The Telegraph - Calcutta : Business

| Monday, April 09, 2007 |

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Q&A

Money matters

I deposited a sum of Rs 12,300 during 1988-89 in NSS-1987 scheme. The amount with accrued interest has become approximately Rs 63,000. I want to withdraw the money and close the account. The post office has said that it would deduct tax at the rate of 20 per cent on the withdrawn amount and would pay me the balance. Do I have to pay further tax on such withdrawal since I'm in the 30 per cent tax bracket'

P.K. Bhattacharjee, Calcutta

An assessee has to file a return of income every year declaring his total income and the tax payable thereon. You can furnish the TDS certificate with the return filed and the tax payable would reduce accordingly. If additional tax has been paid, it would be refunded to you by the tax authority.

Senior citizen status

My birthday is 02.01.1943. Shall I be eligible for income tax exemption as senior citizen for the financial year 2007-08 (assessment year 2008-09)'

K. Banerjee, Uttarpara

You will be 65 years on 02.01.2008. According to the income tax act, a senior citizen is a person who attains 65 years or more in the previous year. The act also clarifies that ‘previous year’ means the financial year immediately preceding the assessment year. For the income earned during a financial year, an individual taxpayer pays the tax in the next assessment year. This, in other words, means that you will attain 65 years in the financial year 2007-08 and hence will be eligible to claim benefits for senior citizens in the assessment year 2008-09.

Interest income

I am a senior citizen and my total annual income, including interest from bank and post office deposits, is less than Rs 1,85,000. I do not submit any income tax return. Is the submission of return mandatory'

S. Sarkar, Calcutta

If you are 65 years old or more, you don’t have to compulsorily file income tax return as your annual income is less than the basic exemption limit for senior citizens. But filing income tax return is voluntary for those who have income less than the basic exemption limit.

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.