My son is living overseas for the last 3 years & visits India for about 3-4 weeks every year.The query is:
• Can I file his income tax return for income from bank interest etc in India on his behalf?
• Can he invest in PPF & claim Sec. 80C deduction?
Ratan
Assuming your son is employed abroad, his status will be that of NRI. If his Indian income is not above Rs 1.60 lakh, he need not file a tax return. However, if he so desires, in spite of having lower income, he may voluntarily opt for filing. You may file on his behalf as his representative assessee. As an NRI, he may invest in PPF only if he had an already existing PPF account running before becoming NRI. In other words, he may continue to contribute to his already opened PPF account till its maturity. As an NRI he will not be allowed to extend this PPF account or open a fresh PPF account.
I hold some shares in a company that has announced a bonus issue. In this regard, can the notional loss on sale of original shares be adjusted against the gain on sale of bonus shares?
Sinha
The answer to this question would depend upon the date of acquisition of the original shares. If the original shares are over one-year old, there will be long-term loss. Now, since long-term gains on equity are tax-free, the long-term loss cannot be adjusted against any other income. In other words, the long-term loss on the sale of original shares cannot be adjusted against the short-term profit on sale of bonus shares.
I am a housewife and have recently earned about Rs 50,000 through tuitions. I want to invest/ trade in stocks. Do I have to maintain any records/documents?
Ritu
It is not clear from your question if the Rs. 50,000 that you refer to is your only income. If your total income for the financial year is less than the basic exemption limit, you do not have to file a tax return. However, it would be advisable to maintain records like the broker’s note etc. for calculating the trading gains / losses. These will also serve as supporting papers in case asked for by the IT officer.
What are the recent changes with respect to gift tax?
R Rao
The Income Tax Act 1961 has been amended with effect from 1st October 2009 to provide that any gift-in-kind, being an immovable property or any other property, the value of which exceeds Rs.50,000 (rupees fifty thousand), will become taxable in the hands of the donee, being an individual or HUF. Therefore, any such person who receives a gift of any such property on or after 1st October 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
• From a person who is a relative;
• On the occasion of marriage of the individual;
• Under a will or by way of inheritance;
• In contemplation of death of the donor;
• From any local authority as defined in the Explanation to section 10(20) of the Act;
• From any fund or trust established under section 10(23C) of the Act;
• 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
Some time back, I had invested in the zero coupon Nabard bonds. However, I am not too clear on the taxability of these bonds. Is the tax to be paid each year on interest on an accrued basis or does it have to paid at the end on a cumulative basis? In other words, will the difference between the issue price and the redemption price? the interest?get added every year to the taxable income or will the tax have to be paid at the end?
Abhay
Nabard bonds also known as Bhavishya Nirman Bonds are essentially 10 year zero coupon bonds. These bonds also known as zero coupon bonds or deep discount bonds are bonds that offer no interest i.e. the coupon is actually zero. However, these are issued at a discount to the face value and the difference between the issue price and the face value is essentially the return that the investor gets. For an example, the issue price of a bond may be Rs 8,500 for a maturity value of Rs 20,000. The discount of Rs 11,500 is the return for the investor.
The tax is to be paid only at maturity and not from year to year. The difference between the issue price and the maturity value would be taxed as capital gains. The investor has the option of paying capital gains tax @10% on the difference between the maturity value and the issue price or @20% on the difference between the maturity value and the indexed issue price.
I live in rented premises, for which I claim the deduction on HRA from my employer. Recently I have inherited a house from my grandfather. However, this property is in a different part of the city and I don?t think I will ever live in that flat. I plan to sell the property as and when I get a good price for it. However, in the meantime, it has resulted in a situation where I own a property and still stay in a rented apartment. So the question is can one enjoy HRA exemption while owning a property in the same city?
Tambe
The only two situations under which the exemption cannot be claimed are
• The residential accommodation occupied by the assessee is owned by him ; or
• The assessee has not actually incurred expenditure on payment of rent in respect of the residential accommodation occupied by him.
There is no restriction on claiming the HRA deduction as long as you continue to live in a rented premises and actually pay the rent yourself. Your owing another property either in the same city or elsewhere has no bearing on the issue.
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