The relief provided for in Section 89 (1) of the Income Tax Act 1961 is also permitted under the new tax regime.
Q. I am 85 years old and a retired engineer. I do not receive any pension. Based on the advice given in your article titled “Where There Is a Will,” I have prepared a handwritten will on plain paper. Here are my doubts:
1) Do I have to have it signed by one or more witnesses?
2) If so, can my wife be a witness?
Gaurav Mashruwala replies: Two witnesses are required for any will. There is no restriction on who can be the witness but as a good practice, avoid having a beneficiary as a witness. The registration of a will is optional. But a registrant will always have more weight.
(Gaurav Mashruwala is a financial planner and author of Yogic Wealth)
Q. I am retired. I could not attach my insurance document during the period 2020-2021 to claim the deduction under 80D.
1) Can I attach the same during 2021-2022 in order to claim the deduction under section 80D?
2) I have a fixed deposit of ₹ 15 lakh under the Seniors Savings Plan for 5 years. Can I deduct ₹ 1.5 lakh from income below C 80 for the entire 5 year term?
N. Sree Kanth replies: The deduction under Section 80D of the Income Tax Act 1961 can only be claimed in the tax year in which the health insurance premium is paid. You cannot claim in FY22 for health insurance paid in FY21. The withdrawal from retirement savings is limited to the ceilings provided for in article 80CCE. The limit is ₹ 1.5 lakh. You cannot claim the deduction for any investment made in a particular previous year beyond the prescribed limits during the term of the investment in subsequent valuation years.
Q. I opted for the old tax regime for the purposes of the salary TDS. Is there a possibility to switch to the new tax regime when filing returns? I also received salary arrears for three years from 2017 to 2020 but did not file an RTI for two years; I have only filed for 2019 to 2020. I am requesting relief under Section 89 (1) of Form 10E. Are computer returns for all 3 years mandatory to claim Section 89 (1)? I have Form16s for the above two years. Is Section 89 (1) Relief Possible in the New Tax System?
A. 1) The CBDT has clarified that the information to the employer regarding the new / old plan option is for TDS deduction purposes only. At the end of the year, you can choose to opt for the new or old tax rates depending on what is advantageous to you. You can file your ITR accordingly and claim a refund of the excess deduction.
2) You must complete Form 10E in order to claim relief under Section 89 (1) of the Income Tax Act, 1961 before filing the ITR of the YA in which the relief is demand. There is no provision that ITRs for taxation years relating to wage arrears should have been filed to seek relief in this YA.
3) Relief under Section 89 (1) of the Income Tax Act 1961 is also permitted under the new tax regime.
Q. My mother is 87 years old. She has two sons and a daughter. My brother is an American citizen. My mother has a property in Hyderabad and Bengaluru in her name. Can she transfer the property to my brother’s name and if so, what will be the tax implications?
A. Your mother can settle property on behalf of her children by entering into a settlement deed and paying the required stamp duty. The transfer method will be the same for resident and non-resident children. There is no tax implication at this stage. Income tax is only levied when the children transfer ownership to persons who are not parents within the meaning of the Income Tax Act, 1961.
Q. I am a PSU employee with two houses in my name and I do stock delivery transactions with STCG and LTCG. Please suggest an appropriate ITR form for me.
A. RIR 2 must be filed by you because you have salary income, two real estate properties and capital gains.
Q. I am an elderly person. I have purchased reimbursement insurance for my daughter. Under the terms of the policy, I am the policyholder and my daughter is the insured person. The insurance premium is paid by me from my source. I ask you to specify:
1) Can my daughter claim relief under section 80c even though the premium is paid by me and I do not request relief?
2) Being a refund policy, the provisional amount due, according to the terms of the policy, has been credited to my account. Is the payment taxable in my hands? If so, can I transfer the tax payable to my daughter by transferring the payment to her even though the premium is paid by me?
A. 1) The benefits of the Article 80C deduction can only be claimed by the appraisee who invests / pays / commits the eligible investments / expenses and such investments / expenses must comply with the conditions set out in the provision in order to claim the deduction. The benefit cannot be transferred to another appraised person from an appraised person.
(N. Sree Kanth is partner, GSS Associates, Chartered Accountants, Chennai)