BackMandatory to file taxes if income is above a threshold
Taxes are entirely deducted by your employer as per the provisions of the Income-tax Act.
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I work in a private firm and my tax is deducted at source. I have never filed returns. My taxable income is 8 lakh. Is it necessary to file returns?
—Minu
Under section 139(1) of the Income-tax Act, it is mandatory for any individual whose total income exceeds a specified income threshold to file his personal tax return within the specified due date.
In the past fiscals, vide a notification issued by the tax department, dispensation has been given to an individual having a taxable income up to 5 lakh and subject to fulfilment of specified conditions (such as the individual should have only income from salary and savings bank account interest not exceeding 10,000 in a fiscal, salary is received from only one employer, etc.) from filing the personal tax return.
However, the said notification is not applicable for FY2012-13. Hence, the aforesaid dispensation shall not be applicable in your case. Accordingly, though on your salary income, taxes are entirely deducted by your employer as per the provisions of the Act, since your income exceeds the aforesaid exemption threshold for FY12-13, it is mandatory for you to file your personal tax return in India.
I intend to gift a certain sum (greater than 50,000) to my Hindu Undivided Family (HUF), of which I am the Karta. I would like to know: (a) if the gift would be taxable in the hands of HUF, (b) will the income arising out of this gift be taxable in my (Karta’s) hands?
—Ashish
As per section 56 of the Act, the entire money received by a HUF from any person during any fiscal without consideration, the aggregate value of which exceeds 50,000, is taxable under the head “income from other sources".
However, an exemption is available if the money is received from a relative which includes members of the HUF. Accordingly, the money gifted by you in your individual capacity to the HUF shall not be taxable in the hands of HUF.
As per section 64(2) of the Income-tax Act, any transfer of property by a member to HUF without adequate consideration attracts clubbing provisions and accordingly the income arising to the HUF out of the property transferred is taxable in the hands of the transferor member.
The term “property" has been defined in the Act to include “interest in movable or immovable property". Accordingly, the cash amount gifted to the HUF may be considered as your property and accordingly income, if any, arising due to investment of the money gifted shall be taxable in your hands.
Separately, wealth tax provisions on cash in excess of specified limits will also have to be separately examined.
Queries and views at mintmoney@livemint.com
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