Has the government now made it mandatory to cut TDS (Tax Deducted at Source) at 5% on interest on small savings schemes?
– Gopal Nag
Normally, interest earned on small savings scheme attract TDS @ 10%. If the interest amount doesn’t exceed Rs 10,000 in the case of deposits with bank and post offices, no TDS is deducted. In some cases, this limit is Rs 5,000. The TDS rate would depend on the kind of scheme you have invested in.
I own a house property along with my wife in a 50:50 ratio. I want to transfer my 50 % ownership as a gift to my wife so that she is 100% owner of this property. How can I transfer the 50% share and will it attract any tax liability or stamp duty registration payment.
You can transfer your 50% share in the house to your wife by executing a gift deed. Stamp duty implications on such gift have to be analysed. You will not be liable to pay capital gains tax on this transaction as gift of immovable property is not treated as transfer for the purpose of capital gains. However, any rental income derived from this house shall be clubbed in your income under Section 27 of Income Tax Act, 1961.
The lowest slab on income tax is 5% but TDS remains at 10%. On income slab of up to `5 lakh I would be paying more as TDS than actual due tax. Kindly advise the way out.
– Aman Kumar
You can apply for refund of TDS deducted in excess of your overall tax liability by filing your income tax return. However, if you don’t want to opt for refund, you can apply for a certificate of lower deduction under Section 197 of the Income Tax Act with your jurisdictional assessing officer. To apply for such a certificate, you will need to produce your previous year’s tax returns and a tentative computation of income and tax liability thereon for the year under consideration along with any other documents as asked by the concerned officer. If satisfied, the officer will issue you a certificate for lower deduction and you can furnish a copy of such certificate to the payer and the payer will need to deduct TDS at the rate specified in the certificate. This certificate is valid for one financial year only.
The writer is partner, Ashok Maheshwary & Associates LLP. Send your queries to firstname.lastname@example.org