We have asked the question on our Simple Tax India Facebook Page that If Cheque deposited in PPF (Public provident Fund) account on 29/03/2013 but Cheque got cleared on 01.04.2013 .Then in which financial year we can claim deduction under section 80C. Options were
- Financial year 2012-13
- Financial year 2013-14
60 % answer goes in the favour of Financial year 2013-14 and 40 % goes in to the side of 2012-13.But as the options are just two then 60 -40 ratio doesn't provide any comfort level ,which way we should go .What you think ?
Person who has gone in side of Financial Year 2012-13
Most of person goes in the favour of 12-13 applies the rule of Govt Tax deposit ,where if tax has been deposited within due date through Cheque but Cheque got cleared after due date then Cheque tender date will be treated as deposit /receipt date.(read Govt rule applicable in Tax deposit by cheque )
Person who has gone in side of Financial year 2013-14.
They have the logic that as the Cheque got cleared in 2013-14 so it deduction can be claimed in fy 2013-14 only. Only Soubhagya Kumar Patra (Financial Planner) replied with correct rule.
Should you go with majority ? What is the Correct answer?
We should respect Majority as the answer given by majority of person are correct . As per RBI guidelines (reproduced here under) cheque clearing date will be treated as receipt date . So answer of the above query is given below.
As per RBI Circular No. DGBA.CDD. H-7530/15.02.001/2009-10, dated 29-3-2010
when a deposit is made in the PPF account by means of a local cheque or demand draft by the subscriber, the date of realization of the amount will be the date of deposit.
If Cheque deposited in PPF (Public provident Fund) account on 29/03/2013 but Cheque got cleared on 01.04.2013 Then deduction under section 80C will be available in Financial year 2013-14.
So ,if you have a plan to deposit an amount in PPF in coming days to claim a deduction in Fy 2012-13 then please select cash option ,and if you have to deposit through cheque then please please make sure that cheque should be got cleared on or before 31.03.2013. otherwise you will not be able to claim the deduction in Fy 2012-13.
Rule also applicable on Deposit through local cheque /Demand Draft
Further the above rule is also applicable ,if amount has been deposited through Local cheque or outstation cheque or even through Demand draft.
Rule also applicable on other saving scheme .
cheque clearance date will be treated as investment date , this rule is applicable on other investment scheme like Post office saving scheme , senior citizen saving scheme also.
Abstract of circular has been reproduced here under
Public Provident Fund Scheme, 1968 : (1) Clarification regarding reckoning of the date of deposit (2) Reiteration of instructions on opening of an account for a minor
Circular No. DGBA.CDD. H-7530/15.02.001/2009-10, dated 29-3-2010
1. Reckoning the date of deposit in case of cheque payment:
(a) As you are aware, in terms of Ministry of Finance letter No. F. 3(9)-PD/72 dated September 4, 1972, in the case of Public Provident Fund Scheme, 1968 (PPF) "when a subscriber makes a deposit by local cheque or demand draft, the date of tender of cheque or draft at the Accounting Office is treated as date of deposit,provided the related cheque is honoured on presentation for encashment." However, in case of all other Small Savings Schemes of the Government of India (GoI), such as, Post Office Savings Schemes (POSS), as also Senior Citizens Savings Scheme, 2004 (SCSS), if the money is deposited in the account by means of a cheque (local or outstation), the date of encashment of the cheque is treated as the date of deposit.
(b) In order to bring uniformity in the reckoning of the date of deposit in the PPF vis-à-vis POSS and SCSS, the GoI, vide their letter F. No.7/7/2008/NS-II dated February 10, 2010, have decided that hereafter in modification of Ministry of Finance letter No.F.3(9)-PD/72 dated September 4, 1972 "when a deposit is made in the PPF account by means of a local cheque or demand draft by the subscriber, the date of realization of the amount will be the date of deposit."
(c) You may bring this to the notice of your branches undertaking PPF business and ensure that the same is also incorporated in the computerized system. The information should also be duly displayed at the branches for awareness of the customers.