Personal Finance

Your Taxes

Sanjiv Chaudhary | Updated on January 15, 2018 Published on November 06, 2016

I wish to open a PPF account in my name as well as my wife’s name. My wife is a housewife. Can I invest ₹1.5 lakh in each of the accounts from my income? What will be the total tax benefit? Will the income from my wife's PPF account be clubbed with mine?


As per the Public Provident Fund rules, a maximum deposit of ₹1.5 lakh can be made by a person in a PPF account in a particular financial year.

The limit is prescribed in respect of your own PPF account and any other account where you are the guardian (that is, in the case of minor children). Hence, you may invest ₹1,50,000 each in your PPF account and your wife’s PPF account.

As per the Act, you may claim the deduction in respect of contribution made towards your own PPF account as well as that towards the PPF accounts of your wife and minor children. However, the maximum deduction available shall be covered under the overall ceiling limit of ₹1.5 lakh as applicable under Section 80C.

The interest income earned from your wife’s PPF account shall be clubbed with your income. However, interest income from PPF account is exempt from tax and you would not be required to pay any taxes on such income.

I wish to sell my gold jewellery and some coins to invest in the next tranche of the Sovereign Gold Bond Scheme. What will be the capital gains tax implications of this transaction?

Are there any exemptions? What will be the tax implications at the time of maturity/sale of the sovereign gold bond investment scheme?

R Gupta

According to the provisions of the Income Tax Act, jewellery is considered as capital asset and any gain arising from the transfer of jewellery is subject to capital gains tax.

In case the jewellery is held by the taxpayer for a period of up to 36 months before sale/transfer, then it is a short-term capital asset and the gain, short-term capital gain. If the jewellery is held for more than 36 months before sale/ transfer, then it is treated as long-term capital asset and the gain, long-term capital gain.

The short-term capital gain from the sale of jewellery is taxed at the applicable slab rates for the individual without any indexation benefit for cost inflation. The long-term capital gain is taxed at 20 per cent (applicable rate for FY 2016-17) after indexation. No exemption is available in respect of investment of sale proceeds of jewellery in the Sovereign Gold Bond Scheme.

The capital gain arising on redemption of the bond on maturity is exempt from tax. However, in case the bond is sold before maturity, then the capital gain tax shall be applicable in the similar manner as discussed above in the case of sale of jewellery. The interest income received on such gold bonds are taxable under the Act as per the slab rates.

The writer is a practising chartered accountant. Send your queries to

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Published on November 06, 2016
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