I am a retired Central Government employee. For the financial year 2007-08, I have only interest income from bank and post office for which tax has been deducted at source.

Am I eligible for claiming deduction under Section 80C in respect of the investments made by me in PPF account and NSC?

My previous employer who has deducted tax on the CPF interest amount paid to me during the financial year 2007-08 has not given the TDS certificate. What is the remedy available to me in respect of the same? — Anonymous

The interest income from bank and post office will be chargeable to tax in your hands under the head income from other sources.

You will be able to claim deduction under Section 80C in respect of investments made by you in PPF account and in NSCs. Since you are a retired Central Government employee, you are also likely to have a pension, which would be assessable under the head salaries. Credit can be claimed for tax deducted at source on such incomes.

As regards the failure to receive TDS certificate from your previous employer, your only remedy may lie in informing the concerned joint commissioner who may initiate penal action for such failure under Section 272A(2).

This may at best work as some kind of a threat which may induce the former employer of yours to issue the TDS certificate. You may, however, note that Section 205 of the Act makes a specific prohibition on the recovery of taxes already deducted by the payer, from the payee, which would apply even if the payer has not remitted the tax so deducted or has not issued a TDS certificate.

This view is also supported by the decision of the Gauhati High Court in ACIT v Om Prakash Gattani [2000] 242 ITR 638 (Gau).

I am working in the US on work permit (H1 Visa). I would like to transfer some money to my savings account in India.

Do I need to pay tax for the money that I transfer to India, as I am already paying tax in the US? — Upendra S.

No tax will arise merely on the transfer of money from the US to India. You will have to examine your residential status under the Income Tax Act.

If you are a resident and ordinarily resident in accordance with Section 6 of the Act, the income earned by you will be taxable in both countries.

It may also be that the income is taxable in both countries in accordance with the Double Taxation Avoidance Agreement between India and the US, if you are a resident of India in accordance with the said agreement.

If the income is taxable in both countries, even on the basis of the Double Taxation Avoidance Agreement between India and the US, you may take the benefit of Article 25, which provides that the taxes paid in the country of source will be allowed as a credit in the country of residence. You will have to examine based on facts as to whether you are a resident of India or of the US as per the Double Taxation Avoidance Agreement and claim credit in the country of residence, the tax paid in the country of source on the doubly-taxed income.

You may note that under the Double Taxation Avoidance Agreement you are most likely to be a resident of India in which case credit should be allowed in India in respect of the tax paid in the US on the doubly-taxed income.

You may also note that the credit that would be allowed in the country of residence will be the lower of the tax payable in the country of source or in the country of residence on such doubly-taxed income.

If, however, you are a resident but not ordinarily resident or non-resident in accordance with Section 6 of the Income Tax Act, the income earned by you in the US will not be taxable in India. All these provisions will apply whether or not you transfer money into India.

I purchased a land for Rs 4 lakh on June 5, 2007, and donated the same a week later to a corporation, which is notified and approved.

Is this donation in kind eligible for deduction under Section 80G of the Income Tax Act? — Shanky Bhandari

You have in the query not stated whether the donation was made to a public charitable trust. You have stated that the donation was made to a corporation.

A donation made to a corporation will not qualify for deduction under Section 80-G, even otherwise a donation in kind will not qualify for such deduction.

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