Senior citizens exempt up to income of Rs 3 lakh

S C Vasudeva

I am a government employee and file income tax return. My wife is a housewife and we have ancestral agricultural land in a village. My wife earns about Rs 50,000 annually from the sale of agricultural crops. Besides, my wife is a science graduate and also takes tuition and earns about Rs 50,000 per annum. My wife has deposited Rs 3 lakh in an FDR in a bank from her savings and has another FDR of Rs 1.5 lakh in another bank. My queries are whether the interest earned by her on the fixed deposits is her income or am I supposed to show that income in my return? If it is her income, is she supposed to file the income tax return? What is the exemption limit for women?

— Kishore Rawat

It is presumed that the agricultural land in the village is owned by your wife. Reply to your query is based on the said presumption. The amount of interest earned by your wife on fixed deposits made in the bank is not on account of transfer of any asset to her by you without any consideration. Therefore, interest income will be considered as her income. You need not include the same as part of your income. Exemption limit in case of a senior citizen is Rs 3 lakh, which is equally applicable to men and women. In case of an assessee who is 80 years or more, the applicable limit of exemption is Rs 5 lakh.

I am a super senior citizen. My income is only from interest on bank FDRs. Total interest is Rs 51,500. I have deposited Form 15H to banks for FY 2015-16. Is it necessary to file income-tax return for FY 2015-16?

— Madan Singh

Your total income being less than Rs 5 lakh, it is not necessary for you to file income-tax return for the Assessment Year 2016-17.

I am employed in an MNC and entitled to free use of gas, electricity and water in respect of the residence provided to me by the company. I am also allowed the reimbursement of school fee being paid by me for my two children — a son and a daughter. Are these amounts taxable in my hand? If so, what amount would be included in my salary for the tax purpose?

— Rajan Kumar

The perquisite in the nature of reimbursement of gas, electricity and water charges and the school fee of your children is taxable in view of the provisions of Income-tax Rules 1962. The gas, electricity and water charges to be added to your salary would be an amount paid or payable by the employer to an outside agency less recovery, if any, from you. In case the gas, electricity or water is supplied by the employer out of its own sources, the manufacturing cost per unit incurred by the employer less recovery, if any, from you would be added to your salary. Similarly, the amount of reimbursement of expenditure made for the education of your children is taxable as perquisite and thus will be included in your salary income for the purpose of taxability.