Sr. Citizen Tax Quary

Tax queries 527 views 3 replies

swapnil

CA Final

598 Points Joined August 2010

can u help me regarding tax planning,

my neighbour is now running 78 age and retired person,

at present he received the following 3 types of income.

1.every month received pension [i.e uncomuted pension]

2.fixed deposites in some co-op sch bank, and received interest.

3. and also invetst 9% senior citizen saving schem.

all the above 3 source of income total amt to Rs. 4,00,000/- {i.e Gross total income]

he also invested under 80-C which investment r eligible under 80 C.

than his Net taxable income comes 2 Rs. 3,00,000/-

than my question is, my neighbour can b claim some expenses as regarded travelling exp., because my neighbour had every month go to bank and update it his passbook 2 see the interest on FD 2 withdraw for surviving.

is it possible to claim travelling expeses, and is possible than suggest me the all 3 types of income under which head 2 come.

thanks 4 share with us, and best of luck,

Replies (3)

karan challani

article

82 Points Joined September 2010

pension is taxable under salary

interest is taxable under other sources

no deduction of expenses can be made from salary....

expenses such as bank charges,pre-maturity of FD charges can be deducted.......Only thing has to be noted that the expenses so deducted should be justifiable against the income earned.

CA.Madhusudan B.P.

Chartered Accountant

1157 Points Joined June 2009

As for as claiming the travelling expenses is concerned, Assessing Officer maynot allow as the provision of Sec 14A -Expenditure incurred inrelation to exempt income, not deductable.

Pension - As Mr Karan rightly said it taxable under the head "Salary" for which no deduction/expenses are allowed.

Fixed Deposit - This the income earned on the amount deposited in the bank, for which you have not incurred any expenses EXCLUSIVELY in earning this income (In some case nominal bank charges are allowed as expenses)

Senior Citizen saving - This income may qualify for exemption.

Considering all the three source of income you estimate Rs4 lakhs as gross total income.Taxable income would be Rs3 lakhs The tax liability would be around Rs 5000/- p.a.

Either you can invest the amount in Infrastructure Bonds in current year 01.04.2010 to 31.03.2011 additional benefit is Rs2000/- (In addition to Sec 80C Rs100000/-) OR Alternatively you can reduce the income at source level by investing the amount in Exempted category.

You can have a look at this link, which is Sec 10 of IT act Exempted income. EG Sec10(15)

https://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITAC&schT=&csId=7bebb7de-d051-4fbb-ba2f-93d333dbd72a&rdb=sec&yr=75996b99-a798-4098-bca8-e66ee23fe426&sec=10&sch=&title=Taxmann - Direct Tax Laws