Tax Talk

I am a senior citizen and run a shop. I want to know if there is any exemption towards house rent incurred as I do not receive any H.R.A.

— Y.V. Raghavendrarao

According to section 80GG of the Income Tax Act, 1961, where an assessee does not receive house rent allowance from his employer and incurs expenditure on payment of rent, then he may claim deduction of rent paid, subject to fulfilment of conditions prescribed. Deduction available under Section 80GG of the Act is limited to lowest of the following:

1) Expenditure incurred on rent, less 10 per cent of total income

2) 25 per cent of total income

3) Rs 2,000 per month (i.e. Rs 24,000 per annum) Also, please note that no deduction is available under Section 80GG if the rent incurred by the assessee pertains to the house owned by him, his spouse or minor child or by an HUF, of which such assessee is a member at a place where he ordinarily resides or performs duties of his office or carries on his business of profession; or the assessee owns a self-occupied house at any other place whose annual value is nil.

I am a retired senior citizen. My income is mostly from bank deposits. I cannot submit 15G or 15H forms, since I am a tax payer. I find that the banks do not give me the tax deducted at source on time. I would like to know whether, if tax is deducted at source, banks are required to give me the details in form 16A, every quarter, or only once in an year? What is the timeframe, if any, for this?

— A.R. Ramanarayanan

According to the provisions of the Income Tax Act, 1961 read with Income Tax Rules, 1962, your banker should issue you the certificate for tax deducted at source (in Form 16A) within 30 days from the date of completion of the quarter to which the certificates pertain. For example, the time limit for issuance of the certificate pertaining to quarter ending June 30, 2013 is July 30, 2013. However, the certificate for tax deducted at source for the last quarter of the financial year needs to be issued within 60 days from the end of the financial year i.e. for quarter ending March 31, 2014, Form 16A needs to be issued by May 30, 2014. You may also note that if the bank fails to issue the Form 16A within the prescribed time limit, a penalty of Rs 100 per day may be imposed for every day during which the failure continues. The amount of penalty shall not exceed the amount of tax deductible.

You may also refer to your Form 26AS to know and verify the tax deducted at source by the bank at the time of filing your tax return.

Mail your queries to >taxtalk@thehindu.co.in

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