Q 1. Can I claim deduction under section 80D for dependent in-laws?

No. Section 80 D provides for a deduction of Rs.15000 for mediclaim of Family only (family is defined as self, spouse and dependant children of the assessee).  Further to this an additional Rs.15000 is allowed for mediclaim of parent/s of the Assessee.  The word “in-laws of assessee” is conspicuous by its absence.  Hence, one cannot claim the tax benefit for the mediclaim of “in-laws”. This would effectively mean that, if a woman takes a mediclaim for her family which includes her in-laws, then the premium attributable to the “in-laws” is not allowable and it is advised that the husband pays for the mediclaim if the benefit is to be claimed.

Q 2. My wife is 62 years old. I wonder whether investment can be made under ULIP in her name and claim 80C benefit from her total income. I guess the advantage is: 1. Reduced lock-in period of 3 years, against 5 years in back tax saver deposit. 2. Do the dividends after 3 years become eligible for tax free income? 3. She is contributing Rs.70, 000/- regularly in her PPF. Is there any limit of investment in ULIP scheme? Of course I understand that the maximum limit that can be claimed is limited to Rs.1 Lac.

Dividends will be tax free. The maximum deduction under 80C including PPF as well as ULIP would be 100000. So, if she so already contributing Rs.70, 000 to PPF, the additional tax benefit she can get under 80C from an investment in ULIP is only on Rs. 30,000. Subject to that, there is no limit on the amount that can be invested in a ULIP. Please note that with most investments there may be no limit on the amount you can invest although the tax exemption that you can avail of may be on only a part of the investment so made.

Q 3. I have a ULIP for which I have not paid the last two annual premiums. The policy can be reactivated by paying the outstanding premium. I would like to know if the total premium paid to re-activate the policy can be used to claim tax deductions for this current fiscal.

Yes, any amount paid as premium for ULIP can be claimed as deduction but amount paid towards the reactivation charges or interest for late payment or any other penalty can not be claimed.

Q 4. What is the amount that is exempted u/s 80c in case of life insurance premium? As per the act maximum limit is 20% of sum assured. Every one is telling that total amount is exempted irrespective of sum assured. Kindly clarify the position.

The maximum amount which can be claimed for insurance premium under 80C is 20% of the actual capital sum assured. This is specifically provided in section 80C.

Q 5. Are the partial withdrawals or the surrender amount of a ULIP policy taxable?

Partial withdrawals or the surrender amount of a ULIP policy are exempt u/s 10 provided contribution to ULIP is paid for 5 years. If however the policy is being discontinued before paying premium for 5 years then the amount claimed as a deduction under 80C in the past will be taxed in the year in which the policy is cancelled or surrendered

Q 6. Child insurance

You can claim an 80C deduction for the amount paid for the insurance of your children.

Q 7. My PPF a/c matured and I got Rs.8 lakhs. I invested the same as Term Deposits in a scheduled bank as Rs.4 and 3 lakhs each for 2 years with my wife as the first depositor and me as the second. My wife is a housewife and has no income or PAN card. Both of us are senior citizens. Pleas advise the would be tax liability on this.646420

Interest accrued on FD will be taxable in your hands even if the FD is in your wife's name as money has been transferred from your account. This happens due to what is known as 'clubbing' provisions where if assets are transferred to a spouse without consideration, the assets belong to the spouse but income thereon is included in the donor's tax account. As you are senior citizen your total taxable income upto Rs.225, 000 will be exempt from tax.

Q 8. I have a sum of Rs 20 lacs which I have put in fixed deposit in 2 different FDs of 10 lacs each. The second FDs which is jointly in the name of my wife as No 1, I and my son. I want to gift this FD to my son as it is. What will be liability of the interest accrued? The FD is for 3 years

You can gift any amount to your son. If you are gifting the FD then it should be transferred in the name of your son and this may or may not be possible without breaking of the FD. The Interest accrued on the FD will be considered as your income till the date of gift and as his income thereafter. If your son is a minor his income will be clubbed into your income, though you will get a tax exemption of upto Rs. 1,500 against his income so clubbed.

Q 9. If I have a savings in post office made in 2004 and close the account and transfer the amount in bank is the total amount received from post office be considered as income for current financial year?2) I have 25000/- deposited in ICICI Pru ,how much tax benefit I will get?3) if I sell a 10years old share will I have to pay tax on the sale value I have received

Only the interest received from Post office saving a/c will be taxable in the current year provided the same has not already been taxed in previous years on an accrual basis.  2) You will be able claim the Rs.25, 000 as deduction from your income under 80C. 3) If the shares are sold through the Stock Exchange and a Securities Transaction Tax (STT) is levied by the Stock Exchange thereon, the entire Gain will be exempt from tax.

Q 10. I plan to invest money in bank term deposits. It is usually mentioned that for interest amount earned upto INR 10'000/- there is no TDS. My question is that whether this limit is valid for just one branch of a bank (as advertised at many places) or one has to consider the total interest earned in all the banks/branches where term deposits are held by an individual. In other words if one sees the interest limit surpassing in one branch then s/he should open a term deposit in another branch to avoid TDS. Also, if the latter is true then while filing the Form 15G or H to any branch, whether one should certify the deposit details pertaining to that branch only or all the holdings in various branches.

As per the law, the TDS limit of Rs. 10,000 is applicable per branch. From a 15G/ 15H perspective however it is the total income which matters and not just income earned from FDs with a particular.

Q 11. Tax implication on surrender of policy

Surrender value of the policy is exempt from tax - unless it is a policy issued after 1.4.2003 and the premium paid in any year exceeds 20% of the total sum assured.

Q 12. Tax implication on surrender of policy

Surrender value of the policy is exempt from tax - unless it is a policy issued after 1.4.2003 and the premium paid in any year exceeds 20% of the total sum assured.

Q 13. My wife is a housewife and I have taken her insurance policy, can I take benefit under section 80c

Yes, Insurance premium paid on life of spouse can be claimed under 80C.

Q 14. I have not withdrawn the amount from PPF, but only from the PF account(I am a salaried Class, working in pvt. Sector).I have left the job after two years of joining & now withdrawn. The PF amount from my PF account of Company. Now tell me the tax treatment for the same. Whether It will be liable to be included under income from other sources, or not

As you have withdrawn amount from your company's PF a/c within 5 years, Same will be taxable as income.

Q 15. I pay a premium of 85000/- to ICICI Pru and Rs. 15000/- (once in 2 years) to ICICI Lombard. Am I to understand that I can add Rs. 15000/- to my ICICI Pru premium and enjoy a deduction of Rs. 1, 15,000/- for AY09-10.

No.  The maximum deduction that you can claim for A Y 09-10 under 80C will be Rs. 100,000 and not 115,000. A further deduction for any mediclaim paid will be available under 80D

Q 16. I have invested in Three Mutual Funds through SIP. These funds are ELSS. Now my Question is can I claim all invested amount under 80 deductions in my IT Return? Please guide me

Yes, you can claim the same under 80C.

Q 17. I have withdrawn Provident Fund Amount from my account. (I was serving with the Pvt. Co for 2 years, now I left & changed the Company. I have received a PF amount in my bank account. As per my knowledge it is liable for Income tax, Pl. suggest better.

As you have withdrawn amount from your company's PF a/c within 5 years, same will be taxable as income.