I had opened a PPF account in February 1973. On the expiry of 15 years, I have extended the account thrice for 5 years at a time. This PPF account is in existence for almost 30 years in February 2003. Can I extend this PPF account for a further 5-year period?
Please advice.

R.S.Chawala, Mumbai

A PPF account can be extended by any number of times after 15 years in a block of 5 years. Therefore, an extention of a period of 5 years after the completion of 30 years of the PPF account can still be done.

I have paid LIC premium on the policy of my father. Can I claim rebate in respect of such premium paid to insure the life of my father?

Arvind Ghosh, Delhi

The Life insurance premium paid by an individual to insure his life, the life of his spouse, child or children, will qualify for rebate under section 88. No rebate can be claimed where a premium is paid by an individual to insure the life of his father. So, in view of the above provision you are not entitled to claim rebate in respect of premium paid to insure the life of your father.

Where an amount is to be invested in infrastructure bonds for claiming rebate under section 88, will the rebate be available even if the entire investment is made in infrastructure bonds, or is it subject to a ceiling whereby rebate cannot be availed of in respect such investment is an amount exceeding Rs. 30,000/-?

Madhukar Chopra, Noida

If the entire investment of Rs. 1,00,000 is made in infrastructure bonds, the rebate will be available on the entire Rs. 1,00,000, provided the assessse’s gross total income before chapter VI — A deduction does not exceed Rs. 5 lakhs.

Six years ago I had deposited Rs. 30,000/- in the name of my minor daughter (12 years then ) in a bank as a gift to her. Now my daughter is above 18 years of age and is still dependent on me. Her fixed deposit is maturing shortly.
I would like to know from you that how the income from the deposit is treated? Shall it be included in my income?
or she can have her own portfolio of investments with separate tax planning. Please advise me.

K. Murali Mohan Rao, (A.P.)

The income from deposit which is in the name of your daughter shall be clubbed with your income till the date of her majority and the income from the date of attaining majority will be taxed in the hands of your daughter as per the provisions contained under section 60-65 of the Income Tax Act relating to clubbing of income.

Please clarify the followings points
1. What is the Taxability of Divdends from Equity Oriented Schemes of Mutual Funds? Will there be any TDS?
2. Can Short Term Capital Loss be set off against Long Term Capital Gain?
3. Can Long Term Capital Loss be set off against Short Term Capital Gain?
4. Can Short Term Capital Loss be carried forward to next year?

J.P. Agarwal Paschim Vihar

1. The Dividend received on the Equity Oriented Schemes of Mutual Fund shall be Tax free in the hands of the Investors, but TDS shall be deducted @10.5%(including surcharge).
2. Yes, the Amendment made by the Finance Act,2002 provides that short term capital loss can be set off from any capital gain so it can be set off against long term capital gain.
3. No, long term capital loss cannot be set off against short term capital gain. It can be set off against only against long term capital gain.
4. Yes short term capital loss can be carried forward to a maximum of eight assessment years.

If you have any investment or tax related questions, send in your queries to:
The Editor, Bajaj Capital Investors India,
Bajaj House, 97, Nehru Place, New Delhi - 110019