The Hindu Business Line : Revision of belated returns

I have filed a belated return for the assessment year 2006-07. However, I have discovered some omissions in my return and there exists a tax liability in respect of capital gains. I propose to pay my taxes with interest immediately and file a revised return disclosing the income and tax-paid details. Will I be able do this under the income-tax law?

Also, if I merely pay the taxes and not file the return (because the law does not take cognisance of revised return of a belated return) have I complied with law? There is no business income and, hence, no carried forward of any losses.

Vasudevan, email

Even though you cannot file a revised return, you must go ahead and pay the relevant tax on the income you omitted to disclose together with interest till date, worked out in the manner specified in Sections 234A to 234C. This would halt the interest clock from ticking at a furious pace of 1 per cent per month. Second, this good conduct on your part would make the department go slow on penalty and prosecution proceedings.

Gifts in dollars

My son resides outside India and wants to gift me in US dollars. Is there any limit on the gift I can receive?

Atar Singh Lodhi, email

None. Being a lineal descendant of yours, the gift from your son is completely tax-free. If the donor is not your relative, the gift is taxable completely if it is in excess of Rs 50,000 either by itself or along with other such gifts received during the financial year.

Housing loan

I have taken a housing loan. The loan has been utilised for constructing a house, which is not in the city I reside. I am employed and living in a rented house in the city I am residing.

Will it be possible for me to get tax benefits in respect of the new housing loan? My family members will be living in the new house in one portion and another portion is given for rent.

Suresh Macharia, email

The rented portion would of course be taxable. The portion to be occupied by your family members would pass muster under self-occupation in the light of the liberal interpretation made of the term by courts in India. If this is the only house you have, you can claim exemption for self-occupation in respect of this portion. Of course you would get deduction under Section 80C for the principal repayments.

The interest relatable to the let-out portion would be deductible in full but the portion of interest relatable to the self-occupied portion would be deductible resulting in a loss only up to a maximum of Rs 1.5 lakh.

Taxing lottery winnings

What is the rate of tax on winnings from lottery?

Chandra, email

Income from lottery along with the other specified unearned incomes such as from TV shows, etc., attract a tax liability of 30 per cent on the gross amount of winnings in terms of a special regime contained in Section 115BB. This would be embellished by education cess of 2 per cent on the tax and also possibly by surcharge before the education cess is applied if the taxable income is in excess of Rs 10 lakh.

Loan conversion

I took a bank loan on the strength of the mortgage of my house for business purposes. The business has failed and the bank is demanding sale of the house to liquidate the loan. Can the loan be converted into a housing loan by the bank?

Rabia Bastri, email

I am afraid not. I don't think any bank would do this because the house has evidently been paid for already. Merely because the security for a business loan was a house does not mean the loan can be given the colour of a housing loan. Some other arrangement such as rescheduling of instalments is possible if you can convince the bank.

Two pensions

I get pension as well as family pension because my husband is no more. Would I get standard deduction on both?

S. Jayalakshmi, email

No, only family pension is eligible for a standard deduction of one-third of such pension or Rs 15,000, whichever is less. Your own pension is not eligible for standard deduction because it was abolished two years ago consequent upon increase in the tax-free limit which in your case is now Rs 1.45 lakh from the assessment year (AY) 2008-09.

(ASK! Send in your queries to ask@thehindu.co.in.)

http://MentorQA.blogspot.com

S. Murlidharan

More Stories on : Income Tax | For the Asking

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Can contract farming strengthen agriculture?

Break-even in merged plants

Too many `development' trouble spots?

Software development

Gold or gold-backed securities?

Currency value and inflation

Just Do IT

Revision of belated returns

ESOP: Changes beyond the fringe

Introspect to better yourself

Imaginary lines

Keep processes simple and measurable