If I open a PPF account on behalf of my 19-year-old son, will it attract any kind of tax now or on maturity? Shall I have to show this in my tax return?

B. Ganapati, Behala

Your son is an adult. You cannot open a PPF account on his behalf. However, he can open an account in his name. You should gift him the money that you plan to deposit in the PPF account every year. Your son should deposit the money in his account. But the interest income from a PPF account is exempted under Section 10 of the Income Tax Act and it will not be included in calculating the taxable income. It is a very good way of gifting money.

House warming

I sold my house in parts and these were registered on different dates between July 2007 and March 2008. What would be the implication of capital gains tax in such transactions? How much time would I get to buy a property to save this tax?

Nirmalendu Ghosh, Calcutta

You shall have to compute capital gains for each transaction separately. The total of all these will be your aggregate capital gains and your tax liability will be calculated on the basis of this aggregate capital gains. However, you will have to buy a new house within two years from the date of transfer of the existing house. If you want to construct a new house with the capital gains from the existing property, you will have to complete the construction within three years from the date of sale.

Tax free

I am 72-years-old. In the current financial year (2008-09), my total income from pension, MIS and Senior Citizen Saving Scheme will be Rs 2,38,000. I invested Rs 60,000 in SCSS on April 4, 2008. Shall I have to file income tax return or pay any income tax in 2008-09?

Nirmal Roy, Sonarpur

The threshold income for people above 65 years is Rs 2,25,000. Your total income is Rs 2,38,000. So, you will have to file income return. However, you don’t have to pay any tax because your investment of Rs 60,000 in SCSS takes care of your tax saving needs. After deducting the investment in SCSS under 80C, your total income comes down to Rs 1,78,000.

If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.