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I am an American and I lived in India for more than 182 days. Can I avail section 80C benefit?

Eligible instruments for the purpose of Section 80C are tax-saving fixed deposits, Senior Citizens’ Saving Scheme, NSC, etc. You can also claim a deduction of up to Rs 50,000 towards medical expenses under Section 80D.

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Last Updated: Jan 20, 2020, 11.48 AM IST
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You are eligible for deduction under Section 80C by investing in ELSS.
I am an American citizen. As I have lived in India for more than 182 days, I have to file resident tax returns. Can I avail of Section 80C deduction of Rs 1.5 lakh by investing in ELSS funds?
Amit Maheshwari, Partner, Ashok Maheshwary and Associates
replies: As per Section 80C of the Income-tax Act, 1961, any individual can claim deduction of the amount invested in equity linked saving schemes (ELSS) subject to the limit of Rs 1.5 lakh per financial year. Therefore, irrespective of the residential status, you are eligible for deduction under Section 80C by investing in ELSS.

I am a retired senior citizen. My gross income will be around Rs 7 lakh for this financial year. How can I save tax?
Rakesh Bhargava Director, Taxmann
replies: The tax liability on Rs 7 lakh is around Rs 52,000. This can be reduced to nil if you make an investment of Rs 2 lakh. By reducing the taxable income to Rs 5 lakh, the entire tax liability is allowed as relief under Section 87A. You can invest in eligible tax saving instruments to get deduction of up to Rs 1.5 lakh under Section 80C. Eligible instruments for the purpose of Section 80C are tax saving fixed deposits, Senior Citizens’ Saving Scheme, NSC, etc. You can also claim a deduction of up to Rs 50,000 towards medical expenses under Section 80D. This deduction is allowed to a senior citizen who is not covered by any health insurance.

I am working in a PSU and staying in accommodation allotted by the company. Apart from not getting HRA, 15% of the total income is clubbed into my gross annual income and tax deducted accordingly for accommodation. I am also paying the licence fee for the type of quarter allotted to me apart from other maintenance charges. Does the Income Tax Act allow clubbing of 15 % of income with my annual gross income and deduction of tax by the employer?

Amit Maheshwari Partner, Ashok Maheshwary and Associates
replies: In case of unfurnished accommodation provided by the central or state government to employees, the licence fee is clubbed to gross taxable salary. In your context, as the accommodation is provided by a PSU, the taxable value of perquisites shall be according to the population of city in which it is provided. Therefore, if population of the city exceeds 25 lakh then clubbing of sum of 15% of the total income is in order. Further, license fee paid by you would be deducted from the value of taxable perquisites.
Click here for all the information and analysis you need for tax-saving this financial year
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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