The authors of legislation excel in making the Act complicated. If you take a loan to acquire, construct, repair, renew or reconstruct any house property (including residential), from any source, the interest is deductible. On the other hand, the rebate u/s 88 can be claimed only if the loan is taken from some certain specified sources (not any source) and is for purchase or construction (not repair, renewal or reconstruction) of only a residential house (not any house). Any sense in having such minor differences in parallel provisions?

Yes, you can take a loan from your employer, but it has to be a public limited company, public sector company, university and its affiliated colleges, a local authority or a cooperative society.

Through short-term capital gains, I have made the following profits: Rs 2,836 (between September 15, 1999 and December 15, 1999), and Rs 42,615.40 (between December 15, 1999 and March 15, 2000). I have paid an interest of Rs 3,843 on March 22, 2000, towards a housing loan. These are not covered in my Form 16 and my income falls in the 30 per cent tax bracket. Please let me know the tax that I should pay.

-Parasar, pvs@eth.netThere was a time when an assessee was required to pay advance tax on September 15, December 15 and March 15 even if he had earned capital gains on March 28 of the relevant financial year. This was stupidity of nth order.

FA96 has taken corrective action. Accordingly, no interest will be charged in respect of any income, which was neither anticipated nor contemplated, received after the date of first or subsequent installment of advance tax. However, it is necessary to pay advance tax on such income at the next due date for advance tax.

Tax of Rs 13,731 should have been paid on March 15, 2000. Now you have to pay a penalty at the rate of 18 per cent. Your short-term gains would be added to your normal income for tax purposes. The interest can be claimed as deduction under income from house property.

Can Section 80 deductions, especially 80L, be availed of on a minor's income before clubbing it with the parent's income? Please give case laws on the subject, if any.-Ramesh, mkal@vsnl.com

The Madras Special Bench, in the case of V Narayan Swami vs ITO, 1992, (1ITR397) has clearly laid down that separate deduction u/s 80L cannot be separately allowed on interest income earned by the donee when it is inclusive in the hands of another person u/s 64. A contrary view has been expressed by the Allahabad High Court in the case of CIT vs Lalji Agarwal, 1993, (153CTR500). Here the wife was a director of the company in which her husband was the managing director. Her salary was clubbed in the hands of the husband without allowing standard deduction. The learned judge held, "If the wife herself had been the assessee, there would not have been any doubt as to her right to compute her net income. She is entitled to standard deductions and other expenses. If that is so, we fail to see any good reason why gross income be clubbed u/s 64."

Can we extend the ratio of this case to the clubbing provisions in respect of a minor child? I personally do not think so. In this case, the child cannot claim benefit under Section 80L before the clubbing takes place.

If I have an NRI account, can anyone deposit money in that account in rupees from India? If yes, will it be taxable?-Purvi Dasari, USA

NRIs can own several accounts, mainly NRE, FCNR and NRNR (without repatriation rights). The NRE and NRNR accounts are maintained in Indian rupees, the others in foreign currencies. All these accounts can be opened and maintained by remitting funds in freely convertible currency from abroad or by transfer of funds from NRE or FCNR accounts. The interest is tax-free in India as long as the account-holder remains an NRI. There are two other NRI-related accounts, NRO and NRSR. These enable the NRI to handle his investments and income arising from Indian sources before he became an NRI and also non-repatriable income. These are the only two accounts into which rupees can be credited.

FA99 has reduced long-term capital gains from 20 per cent to 10 per cent bringing Indian residents on par with NRIs. Has the longterm capital gain in respect of immovable properties like sale of residential flats, land, etc, also been reduced to 10 per cent from 20 per cent?-Nutan Patel, BYCULLA

NRIs are allowed 10 per cent tax on longterm gains arising out of only shares and securities with protection against exchange risk, but not against inflation. On all other assets, such as residential flats, land, etc, the rate is 20 per cent with the benefit of the cost inflation index.There was a long-standing demand from residents to bring them on par with NRIs. While conceding to this demand, unfortunately, the fact that residents have no exposure to exchange risk has not been taken cognisance of.Residents can opt for 10 per cent tax without indexation or 20 per cent with indexation. On finer analysis, it is found that in most cases, 20 per cent tax is lower than 10 per cent! And then again, this option is applicable only for shares and securities.

This `at par with NRIs' business appears to be eyewash.The author may be contacted at anshanbhag@ yahoo.com.