Query 1]

1. I would be grateful to you if you solve my query. My father is a retailer and was not having taxable income till last year. He has lost his PAN card & we don’t have copy of it. We don’t know his PAN Number also. This year he is suppose to file the income tax Return. It won’t be possible to file the return without PAN. What should we do? Do we apply for new PAN card? If possible, how can we get new copy of old PAN number itself? Please advice.
2. I have a commercial property which I have given it on Rent @ Rs. 1,50,000/- per month. I have come to know that corporation tax @ 40% is applicable on such rent. Since annual rent is more than Rs. 8,00,000/-, Service tax is also applicable as Rs. 1,50,000/- received by me is inclusive of the service Tax. Further there will be TDS Deduction & my other income is also above Rs. 6,00,000/- (Business). After deduction of all above, I am left with very little. I request you to please advice me on the above. What if I enter into partnership with the tenant and limit my share to amount of rent for the period of the lease?  [harshwardhanagrawal@rediffmail.com]

Opinion:

1. You can get the Permanent Account Number by entering the required data at the following link: “https://incometaxindiaefiling.gov.in/portal/knowpan.do”
   Once you get the Permanent Account Number from the above link, you can apply for duplicate PAN by making an application in “Request for New PAN Card or/and Changes or Correction in PAN data” . The form can be downloaded from the websites of UTI Technology Services Ltd (UTITSL), National Securities Depository Ltd (NSDL), or the I-T department [utitsl.co.in, www.tin-nsdl.com or www.incometaxindia.gov.in].
2. You can think of having a joint venture (or forming a partnership firm) whereby rent could be compensated by other forms of payment as a result of which Service Tax, Municipal Tax. TDS etc can be planned. However, depending upon each & every individual case, one needs to understand & anticipate various other implications & probability involved of this type of arrangements.

Query 2]

I have a query regarding tax liability for the Accounting Year 2011-2012 (A.Y. 2012-13).

I had planted Teak (Sagwaan) plants in my agricultural land of 14 acres in the year 1989. Since then, I have regularly maintained the plants, I had also shown expenses related to it in my accounts from time to time. I had received Rs. 22 Lacs on sell of these plants, after requisite permission from the Forest Department.  I am also having business income of around Rs. 10 Lacs every year. I have following queries:

1. Will the income from teak trees would be treated as Agricultural income or Business income?
2. What will be my tax liability in A.Y. 2012-13? [rahulagrawal1972@gmail.com]

Opinion:

1. Agricultural income is exempt from tax u/s 10(1) of the Income Tax Act-1961. Income from sale of forest.  trees, wild grass, fruits and flowers grown spontaneously without human efforts is not considered as Agricultural Income. However, as per the facts provided by you in the query, the income of teak wood plantations would be treated as Agricultural Income.
2. Although the Agricultural Income is exempt from income tax. It is include in the income of an individual / HUF for the purpose of determining the income tax on non agricultural income.
   Ignoring the investment eligible for deduction under Chapter VI-A (like deduction u/s 80C, 80G, 80D etc), your tax liability for the A.Y. 2012-13, considering Agricultural income of Rs. 22 Lacs & Business Income of Rs. 10 Lacs, shall be Rs. 2.53 Lacs assuming that you are a male, resident non senior citizen Assessee.

Query 3]

I am Employee in Government Organization. My son went to UK for higher studies. I have taken Education loan, personal loans for him from Credila and cooperative society in my name. Also I am repaying these loans from my salary. I am taking benefit of 80E from Income tax. Now he got a job there. He is in a position to send some money (monthly or bimonthly) to me. If he sends me money, will it be taxable? Will it be considere as my income from other source? Can I repay my loan from this money without showing this money as my income from other source?
Please guide me in this matter. Please give rules of income tax for the same if
any. [R.V.Deshmukh – rvdsh@rediffmail.com]

Opinion:

Financial institution [Clause (b)]

As per clause (b) of section 80E (3), Financial institution means a banking company to which the Banking Regulation Act, 1949 applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf.

1. “Higher Education” for the purpose of Deduction U/s 80E means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognized by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so.
2. The money your son would be remitting to you would either be in the form of Loan or in the form of a Gift. In either case, the amount received by you will not at all be taxable as your income.
3. The amount could be use for any purpose. It can be use for the repayment of the loan take by you. However, it may be noted that deduction u/s 80E towards interest payment is available only if it is paid out of the income & not otherwise. You are advise to make the payment of the loan out of your regular income.