Kamal Rathi
I resigned in 2004 and accumulated super annuation fund was used for five year pension. I did not opt for one-third commutation, which is tax free, instead used the full pension amount for five years. Since I have not availed the commutation amount, can I claim one-third tax free deduction and show the pension in my returns?
K.V.S. Prasad
Via email
The exemption available under Section 10 (10A) of the Income Tax Act for the commutation of pension is specific. Since you have not opted for commutation, you cannot claim exemption for one-third of the amount received as pension as proposed by you.
If I buy a flat by taking loan and rented it out, can I claim exemption for the interest paid? I would also want to know if I can cla-im interest exemption on the second housing loan?
Krishna Murthy
Via email
In case of a rented property, the entire interest paid on the loan taken for its construction is admissible as a deduction. You can also claim interest exemption on loan borrowed on the second house. However, if the house is used for self-occupation, the amount of deduction towards interest payable is restricted to Rs 1,50,000.
I received Rs 1,78,000 as unutilised earned leave at the time of retirement. The break up of my monthly salary was: Basic Rs 11,300, DA Rs 3,960, Special Allowance Rs 1,526, CCA Rs 300 and other allowances Rs 1,480. What are the exemptions that are available to me?
Ravindranath
Via email
As per the provisions of Section 10 (10AA), cash equivalent of leave salary received only at the time of retirement whether on superannuation or otherwise is wholly exempt in the case of central or state government employees. For others, it will be exempt from tax to the extent of the least of the following:
Earned leave entitlement cannot exceed 30 days for every year of actual service rendered by him as an employee of the employer from whose service he has retired.
Earned leave so encashed must not be for more than 10 months.
Leave salary must be based on the average salary drawn by the employee during 10 months immediately preceding his retirement.
The amount is subject to a maximum ceiling of Rs 3,00,000.
According to IT provisions, salary includes only basic and DA. Therefore, your exemption will be Rs 1,52,600 (Rs 15,260 (Basic+DA) X 10 months) and the balance Rs 25,400 will form part of your income.
My dependent brother had jaundice and was hospitalised in August. I had to pay Rs 9,800 for his treatment. Can I claim deduction under Section 80 DDB towards the medical treatment expenses?
Sharat
Via e-mail
Section 80 DDB of the Income Tax Act is applicable if the assessee has actually incurred any expenditure for the medical treatment of specified disease or ailment prescribed in rule 11DD(1) of the income tax rules. Since jaundice is not covered in the list of specified diseases and ailments under rule 11 DD(1), you are not entitled to claim any deductions.
(Kamal Rathi is a chartered accountant, representing Rathi & Malani, a Hyderabad-based accounting firm.
Readers can mail their
queries on income tax to kamalrathi.ca@gmail.com)
No deduction on loan repayment Kamal RathiQ) I am working as an accountant with a hospital, which is registered under Section 12AA and has the Section 80G exemption also. While paying consultation charges to our consultant doctors,... |
No liability of I-T on sale of vehicle Kamal RathiI am an employee of a private company. Last year, I took a personal loan from a bank and invested the money in National Saving Certificates. Since this investment was not from my taxable income... |
Capital gains have to be re-invested Kamal RathiI was told that if I realise capital gains on the sale of land, I need to re-invest in a house property to claim tax exemption. If I don’t invest in the house property, I have deposit the... |
Tax deduction for full premium paid Kamal RathiQ) I have traditional policies with ICICI Prudential Life Insurance Company. For the sake of tax exemption on life insurance premium, the company has issued premium certificates exclusive... |
Day trader must pay advance tax Kamal RathiQ) My income has crossed income tax exemption limit in this fiscal because of 60 per cent arrears that I got following the Sixth Pay Commission award. I am filling Form 10E under Section 89(1)... |
Deduction towards mediclaim allowed Kamal RathiQ) My income from house property is Rs 72,000 and this year I spent Rs 1.2 lakh on repairs. The usual deduction of 30 per cent — allowed as per Section 24(A) — may not be sufficient to... |
