No tax on gift by ‘relatives’

SC Vasudeva

I want to gift some money to my brother’s daughter-in-law and grandson. How much money can I gift them without inviting any tax liability on donor as well as on donee?

— Harbhajan Singh Ranote

The maximum permissible amount of gift to both parties specified in your query should not exceed Rs50,000 in aggregate so as to avoid tax liability in the hand of the recipient. A gift exceeding Rs50,000 would not be taxable in the hands of your elder brother’s daughter-in-law or grandson in case the same is received by them from the following relatives:-

a) Spouse of the daughter-in-law/grandson;

b) Brother or sister of daughter-in-law/grandson;

c) Brother or sister of the spouse of the daughter-in-law/grandson;

d) Brother or sister of either of the parents of the daughter-in-law/grandson;

e) Any lineal ascendant or descendant of the daughter-in-law/grandson;

f) Any lineal ascendant or descendant of the spouse of the daughter-in-law/ grandson;

g) Spouse of the person referred to in items (b) to (f).

Q: I am a senior citizen. I had received Rs3,33,660 as pension and arrears from the State Bank of India after deducting Rs755 as TDS in financial year 2014-15. I, jointly with my wife (homemaker), took a loan of Rs5 lakh from Punjab & Sind Bank for repair and renovation in June 2013. In the financial year 2014-15, I repaid Rs1,47,000 (interest Rs46,887 + principal Rs98,427 + inspection charges Rs1,685) to Punjab & Sind Bank. Can I deduct only Rs30,000 as interest under Section 24 and how much benefit can I avail under Section 80C? What will be my tax liabilities or any refund?

— Devinder Singh Gill

Your queries are replied hereunder:-

a) The allowable deduction is Rs 30,000 only in respect of interest paid on amount borrowed for repair and renovation of a self-occupied house. This deduction is limited to the extent of above amount under Section 24 of Income Tax Act, 1961 (The Act).

b) No deduction is admissible under Section 80C of the Act as the said section provides for deduction up to Rs 1,50,000 for repayment made towards the loan raised from specified sources for purchase or construction of a residential property.

c) It is not possible to compute the amount of tax payable as you have not indicated annual letting value of the property as well as the amount of house tax paid in respect of the house occupied by you.

My total income is always much below the taxable limit for senior citizens, so I submitted 15-H Form to a PSD Bank for FY 2014-15 in respect of seven fixed deposits. At three different costs, IDIS were negligently allotted to me by the bank so, one fixed deposit could not escape TDS deduction of Rs1,882 for FY 2014-15. I have persuaded for compensation for this negligence. Which option should I follow further— the district consumer forum or banking ombudsman?

— Surinder Jit Kaur

Your total income being below taxable income, it would be appropriate to file the tax return and claim the refund to the extent of Rs1,882. You may pursue with the bank’s ombudsman for incorrect deduction made for tax despite having submitted Form 15H to the bank.