Is it mandatory to make a gift deed if I want to give some money to my son, who is a government employee, through an account payee cheque?

Tapas Kumar Khan, Naktala

Under section 56 (2) of the income tax act, relatives from whom gift is received do not attract tax liability. Gift from a father to the son will not attract any tax liability. For money received as gift through an account payee cheque, it will be sufficient to give a declaration of gift on a plain paper by the donor father and a declaration of acceptance by the donee son. A gift deed before a magistrate or notary is not mandatory.

Mediclaim relief

I am a senior citizen and holder of mediclaim policy. I would like to know the amount eligible for deduction under section 80D.

D. Saha, email

According to section 80D, the premium paid on a mediclaim policy by a senior citizen is eligible for deduction to an extent of least of the actual, or Rs 20,000 per annum. If your employer has partially contributed to the premium paid for the mediclaim policy, you can claim the deduction by collecting a certificate from the employer regarding deduction of the amount for medical insurance.

Lowering tax liability

After a tax exemption of Rs 1 lakh under section 80C and house rent relief, I still have to pay income tax. Would it be prudent to save tax by taking a home loan even if I have the money to buy a residential flat?

Deepanjan Nandy, email

According to the Finance Act (No. 2) 2014, the deduction limit under section 80C has been raised from Rs 1 lakh to Rs 1.5 lakh. Furthermore, the deduction limit on the interest portion of a loan taken for a residential property has been increased to Rs 2 lakh from Rs 1.5 lakh, offering greater scope of tax exemption. Since you have sufficient liquidity and you are also looking to purchase the flat for residential purpose, you may opt for a home loan and lower your tax burden in the process. But, you should also consider your future income stream before choosing any liability.

If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abp.in, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.