CONVEYANCE ALLOWANCE FROM TWO EMPLOYER & EXEMPTIONS

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CONVEYANCE ALLOWANCE FROM TWO EMPLOYER & EXEMPTIONS

EMPLOYER & EXEMPTIONS

Query 1]

In a Divorce case, I want to know the following as per the provision of income tax law:

  1. It has been decided to pay Baran Poshan (One time payment to my spouse on divorce by Mutual Consent) amount of Rs. X to my wife. Whether this amount is taxable at the other end i.e. at my wife end, who is the receiver of the amount?
  2. The amount Rs. X to be paid to my wife, can it be contributed by my family members like mother, father from there saving account shown in the Income Tax as I am unemployed from the last 6 months due to health problem?
  3. The advance amount of Rs. Y paid to my wife during the first hearing of the Mutual Consent Divorce, should I show the same in my Income Tax Return for the Assessment Year 2012-13 as the amount Rs. Y has been paid through cheque and the same has been debited from my saving bank account passbook?

I therefore request you to please guide me. [vinaygodbole1972@yahoo.com]

Opinion:

  1. Being a capital receipt, one time payment (Bharat Poshan) received by the spouse would not be taxable in her hands.
  2. The contribution of the amount by other family members would not carry any income tax implications as such.
  3. The amount paid could be debited to the capital account. If you are filing either ITR-4 or 4S, the capital account would incorporate the same. If however, you are filing ITR-1, 2 or 3, there is no requirement to reflect the same.

 

Query 2]

  1. If a person is employed with two employer then whether he can claim deduction of Conveyance allowance (i.e., Rs. 9,600/-) from both the employer?

  2. If a person books a flat & then sold its booking whether he can claim exemption u/s 54 for short tem capital gain. ? [ca.seema******@gmail.com]

Opinion:

  1. It’s a very interesting query indeed where two different views are possible. There is nothing specific in the Income Tax Act/ Rules to express one sided opinion on the issue. One can form an opinion that section 10(14) read with Rule 2BB restricts an exemption towards conveyance allowance to Rs. 800/- per month for both the employments taken together. The possibility of another interpretation that Rs. 800/ per month is a deduction admissible per employment and not per assessee cannot be over ruled. I have a conservative opinion & of the view that Rs. 800/- per month deduction is available per assessee and not separately for each employment.
  2. No deduction is admissible u/s 54 towards Short term capital gain. Exemption u/s 54 is available only if the assessee has Long Term Capital Gain (LTCG).
Query 3]
Sir, My late father (Retired MH. state govt. servant) had an amount of Rs. 3,75,000/- in a bank. After his death, the amount was claimed by my mother & the said amount was transferred to her account in the same bank. Out of the fund so transferred, she has kept an amount of Rs. 2,00,000/- in FD for three years. Also, an amount of Rs. 1,25,000/- (a DD) which my father had in other bank, was deposited in the above said bank A/c. My mother is a housewife and 58 years old.  She is PAN card holder. Now my queries are
  1. Whether my mother has to file the income tax return?
  2. If yes, which form of ITR she has to submit?

Please guide. [Deepak Nanoti-Nagpur-deepak.nanoti@rediffmail.com]

Opinion:

The income of your mother appears to be below the basic exemption limit & if it is so, the income tax return filing by her is not mandatory. It may be noted that the basic exemption limit for non senior citizen – female assessee is Rs. 1.90 Lacs for the AY 2012-13 & Rs. 2.00 Lacs for the AY 2013-14.

Query 4]
While e-filing the income tax return, TDS certificate number is required to be furnished in the table at S. No. 24, Column no. 5 (Form No. 16A). I am trying to fill in the TDS certificate No’s issued by my banks that are in alpha characters. However, this alpha character certificates No’s. are not accepted in the system. Please advice as to how this alpha character certificates No’s. are to be inserted in the table? [Shripal budavi – bshreepal@gmail.com]

Opinion:

You can e-file the return without quoting the Alpha character certificate number also. Quoting of the six character Alpha TDS Certificate number generated by the NSDL, as mentioned on the right top side of the TDS Certificate is not mandatory in Column No. 5. The return could be validated & uploaded without quoting of this alpha character certificate number. In my opinion Income Tax department has inserted this column to educate and digest these new features by all taxpayer in voluntary manner.

