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An individual with NRI status for the AY 2017-18 has the following income: EPF withdrawal of ₹4 lakh after seven years of membership and interest from savings bank accounts ₹20,000.
Should he file IT return for AY 17-18 ?
Barathidason Ramadoss
The amount withdrawn from recognised provident fund is exempt from tax, provided the individual has rendered continuous service with his employer for a period of five years or more.
This exemption would apply even if the individual has changed employment and the accumulated balance is transferred to the new employer.
Mere membership for five years or more with PF would not be sufficient for exemption if the service criteria are not met.
Interest from savings bank account is exempt up to ₹10,000 under Section 80TTA of the Income Tax Act, 1961.
If the individual meets the service criteria, then the entire provident fund withdrawal would be exempt. If the individual is a non-resident during the AY 2017-18 and has no other taxable income in India apart from bank interest of ₹20,000, then the individual is not required to file return of income.
The income tax department website mentions the investments eligible for deduction u/s 80C.
Among others are: Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions). Can you elaborate on the conditions?
Jaya Nayak
Senior citizens (individuals who have attained 60 years of age) can make a deposit with any post office across India or in certain branches of nationalised and private banks under Senior Citizens Savings Scheme (SCSS). This scheme is available only for resident individuals.
Eligible deposit under the scheme is allowed as deduction under Section 80C of the Act, subject to the overall limit of ₹1.5 lakh under that Section.
The conditions are: An individual can only make one deposit under the scheme for each year; the deposit has to be in multiples of ₹1,000; the minimum deposit is ₹1,000 and maximum is ₹15 lakh; the tenure is five years.
However, deposits under SCSS can be extended for a further period of three years.
The writer is Partner, Deloitte Haskins & Sells LLP. Send your queries to taxtalk@thehindu.co.in
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