I am disabled person (visually impaired ). I teach in a private school and earn a salary of about ₹15,000 a month. My wife is a homemaker. I have FDs both in our joint names and individual names. Will I be charged TDS for my income? Is there any tax exemption for disabled persons that I can claim? What are the relevant documents that will be needed?
Hilal Ahmed
Assuming that your FDs are with banks, if your interest income from fixed deposits with the bank branch exceeds ₹10,000, the bank will withhold tax at 10 per cent. Further, since the deposits are made from income earned by you, tax should be withheld under your PAN even though the FDs are in joint names. However, there will be no TDS on your salary income.
As per the income-tax provisions, if you qualify to be a person with disability in accordance with the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, and obtain the prescribed certificate from the medical authority, you are eligible for deduction of ₹75,000 (if the disability is not severe) and ₹1,25,000 (if the disability is severe) under Section 80U, while filing your tax return.
My daughter, in the beginning of this financial year, quit her job in India and moved to the US. She has taken up a job there. She has investments in India in PPF, EPF, bank fixed deposits and savings accounts, mutual funds and equities. She has filed her income tax returns till the assessment year 2017-18 (FY 2016-17).
Now that she is an NRI working in the US, what are the requirements that she has to comply under the Indian income tax rules?
Can she continue to contribute to her PPF account and mutual funds?
Since TDS is effected on the interest on her fixed deposits, can she file income tax return and seek refund?
Venu Pattani
Assuming that your daughter has spent less than 182 days in India in FY 2017-18, she will qualify to be a non-resident for income tax purposes. She can file a tax return and claim refund for the tax withheld on her income (including fixed deposits) if the TDS exceeds the income tax that she has to pay.
Further, since she has left India to take up employment abroad with the intention of staying there indefinitely, she will also qualify to be non-resident as per the Foreign Exchange Management Act.
As per a recent notification, her PPF account will be deemed to be closed from the date she became non-resident and the interest will be paid at the rate applicable for post-office savings account. Though there is no bar for an NRI to invest in mutual funds in India, it is advisable to inform the investment advisors and bankers about the change in her residential status.
The writer is Partner, Deloitte India. Send your queries to taxtalk@thehindu.co.in