I’m planning to go for the brand new tax regime whereas submitting my earnings tax return (ITR) for the evaluation 12 months (AY) 2024-25. Ought to I proceed to deposit ₹1.5 lakh each year in public provident fund (PPF) and in my mediclaim? Is it crucial to indicate these two gadgets in my ITR underneath the brand new regime?
—Identify withheld on request
The Revenue-tax Act, 1961, gives an choice to file the tax return utilizing the default new tax regime (relevant for AY 2024-25) underneath part 115BAC of the Act or choosing the previous tax regime. These tax regimes differ vis-à-vis the tax charges and the supply of sure deductions/exemptions whereas calculating your taxable earnings.
The brand new tax regime doesn’t pose any restriction on making deposits in PPF account or paying medical insurance coverage. It solely stipulates that underneath the brand new tax regime, deduction underneath Part 80C (which covers funding in PPF account) and part 80D (which covers medical insurance coverage premium fee) of the Act, can’t be claimed. Contemplating that the stated deductions are usually not allowed underneath the brand new tax regime, the identical are additionally correspondingly not required to be reported whereas submitting the tax return. Nonetheless disclosures within the asset schedules, as relevant, will proceed even underneath the brand new tax regime.
Please be aware that these deductions proceed to be accessible if a taxpayer chooses to go for previous tax regime, topic to prescribed limits.
My father-in-law needs to present my spouse roughly ₹30 lakh, which we intend to make use of to repay our housing mortgage. As the only real borrower of the house mortgage, what’s the best suited strategy to make sure there aren’t any tax liabilities?
Can my father-in-law present this quantity on to my spouse, permitting us to make use of it for mortgage compensation with out incurring any earnings tax? Alternatively, ought to we contemplate including my spouse as a co-borrower to the mortgage earlier than paying it off? Or is it attainable for my father-in-law to present the cash on to me?
—Identify withheld on request
As per the provisions of part 56(2)(x) of the Revenue-tax Act, 1961, any sum of cash or worth of property obtained from ‘relative’ will not be thought of as taxable earnings within the palms of the recipient. The definition of ‘relative’ for this function covers ‘partner, ‘any lineal ascendant or descendant of the partner of the person’ or ‘any lineal ascendant or descendant of the person’.
Thus, a sum of cash obtained by you as present out of your father-in-law straight or out of your spouse will not be taxable in your palms. Equally, any sum of cash obtained by your spouse from her father as a present (and, in flip, gifted to you), shall not be thought of as a taxable receipt in her palms.
Parizad Sirwalla is companion and head, world mobility providers, tax, KPMG in India.
Up to date: 28 Could 2023, 10:28 PM IST