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Mihir

Mihir Tanna  |580 Answers  |Ask -

Tax Expert - Answered on Aug 29, 2023

Asked by Anonymous - Aug 28, 2023
Money

My wife is housewife, and has no other income. To secure her future, from my salary, if I contribute every year around 2Lac into NPS tier-1 account of my wife, will there be any tax implication to her or me, whenever she gets pension from NPS when she becomes 60 years old.

Ans: Upon maturity of the NPS account, you can only withdraw 60% of the amount, and this is entirely tax-free. The balance 40% is used to buy an annuity. However, the annuity income is taxable as per the investor’s income tax slab rate in the year of payout.



With reference to contributing to NPS account on behalf of spouse, amount transferred to spouse’s NPS A/c will not be subject to tax.



However, Income from asset (amount) transferred directly or indirectly to spouse without consideration is clubbed in the hands of the transferor. Accordingly, the tax implication would be on you (Husband) wherever your wife gets pension as annuity Income (balance 40%).
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Hardik

Hardik Parikh  |106 Answers  |Ask -

Tax, Mutual Fund Expert - Answered on Jul 27, 2023

Money
Hardik Sir, i am retiring from Govt services shortly, all the pension benefits which i get , i would like to give it to my wife, will there be any tax implication to her for this one time transaction. Whether it is advantageous or dis advantageous to transfer to wife as one time gift, i want her to take the responsibility of this amount of around 60 lakhs.
Ans: Dear Prasanna,

Firstly, congratulations on your upcoming retirement. It's a significant milestone, and I'm here to help you navigate the financial aspects of it.

Now, coming to your question about transferring your pension benefits to your wife. As per the Income Tax laws in India, any gift received from specified relatives, such as a spouse, is not treated as income. Therefore, it is fully exempt from income tax. So, if you decide to give your pension benefits to your wife as a one-time gift, there won't be any immediate tax implications for her.

However, there's an important aspect to consider. While the gift itself is tax-free, any income generated from this gift (for example, if your wife invests this amount and earns interest or dividends) would be clubbed with the income of the giver, i.e., you, and taxed accordingly. This is known as the clubbing of income.

In conclusion, gifting your pension benefits to your wife could be a good idea if the aim is to let her manage the funds. However, the income generated from the gifted amount would still be taxable in your hands.

I hope this clarifies your query.

Best,
Hardik
(more)
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Sanjeev

Sanjeev Govila  |192 Answers  |Ask -

Financial Planner - Answered on Sep 23, 2023

Sanjeev

Sanjeev Govila  |192 Answers  |Ask -

Financial Planner - Answered on Sep 23, 2023

Asked by Anonymous - Sep 14, 2023
Money
Sir, I just retired from my service @60yrs. I will get my PF+other fund ₹50L. Please advice how to invest the amount so that my principal not disputed and I can get ₹30,000 pm for my monthly expenses. My family of 2 persons are covered ₹50L health insurance. Regards
Ans: Considering your age and your requirement, you will need to invest in a mix of debt and equity instruments. Here are some investment options available to you:-

• Senior Citizens’ Savings Scheme (SCSS) – This is a pure debt instruments and provides guaranteed returns of 8.2% per annum. The interest is paid quarterly. The maximum amount that you can invest is Rs. 30 Lakhs.

• Corporate FDs – It provides you return more than the regular bank FDs. It contains two options i.e. cumulative and non-cumulative.

• Post Office Monthly Income Scheme (POMIS): This is another government-backed scheme that offers guaranteed monthly income. The current interest rate is 7.1%.

• Debt Mutual Funds: As your main concern is to protect the principal amount you may consider debt funds and monthly income can be achieved through the route of SWP (systematic withdrawal plan).

• Equity mutual funds: Equity mutual funds offer the highest potential returns, but they are also the riskiest. A small portion of the amount can be invested in the equity mutual funds for growth of the money in the long-term horizon.

It is good to know that you are adequately insured for any healthcare emergency.

Your requirement of Rs. 30,000 will be changing in the future due to inflation, hence you should consult with your financial advisor for a proper increasing income or SWP (systematic withdrawal plan) which can help you to ensure sufficient amount available for your monthly expenses.
(more)
Sanjeev

Sanjeev Govila  |192 Answers  |Ask -

Financial Planner - Answered on Sep 23, 2023

Money
Hi Sir, I worked a small level company between 01.02.2018 to 30.04.2021. They paid standard EPF contribution of Rs. 1800/- from my side they deducting the same of Rs. 1800/-. After I exit the company I applied the EPF Withdrawl (both contribution) on 06.05.2023 and it was rejected by the officer and the reason was mentioned "Claim Rejeced EQUAL SHARE 07/18". The Employer deposit the July 2018 share in wrongly i.e. The deposited Rs. 1800/- in Employee Share and Rs. 1800/- employer Share and Pension is " 0 ". instead of Rs.1800/- as employee, Rs. 550/- as Employer and Rs.1250/- as pension contribution. When I sent a 2 continues mail to EPF they taking my query as a grivience and sent a query to the employer. But Still they not close the issue. How to I approch them to clear my claim. Because there is no mistake from my side. Thanks in Advance. Narayanan
Ans: I understand that your EPF withdrawal claim has been rejected due to an error in your employer's contribution. This is frustrating, but it is important to remember that you are not alone. Many people experience problems with their EPF claims, especially when their employers make mistakes.

When filing a grievance, be sure to provide clear and concise information about the issue. You should also include any relevant documentation, such as your EPF statement and the revised Form 11 from your employer (if you have one).

Once you have filed a grievance, the EPFO will investigate the matter and try to resolve it. This process can take some time, but it is important to be patient.

Here are some additional tips:

• Keep track of all your communication with the EPFO. This includes emails, phone calls, and visits to the office.
• If you are not satisfied with the EPFO's response, you can escalate the issue to the regional or national level. You can also mail on employeefeedback @ epfindia.gov.in for the redressal of your grievance.
(more)
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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