Personal Finance

Your Taxes

Sudhakar Sethuraman | Updated on March 22, 2020 Published on March 22, 2020

I am a senior citizen aged 62. I have income from pension and other sources (interest), and no other income. I understand that I am exempt from payment of advance tax. However, as per Section 234B, if tax due is more than ₹10,000, as on March 31, interest of 1 per cent per month plus penalty (if applicable) is charged from April 1, till actual deposit of tax. Please clarify whether this is applicable for senior citizens. If my tax liability (after deducting TDS), is, say ₹60.000, for FY2019-20 and I deposit it at the time of filing return in July 2020, will I be liable for interest/penalty? Or, do I have to pay 90 per cent of tax before March 31 and only maximum ₹10,000 can be deposited at the time of filing return?

Jayant Gajendragadkar

An individual resident in India (age of 60 years or above) and not having any income from business or profession is not liable to pay advance tax as per Section 207. Consequently, interest liability for default/deferment in payment of advance tax under Section 234B/Section 234C of the I-T Act shall not arise.

Accordingly, if you qualify to be a resident in India, pursuant to Section 207, there is no requirement to pay advance tax in India, and interest provisions shall not apply.

You may discharge the tax liability on your pension and interest income at the time of filing your tax return.

I am a senior citizen. A public limited unlisted company with retained earnings bought back minority shares after three years (January 2016-October 2019). Cost price is ₹2 lakh, bought back at ₹20 lakh. I have other net taxable income of ₹10 lakh. Kindly advice: Since the company has paid DDT, am I liable for capital gains tax? If taxable for capital gains, can I avail ₹10 lakh as tax-free dividend? How much indexation deduction can be claimed? What is the balance amount I need to put in REC/NHAI bonds for five years, to claim tax exemption on buy back?

Shivananda N

As per Section 115QA, the unlisted company doing the buyback is required to pay tax on distributions to the shareholders. There will not be any tax implications for the shareholder as income arising from buyback is exempt from taxation (Section 10(34A)).

As the income is exempt in your hands, indexation, investment provisions to claim tax benefits, etc, shall not apply.

The writer is Partner, Deloitte India. Send your queries to taxtalk@thehindu.co.in

Published on March 22, 2020

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