Income Tax Issues And Solution

CMA Gul S | Last updated: 25 September 2007

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WS Bhakti: I am doctor retired from MCGM three years ago. Presently, I am looking after a training program of foreign medical students in Mumbai for which I get professional fees every month from a US-based NGO in the form of dollars. The dollars are wire transferred to my bank and the equivalent Indian rupees are credited to my account every month. In the current year, I have taken a loan from a bank to pay tuition fees and to meet other expenses for the education of my son abroad. I want to know if there is any income tax rebate on the income received in US dollars. Am I entitled for any tax relief on the amount of interest paid to the bank for the educational loan?

You can claim relief in respect of income-tax, if any, withheld by the US-based NGO against the tax liability payable by you. You can also claim deduction for expenses, if any, incurred by you for earning the said professional income. There is no exemption/deduction available for income under consideration.

As the loan is taken by you in the current year, you will be entitled to claim deduction for interest paid to bank on the educational loan for the purpose of higher education of your son, as per the provisions of section 80E of the Income-tax Act, 1961. In the said section, the "higher education" is referred to as full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences, including mathematics and statistics.