Money received as gift on marriage is exempt from tax
An exemption is allowed under section 56 if the sum of money is received from a relative or on the occasion of marriage
Latest News »
- Bharti Infratel Q1 consolidated profit falls 12%
- World oil demand could peak in 2024 on higher vehicle efficiency: Goldman Sachs report
- After five decades in politics, President Pranab Mukherjee says ‘Nomoshkar’ to private life
- Opposition boycotts UP Assembly, holds parallel ‘House’
- IT start-up employees are entitled to labour law benefits, says government
My current employer has not taken into account the home loan interest while calculating tax. How can I claim a refund?
Quantum of tax deduction or benefit towards interest paid on a home loan depends on whether the residential property against which the loan has been availed is a self-occupied (SOP), let-out (LOP) or deemed to be let out property (DLOP). For an SOP, the deduction towards interest on housing loan is restricted to Rs.2 lakh per financial year (FY). If the property is actually let out or considered as deemed to be let out, you would be taxed on the rental value received or deemed to be received. The entire interest paid on the loan for such a property (not restricted to Rs.2 lakh per FY) can be claimed against the taxable rental value.
You may claim a deduction of interest on housing loan and full refund of excess taxes deducted in your tax return. If you have other income on which taxes are payable, excess tax above will first get adjusted against the tax liability on other incomes. Balance excess taxes, if any, can be claimed as refund.
I got married in January. My wife and I received gifts in the form of cash from our relatives and friends. It totalled to around Rs. 35,000. Do we have to show this in our tax returns?
Under section 56 of the income-tax Act, money exceeding Rs.50,000 received by an individual during a financial year without or for inadequate consideration, is taxed under ‘Income from other sources’ in the hands of the recipient. An exemption is allowed under section 56 if the sum of money is received from a relative or on the occasion of marriage. So, the amount of gift that you have received on your wedding day shall not be taxable as income in your or your wife’s hands. This can be claimed as exempt from tax. It, however, needs to be disclosed in your returns to be compliant from a reporting perspective.
I have kept Rs. 5 lakh that I received as pension in a bank savings account. How much tax do I have to pay on the interest?
The interest earned on a savings bank account is taxable in the hands of the individual as ‘Income from other sources’. One can claim deduction on interest earned on savings account maintained with a specified bank, cooperative society or post office from total income subject to a maximum cap of Rs.10,000 per financial year, under section 80TTA.
Depending upon the applicable income tax slab rate, you will be taxed on the balance interest amount. If your total income exceeds Rs.1 crore during the year ending 31 March 2016, surcharge at 12% will be applied on the basic tax rate. Also, education cess of 3% on basic as well as surcharge (if applicable) shall be levied. It has been proposed in the Finance Bill 2016 to increase surcharge to 15% from 12% on total income above Rs.1 crore for FY17.
Queries and views at firstname.lastname@example.org