The Lok Sabha has passed the Finance Bill. The basic income tax exemption limit for the current Financial Year 2007-08 for individuals is Rs 110,000, says tax expert Subhash Lakhotia.
For women, it has been fixed at Rs 145,000 and for senior citizens at Rs 195,000.
The Bill also has some good news. Interest to the tune of Rs 10,000 received on the bank and post office deposits after June 1 has been exempted from TDS. Earlier, this limit was Rs 5,000. Similarly, the TDS limit on commission, professional fee, technical fee from has increased from five to 10 per cent.
Excerpts from an interview with Subhash Lakhotia on CNBC Aawaz:
There have been several problems related to form no 16. What can be done about it?
This March, some changes were introduced in Form no 16, given by the employer to the employee, and Form 16 A for TDS. As per these changes, one has to mention the acknowledgement number and the date of filing of four quarterly returns.
Now some employers who haven't issued the TDS certificates to employees until now are in a fix. While it's their duty to hand over the TDS certificates before April 30, last quarterly return can be filed by June 15.
But to give relief to employers who have not given the TDS till April 30, the CBDT issued a new Circular no 142 on April 25, 2007. The circular makes it clear that if an employer has not submitted tax returns for the last quarter, he/she can issue employee Form 16 just by writing in the given column that fourth quarter returns are yet to be submitted.
Also, you can now file income tax returns without submitting Form no 16. However, I suggest you attach form 16A.
Is the rehabilitation and compensation given by the builder for shifting and staying away from the society until it is rebuilt, taxable? We have entered into an agreement with a developer for reconstruction of the society.
-- Uttam Shah, Mumbai
You will have to pay the tax as the builder has given you compensation on the transfer of flat from the society so you can leave your flat. If you have been living in that property for more than three years, the compensation will qualify for long-term capital gains.
However, if you spend money from this amount to buy another house, you will not get tax deduction for that amount.
I have moved to Kolkata after retirement, but have yet to file my income tax returns.
-- Vidyu, Kolkata
You can file returns at Kolkata itself, but before that, do complete the formalities related to migration of PAN. If you haven't filed returns yet, you can file it up to March 31, 2008. Once you file tax returns you will also get the refund.
Can I claim HRA exemption by paying rent for a rented house while I am already availing benefit of tax deduction for home loan?
-- Om Agrawal, Ahmedabad
If your employer gives you HRA as part of your salary, you claim tax deduction. Otherwise, it is not allowed. So, you can claim the benefit of home loan as well as of HRA.
For more on financial planning, click here