My family comprises of my wife who is working, my dad who is a retiree and gets a nominal pension of Rs 1,534 pm. We are planning to buy a house jointly with my wife who will be availing of a housing loan from HDFC. As per her salary and my savings we are not able to meet the budget, so I am taking a loan from my dad. My question is can my wife and I claim a housing loan rebate on the same property, which we are jointly purchasing – by way of loan from HDFC and by way of a loan from my dad?

?Subhash Rohra

On the portion of the loan taken from your father, if you pay interest, the same will be deductible u/s 24, however, Sec 80C rebate on principal repayment will not be available. Note that this pertains only to the part of the loan taken from your father.

In the last budget, the finance minister announced exemptions for mediclaim charges paid for senior citizens. However, I am not sure if it has yet been notified and effective. I need to take medical insurance for both my parents, who are senior citizens.

I would appreciate if you can let me know.

?Girish Bonde

Earlier Sec 80D deduction in respect of medical insurance premium was Rs 15,000 for an individual and Rs 20,000 for a senior citizen. However, from this year, if someone were to buy medical insurance for his parent/s, an additional deduction of Rs 15,000 (over and above Rs 15,000) will be available. If such parent/s were senior citizen, the additional deduction would be Rs 20,000. So a person insuring himself, his spouse, children and parents could potentially get a deduction of Rs 35,000. This provision is effective from 1.4.08.

I would like to know that if somebody is receiving HRA from their employer and staying with their parents, can he/she pay rent to the parents and get the HRA deduction. What documents are needed? I mean is a simple rent receipt allowed or is an agreement required?

?Sarika Khot

There is a deduction available from the House Rent Allowance amount (HRA) if the taxpayer pays rent for the premises he or she resides in. If you pay rent to your parents for living in a house owned by them then indeed you would be able to claim HRA deduction. If no rent is paid, then there is no deduction available. However, this transaction should not be entered into to evade tax. In other words it should be a genuine arms length agreement between you and your parents. Also, note that your parents would have to include the rent you pay in their taxable income.

I own a flat in Mumbai for which I am paying housing loan EMI every month.

I am staying in a rented house in Mumbai as this is near to my work place and I am entitled to HRA from my employer.

My question to you is can I avail deduction in income tax for both of these i.e. on housing loan EMI and HRA for which I will be producing rent receipts. Is this possible to claim tax deduction for housing loan EMI and HRA simultaneously?

?Jigar Shah

HRA and home loan provisions are two different issues as far as the Income Tax Act (ITA) is concerned and one does not influence the other. So, you may own a flat or any number of flats, either in the same city that you work in or anywhere else in the whole of India or for that matter abroad — this will, in no way influence the HRA deduction that you are entitled to. Conversely, notwithstanding the amount of HRA that you receive, your home loan deductions on the EMIs for the house that you have bought or intend to buy will not be affected.

When I went to file my tax returns, the official at the counter asked me to submit my Form-16 as well as TDS certificates. This has come as a surprise to me as I was under the impression that now tax return forms are supposed to be annexureless. In fact, last year I have submitted my return without any annexures. In this regard, has there been any circular or order from CBDT specifying that the rules have been changed?

?R J Nair

Yes, there is a circular but it states quite the opposite. CBDT has issued a circular (No 6 dated. July 18, 2008) that in fact specifies that tax returns have to be indeed filed without any annexures. The relevant extract of the circular is reproduced hereunder:

?2. It has come to the notice of the board that in spite of the directions contained in the instructions for filling the return forms, the practice of accepting returns, along with annexures is still continuing. This practice goes against the expressed policy of the government and is not in consonance with the legal provisions. Therefore, it is emphasised that chief commissioners of income tax must ensure strict compliance with the provisions of law. It may be reiterated that all annexures accompanying the income tax return forms should be detached and returned to the tax payers by the receiving official.?

The authors may be contacted at

wonderlandconsultants@yahoo.com