VB Prabhu Verlekar
Q. I am a pensioner. I have joint bank account with my son on “Former or Survivor” basis. My pension is deposited in this account as also other income. This is done on the advice of bank manager. Is there any risk in maintaining such type of bank account?
Joseph S Cardozo, Betalbatim.
Many pensioners maintain such type of account to deposit their pensions. Under this mandate, only primary account holder (you) can operate the account. Only after death, survivor can operate this account. Such accounts have a potential risk of inaccessibility to funds in case the former (you) is permanently incapable of operating the bank account for physical or mental reasons. You will not be able to withdraw cash or make payments from the account to meet medical and other expenses as your son will not have authority to operate this account. There have been instances where despite large funds in the bank, person could not get proper medical treatment in the absence of funds. Ideal mandate is to operate bank account on “either or survivor” basis.
Q. We have sold our joint ancestral immovable property for Rs 2 crore. We are cousin brothers. The individual share of each party is less than Rs 50 lakh. We are informed by our tax consultant that there is no need to deduct tax at source by buyer since amount is less than Rs 50 lakh each. However, the buyer insists on deducting TDS of 1 per cent. What is the correct position?
Ganesh S Dangui, Savordem.
Under section 194-IA(1), the buyer of immovable property is required to deduct tax at source at 1 per cent on the consideration amount or stamp duty value (SDV), whichever is higher, at the time of credit or payment whichever earlier. However, under section 194-IA(2) if consideration or SDV is less than Rs 50 lakh then no TDS is required. From October 1 2024 under proviso to section 194- IA (1), where there are multiple transferors (like in your case) or transferees, the consideration in aggregate of the amounts payable by all transferees to all transferors has to be considered for the purpose of determining the limit of Rs 50 lakh. In view of this, for all sale deeds executed from October 1 2024, buyer is mandatorily required to deduct TDS at 1 per cent, even though the individual share of sellers is less than Rs 50 lakh.
Q. I am Goan holding Portuguese citizenship living in United States. My husband is black American citizen working for White House. Can my husband be eligible to apply for registration as OCI card holder?
Maria Venessa Alphanso, LA, USA
As per section 7A of The Citizenship Act, 1955 the spouse of foreign origin, of a citizen of India, or spouse of foreign origin, of an Overseas Citizen of Indian card holder, registered under section 7A of the Citizenship Act, 1955 and whose marriage has been registered and subsisted for a continuous period of not less than two years immediately preceding the presentation of the application, is eligible for registration as OCI Card holder. Such spouse is subject to prior security clearance by the home ministry. Please note that you have been eligible to become Citizen of India when Goa was liberated on 19.12.1961.
Q. I am running a restaurant cum bar with annual turnover of less than Rs 30 Lakhs. I wish to take benefit of Composition Scheme under Goa Goods and Service Tax Act as my turnover is less than Rs 1.50 Crs. Is this in Order?
Peter Sequira, Mapusa.
Composition Scheme under Goods and Service Tax Act, is not available to restaurants and caterers serving alcohol (liquor) for human consumption as provided in Entry 6b of Schedule III, of the Act. The Composition Scheme can be availed only by restaurants and food caterers serving food and non- alcoholic drinks.
Q. Our cashier has misappropriated cash withdrawn from bank for office expenses. Police case is filed. Can we claim this misappropriated amount as deduction from profit?
Anant R Pangam, Ponda.
Since cash is misappropriated in the course of business, the same can be claimed as deduction from profits under the provisions of section 37 of the Act. This is supported by various high court judgements.
Q. We are running a small scale industry what are the provisions regarding deduction of tax at source for making payment to contractors?
Dayabhai S Patel, Cuncolim Industrial Estate.
Under provisions of section 194C (3) any resident person who gives works contract, where the bill amount exceeds Rs. 30,000 or if the total value of such payments in a year exceeds Rs. 1,00,000/-, such person is required to deduct tax at source and same is required to be deposited in government treasury. TDS rate for individual contractors is 1% and for others TDS rate is 2%. In case the contractor does not furnish PAN, you will be required to deduct TDS at 20%.
Q. I have three residential flats in different locations which are used as residence of my family. How will these flats be taxed for the purpose of income tax?
Rajesh S Gupta, Dona Paula.
From assessment year 2020-21 income from any two self-occupied residential houses will be treated as NIL under provisions of section 23, 24 of the Income Tax Act. The third residential house will be charged to tax by taking standard market rate of rent even though you have not received any income.
The writer is well established, senior practising chartered accountant with wide experience in taxation and finance. He is also a strategist in turn round management of institutions.
