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Can I claim standard deduction from pension received from EPFO?

"The standard deduction of up to Rs 50,000 is available for income from salary. "

ET CONTRIBUTORS|
Jul 22, 2019, 03.50 PM IST
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CBDT has clarified that the maximum standard deduction would be Rs 50,000 or the amount of pension, whichever is less.
I earn a pension of Rs 26,736 from the EPFO and interest income of Rs 3 lakh from fixed deposits. Can I claim the standard deduction of Rs 50,000?

Archit Gupta, CEO, ClearTax replies, "The standard deduction of up to Rs 50,000 is available for income from salary. As the pension received from EPFO is taxable as salary, it will qualify for the standard deduction. However, the Central Board of Direct Taxes has clarified that the maximum standard deduction would be Rs 50,000 or the amount of pension, whichever is less. So, you will be eligible to claim a standard deduction of Rs 26,376."

I invested in equity-oriented mutual funds in April 2015 and redeemed the investment in May 2018. The redemption value is more than the sum invested and less than the NAV on 31 December 2018. What should I consider as my cost of acquisition for calculating capital gains?

Amit Maheshwari, Partner, Ashok Maheshwary and Associates replies, "Assuming that you mean 31 January 2018 and not 31 December 2018 (which is not relevant for comparison), the redemption value would be taken as the cost of acquisition for calculating capital gains as it is lower than the NAV on 31 January 2018 and higher than the actual cost. There will be no capital gains in this transaction."

I want to pass on my movable and immovable assets to my spouse and my children as I have been not keeping well. Will there be any tax implications?

Archit Gupta, CEO, ClearTax replies, "You can distribute your movable and immovable assets through a will. The transfer will qualify as gifts to relatives and there won’t be any tax implications. A will helps avoid disputes among legal heirs. In the absence of a will, the assets would come to the legal heirs as inheritance, which too won’t have any tax implications. But if the recipients of such gifts earn any income from them, the income would be taxable in their hands."
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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