What are the recent changes in the Income Tax rules with respect to gift tax?
?R Rao
The Income Tax Act 1961 has been amended with effect from October 1, 2009 to provide that any gift-in-kind, being an immovable property or any other property, the value of which exceeds Rs.50,000, will become taxable in the hands of the doanee, being an individual or HUF.
Therefore, any such person who receives a gift of any such property on or after October 1, 2009 must pay the income tax due on the value of the gift and disclose the taxable value of such property in the return of income for assessment year 2010-11 and subsequent years.
The following types of gifts will, however, not be subject to tax, i.e. gifts (a) from a person who is a relative; (b) on the occasion of marriage of the individual; (c) under a will or by way of inheritance; (d) in contemplation of death of the donor; (e) from any local authority as defined in the Explanation to section 10(20) of the Act; (f) from any fund or trust established under section 10(23C) of the Act; (g) from any trust or institution registered under section 12AA of the Act.
Earlier only cash gifts (and not gifts in kind) exceeding Rs.50,000 in the aggregate were subject to tax.
I have submitted Form 15G/15H for two separate FDs in SBI and ICICI at the start of current financial year, which I want to withdraw now, as my income has increased recently. But both banks have informed me that Form 15G/15H cannot be withdrawn once submitted. Shall I start paying more tax out of my salary income? Alternatively, suggest other remedial steps.
?P. S Maggo
The banks are absolutely right in refusing to allow you to withdraw the Form 15G or 15H (but not both simultaneously). You should include the interest income while paying advance tax for the year. Your income tax returns would also include this income along with your other income.
I held agricultural land for the last 15 years. I got it was converted to non-agriculture land in January 2009 and sold it in October 09. What is the tax payable by me on this sale?
?Sudhir Katariya
You have sold a non-agricultural land which came into your possession during FY 08-09. The fact that it was an agricultural land before you got it converted is immaterial and inconsequential. It was a different species. Since the land was in your possession for less than three years, you have earned short-term capital gains. For obtaining its cost of acquisition, you can get its value as in Jan 2009 from a registered valuer. The difference between the net sale proceeds (after accounting for stamp duty, brokerage if any, etc.) and the value as assessed by the valuer would be your short-term capital gains. This gain will have to be added to your normal income and the total would be exigible to tax at the rate applicable to the normal incomes.
I am a government bank employee with 32 years of service and fall under 30% income tax bracket. My wife underwent heart surgery in the month of October 2009 and 75% expenses were reimbursed by the bank as per rules. But now the bank has specified that Rs 15,000 is to be deducted from the reimbursement amount given and then TDS to be deducted on the balance amount of reimbursement amount. This reimburs- ement amount is not a part of income then why is TDS being deducted in this regard? Kindly clarify as to the Income tax rules in this regard. Please also make it clear whether I am eligible for claiming any refund after filing return?
?Yash Paul Sharma
The bank has made payment to you u/s 17(2). Item (v) of the provision to this clause exempts reimbursement up to Rs. 15,000 in a year, for medical treatment for himself and his family members from any doctor. The rest of the amount is taxable in your hands.
However, item (ii) of the same provision exempts ? any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family?
(a)in any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees;
(b)in respect of the prescribed diseases or ailments, in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines.
If you are covered under this clause, you may claim the deductions while filing the returns.
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