I am working in a bank and I have got reimbursement of Rs 24,000 as domiciliary treatment from the bank for the heart ailment in this financial year. As this amount is more than Rs. 15000 p.a., will it be included in my income for this year? My employer is deducting TDS on Rs. 9,000 which is the amount over and above Rs. 15,000.

— Lubana

U/s 17, some of the perquisites are either totally exempt or exempt up to prescribed limits. The following are the perquisites related with health.

• Medical facility provided to the employee or any family member in hospitals, clinics etc., maintained by the employer.

• Reimbursement of expenditure incurred by an employee or any member of his family in hospitals, dispensaries etc., maintained by the government, a local authority or in other approved hospitals.

• Payments for prescribed ailments by the employer directly to any non-government hospital approved by a CIT. The employee should attach with his returns a certificate from the hospital specifying the ailment and also the receipt for the amount paid.

• Group medical insurance for employees under any scheme approved by the Central Government or IRDA or reimbursement of insurance premium to the employees who have taken such medical insurance for themselves and their families. Only the amount received by the assessee under the health insurance policy taken by his employer is taxable as perquisite u/s 17(2v), not the contributions made by the employer towards other insurance policies. The assessee has not acquired any vested right over the contribution and the policy?s benefit is contingent in nature, being dependent on the relevant insurance plan. [JCIT vs T. Adachi FY 1995-96].

• Reimbursement up to Rs. 15,000 in a year, for medical treatment for himself and his family members from any doctor.

If your case falls in any of the above mentioned categories (except the last one), you are entitled to get the benefit. Otherwise, your case is governed by the last category and your employer is justified in deducting tax on the extra Rs. 9,000.

I have a query regarding tax rebate on second home. I have taken second home loan in August-2008 and property was under construction. Now I have got possession of this property in Feb-2009. So I want to understand can I not claim the interest component on second property as a tax deduction? My company has denied it. I was thinking about claiming the same during filing of income-tax return.

— Zare

One self occupied property may be taken by the assessee to be tax-free. The second property even if not let out will be deemed to be let out and such notional rental income will be brought to tax. On the tax-free property, the limit on interest deduction is Rs. 1.50 lakh. On the let out / deemed let out property, there is no limit on interest deduction; the entire amount of interest can be taken as tax deduction. If your company doesn?t consider the deduction through payroll, you are free to claim the same through your tax return.

I am working for a private limited company as an accountant, handling one of the group company. We make provision for the TDS in the books on the last date of the month. We pay salary, adjusted for TDS, to the staff on 15th of the next month. Within what period should I pay the TDS amount to the Government? Is it within seven days from the date of credit i.e within 7th of Feb 2009 for January salary or seven days from the date of payment of salary i.e. on 22.2.09?

— Bipin Anchan

A : Sec. 200 read with Rule 30 requires the person responsible for applying TDS to deduct tax on salary at the time of paying it and credit the amount of TDS to the credit of the central government within one week from the last day of each month on which income tax is due. Since the salary is paid on February 15, the payment to the central government must be made on or before March 7.

My employer has given us an option to either take away the funds lying in our PF account or they will transfer the same to government PF.(its a private PF) If I take this amount will it be taxable when I receive it. Or will it be prudent to transfer it to government PF? For your information, my company PF is a recognised provident fund and I have been contributing for 15 years.

— Keshavji Dedhia

The accumulated balance due and becoming payable to an employee participating in a recognised provident fund shall be excluded from the computation of his total income?

I. if he has rendered continuous service with his employer for a period of five years or more, or

II. if, though he has not rendered such continuous service, the service has been terminated by reason of the employee?s ill-health, or by the contraction or discontinuance of the employer?s business or other cause beyond the control of the employee, [or]

III. if, on the cessation of his employment, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised provident fund maintained by such other employer.

It would be better to transfer your account to the Commissioner of Provident Fund unless you feel that you can earn more than after-tax income from any other source.

The authors may be contacted at wonderlandconsultants@yahoo.com