Suppose your wife’s PPF is maturing in April. She wants to transfer Rs 23 lakh to your senior citizen savings account. Apart from this, she wants to give Rs 7 lakh to your daughter. What will be the impact on your tax in this case?

Tax arithmetic of PPF maturity

If you, your wife and your daughter are eligible for tax as residents in India. Your daughter is 18 years or older, then these tax implications will apply on receipt and transfer of PPF maturity amount. The PPF maturity amount that was deposited only by your wife will be completely tax-free in her income.

Transfer as a gift

If your wife transfers the PPF maturity amount to you and your daughter as a gift, then there will be no tax on it. Since gifts received from spouse and parents are not taxable, the amount that you and your daughter will receive will be tax-free in the hands of both. The interest that will be received from the gifted funds will come under the “clubbing provision” under the Income Tax Act.

Will be added to this income

This means that the interest will be added to your wife’s income and will be taxed as per her tax rate. However, if you reinvest the interest, the other income generated from it will be taxable in your hands. There is no special exemption or deduction for payments made under indemnity bonds under the Income Tax Act.

Related Articles:-

• Train Delay Cancellation Rights: Can you claim a refund if the train is late? Know Here
• Delhi Govt likely to Roll Out 2500 rupees mahila samman yojana on womens day 2025
• Govt Education New Policy: Now these children will have ‘Digital’ admission in schools, issued circular
• New Passport Rules: Central Govt makes THESE amends, 5 key changes you must know about
• UPI Lite Transaction Limit: NPCI has announced new limits for UPI Lite, Auto top-up facility also applicable

The post Transferring PPF maturity funds? Know the tax implications before you do first appeared on Rightsofemployees.com.