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April 10, 2000

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"What should I do to receive my refund?"

The Rediff Money Channel presents everything you wanted to know about tax issues, but didn't know whom to ask.

I took a house loan of Rs 6,40,000 in four equal installments in December 1998 and thereafter in March, June and September 1999 from the Army Group Insurance Fund (AGIF) at a 14.5 per cent rate of interest.
The apartment is constructed by the Army Welfare Housing Organisation (AWHO) and was acquired in October 1999. I am repaying the loan in 180 EMIs of Rs 7,271 starting October 1999.
Please advise me on how much tax rebate can I avail under all heads for FY ending March 2000?

Indrabalan

In the absence of information, it is presumed that the flat acquired by you is being used by you for your own residence. On this presumption, the answers that you seek are as under:

  • First of all, you will have to obtain from Army Group Insurance Fund(AGIF) a certificate giving the break-up of the EMIs paid by you upto 31st March, 2000. This certificate should give separate figures of Interest paid and the principal amount of loan repaid.
  • The principal amount of loan repaid will be eligible for rebate under section 88 alongwith other eligible investments such as PPF, Life Insurance Premium etc.
  • The interest paid will be treated as Loss from House Property and subject to a maximum of Rs 75,000, be allowed to be set off against your other income.
  • However, please note that the limit of Rs 75,000 applies to loans taken after April 1, 1999. In your case, the Income Tax Department might take a stand that the loan was taken by you before April 1, 1999 and accordingly, the limit should be Rs 30,000 and not Rs 75,000.
  • The amount of interest paid on the loan for the period upto March 31, 1999 will be allowed as a deduction as mentioned above in five equal instalments for the five years starting from year ended March 31, 2000 (which is the year in which you acquired the property).

I has been to US on H1-B visa for 31days. There I received a substantial part of my salary as housing rent allowance. I want to know whether its taxable in India . If yes, then how will the tax calculation be done on it.

Shilpi Jain

Most companies give a housing allowance or subsistence allowance to Indians who go abroad for employment purposes. Presently, such allowances are not subject to tax in India provided the entire amount is genuinely spent by the employee for the purpose for which it has been given to him/her. In the event that any portion is saved and brought back to India, then such amount (which is brought back to India) would be taxed in India as part of Salary.

I was working in Mumbai from 1998-1999. I applied for PAN in June 1999. In July 1999, I came to US on H1 visa. My company is paying my regular salary in India also. I understand that I need to file my Income tax returns this year too.
But I have not yet received my PAN number. My Mumbai address is same as I had given in PAN application form. Where do I contact them? Any phone number, email, web site? Or can I apply again on net? Which site?

Sushant Tyagi

The problem faced by you is a very common one which thousands of Indians are facing today. The Income-tax Department is just not equipped to deal with the deluge of applications received by it for allotment of Permanent Account Numbers.
In all cities, there is a central office in the Income-tax Department which is in charge of allotting PANs. The records relating to this Department are computerised. You should go to this PAN Cell in your city and ask them to check the data in their computers. They will be able to give you your PAN. Since you are from Mumbai, the address of the PAN Cell is:

Block C-13
Pratyaksha Kar Bhavan
Bandra Kurla Complex
Bombay 400 051

I am quite confident that if you try to contact them on phone, you will not receive a satisfactory response. There is no web site from which you can apply again.

I understand that the limit of Rs 75,000 for claiming interest as a deduction is applicable only in case of a self-occupied property. Is it correct that the entire amount paid as interest on housing loan ca be deducted u/s 24 in the case of a let-out property. Can any loss under the head house property be set-off against income from salaries and loss can be carried forward to the next year?

Srikanth

What you have understood about the deductibility of interest on a housing loan is correct.
The loss under the head Income from House Property can be set off against income under any other head. If any part of the loss is not set off against other income then the unabsorbed amount is to be carried forward to the next assessment year for being set off against 'Income from House Property' for that next year.
In this manner, the loss can be carried forward for a maximum of eight assessment years immediately succeeding the year for which the loss was first computed.

