Contribution to SCSS covered under Section 80C

SC Vasudeva

Q. I am a senior citizen. I want to invest Rs 1.50 lakh in a post office under the Senior Citizen Savings Scheme. Can I claim rebate of Rs 1.50 lakh under Section 80C? — Raj Kumar

A. The amount deposited under the Senior Citizen Savings Scheme in the Post Office has now been covered under Section 80C of the Act and deduction thereof against the total income will be allowed within the overall limit of Rs 1.50 lakh provided under the said section. 

Q. I am retiree from the Central government. My annual pension is Rs 2,50,000 approximately and annual interest on fixed deposits is Rs 3,10,000 and on saving Rs 20,000 approx. After investment Rs 1,50,000 u/s 80C and after rebate u/s 87A my taxable income might be nil. Both banks deducted quarterly income tax on interest income. I am a senior citizen. Can I submit form 15H now to both banks? If yes, then in which section. Please advise. — Gulshan Rai

A. You would not be entitled to a rebate under Section 87A of the Income-tax Act 1961 (The Act) as the limit of total income in respect of which such rebate is allowable has been reduced to Rs 3,50,000 from assessment year 2018-19 (financial year 2017-18).  On the basis of the figures given in your two mails, your total income after allowing the deduction admissible under Section 80TTA would be Rs 4,20,000.   You would be liable to pay tax of Rs 6,180 on the said total income. It may, therefore, not be possible to file form 15H with the bank as your income exceeds the limit up to which tax is not payable by a senior citizen.

Q. My mother, who is a super senior citizen, has given (by bank transfer) a sum of Rs 1,50,000 to me. My query is as under: 

a) If this amount of gift received by me will be included in my income? Please also intimate the maximum limit of gift amount which could be given and received in a year.

b) What type of documents pertaining to gift amount need to be obtained/prepared from my mother? — Shiv Om Grover

A. a) The Gift Tax Act, 1958 is not currently applicable in India. The provisions of Section 56 of the Act which provide that an amount received in excess of Rs 50,000 will be included in the total income of an individual assessee if the same is not received from a relative. The term relative as defined by the aforesaid section includes ‘mother’ as one of the ‘relatives’. The amount of Rs 1,50,000 received from your mother would, therefore, not be includible in your total income in view of the provisions of the aforesaid section.

b) The gift by your mother can be made by a simple letter addressed to you. The gift so made should indicate the details of the cheque issued by her, the name of the bank on which it has been drawn, your complete address and Permanent Account Number of your mother.  There should be an acceptance letter with regard to such gift to be issued by you which should indicate your Permanent Account Number, complete address and the particulars of the cheque received by you.

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