Your Taxes

I am an employee of Central Industrial Security Force. I am paid ration cost of ₹3,000 per month. My employer is deducting income tax at source on this by including the amount in the total salary. I understand that employees of PSU/private organisations, being provided meals, are eligible for tax deduction @ ₹50 per meal per day under the provisions of Income Tax Act. Military personnel getting ration allowance equal to the cost of ration paid to me are also eligible for tax deduction on the full amount. Please let me know whether I am eligible for tax deduction.

  Abhey Singh

We understand that Central Industrial Security Force (CISF) is part of the Central Armed Police Force in India and not an Army Force. According to tax regulations, income tax exemption for ration allowance can be claimed by individuals employed by the Armed forces and not otherwise. Further, the provision for tax exemption at ₹50 per meal per day is available only for meal vouchers provided by the employer, which are usable at eateries.

 Considering the above, you may not be eligible for tax deduction on the amount paid to you as cost of ration.

I am an NRI employed abroad since 1992 and my only source of income is my salary paid in foreign currency. I remit my receipts (minus local expenses) to my NRE account in India for family maintenance, etc. I have only one FD, made in February 2014, from which I earn interest exceeding the IT limit of ₹2.5 lakh. In this connection, I would like to know the following:

Should I file ITR? Till date, I have not filed any as I did not cross or violate any of the IT limits. Which form should I use to file my ITR in case I have to? In the specified form, should I mention my income from salary as zero or state the actual annual income in rupee terms?

B S Chandramouli

  According to Section 10(4)(ii) of the Income Tax Act, 1961, interest earned on balances in an NRE account by persons resident outside India (according to the Foreign Exchange Management Act, 1999 (FEMA)), is exempt from India taxes. Since you have been employed abroad since 1992 and assuming you would qualify to be a person resident outside India in accordance with FEMA, you could claim the interest income from such account as exempt from India taxation.

Further, if the FD is also in the nature of an NRE account, interest from that would be exempt as well. Accordingly, you would not have an India tax filing requirement.

If the FD is not an NRE account, then you may have to file the tax return since the interest income from fixed deposits has exceeded the threshold limit of ₹2.5 lakh. This would fall under ‘Income from other sources’ and hence you could use form ITR 1 and file your return electronically. Further, you would have to report only income earned/received in India since you would be a non-resident for tax purposes. 

 However, please note that the due date for filing the return for 2014-15 has lapsed (August 31, 2015) and hence you would have to file a belated return after remitting the tax dues along with applicable interest.

The writer is Partner, Deloitte, Haskins and Sells LLP. Send you queries to taxtalk@thehindu.co.in

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