I had filed my tax return for 1997 in 1998 and I have not yet received my refund. After that I am in the US. What should I do to receive my tax refund?

Sanil Gajendra

Normally how long does it take for the Income Tax Department to process Income Tax refunds for the financial year? Who should one contact in case it is well over the stipulated period?

Swaranjit Singh

The time taken to issue refunds depends on the which officer is passing the order. Some of the officers are quite efficient and are known to issue refunds even within a month of the filing of the Return of Income. As against this, in some cases, refunds are not received for several years.

In case more than 12 months have passed since you have lodged a claim for refund, you should write a letter to the Officer in whose charge you have filed the Return reminding him to issue the refund. In the letter, you should give details of the date on which you filed the Return and give reference of the Acknowledgement Number of your Return.

Request the Officer to issue the refund alongwith Interest under section 244A @ 1 per cent per month from April 1, 1997 (in case of Return filed in 1997) and April 1, 1998 (in case of Return filed in 1998) upto the date of granting the refund.

For prompt action, you can endorse a copy of the letter to the officer's superior (if you are assessed with an Income Tax Officer or an Assistant Commissioner of Income Tax then send a copy to the Deputy (or Joint) Commissioner of that ITO or Asst. Commissioner.

I'm a salaried employee. So my IT from salary is deducted and paid to the IT dept from my office itself. In addition to this I'm having other sources of income like capital gains. Where should I make the IT payment due for these and in which form do I file the returns?

Shiva

You have two options:

  • Give details of your other income to your employer and ask him to deduct tax from the salary after taking into consideration this income also.
  • Compute the other income, add it to your salary income, compute the tax payable on the total income, reduce the rebates, reduce the TDS from Salary and the balance amount payable would have to be paid by you as advance tax in 3 instalments - 30% by September 15, another 30 per cent by December 15 and the balance 40 per cent by March 15.

I am a salaried person in a private organisation. Please compute tax payble in the following case of monthly salary of Rs 18,300:
Basic: Rs 11,500
HRA: Rs 5,500
Transport allowance: Rs 800
Medical allowance: Rs 500
Actual rent paid: Rs 5,500
Savings u/s 88: Rs 70,000
Saving u/s 80CCI: Rs 9,228 (Jeevan Suraksha)
Kindly let me know what tax is payble with special focus on the medical allowance taxability aspect.

Sudhir Trikha

As regards the medical benefits, please note that reimbursement of medical expenses actually incurred by you would not be treated as a taxable perquisite in your hands subject to a maximum of Rs 15,000 per annum.

The Income-tax Department has been taking a stand that a fixed monthly allowance paid towards medical expenses is not the same as reimbursement of medical expenses. And so, it has been taxing such a fixed allowance as part of taxable salary. In short, medical benefits are tax free in your hands only if they form a reimbursement of actual expenses (which should be supported by medical bills).

Presuming that the medical allowance and the transport allowance are fully exempt in your hands, and presuming that you are located in either of the 4 metros of our country, your taxable salary would be as under:

Basic salary

 

Basic salary

Rs 11,500 x 12 months

 

Rs 1,38,000

House Rent Allowance

Rs 5,500 x 12 months

 

Rs 66,000 

Total

 

Rs 2,04,000

Less: Exemption in respect of HRA

 

 

Lower of the following 3:

 

 

Actual HRA

Rs 66,000

 

50% of salary

(Rs 1,38,000)

Rs 69,000

 

Rent paid minus 10% of salary

(Rs 66,000 Rs 13,800)

Rs 52,200

 

 

 

Rs 52,200

 

 

Rs 1,51,800 

Less: standard deduction

 

Rs 20,000

 

 

Rs 1,31,800 

Less: deduction for Jeevan Suraksha

 

Rs 9,228

Taxable salary

 

Rs 1,22,572 

Tax payable

 

Rs 13,514

Less: rebate under section 88

 

Rs 13,514 

Balance tax payable

 

Nil

 

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