Comments
My organisation is a cooperative institution and I have taken a house on rent. I am getting house rent allowance (HRA) by my employer. Kindly advise on the exemption available towards HRA.
— K. Prabhakaran
According to the provisions of Income-tax Act, 1961, house rent allowance exemption will be least of the following:
House rent allowance actually received; Rent paid less 10 per cent of salary;
40 per cent of salary in case of non metro cities/50 per cent of salary in metro cities (Delhi, Kolkata, Mumbai, Chennai).
Salary for the purpose of the above provisions shall be the Basic salary plus Dearness allowance if the terms of employment contract so provide plus any commission based on a fixed percentage of turnover achieved by the employee.
Hence, the maximum exemption available to you shall be based on the aforesaid limits. Further, it is advisable to maintain proper documentation as proof of payment of rent (rent receipts, lease deeds).
I want to gift some money to my college going child who has turned 18. Will the interest earned from fixed deposits be clubbed with my income and is it necessary for him to file the income tax returns?
— R.R. Chelani
According to the tax laws, any sum of money received from a relative as gift is exempt from tax. The term relative includes father and mother. Hence, the sum gifted by you to your major son shall be tax exempt in his hands.
Further, clubbing provisions would apply to income accruing or arising to a minor child from any sum received as gift. Since your son is a major, clubbing provisions will not apply and the interest earned from fixed deposits shall be taxable in his hands.
Maximum amount
Furthermore, according to the tax provisions, a person is required to file a return if the total taxable income exceeds the maximum amount not chargeable to tax (for Assessment Year (AY) 2013-14, the said limit is Rs 2 lakh). Hence if your son’s taxable income, for the AY exceeds Rs 2 lakh, he will have to file an income tax return by the specified due dates.
Mail your queries to >taxtalk@thehindu.co.in
(The author is a practising chartered accountant)
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.