ave a tax-related query? Relax With Tax answers your questions.
I live in a rented accommodation in Gurgaon and get House Rent Allowance. In June 2004, I booked a house (still under construction) with a home loan. Can I claim the HRA as well as benefits from the home loan?
- Shubhranjan Bagchi
You will not be eligible for the home loan benefits unless the construction is completed. You can avail the interest repayments during the pre-construction period as deduction in five equal installments from the date of completion of construction. Meanwhile HRA benefit would continue to be available to you.
I work with an American company but am based in India. What evidence do I need to show that I am employed by the US company and that I receive a salary? Will I have to pay service tax?
- Ashish Padave
Your salary payslip, appointment letter and posting letter are enough to prove that you are here in India on deputation and are hence receiving salary from the US company. Service tax will not be applicable for you in case you get remittance in convertible foreign exchange and is not repatriated back.
I am in the US for a business visit. I am given allowance for my stay. Is the unspent allowance (savings out of the allowance) taxable in india?
- Rajagopal Babu Ganesh
Yes it is. Tax exemption is allowed only to the extent of actual expenditure. Unless you provide expense bills to your employer, this allowance will be taxed as income.
While filing returns, do we also need to show mutual fund dividends (since long term dividends are totally tax free in the hands of investors)?
- Velupula Shyam Prakash
Yes, while filing your returns, you will need to show dividends received from mutual funds though the same is not taxed. It is shown under the head amount claimed as exempt which is not included for the purpose of computing taxes.
I am paying LIC premiums for my father who is retired and dependent on me. Can I submit those receipts for my tax exemption? Also, does he have to file a return? Will he fixed deposits attract tax deducted at source (TDS)?
- C Rao
1. He will have to file a return and have a PAN if he has a taxable income or falls in the one-by-six category. Those falling in this category indicates that they must file a return. To see if you father does, read Should you file a return?
2. Since your father is a senior citizen, he can submit a declaration in Form 15G to the bank where the FD is invested, provided his tax liability is nil, as far as the TDS is concerned.
3. The LIC premium you pay on behalf of your dependent father will not be eligible for rebate under Section 88. It is available for payments on policies on the life of self, spouse, or children (dependent/independent).
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Note: Questions may be edited for brevity. Due to the tremendous response, all queries will not be answered.
