No tax on money gifted to daughter

Q. I am 72 years old. I took a “Jeevan Sureksha Policy” (Pension plan without life cover) from LIC in March, 1997 for Rs 50,000. The same got matured in March, 2002 and 25% of the matured value i.e. Rs 17,200 was paid to me in March, 2002. Thereafter, monthly pension of Rs 448 was started w.e.f. April, 2002 and the same continued up to July, 2014. In July, 2014, I surrendered the policy and final payment of Rs 49,000 was paid to me. Please advise whether this amount of Rs 49,000 is taxable or not.

b) Recently, I have gifted a sum of Rs 1.5 lakh to my daughter by cheque. She is doing private job and filing her I-T return. Please advise the tax liability on my part and on part of my daughter on this amount of Rs 1.50 lakh and its interest. She has put this amount in a bank fixed deposit.

— Gian Chand

A. a) You have not explained in the query whether the amount of Rs 17,200 and monthly pension of Rs 448 was tendered for taxation. In case of a pension plan policy, the amount of pension received by a person under the said policy is taxable. The amount of Rs 49,000 received by you would also be taxable in accordance with the provisions of Section 80CCC of the Act.

b) The amount of Rs 1.50 lakh gifted by you to your daughter would not be taxable in either of the hands. The amount of interest earned on the fixed deposit would be taxable as her income. This reply is based on the presumption that your daughter is not a minor.

Q. a) I am 82-year-old having income from pension and interest on bank deposit only. There is no income from any profession or any other source. Can I deposit income tax termed as self-account at the time of filing my income-tax return in July, 2015 or it has to be deposited before March 31, 2015.

b) I got relief under Section 80C by depositing a sum of Rs 50,000 in FD in the year 2010, which will get matured in February, 2015. The interest accrued thereon, will count towards income for calculating income-tax. Whether the amount of Rs 50,000 will also be taken into account for that purpose?

— Kulwant Singh

A. a) You can deposit the tax on your total income at the time of filing the tax return in view of the fact that you are senior citizen and therefore you are not required to pay advance tax as you do not have any income from any business or profession.

b) The amount of interest earned on the fixed deposit in respect of which deduction has been claimed under Section 80C of the Income-tax Act 1961 (The Act), is duly taxable. However, the principal amount received back at the time of maturity would not be subjected to tax.

Q. The income particulars of Mr ‘X’ are as under:-

Bank interest: Rs 2,70,000

Salary: Rs 1,10,000

Total: Rs 3,80,000

Less PPF: Rs 1,40,000

Balance: Rs 2,40,000

Tax liability: Nil

Can Mr ‘X’ furnish form 15G to the bank to avoid TDS. If not, a huge amount of Rs 2,70,000 will be deducted as TDS and he will have to go through the process of claiming refund.

— Bal Krishan

A. Mr ‘X’ should file form 15H with the bank so as to avoid the deduction of tax at source on the bank interest. The reply to your query is based on the presumption that Mr ‘X’ is a senior citizen. In case he is not a senior citizen, it may not be possible for him to file form 15G to avoid a deduction of tax at source on a bank interest as his interest income is not below taxable limit.