I plan to take a break for a year from my job and do freelancing during that time. Do I still need to file my returns?
Section 139(1) mandates every individual to file his/her returns of income provided the total income of such individual exceeds the maximum amount not chargeable to tax. In case income earned by you for a financial year does not exceed the maximum amount not chargeable to tax—Rs 1.90 lakh for women taxpayers—you are not required to file your returns in that financial year. However, in case you are have other income such as interest income and capital gains and the income generated by virtue of freelancing exceeds the maximum amount not chargeable to tax you would need to file returns of income.
Also, if you have other income like interest income which is subject to tax deduction at source and your total income does not exceed the maximum amount chargeable to tax you may wish to file returns to claim refund of taxes.
If I buy a house jointly with my brother and take a joint home loan, can both of us claim income-tax deduction?
For the purposes of computation of income from house property under section 24, deduction in respect of interest paid on money borrowed for acquisition of a house is allowed for an individual who owns the house. Also, deduction in respect of repayment of the principal amount of loan is allowed under section 80C up to Rs 1 lakh. As you and your brother are co-owners of the house, both of you can claim deduction under section 24(b). However, for the purpose of computing deduction, interest payable by you and your brother individually on loan taken for purchase of the house shall be taken into consideration. Further, both of you shall be eligible to claim deduction under section 80C in respect of repayment of the principal amount.
I do not get house rent allowance (HRA). But since I pay rent, can I claim deduction?
As per section 10(13A), exemption from HRA can be claimed by an employee only if HRA is paid by the employer. Where HRA is not paid by the employer, deduction under section 80GG can be claimed by an individual. Such deduction can be claimed in respect of expenditure incurred in excess of 10% of his total income towards payment of rent for any property occupied for his own accommodation. However, deduction under section 80GG shall be limited to the lower of Rs 2,000 per month or 25% of the total income of an individual for the financial year and subject to such other conditions or limitations as may be prescribed.
Nitin Baijal, director, BMR Advisors
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