Query 1]

I request you to please respond to my following points:

1. My gross total income for the current FY is Rs.3,05,956/-. I am a senior citizen. What is my tax liability? To save tax, what should I do? I am retired and all the income is from Fixed Deposits in bank. There is no deduction of tax at source. If I am to pay tax, will it be OK if I pay it at the time of filing the return?
2. My wife is a housewife. Her yearly income is:
   -From FD in bank-Rs. 12,859/-
   -From House rent: Rs. 1,98, 000/-
   Her income is less than Rs. 2.40 Lacs, is it required that she should file the return? She has got the PAN card also. [bltiwari@gmail.com]

Opinion:

The basic exemption limit for the senior citizens for the F.Y. 2011-12 is Rs. 2.50 Lacs.

1. In your case, on income of Rs. 3,05,956/- the income tax liability works out to Rs. 5,764/-. You can save the entire income tax liability on you by investing the approx amount of Rs. 55,960/- in the mode prescribed u/s 80C like purchase of NSC, Investment in PPF, 5 Years tax saving FD with the Bank, etc. If you don’t want to invest, you can pay the tax at the time of filing the income tax return itself & there is no liability on you to pay it by way of advance tax.
2. If the income of any individual is below the applicable basic exemption limit, the filing of the income tax return would be optional & not mandatory in such case. Merely having a PAN doesn’t fix an obligation on the individual assessee to file the income tax return. The income of your wife is comfortably below the basic exemption limit and as such, she is not compulsorily required to file the income tax return.

Query 2]

I am working as a broker/ agent in real estate activities. And I am getting commission from the companies which are pay to me after 10% T.D.S. Also I have a team of sub-agents working under me. From the commission I am receiving, I have to pass on about 80% to 90% commission to the sub-agents as a result of which at the end of the year I have to claim the income tax refund back which takes its own time & energy.

Is there any remedy to avoid TDS? What is the way out? Can it be given without TDS or by doing deduction at a rate lower than 10% As is presently done presently by the payer company?  Also, please let me know whether the dividend received from the credit co-operative society is tax free or not? I learned somewhere that the dividend is not taxable as the same is specifically exempt from income tax as the same is paid out of the tax paid income of the payer.[SMP]

Opinion:

1. Yes, you can get the Commission after Tax Deduction at Source (TDS) at a lower rate or even without TDS also. For this, you have to apply to your Assessing Officer in the prescribed Form No. 13 u/s 197 of the Income Tax Act-1961 read with rules 28 and 37G stating that you may either be exempt from TDS or TDS should be at a rate lower than the prescribed rate. To justify your demand, you have to attach documents of last three years to make your point.
2. The CBDT has delegated the power to the Assessing Officer either to exempt the payment from TDS or to subject the payment at lower rate of TDS.
3. The dividend from Co-operative society is taxable in the hands of recipient. As per section 10(34), only that dividends, on which Companies are paying pay tax u/s 115-O (Dividend Distribution Tax) are tax free in the hands of shareholders.

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