Interest on PPF
This query is : Resolved
05 August 2009
Can u tell me that interest on PPF is eligible for the deduction us Sec80C and the refrence for the same
06 August 2009
No Dhruvesh, Interest on PPF is not eligible for deduction under section 80-C, because income tax rules specified same. Further the said income also not taxable, then how can you claim deduction for the income which is not at all taxable. Whereas contribution to PPF is eligible u/s. 80-C. Hope i have clear your doubt
27 October 2010
Can you give me any case regarding the same??
01 August 2024
Interest earned on a Public Provident Fund (PPF) account is not eligible for a deduction under Section 80C of the Income Tax Act. Instead, the contributions made to the PPF account are eligible for a deduction under Section 80C.
### Section 80C Overview
- **Deduction for Contributions:** Under Section 80C, contributions made to the PPF account are eligible for a deduction from taxable income, up to the limit of ₹1.5 lakh in a financial year.
- **Interest Earned:** The interest earned on the PPF balance is tax-free and does not need to be included in the taxable income. However, it is not eligible for an additional deduction under Section 80C.
### Key Provisions and References
- **Section 80C:** Allows deductions for contributions to specified savings instruments, including the PPF.
- **Interest Taxability:** Interest earned on the PPF account is exempt from tax under Section 10(11) of the Income Tax Act. This section provides for the exemption of interest income from PPF and other specified savings schemes.
### Relevant Case Laws
While there may not be specific case laws directly related to the deduction of interest on PPF under Section 80C, the following points are generally upheld by judicial decisions:
1. **Interest Exemption:** The interest earned on PPF is tax-free as per Section 10(11). This principle has been consistently upheld in various rulings.
2. **Contribution Deduction:** The eligibility for deduction under Section 80C is limited to contributions made to the PPF, not the interest earned.
#### Key References:
1. **Section 80C of the Income Tax Act:**
- Provides for deductions for contributions to PPF.
2. **Section 10(11) of the Income Tax Act:**
- Exempts interest income from PPF from tax.
For further confirmation or detailed analysis, you might consider consulting the Income Tax Act directly or referring to professional legal or tax advice. If you're looking for judicial pronouncements or case laws, they generally reinforce that only contributions to PPF are deductible under Section 80C and interest earned is tax-exempt.
### Section 80C Overview
- **Deduction for Contributions:** Under Section 80C, contributions made to the PPF account are eligible for a deduction from taxable income, up to the limit of ₹1.5 lakh in a financial year.
- **Interest Earned:** The interest earned on the PPF balance is tax-free and does not need to be included in the taxable income. However, it is not eligible for an additional deduction under Section 80C.
### Key Provisions and References
- **Section 80C:** Allows deductions for contributions to specified savings instruments, including the PPF.
- **Interest Taxability:** Interest earned on the PPF account is exempt from tax under Section 10(11) of the Income Tax Act. This section provides for the exemption of interest income from PPF and other specified savings schemes.
### Relevant Case Laws
While there may not be specific case laws directly related to the deduction of interest on PPF under Section 80C, the following points are generally upheld by judicial decisions:
1. **Interest Exemption:** The interest earned on PPF is tax-free as per Section 10(11). This principle has been consistently upheld in various rulings.
2. **Contribution Deduction:** The eligibility for deduction under Section 80C is limited to contributions made to the PPF, not the interest earned.
#### Key References:
1. **Section 80C of the Income Tax Act:**
- Provides for deductions for contributions to PPF.
2. **Section 10(11) of the Income Tax Act:**
- Exempts interest income from PPF from tax.
For further confirmation or detailed analysis, you might consider consulting the Income Tax Act directly or referring to professional legal or tax advice. If you're looking for judicial pronouncements or case laws, they generally reinforce that only contributions to PPF are deductible under Section 80C and interest earned is tax-exempt.
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