Q. I am a retired pensioner who purchased a plot for Rs 2.20 lakh on 21.2.2015 with stamp duty of Rs 13,200 and sold for Rs 10 lakh on 26.10.2018. In November 2018, I started construction of the house on another plot and got a loan for Rs 10 lakh jointly with my son who is also working. During the year I got/used loan for Rs 8,43,829 from our loan account in addition to processing charges etc. for Rs 12,450. The amount (Rs 10 lakh), which I got by selling the plot, was put in a capital gains account and I spent around Rs 4.5 lakh during the year. Kindly let me know whether I am entitled to tax relief on loan obtained from bank account with interest and money spent from capital gain account. Can my son also get relief?
— RL Chaudhary
A. You have not clarified in the query whether the amount of entire sale consideration in respect of the plot which was purchased on 21.2.2015 had been deposited under the capital gain scheme account before the due date of filing the income-tax return for the financial year 2018-19. Presuming that the deposit was made before the said date, you are required to utilise the amount deposited under capital gain scheme account towards the construction of a residential house within three years after the date of sale of the plot. It would, therefore, be advisable for you to utilise the balance amount of Rs 5.50 lakh lying in the bank under capital gain scheme towards construction of the residential house within three years after the date of sale. You would be entitled to claim an exemption in respect of the amount of capital gain arising on the sale of the plot provided the above condition is met. The amount of interest paid on the loan raised for the construction of the house shall be deductible while computing the income from house property to the extent of Rs 2 lakh. The amount of interest paid during the construction period shall be allowable in five equal instalments beginning from the year in which the income from house property arises. Your son would not be entitled to claim any deduction as the amount of capital gain is in respect of the plot which was sold was in your name. The plot on which construction has been undertaken is also in your name as is evident from the query.
Q. I am a super senior citizen and pensioner. I file my income tax return regularly. I want to help my son send his daughter to a foreign country for studies. My son is an employee of LIC and is an assessee. The amount will be in lakhs. Kindly advise as to how this monetary help will be shown in the accounts of my son and my accounts. Can it be treated as gift?
— Sant Singh
A. The amount paid by you to your son would be treated as a gift to your son. However, such a gift would not be exigible to income-tax in view of the exemption provided under the provisions of Section 56(2)(x) of the Income-tax Act 1991 (The Act).
Q. It is often advised that an assessee can claim rebate under Section 80D sub-section 2(c) of the whole amount paid on account of medical expenditure incurred on the health of the assessee or any member of his family not exceeding in aggregate Rs 30,000 (Rs 50,000 in case of senior citizens). Section 80D also provides that such payment is made by any mode as specified in sub-section 2(B). Sub-section 2(B) provides:
(i) Any mode, including cash,
in respect of any sum paid
on account of preventive
health check-up;
(ii) Any mode other than cash, in all other cases not falling under clause (i).
My query is:
(a) Whether cash memos obtained from the chemists for purchase of medicines as per doctor’s prescriptions are admissible for claim during the previous year under above sub-section 2(B)(ii)?
— Gurdev Singh
A. Cash memos obtained from the chemists for purchase of medicines will be considered for the purposes of deduction under Section 80D of the Act in respect of preventive health check-up only. In case the deduction is claimed to the extent of Rs 50,000 for medical expenditure, the payment should be made by a mode other than cash. It may be noted that deduction towards medical expenditure to the extent of Rs 50,000 is allowable to a senior citizen.
Q. Kindly advise on the following:
a) I have FDs which give me interest of nearly Rs 1,20,000 annually.
b) My agriculture land gives me annually Rs 1,40,000.
c) I earn approximately Rs 1,10,000 by giving tuitions to children.
d) I have transferred my house to my daughter legally.
e) I am a senior citizen aged 73 years. With the latest income-tax rules i.e. up to a income of Rs 5,00,000, no income-tax is leviable.
Kindly advise me whether I am required to file income-tax return or not for the FY 2019-20 onwards. Till now I have been filing the income-tax return as I was getting rental income from the house. Now the house has been transferred to my daughter legally, I have no rental income. I transferred the house in my daugher’s name on 11.02.2019.
— Hardial Singh Gill
A. On the basis of the figures given in the query, the total taxable income works out at Rs 2,30,000 as the agricultural income of Rs 1,40,000 is exempt. In view thereof, your total taxable income being much below Rs 3 lakh, you would be required to file the tax return provided:
(a) You have deposited an amount or aggregate of the amount exceeding Rs 1 crore in one or more current accounts maintained with a bank.
(b) You have incurred an expenditure of an amount or aggregate of the amount exceeding Rs 2 lakh for yourself or any other person for travel to the foreign country; or
(c) You have incurred an expenditure of an amount or aggregate of the amount exceeding Rs 1 lakh towards the consumption of electricity; or (d) fulfil such other conditions as may be prescribed by the Government.
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