So that there is a smooth run when this field is declared as mandatory field and Income tax department is planning to do so from FY 2012-13 Assessment year 13-14. In your case, the non acceptance of the alpha character certificate number could be due to the usage of old forms or software from your side. If you wish to file the return only by quoting the Certificate Number, then you may try further by uploading the return using the latest schema of the form from www.incometaxindiaefiling.gov.in

Query 1]
In a Divorce case, I want to know the following as per the provision of income tax law:
  1. It has been decided to pay Baran Poshan (One time payment to my spouse on divorce by Mutual Consent) amount of Rs. X to my wife. Whether this amount is taxable at the other end i.e. at my wife end, who is the receiver of the amount?
  2. The amount Rs. X to be paid to my wife, can it be contributed by my family members like mother, father from there saving account shown in the Income Tax as I am unemployed from the last 6 months due to health problem?
  3. The advance amount of Rs. Y paid to my wife during the first hearing of the Mutual Consent Divorce, should I show the same in my Income Tax Return for the Assessment Year 2012-13 as the amount Rs. Y has been paid through cheque and the same has been debited from my saving bank account passbook?

I therefore request you to please guide me. [vinaygodbole1972@yahoo.com]

Opinion:

  1. Being a capital receipt, one time payment (Bharat Poshan) received by the spouse would not be taxable in her hands.
  2. The contribution of the amount by other family members would not carry any income tax implications as such.
  3. The amount paid could be debited to the capital account. If you are filing either ITR-4 or 4S, the capital account would incorporate the same. If however, you are filing ITR-1, 2 or 3, there is no requirement to reflect the same.

 

Query 2]
  1. If a person is employed with two employer then whether he can claim deduction of Conveyance allowance (i.e., Rs. 9,600/-) from both the employer?
  2. If a person books a flat & then sold its booking whether he can claim exemption u/s 54 for short tem capital gain. ? [ca.seema******@gmail.com]

Opinion:

  1. It’s a very interesting query indeed where two different views are possible. There is nothing specific in the Income Tax Act/ Rules to express one sided opinion on the issue. One can form an opinion that section 10(14) read with Rule 2BB restricts an exemption towards conveyance allowance to Rs. 800/- per month for both the employments taken together. The possibility of another interpretation that Rs. 800/ per month is a deduction admissible per employment and not per assessee cannot be over ruled. I have a conservative opinion & of the view that Rs. 800/- per month deduction is available per assessee and not separately for each employment.
  2. No deduction is admissible u/s 54 towards Short term capital gain. Exemption u/s 54 is available only if the assessee has Long Term Capital Gain (LTCG).
Query 3]
Sir, My late father (Retired MH. state govt. servant) had an amount of Rs. 3,75,000/- in a bank. After his death, the amount was claimed by my mother & the said amount was transferred to her account in the same bank. Out of the fund so transferred, she has kept an amount of Rs. 2,00,000/- in FD for three years. Also, an amount of Rs. 1,25,000/- (a DD) which my father had in other bank, was deposited in the above said bank A/c. My mother is a housewife and 58 years old.  She is PAN card holder. Now my queries are
  1. Whether my mother has to file the income tax return?
  2. If yes, which form of ITR she has to submit?

Please guide. [Deepak Nanoti-Nagpur-deepak.nanoti@rediffmail.com]

Opinion:

The income of your mother appears to be below the basic exemption limit & if it is so, the income tax return filing by her is not mandatory. It may be noted that the basic exemption limit for non senior citizen – female assessee is Rs. 1.90 Lacs for the AY 2012-13 & Rs. 2.00 Lacs for the AY 2013-14.

Query 4]
While e-filing the income tax return, TDS certificate number is required to be furnished in the table at S. No. 24, Column no. 5 (Form No. 16A). I am trying to fill in the TDS certificate No’s issued by my banks that are in alpha characters. However, this alpha character certificates No’s. are not accepted in the system. Please advice as to how this alpha character certificates No’s. are to be inserted in the table? [Shripal budavi – bshreepal@gmail.com]

Opinion:

You can e-file the return without quoting the Alpha character certificate number also. Quoting of the six character Alpha TDS Certificate number generated by the NSDL, as mentioned on the right top side of the TDS Certificate is not mandatory in Column No. 5. The return could be validated & uploaded without quoting of this alpha character certificate number. In my opinion Income Tax department has inserted this column to educate and digest these new features by all taxpayer in voluntary manner.

So that there is a smooth run when this field is declared as mandatory field and Income tax department is planning to do so from FY 2012-13 Assessment year 13-14. In your case, the non acceptance of the alpha character certificate number could be due to the usage of old forms or software from your side. If you wish to file the return only by quoting the Certificate Number, then you may try further by uploading the return using the latest schema of the form from www.incometaxindiaefiling.gov.in

EMPLOYER & EXEMPTIONS


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