Here's where we step in with our experts, Relax With Tax.
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Even though my father files a return, he won't reach the taxable limit and won't have to pay tax.
However, we will be showing following documents while filling his Income Tax returns
1. Interest income from SCSS
2. Loan agreement document
Is this illegal?
- Anjan Mehta
We are not clear as to the reason why you are giving the loan.
If you are doing it with the objective of getting a higher rate of interest on the senior citizen scheme, then it would also be wise to invest in mutual funds in your own name. This will yield a tax-free return in terms of dividend and long-term capital gain.
To understand these funds, read Invest in an ELSS fund. To understand the capital gains implication, read All you want to know about capital gain.
On the other hand, if you want your father to have the money, you could also make a gift to him on a certain occasion. To understand the implications of a gift, read Beware of expensive gifts. You may be taxed!
If you still want to go ahead with the loan, there is no harm in doing so at all. Nothing illegal on that front.
Also, there is no need to attach the agreement along with the IT return. You could provide it whenever a notice is sent to you for assessment proceedings.
However, in case you are moving ahead with the proposition of either executing a loan document or a gift deed, then it would be advisable to do so on the appropriate stamp paper.
Plain paper agreements may be contested by the revenue authorities.
I got a joining bonus of Rs 1,00,000 from my current employer.
I am told it will be taxed at 30% (over and above my regular salary).
I thought the bonus is to be included under the salary head and to be taxed along with the salary.
- Arun Kumar Singh
You are right as to your understanding about the bonus being taxed under the salary head.
However, the rate at which it will be taxed is best judged by your payroll department.
Hence, when the tax is 30%, it needs to be seen in the light of total income being taxed and the tax liability that works out.
I am paying an LIC premium of Rs 12,000 per annum for my dependent parents.
Can I claim this under Section 80C?
- S Naga Jagan Mohan Rao
The deduction for life insurance premium is available for a policy taken on the life of self, spouse, any child (dependent/ independent). It does not cover parents.
However, in case of a Hindu Undivided Family, the policy could be taken on the life of any member of the family.
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