| I am 67 years old. My estimated annual income during 2007-08 will be Rs 1,90,000, which will include a pension income of Rs 1 lakh, interest income of Rs 75,000 and income from capital gains of Rs 15,000. What will be my tax liability? If I don’t have to pay any tax, do I have to file returns? |
Mrinal Kanti Mitra, Hind Motor |
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| The threshold annual income limit for income tax purposes for people above 65 years has been increased to Rs 1,95,000 for 2008-09. Your total annual income this fiscal, including capital gains, will be less than the basic exemption limit. This means you don’t have to pay any income tax. Filing returns is voluntary for people with no taxable income. |
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| Skirting TDS |
| I am 72 years old. My total income, including pension and interest on fixed deposits, post office MIS and Senior Citizen Savings Scheme (SCSS), will be about Rs 2.4 lakh this fiscal. But my tax liability will be nil after I deposit the required amount in PPF. Can I submit Form 15H to my bank for non-deduction of interest at source on SCSS and FDs? |
Tapan Chatterjee, Serampore |
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| Under Section 197A(1C) of the Income Tax Act, an individual who is 65 or more can submit Form 15H in duplicate declaring that he or she has no taxable income and hence no tax should be deducted at source from accrued interest. However, under Section 139, you will have to file returns because your income without giving effect to the deduction under Section 80C is more than Rs 1,95,000. Whether Section 197A(1C) would be applicable in your case is debatable. Pending a clarification, you may file Form 15H to avoid TDS. |
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| Scheme for seniors |
| I earn Rs 1,20,000 as annual pension. If I invest Rs 15 lakh in Senior Citizen Savings Scheme, I will earn Rs 1,35,000 as interest income every year. In that case, my total income will be Rs 2,55,000. Will my interest income of Rs 1,35,000 from the SCSS be tax-free? What will be my tax liability? |
Anil Kumar Roy, Belgharia |
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| Interest income from SCSS has never been tax-free. The government recently proposed that investment up to Rs 1 lakh in SCSS would be made tax-exempt under Section 80C of the Income Tax Act. Therefore, you can claim a deduction of up to Rs 1 lakh from your total income by investing in SCSS. But you will have to pay tax on your annual income in excess of the basic exemption limit of Rs 1,10,000. |
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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. |
