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I AM a retiree, and have calculated income-tax myself. I do not intend to consult a CA for this small income. The details are as follows: Income from post office MIS, Rs 48,000; income from LIC Varishtha BemmaYojna, Rs 24,000; dividend income, Rs 13,580; interest, Rs 2,580; total income, Rs 88,160; short-term capital gain, Rs 16,593.73; short-term capital gain tax, Rs 1,659.37; education cess on tax, Rs 33.19; tax payable, Rs 1692.56. I would request you to kindly get it checked by your tax expert and oblige me.

Brahma Nand Singh

Your gross total income (GTI), excluding short-term capital gains, governed by Section 111A is Rs 88,160 as per your calculations.

This includes dividend from Indian companies of Rs 13,580 which is tax-free and ought not have been included in the computations at all and income from post office monthly income scheme of Rs 48,000 out of which Rs 12,000 enjoys deduction in terms of Section 80L.

This leaves you with an income of Rs 62,580 to which must be added short-term capital gain of Rs 16,594 resulting in a total income of Rs 79,174 which is below the Rs 1 lakh mark entitling you to 100 per cent tax rebate in terms of Section 88D which in your case would be Rs 1,659 (tax on short-term capital gains) + Rs 1,516 (tax on Rs 62,580). You are thus not required to pay any income-tax.

FBT rethink

THE Finance Minister is reported to be rethinking his fringe benefit tax proposal. Should it be withdrawn in toto?

Bharat Singh Rathore, Alwar

No. The Finance Minister is only going to smoothen the rough edges. For example, advertising and sales promotion should not have been subject to the fringe benefit tax in the first place given the fact that the tax targets personal expenses of employees footed by companies which cannot be ferreted out of the mass of expenses that have both personal and business elements.

Advertising and sales promotion expenses may be wasteful in the perception of few but they are by no means for the personal benefit of employees a wee bit. Therefore, it must be spared of the burden of the new tax.

And spared must also be contribution to superannuation fund if the contribution is at the same rate across the board.

Pension problem

I CONTRIBUTE to a pension fund Rs 18,000 per annum. In addition, I use Section 88 rebate to the hilt by investing Rs 1 lakh.

Now can I from next year claim the entire amount of Rs 18,000 as deduction under the proposed new Section 80C to the extent of Rs 8,000 and the balance of Rs 10,000 under Section 80CCC?

Saji Kurian, e-mail

No you can't. If you want you can claim the full amount of Rs 18,000 as deduction under Section 80C but that would reduce your quota under that Section to Rs 82,000 for other investments.

And if you prefer to claim under Section 80CCC, then Rs 8,000 will go abegging as only Rs 10,000 can be claimed under that section.

In any case, something will go abegging now that the ceiling of Rs 1 lakh would operate not only for Section 80C but for Sections 80C, 80CCC and 80CCD put together.

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

S. Murlidharan

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