My son is going to Singapore on a work contract for three months. Where will he be liable to pay the income tax?
As per the Income Tax Act, an individual’s foreign income is not taxed in India if he is a non-resident or not ordinarily resident Indian, that is, an NRI or an NOR. A person loses his Indian resident status if his foreign stay exceeds 182 days. So you don’t have to pay tax in India for the income earned abroad if you have lived abroad for more than 182 days. As your son will be living in Singapore for only 90 days, the income earned by him there shall be taxable in India. However, if your son paid his income tax in Singapore, he can claim deduction for the amount of tax paid under the double taxation treaty.
My father was a government employee and after his death my mother received Rs 2 lakh as compensation. She gets a family pension now. What are the tax implications?
According to the Income Tax Act, the lump-sum payment made gratuitously or otherwise to the family or other legal heirs of an employee who dies during active service is not taxable. So, you will not have to pay any tax for the compensation.
In case of the pension received by a family after the death of the employee, it is taxable under the head “Income from other sources”. Standard deduction at the rate of 33% of the family pension or Rs 15,000, whichever is lesser, can be claimed as a deduction from the gross family pension. The balance amount is taxable.
However, for women, income up to Rs 1.85 lakh is exempt from tax for the financial year 2008-9. So, if your mother’s income, including that from the family pension (after deduction), is below the taxable limit, she will not have to pay any tax.
I am a physically handicapped person employed in a private company. Am I entitled to a higher than normal deduction on conveyance allowance. If yes, how much will it be?
Under Section 10(14) of the Income Tax Act, if you receive a conveyance allowance from your employer, up to Rs 1,600 a month is exempt from tax. For other assessees, the amount is only up to Rs 800.
I live in a rented accommodation and get house rent allowance (HRA) from my employer. I have also taken a home loan to buy a flat, which is under construction. What tax benefits are available to me? Can I claim the HRA and the benefits from the home loan?
If you are living in a rented accommodation and paying rent, you can claim HRA from your employer. However, as the construction of the flat is not complete and you have not received its possession, you cannot avail of the benefit on the interest paid by you on the home loan. You can claim the benefit under Section 24 only after you have taken possession of the flat. You can claim the total interest paid on the home loan during the construction period. This can be done over five years in equal instalments, starting from the year that the construction of the flat was completed.
My income-tax refund cheque has the wrong bank account number. Whom should I approach to have the error rectified?
The bank account details in income-tax refunds are usually the same as those mentioned by you in the return of your income. If the income-tax office (ITO) has provided incorrect account details, you can resolve the matter by visiting your ITO personally with the copies of the acknowledgement of your return and the bank statement with the account details. However, if you filled in the wrong account number, the income-tax officer, in addition to the above documents, will also demand a letter of indemnity before making the endorsement. In either case, the ITO will endorse the correct account detail on the cheque.
I am a housewife and have started trading in shares from this year. I have made a profit but have also suffered a loss. How will the gains be taxed? Am I entitled to any deduction because of the losses?
If you sell shares and securities after holding them for more than a year, the profit or loss is treated as long-term capital gain/loss. If you sell the shares within a year of buying them, the profit or loss is termed as short-term capital gain/loss. In your case, the entire gain or loss is short-term. If you have sold your shares through a recognised stock exchange and the securities transaction tax has been deducted on the sale, the short-term capital gain will be taxed at 15%, along with the cess and additional surcharge as applicable.
A short-term loss can be set off against a short-term gain. If after setting off this loss there is no gain, you do not have to pay any tax. Any loss that cannot be set off now, can be carried forward to the next year (for a maximum of eight assessment years). If the losses are to be carried forward, the incometax return must be filed on or before the due date, which is 31 July of a financial year.
I have lost my PAN card. Which are the documents I need to submit to the tax authorities for getting a duplicate one?
You should report the loss of your PAN card to the police department and obtain an FIR. To get a duplicate card, you will have to fill a form for getting a new PAN card and mention your existing PAN number. You can download the form from the Website incometaxindia.gov.in. You will have to attach your photograph, address proof, identity proof and the copy of the FIR with the form. Apart from the above documents, you can enclose a copy of the lost PAN card, if you have one.
My employer provides me a medical cover under a group insurance scheme. The insurer reimbursed a claim for Rs 40,000 that I had incurred for my mother’s surgery. The amount was deposited in my salary account. Is this amount taxable?
The claims under medical policies are reimbursement of expenditure that has already been incurred by the policyholder. Since medical insurance is a contract of indemnity and there is no profit in the claim received by the insured, it is not taxable in his hands. So, the medical reimbursement credited in your salary account will not be included in your total income for tax purposes.
I have filed the return for 2007-8 through the Internet, but I have not submitted it to the tax authorities. What should I do?
If you file the income-tax return electronically by using digital signature, you do not have to get it stamped by the ITO. If you file the return without a digital signature, it is mandatory to file it with the income-tax department within 15 days of e-filing. You can have the copy stamped now, but the date of filing of the return will be considered the date on which the copy is stamped by the ITO.