My employer has deducted tax at source because I failed to disclose my investments under Section 80C for 2008-9. Can I claim the benefit when I file my return?
— Revati Pundit
Yes, you can claim the benefit of savings made under Section 80C in your income-tax return provided the savings were made before 31 March 2009. Your employer will give you a document called Form 16 at the end of the financial year. This lists the salary you have earned and the tax deducted at source (TDS) by your employer. You will have to include the TDS amount in your tax-return form. In case your net tax liability is less than the amount of TDS that has been deducted, you will be eligible for a refund. While filling the incometax return, provide your bank details and account number correctly so that the money can be refunded electronically without any delay.
Does the repayment of the principal portion of a home loan qualify for deduction only if the house is self-occupied? What if the house has been given on rent? Is a loan taken for renovating the house eligible for deduction under Section 80C?
— Devi Dutt
The repayment of the principal portion of a home loan qualifies for deduction in both cases, whether the house is self-occupied or on rent. You can avail of the deduction under Section 80C up to a maximum of Rs 1 lakh. The interest component of the loan is allowed as a deduction under the head ‘Income from house property' under Section 24(b), where the amount is restricted to Rs 1.5 lakh for a self-occupied house. However, the full amount of interest can be claimed in case the house is on rent.
The loan taken for renovation of an existing house is not eligible for deduction under Section 80C. However, the interest component is eligible for deduction under Section 24(b).
Insurance For Parents |
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| If you have bought medical insurance for your parents, you can claim a deduction of Rs 15,000 on the premium paid. In case your parents are senior citizens, the amount is Rs 20,000. |
I will be receiving Rs 18 lakh as retirement benefit. I plan to invest Rs 12 lakh in fixed deposits. If I put some money in my wife's name, will the interest earned be added to her income or mine? What if I gift the amount to my children?
— Seshadri Bharatan
As per the Income Tax Act, if you gift the money to your wife, the income earned by investing this amount will be considered your income. So the interest from the fixed deposits in your wife's name will be included in your income.
If you gift the money to your children who are over 18 years old, it will be exempt in their hands. But if they invest the money, then the interest earned will be considered a part of their income and they will have to pay tax on it. However, if your children are minor, the interest from the amount gifted will be clubbed with your income.
I need to take medical insurance for my parents who are senior citizens. What is the tax benefit on the insurance premium paid for parents?
— Radhey Shyam
Prior to the 2008 Budget, the deduction allowed for medical insurance premium was Rs 15,000 for an individual and Rs 20,000 for a senior citizen. However, since the financial year 2008-9, there has been a provision for buying medical insurance for one's parents.
Under this provision, an additional deduction of Rs 15,000 is available. This is over and above the Rs 15,000 that one can claim for oneself. If the parents are senior citizens, the additional deduction is Rs 20,000. So, in your case, if you insure yourself, your spouse, children and senior citizen parents, you can claim a deduction of Rs 35,000.
