VB Prabhu Verlekar
Q. I am carrying on three different proprietary businesses- grocery store, restaurant and a travel agency, in three separate locations. Each business has a separate GST registration number. Am I also required to obtain separate PANs for each of these proprietary concerns?
Atmaram S Dangui, Margao.
No. A proprietorship has no separate legal existence distinct from its owner. Under the Income-tax Act, 1961, the proprietor and the proprietary concerns are treated as one and the same person. Therefore, irrespective of the number of businesses, places of business or separate GST registrations, you can hold only one PAN in your individual name. Separate GST registration numbers is required under the GST law due to different business verticals or locations, but they do not entitle or require separate PANs for proprietary concerns. While filing your income-tax return, you must consolidate the income and expenses of all three businesses and report them in a single return under your individual PAN. The same PAN should be quoted for all your proprietary businesses and related tax compliances.
Q. I am a retired senior citizen residing in Panaji and own three residential houses. One house is used as my residence, the second remains vacant for occasional use by my children when they visit from abroad, and the third is occupied rent-free by my married daughter. I do not receive any rent from the latter two houses and have therefore shown nil income from house property in my return. Can all three houses be treated as self-occupied with nil annual value, or is any property liable to tax on a notional rental basis?
Gokuldas J Kamat, St Inez, Panaji.
No. Under Section 23(2) of the Income-tax Act, 1961, an assessee can treat only two houses as self-occupied and claim nil annual value for them. The third house is deemed to be let out, even if no rent is actually received. Accordingly, its expected rent (notional rent) is taxable under the head, Income from House Property, after allowing deductions such as municipal taxes and the standard deduction of 30 % under Section 24(a). The fact that the house is occupied rent-free by your married daughter does not exempt it from this provision.
Q. I am an Indian-origin IT engineer who acquired Portuguese citizenship and surrendered my Indian passport to pursue career opportunities in Europe. I presently hold an OCI card. Unfortunately, despite my qualifications and experience, I have not been able to secure suitable employment and am working in a modest position to sustain myself. I now wish to return to Goa and settle there permanently. Can I regain Indian citizenship?
John F Valadares, Berlin, Germany.
Under Section 5(1)(g) of the Citizenship Act, 1955, an OCI cardholder is eligible to apply for Indian citizenship if he or she has been registered as an OCI for at least five years and has ordinarily resided in India for twelve months immediately preceding the application. As an OCI cardholder, you may reside and work in India indefinitely without a visa while pursuing citizenship by registration.
Q. I am a partner in a partnership firm. During the financial year, my share of the firm’s loss amounts to Rs 2 lakh. Apart from this, I have income from other sources of about Rs 8 lakh. Can I adjust my share of the partnership loss against my other taxable income and reduce my tax liability?
Rajesh M Patel, Borda, Margao.
No. A partner cannot set off his share of loss from a partnership firm against his other income. Under the Income-tax Act, a partner’s share in the profits of a partnership firm is exempt under Section 10(2A) because the firm’s income is already taxed in the hands of the firm itself. Correspondingly, the partner’s share of loss also remains at the firm’s level and cannot be claimed by the partner as a personal loss. Therefore, the loss of Rs 2 lakh, cannot be adjusted against your other income of Rs 8 lakh. The loss, if eligible, can be carried forward and set off only in the hands of the partnership firm, subject to the provisions of the Act.
Q. I am an 89-year-old widower and a resident of India. Owing to age-related ailments, I am bedridden and presently reside in a senior citizens’ home managed by a religious institution. My only sources of income are a central government pension and interest on fixed deposits, on which tax is deducted at source. Considering my advanced age and medical condition, can I be exempted from filing an income-tax return?
Joaquim Francis Dsouza, Siolim.
The Income-tax Act does not provide any general exemption from filing returns merely because a person is very old, bedridden, or suffering from physical or mental infirmity. However, Section 194P grants relief to certain senior citizens aged 75 years or above who are residents in India.
To qualify, the individual must receive only pension and interest income, and both must be credited in the same specified bank. The bank will compute the taxable income after considering eligible deductions and rebate, deduct the due tax, and in such cases the senior citizen is not required to file an income-tax return.
Q. I have read reports that the Enforcement Directorate (ED) has provisionally attached assets worth over Rs 1,000 crore in connection with alleged illegal mining activities in Goa under the Prevention of Money Laundering Act, 2002 (PMLA). What constitutes money laundering under the PMLA? On what basis can the ED provisionally attach movable and immovable properties, including assets situated abroad and shares held in companies? Does such attachment amount to confiscation of property, or is it merely an interim measure? What remedies are available to affected persons, and what is the complete appellate hierarchy under the PMLA up to the highest judicial forum?
Ramnath Kamat-Timble, Margao.
Under Section 3 of the PMLA, money laundering involves directly or indirectly attempting to indulge in, assisting, possessing, concealing, using, or projecting the “proceeds of crime” as untainted property. Under Section 5, the ED may provisionally attach property believed to be proceeds of crime for 180 days. Such attachment is temporary and does not amount to final confiscation. The attachment must be confirmed by the Adjudicating Authority under Section 8. Aggrieved persons may appeal to the Appellate Tribunal under Section 26, thereafter to the High Court under Section 42 on questions of law, and ultimately to the Supreme Court of India by special leave under Article 136 of the Constitution. Courts have consistently held that attachment proceedings must comply with principles of natural justice and statutory safeguards.
The writer is well established, senior practicing chartered accountant with wide experience in taxation and finance. He is also a strategist in turn round management of institutions.
