A salaried employee with a private limited company, I pay R10,000 per month as rent. Is there any way to claim deduction of rent against my income — my salary does not have the HRA component?
—Vinod Kumar Gupta

Yes, you can claim deduction of rent paid from your total income under Section 80GG of IT Act, 1961, which is, however, restricted to the amount computed as per the prescribed method. Further, another condition is that your spouse or minor child or Hindu Undivided Family (HUF), of which you are a member, does not own any residential accommodation where you reside or perform your
office duties.

I have taken a home loan from a private bank. Due to rising rates, I am considering switching the loan to a nationalised bank at a lower rate. But the current bank will charge switchover fees. Will I get any deduction against the switchover fees?
—Pawan Singh

Under Section 24(b) of IT Act, 1961, deduction for interest on borrowed capital is available only for specific purposes, i.e., on capital borrowed for construction, purchases, repairs and renovation of house property and not for any other purposes. As such, you cannot claim deduction against switchover fees for transfer of loan from one bank
to another.

I have been a partner in a firm for the last 35 years. Due to my rising age, I will retire in a couple of months. My partners are planning to gift me R5 lakh as a token of appreciation. Will I get any exemption on the gift received by me?
—Abhishek Shukla

Any sum of money received without consideration, i.e. gifts, in excess of R50,000 a year by an individual is liable to tax under Section 56(2)(vii) of the Income Tax , subject to certain exemptions. As the sum would be gifted to you by the firm, you would be liable to income tax on its receipt.

I am working with a state-run bank and am posted in its Bangalore zonal office. I was earlier posted in Mumbai and I own a flat there. As I am not occupying the flat, the society charges non-occupancy charges and other additional charges as per its bye-laws. Can I claim deduction on such charges paid by me against the rental income if I let out the flat?
—Piyush Sinha

You cannot claim deduction on the sum paid towards non-occupancy and other charges while computing the rental income from house property. The expenses that are allowed as deduction against income from house property are payment of municipal taxes and the interest on housing loan, subject to specified conditions. Further, a standard deduction of 30% of net annual value is also allowed.

During FY15, I, along with my wife and children, had formed an HUF. I have certain businesses carried out through it. I am
the Karta of the HUF. My question: Will the profits of the HUF be added to my income for
tax computation?
—Amit Goel

The income of the HUF will not be added to your income for computing the total income. In fact, an HUF is considered a separate entity for the purpose of income tax and it is liable to tax in its own capacity — a separate return has to be filed for an HUF.

As such, any income that has already been taxed in the hands of the HUF cannot be taxed in the hands of the individual Karta.

By Suresh Surana

The writer is founder of RSM Astute Consulting Group
Send your queries at fepersonalfinance@expressindia.com