Dead won’t get interest

QI am a salaried person. My only extra income is from fixed deposit of `20 lakh. The bank has already deducted 10 per cent TDS. Currently I am in the 30 per cent income bracket. Please advise me the exact rate including surcharge to be paid and by what date for FY 201617? RANJAN

Via email

The obligation to pay advance tax arises only where the advance tax payable is `10,000 or more. An assessee has to estimate his income during the relevant financial year and pay advance tax thereon. The assessee shall himself compute the tax payable on his current income at the rates in force in the financial year and after taking the credit for the tax deducted/collected at source on his account if the amount payable is in excess of `10,000, the advance tax provisions will be applicable.

As per the Income-Tax Act, 1961, the advance tax payment can be made in four instalments on June 15, September 15, December 15 and March 15 of the respective financial year and the amount payable is not less than 15 per cent, 4 per cent, 75 per cent and the whole amount (after taking the credit of first three instalments of advance tax paid) respectively.

Interest at the rate of one per cent a month shall be applicable, if there is shortfall in payment of advance tax before the due dates mentioned above. It is pertinent to note that advance tax provisions will not be applicable to senior citizens (age of 60 years or more) subject to a condition that their income does not include any income chargeable under the head “profits and gains of business or profession”

As you are assessed in the 30 per cent (30.9 per cent including education cess) tax bracket and tax on fixed deposit interest is deducted at the rate of 10 per cent, you are liable to pay the balance tax of 20.9 per cent. Only if the balance tax payable computed above exceeds `10,000, advance tax provisions shall be applicable to you.

It may also be noted that surcharge at the rate of 15 per cent will also be applicable in case the total income exceeds `1 crore. The difference amount of income tax in that case will have to be calculated at the rate of 25.535 per cent after taking the credit of 10 per cent of tax already deducted.

QInterest is not payable on contribution made in the account after the death of PF subscriber. So you need claim your mother’s PF funds

My mother’s PPF account was opened in March 2001. She expired in August 2014. Myself and my brother are the nominees for the PPF account. We intimated the bank about the death by enclosing copy of death certificate. This has been endorsed in passbook. However we did not submit claim for payment but allowed the account to remain. No installment was paid after mother’s death. As per PPF rules, 15 years is prescribed for closure but payment can be received in death cases when claim is submitted. As per PPF rules, the account is being credited with interest every year. The 15-year period would ended in March 2016. Since it is advantageous to us we have not submitted the claim. The account is being updated at the end of every financial year with the credit of interest. Please clarify if PPF account allowed to remain further or not? Is there any limit of the claim in this case (death case)? SADANAND V.S.

Via e-mail

As per PPF rules, no time limit is specified for claiming the amount by the nominees or legal heirs on the death of subscriber. However, after the 15 years period is completed, a requisition for extending the duration by another five years needs to be made by the subscriber. You will be eligible to receive interest for the completed calendar month upto the submission of the claim, which is however subject to the condition that no interest will be paid after March 31, 2017. Further, interest is not payable on any contribution made in the account after the death of subscriber. Therefore, it is suggested that you may put up your claim immediately with the necessary documentary evidence.