Income tax filing FAQs part 1
The losses under the head income from house property can be considered by your employer while computing the TDS on the salary.
Can loss under the head income from house property be considered while computing the TDS on the salary?
Yes, the losses under the head income from house property can be considered while computing the TDS on the salary. However, no other losses can be set off against the salary to reduce TDS.
Can I avail the deductions under section 80C to 80U if the only source of income I have is from the long term capital gains?
No, you cannot avail the deductions under the section 80C to section 80U if the only component of your gross total income is long term gains. However, if you're a resident individual you can count your long-term capital gains as included in the basic exemption limit of income chargeable to tax. NRI cannot avail this adjustment.
Are Pension and family pension both taxable under the head 'Income from salary'?
No, pension is taxable under the head 'Income from salary' and family pension received is taxable under the head 'Income from other sources'.
Do I need to pay any tax on the maturity amount received from the life insurance policies?
Section 10(10D) of the Income Tax Act states that any amount received under a life insurance policy including bonus is exempt from tax if they satisfy the following conditions:
1. In case of life insurance policies, issued after 01.04.2003 but on or before 31.03.2012, the annual premium payable should be less than or equal to 20% of the actual sum insured. Here the actual sum insured is the minimum sum insured in all the policy years and does not include bonus or premiums that are to be returned to the policyholder.
2. For the policies issued on or after 01.04.2012, the premium payable for any policy year should be less than 10% of the actual sum insured.
Am I required to pay any tax on the gift money received from my friend at the time of my wedding?
No, any money received from friends on the occasion of marriage of an individual is exempt from tax.
Am I required to pay any tax on the gift money received from my friend on any occasion?
Yes, you're required to pay tax on money received in the form of cash, cheque etc as gift if the value of the sum exceeds Rs. 50,000 in a year.
What amount will be chargeable to tax if the value of the gift exceeds Rs. 50,000?
In case the value of the gifts received from friends on any occasion apart from marriage in a year exceeds Rs 50,000 then the entire amount will be chargeable to tax under the 'Income from Other Sources' head.
It is important to remember that taxability of gift received depends on the aggregate value of all the gifts received during the year and not on the value of the individual gifts.
What are the possible cases when gift received is not taxable in the hands of the receiver?
The following gifts are not chargeable to tax:
a) Money received from specified relatives
b) Money received by an HUF from its members
c) Money received on the occasion of one's marriage
d) Money received under a will/via inheritance
e) Money received in contemplation of death of the payer or donor *
f) Gift received from a local authority defined in the section 10(20) of the Income Tax Act
g) Money received from a trust or institution registered under section 12AA
h) Money received from any fund, foundation, university other educational institution as mentioned in section 10(23C) of the Income Tax Act.
*Money received in contemplation of death of the payer or donor' means that any property or sum of money received by an individual from a payer or donor who is on death bed or dying to an illness.
Are gifts from certain relatives not taxable?
Gifts from following relatives are not taxable as per the Income Tax Act:
1. Spouse of the individual
2. Brother or Sister of the individual
3. Brother or Sister of the spouse of the Individual
4. Brother or sister of either of the parents of the individual
5. Any lineal ascendant or descendant of the individual such as grandfather, great grandfather, grandson or great grandson
6. Any lineal ascendant or descendant of the spouse of the individual such as grandfather, great grandfather, grandson or great grandson
7. Spouses of the people mentioned in point 2 to 7.
Are gifts received in kind taxable?
Yes, gifts received in kind whether movable or immovable are taxable if its value exceeds Rs 50,000.
Can income of a minor child be clubbed with the parents?
Yes, the income of the minor child can be clubbed with income of the parents.
What are the cases when income of the minor is not included with the income of the parents?
Following are the scenarios when income of the minor child is not included with the income of the parents:
a) Income earned by child on account of manual work done by the child himself/herself
b) Income earned by the child from an activity involving his/her skill, knowledge, talent, experience etc.
c) Income of a minor suffering from disability specified under the section 80U of the Income tax Act will not be clubbed with the income of the parents.
When is income earned by a minor clubbed with parents' income?
Any income earned on the investments done in the name of the minor is clubbed with income of that parent whose income, excluding minor's income, is higher.
Is there any exemption available when the income of the minor is clubbed with the parents?
An Individual can claim exemption under section 10(32) of Rs. 1,500 or income of the minor whichever is lower.