The Hindu Business Line : No tax benefit for farm losses

I am working with a private firm in Thanjavur and have purchased a flat in Chennai and let it out for Rs 2,000 a month. I spent Rs 6,000 on white washing, property tax and miscellaneous expenses. I am residing in a rented house in Thanjavur and am paying Rs 3,000 as rent. Is it possible to claim any tax benefit for the excess rent I am paying at Thanjavur and for the maintenance I have incurred for the Chennai house?

Also, I had purchased an agricultural land through a bank loan and cultivated paddy on it. This year, due to cyclone, I incurred huge losses due to agricultural activities. Can this loss be treated as capital loss and can I claim any tax deduction for this loss?

My father is 72 and dependent on me. In November he had neuro brain stroke and was hospitalized. I spent more than Rs 30,000 on his treatment. Is this expenditure eligible for deduction u/s 80DDB? – C. Saravana Kumar

You will not be able to claim maintenance of the Chennai flat as deduction. When a property is let out, 30 per cent of the annual value is allowed as deduction. This deduction is essentially meant to take care of the repair expenses. You cannot claim the excess rent paid by you as deduction. You may, however, examine the possibility of claiming exemption u/s 10(13A) or deduction u/s 80GG in respect of the rent paid.

Section 10(13A) allows an exemption computed in accordance with the provision if the individual is in receipt of house rent allowance. Section 80GG allows a deduction computed in accordance with the provision if the individual is not in receipt of house rent allowance.

It is to be remembered that agricultural income arising from a land in India is exempt u/s 10(1) of the Act. In case the income is exempt, the loss apparently has to be ignored and no tax benefit would be available in respect of such loss. As for claiming deduction on father’s treatment, Section 80DDB allows deduction to an individual or HUF for expenses incurred on treating certain diseases and ailments.

The ailments for which deduction can be claimed are mentioned in Rule 11DD and include neurological diseases where disability has been certified to be 40 per cent or more in dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and Parkinson’s.

It is not clear if neuro brain stroke falls within the categories mentioned in the rule. If it does, deduction can be claimed u/s 80DDB.

A certificate in prescribed format needs to be furnished from a specialist working in a Government hospital to claim the deduction, which can be the amount paid for treatment or Rs 40,000 whichever is less. If the person is a senior citizen, the bar is the treatment amount paid or Rs 60,000 whichever is less.

This section further provides that the deduction will be reduced by the amount received from an insurer, under insurance, or reimbursed by an employer.

Does tuition fee, allowable as deduction u/s 80-C, include term fees, admission fees, stationery fees, extra activity fees, annual fees, library fees and computer fees? – Sanjay Patil

The deduction that is available under this section is in respect of sums paid as tuition fees (excluding any payment towards any development fees or donation or payment of a similar nature) whether at the time of admission or after to any university, college, school or educational institutions in India for the full-time education of any two children of an individual.

Out of the items listed by you, stationery fees and extra activity fees are apparently not in the nature of tuition fees. All the other items enumerated by you appear to be essentially in the nature of tuition fee. This being so, out of the items enumerated by you, stationery fees and extra activity fees will not qualify for deduction while the other items mentioned by you will qualify.

Is a one-time amount received as foreign bank remittance towards lottery prize taxable in the hands of a resident Indian? – Shalini Damodaran

Lottery income would be a taxable income and in a case you are a resident of India, the foreign bank remittance towards lottery prize – apparently a foreign lottery – will be taxable in India. You may, however, examine the possibility of claiming benefit under Double Taxation Avoidance Agreement between India and the other country or credit u/s 91 of the Income Tax Act if there is no Double Taxation Avoidance Agreement.

Am I eligible for claiming deduction in respect of the tuition fees paid for the education of my sisters, who are dependent on me? – Jobin Joseph

No deduction can be claimed by you in respect of expenses incurred by way of tuition fees on your sisters’ education though they are dependent on you.

(Mail your queries to taxtalk@thehindu.co.in or by post to `Tax Talk', Business Line, Kasturi Buildings, 859, Anna Salai, Chennai-600002)