I had donated Rs 10 lakh to the Venu Charitable Society in 2007, which issued a certificate in Form 58A to claim exemption u/s 35AC from income tax and I had claimed it in my tax return. This has come under scrutiny. The ITO is not allowing full exemption of Rs 10 lakh, but only exemption u/s 80G, 50/10% on the plea that individual assessees are not allowed full exemption as this facility is only for companies/corporate bodies. Please clarify.

–Trilochan S Saluja

Under section 35AC, 100% deduction, in respect of the expenditure, is available by way of payment towards a specified project or scheme to assessees whose income falls only under ?business? or ?profession?. However, for assessees whose incomes do not fall under these, section 80GGA provides for 100% deduction on donations made to projects under section 35AC, subject to the computation prescribed in the specified manner, subject to certain conditions. As the details of your income are not available with us, you can claim before the IT officer, the benefit of contribution under section 35AC if you have income under ?business? or ?profession?. In other cases, you can claim the deduction under section 80GGA for contributions to eligible projects under Section 35AC.

I am an Indian citizen and had earlier worked in the US for about 15 years. I had made some bank deposits there. I am now an Indian resident, employed in India for the last two years. Will my bank deposits be included in my wealth tax computation under the present Wealth Tax Act and also under the DTC?

–Suresh Raina

Under the existing Wealth Tax Act 1957, bank deposits are not chargeable to wealth tax. However, under the DTC, bank deposits outside India, in the case of individuals and HUFs, are included as taxable assets under the purview of wealth tax and shall be included in your net wealth for computing the wealth tax under the DTC.

I had taken a high-value life insurance policy for which I am paying premium in excess of 5% of the sum assured p.a. Currently, I claim insurance premium under section 80C of the Income Tax Act 1961. Will I be eligible to claim this benefit in the future?when the DTC would be implemented?

–KP Unnikrishnan

Under the DTC, the aggregate deduction for life insurance, health insurance and for education of children has been capped at Rs 50,000 pa. In case of life insurance, if the insurance premium exceeds 5% of the sum assured, the person shall not get the benefit of such a deduction. Therefore, under the DTC, you may not get deduction for the life insurance premium paid? something you currently avail of under section 80C of the Income tax Act 1961.

?* The writer is founder of RSM Astute Consulting Group

* Send your queries at fepersonalfinance@expressindia.com