Payment of Income Tax – Benefits and limits

On receipt of Rs 60,000 as a gift from a relative:
A gift is any sum of money received without consideration. According to experts gifts in excess of Rs 50,000 in a year by an individual or Hindu Undivided Family (HUF) is taxable under section 56 56(2)(v) of the Income Tax Act. However, exemption is given for gifts received from any relative, or on the occasion of an individual’s marriage. Gifts received as inheritance are also exempt from tax. Similarly, gifts made in contemplation of death of the payer, or from any local authority, or from specified charitable institutions are also exempt from tax. Relatives, under the law, include spouse, brother or sister, the brother or sister of the individual’s spouse, the brother or sister of either of the individual’s parents, any lineal ascendant or descendant of the individual, any lineal ascendant or descendant of his/her spouse, and the spouse of the siblings, parents, ascendants and descendants.
Tax treatment of medical reimbursement received from the employer:
Medical reimbursement is not taxable up to Rs 15,000 in the hands of the employee, so long as the employee produces evidence of actual spending, such as bills. The exemption is available for medical expenses of the employee and his or her spouse, children and dependant parents. The employer, other than individual, is liable to pay FBT on the medical reimbursement which is exempt in the hands of the employee i.e medical reimbursement or allowance up to Rs 15,000.
Deadline to file income tax returns:
The due dates for filing returns for non-corporate entities are as follows. In a case where the accounts of the assessee are required to be audited, or the report of an accountant is required to be submitted under specified provisions, the date is October 31 of the succeeding year. In other cases, the date is July 31 of the succeeding year.
Resident or non-resident status of an individual:
Individuals are classified into “residents”, “non-residents” and “residents but not be ordinarily resident”. The experts point out that the gamut of income subject to tax depends on an individual’s residential status, irrespective of his or her nationality. An individual is said to be resident in India in any tax year if he is in India for a period or periods amounting to 182 days or more in a tax year; or if he is in India for an aggregate period of 60 days or more (182 days in certain cases) in the tax year, and has been in India for an aggregate period of 365 days or more in the four tax years preceding that tax year. A person is said to be “resident but not ordinarily resident” (NOR) in India in any tax year if she has been non-resident in India for nine out of ten tax years preceding that tax year; or if she has been in India for a period or periods amounting to 729 days or less, during the seven tax years preceding that year. A non-resident is a taxpayer who is not resident in India.
Can all the joint owners of a property claim the tax benefit available for interest payable on such property?
The tax benefit in respect of interest on loan, as also on repayment of the housing loan, is allowed to each co owner of the property.
Treatment of health insurance policy premium and the premium paid for the family for any tax benefits:
Premiums for health insurance cover qualify for tax deduction up to Rs 15,000 under the Income Tax Act. This includes the cover for self and family. For senior citizen, tax deduction up to Rs 20,000 can be claimed. —

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  • Nirmal Kumar Sahu

    This article is very useful. I want to know more about the tax benefit on loan

  • Subrahmanyam P.H.V.K.S.R.