I am a 62-year-old businessman and hold a senior citizen card issued by the government to avail various benefits. I am yet to submit my return for financial year 2010-11. Can I avail the benefits of the tax slabs available to senior citizens under the income-tax Act?
? Sunrat Dutt
For financial year 2010-11, a person will be considered as a senior citizen only if he attains the age of 65 years during that financial year and, as such, you are not eligible for the tax benefits available for senior citizens. However, you shall be eligible in the next financial year, 2011-12, as the age limit has been reduced from 65 to 60.
I have taken a home loan from a bank. But, with rising interest rates, I wish to switch to a lower interest charging bank. Will I get any deduction for the switch-over fees paid for it?
?Amarinder Gill
Deduction for interest on borrowed capital under Section 24(b) is available only for specified purposes, i.e., for capital borrowed for construction, purchases, repairs and renewal of house property and not for any other purpose.
As such, deduction for switchover fees will not be allowed as deduction under Section 24(b) of the Income tax Act,1961.
I have been working abroad for about 20 years. Recently, I joined an Indian company where my gross salary is R72 lakh. I pay a monthly rent of R50,000. Do I have to deduct tax at source from the rent payment as it exceeds R1,80,000 per annum?
?SL Mohan
According to the provisions of Section 194-I of the Income Tax Act, 1961, an individual is required to deduct tax at source on rent, only if he is subject to tax audit specified in Section 44AB in the immediate preceding previous year.
Tax audit is applicable if the income exceeds certain specified monetary limits. However, the stated monetary limits are only applicable to individuals engaged in a business or profession and not to a salaried employee. Accordingly, you are not required to deduct any tax at source from the rent paid by you.
Can I pay mediclaim on behalf of my mother-in-law and claim deduction under Section 80D of the Income Tax Act?
?Suman Mustafa
An individual is allowed to claim deduction under Section 80D when the policy is taken on the health of the assessee, his spouse, parents (dependent or not) and dependent children. Accordingly, you cannot claim the deduction under Section 80D in respect of mediclaim paid for your mother-in-law.
The writer is founder of RSM Astute Consulting Group
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