The Hindu Business Line : There's an old couple at the counter

WE ARE a private sector bank. A couple, husband and wife, both of whom are senior citizens, have a joint deposit account with us on which they have earned Rs 70,000. Can we accept Form 15H from both of them if they say that the joint income belongs to them equally? -- Mathew George, Chennai

I am sure you would have tackled the situation with ease had it arisen on or after June 1, 2003, because the Finance Bill, 2003 proposes to allow senior citizens to make an application for non-deduction of tax even though their total income is above Rs 50,000, the tax-free threshold. Your predicament is that if you view the interest income as that of the first depositor, obviously you cannot entertain his application because his income is more than the tax-free threshold. You must insist upon an affidavit from the couple stating that indeed the interest income belongs to them equally (Circular 256 of May 29, 1979).

Proof is in payment

WHILE deducting tax at source, we insist upon the originals of rent receipt, LIC premium, and so on. Some employees only produce a photocopy of these documents. Our anxiety is the same document should not be produced by the employee's spouse as well which is possible if the employer does not insist upon the originals. -- T. A. P. Krishnan, e-mail

You would agree that for claiming the tax rebate in respect of life insurance premium it is not necessary that the beneficiary must himself have paid the premium.

As an employer, therefore, you should be insisting upon proof of payment rather than on the LIC premium receipt. And as far as exemption for HRA is concerned, it is available to the employee who pays rent in excess of 10 per cent of salary.

Once again, you should be insisting upon proof of payment rather than a mere receipt because a receipt acknowledges the fact of receipt of an amount without delving into its source, that is from whose bank account it has come.

Rebate on loan

MYSELF and my wife purchased a land and paid registration fee thereon. Subsequently we got a loan in our joint names. Will we be eligible for tax rebate under Section 88 separately? -- Vanjiappan, Coimbatore

Yes, subject to a ceiling of Rs 20,000 each on the qualifying amount. This is assuming that both of you have paid at least Rs 20,000 each from your income. In other words, part of the EMI should have been paid by you and part by your wife. The registration fee for house property alone qualifies for tax rebate. Therefore, the one on land does not qualify.

SEBI vs ICAI

THE formats of interim financial statements prescribed by SEBI under clause 41 of the Listing Agreement varies from the one prescribed by AS-25 promulgated by the ICAI. Which one holds the field? -- N. Srinivasan, Chennai

It is good that the ICAI is taking a proactive role to patch up the differences with SEBI in this regard. This is yet another instance of too many cooks spoiling the broth. Strictly speaking, matters accounting are the ICAI's baby. We have another instance of avoidable confusion engendered by dual legislation — audit committee, as contemplated by SEBI, is vastly different in its composition from the one contemplated by Section 292A of the Companies Act. The sooner the respective jurisdictions of various regulatory authorities are clearly defined, the better it would be for everyone.

(ASK! Send in your queries on accounting, auditing, corporate law and taxation to ask@thehindu.co.in)

S. Murlidharan

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