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June 27, 2000

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"Is pension eligible for standard deduction?"

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

I applied for the PAN an year ago during a very brief visit to India. I do not have the 'acknowledgement' or any such references to that application, in my possession as of now. Is there any way I can get my PAN?

Sanjaya Hasthak

It is very difficult to get your PAN if you have missed it via the post. However, we suggest the following alternative. If you know the ward number where you have filed your last return, you could approach them and request them to search the same for you based on your name. The respective ward officers generally have a computerised list of all PAN/ GIR Nos. falling within their jurisdiction and that is the only way you can get your number.

I had invested Rs 5,000 in IDBI retirement bonds in 1996. I do not have any income coming under the heading of interest on bank deposits/securites (80L). Now IDBI has given the call option for redemption. I am getting a return of Rs 4,700 on an investment of Rs 5,300 in four years. Should I pay any income tax on this? Can this income be treated under 80L?

Abhinav K

From the information provided by you, it seems that you wold be eligible to receive Rs 4,700 over and above the investment made by you (i.e. Rs 5,000). In your case, as IDBI has given you the call option for redemption, such income (Rs 4,700) received by you would be taxable as interest under the "Income from other sources". Accordingly, you would be eligible to section 80L deduction on the same up to the limits specified therein.

I am a salaried individual whose TDS has been deducted from the salary for the last five years. But I have not filed any returns so far. Please let me know whether I am an assessee in default. I applied for a PAN number two years ago and got it recently.

Vivek Iyer

Every person, if his/her total income exceeds the maximum amount which is not chargeable to tax, is required to furnish a return of his/her income voluntarily within the due dates prescribed (in your case June 30 of every year). If such return is furnished after the due date or is not furnished, the assessee is liable to pay interest under section 234A. Interest under 234A is calculated @ 2% (1.5% from June 1, 1999) per month or part of the month from date immediately following the due date of furnishing of return or the date of assessment (where no return is filed) whichever is earlier. In computing such interest, the following is relevant:

  • Determine the tax liability
  • Reduce any advance tax paid or any tax deducted at source
Say your tax liability is Rs 15,000 and TDS is Rs 12,500 and advance tax paid by you is Rs 1,500. In this case the amount that would be considered for the purpose of interest u/s 234A is Rs 1,000 (15,000 - 12,500 - 1,500).
Moreover, you would also be liable to pay penalty u/s 271F of Rs 1,000 if such return is not filed before the end of relevant assessment year (applicable from April 1, 1999).

I am a retired person, receiving pension from a limited company under private sector. Can the pension received from the employer be treated as income under the head "Salaries" under Indian Income-Tax Act? If yes, is it eligible for standard deduction?

Sudhakar V Gokhale

Yes, the pension received by you is taxable under the head salaries under section 15 of the Income Tax Act, 1961. You would be eligible to claim standard deduction under section 16(1) as follows:

  • If salary is less than Rs 100,000: Rs 25,000
  • If salary is more than Rs 100,000 but less than Rs 500,000: Rs 20,000
  • If salary more than 500,000: Nil
This is subject to an overall limit of 33.33 per cent of your salary.

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