| I will retire from railway service at the age of 60 on December 31, 2005. On retirement, I shall receive my provident fund, leave salary, gratuity, group insurance, salary arrears and productivity-linked bonus for 2005-06. Are these amounts taxable? Do I have to submit my income tax returns after retirement and can I get senior citizens’ benefits? |
Arun Goswami, by e-mail |
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| Salary in arrears received as a lumpsum is liable to tax in the year of receipt. Some relief is, however, allowed from tax on such receipts. Relief is also available for gratuity, leave encashment and other compensations, though the computation of tax benefits will vary according to the heads. Your need to continue filing returns will depend on your post-retirement total income and the one-by-six scheme. However, to be eligible for senior citizen tax benefits, one needs to be 65 years of age and above. |
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| Home truth |
| If two persons jointly own a residential property in Calcutta and one of the owners regularly submits income tax returns, is it necessary for the second owner to do so, if his income is within the exempted limit? |
Amitava Dutta, Calcutta |
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| Income tax laws require co-owners of any property
to assess their income from house property separately.
Thus, the second individual is also required to submit
his income tax returns under the one-by-six scheme,
even though his total income is within the exempted
limit. |
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| Card conundrum |
| My employer has given me a credit card with a limit of Rs 50,000. My employer pays the amount I spend on the card every month. Is this amount taxable? |
Ridhima Sinha, by e-mail |
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| Since assessment year 2005-06, any expenses incurred
through the credit card, including the membership and
annual fees, which are paid or reimbursed by the employer,
was treated as perquisites in the hands of the employee
and thereby fully taxable. But, if the expenses were
incurred for official purposes, the perquisite value
shall be deemed to be nil. However, from the assessment
year 2006-07, the value of this perquisite shall be
nil, since the same shall be chargeable to fringe benefit
tax. |
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| If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001. |
