I am a 53 years old individual working in State Government Undertaking and will retire in December 2008. My PPF Account has matured on 01.04.2003 but has not been closed so far. I do not intend to continue the PPF Account for next 5 years to save tax u/s 88 and lock the savings for that period, because during next 2 years need may arise for withdrawal of this amount. My current annual income from salary is around Rs.1, 90,000. During current F.Y. a sum of Rs.58, 000 is booked/likely to be booked for saving U/s 88 (LIC, PLI, ULIP, CPF and Infrastructure Bond). Benefit of Section 80 CCC already utilized. I wish to make full utilization of Section 88 (Rs.100000) for tax rebate, therefore, please provide your expert advice in the matter for the balance investment of Rs.42,000 on the basis of circumstances explained above, keeping all the avenues open.

Murlidharan, Ajmer

For claiming benefit under section 88, you could consider investing an additional amount in infrastructure bonds since the lock-in period for these bonds is 3 years. This will meet your liquidity requirements also. Further, from your letter we find that you have not mentioned any amount under Section 80D. Since you are going to retire soon, you should also look at purchasing a medical insurance policy to cover the risks associated with rising medical costs.

I am a regular subscriber of your above Magazine (subs. no. 24802). I found it very informative and useful for planning my investments. But refer your issue of February 03, Page - 44, where as it is stated that Interest/Dividend income under section 80L is allowed upto Rs.9,000/-. In my opinion it should be Rs.12000/- Plus Rs.3000/- (additional) as interest of Central/State govt securities. Please clarify it.

Mahesh Kumar Gupta , Rohtak

The deduction under Section 80L is upto a maximum limit of Rs 15,000 (Rs 12,000 plus Rs 3,000 on interest from government securities). This is applicable for the Assessment year 2003-04 also.

I am a government servant and widow. I file Income-Tax return annually. My father, a rich farmer, never filed Income-Tax return. He had fixed Rs.50000/- in a Bank in the year 1999 making me the nominee. Unfortunately he died in Oct, 2001 at the age of 85 years. Being the nominee, I got the maturity amount of Rs.70000/- in Oct. 2002 after completing banking formalities.
Now my question is - Should I include the interest portion of Rs.20000/- of this fixed deposit into my income for financial year 2002-03 considering this fixed deposit being a gift from my late father. Please guide me.

Asha Sinha, Bihar

As per the provisions of the Income tax Act, 1961, where a legal heir, pursuant to the death of the individual, receives an amount the receipt qualifies as a capital receipt, and therefore is not considered as income. Hence, no tax liability arises on the same in you hands.

I would like advice on my following problem:
I had purchased US 64 at different periods and I posses 10,800 units which had cost me Rs.1,53,800/-. Now, when I sell them in May 03, I shall incur a loss of Rs.35, 800/-
1. Can the loss be shown as Capital Loss and adjusted in my total income next year?
2. Or, is there a better option, so that my loss is minimized?

N.S.Ramakrishnan, Kolkatta

The loss will have to be shown as a capital loss, and in the scenario that there is no capital gains in the current year, the loss can be carried forward for 8 financial years, to be set off against any capital gains in those years.

I am the subscriber of your monthly Magazine (subscription No.23804) from last 3 years. I am a salaried person. I have a house in the name of my wife. But I have taken a Housing loan for it from ICICI in the names of both of us (i.e. my wife and me). My wife is housewife. Whether I get Income tax benefits and in which way?
Please clarify the above said as early as possible since I have to file my return as per your advice.

Hemant Kumar Choudhary / Solapur

You will be entitled to income tax benefits on housing loans only if the property is in your name. Please note that the beneficial tax treatment in Income tax is applicable only where the property is assessable in your hands. Since the property is going to be assessed in the name of your wife, she will be entitled to the benefits.

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