Retiring staff should file return for entire benefits
I am a central government employee. I have received Rs 3,40,839 as salary for the period between March 1, 2009 and February 28, 2010. Total deductions are Rs 1,00,480. My company has deducted TDS of Rs 8,277 for Rs 2,40,399 taxable income. The Form 16 shows Rs 21,713 as arrears for 2008-09 and Rs 65,859 for 2007-08, but it has not claimed tax relief under Section 89.
No tax was deducted at source for me during financial years 2008 and 2009. In 2008-09, my salary was Rs 2,12,058, total deduction was Rs 80,040 and taxable income was Rs 1,32,018. In 2007-08, my salary was Rs 1.35,598, total deduction was Rs 82,556 and taxable income was Rs 53,042.
Am I eligible for the refund of TDS deducted from my salary under Section 89? If yes in which column of ITR-II, I have to fill the amount of tax relief under Section 89. I am filling ITR-II as I am eligible for tax relief on loss of Rs 50,403 for interest paid on housing loan.
J. Pradeep Kumar
Via e-mail
Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than 12 months, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the assessing officer will, on an application made to him in this behalf, grant relief under Rule 21A of the Income-Tax Rules, 1962. The relevant column to be filled in ITR-II is on page 2 under Part B-TTI, point no. 4(a).
Tax payable on total income including arrears for FY10 is Rs 8,277, FY09 is Rs 373 and FY08 is Rs 890. If you exceed arrears from your total income, the tax liability for FY10, Fy09, FY08. Hence, the relief, which can be claimed under Section 89 would be Rs 7,014 (tax paid in FY10 minus tax payable in FY09 and FY08).
Q) I am a central government employee retiring from the service on July 31, 2010. As a result, I will get Rs 18 lakh as my retirement benefits.
Out of this, I want to give Rs 2.2 lakh as gift to my relations, earmark Rs 1 lakh for my pilgrimage and spend Rs 3.7 lakh for renovating my house.
Apart from this, I would like to invest Rs 9.5 lakh in pension plans, fixed depo-sits and mutual funds. The rest of the money, I would like to keep in my savings accounts. How can I show the above particulars in the I-T returns?
P.S.S. Prasad
Via e-mail
Your income-tax return needs to be filed after computing all the incomes received by you from various sources during each financial year. You can also claim the deduction provided under Chapter VI-A for contributions/investments u/s 80C, mediclaim u/s 80D, any eligible donations u/s 80G, etc. There is no need to mention the particulars like gift to daughters or purchase of gold ornament for spouse or renovation of your house needs in the return of income. The information on these issues needs to be provided to the IT department only if you are required to furnish the same in future.
(Kamal Rathi is a chartered accountant, representing Rathi & Malani, a Hyderabad-based accounting firm. Readers can mail their queries on income tax to kamalrathi.ca@gmail.com.)
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