V B Prabhu Verlekar
Q. I am a investment and finance consultant for High Net worth Individual ( HNI) clients and represent a Global Fund for India. For the purpose of branding and marketing, I have to wear smart luxury suits and shoes, wear signature Rolex Gold watch, use satellite IPhone and move in chauffeur driver luxury car. Personally, I lead a simple life with ordinary clothes and do not even wear a watch. I operate from Goa and have to visit HNI clients all over India. I cannot claim 50% deductions u/s 44AD/44ADA as my income is much higher. Can I claim depreciation on watch, iPhone and deduction for my attire under Indian income tax?
Ramesh K Prabhu, Dona Paula
Since you are not eligible to claim income as per section 44AD or 44ADA (as you are not specified professional), you will be taxed under normal provisions, meaning genuine business deductions are allowed if they satisfy tax law criteria.
Under section 32 of IT Act depreciation is allowed at applicable rate on certain assets which are used for business. Since Satellite IPhone is used by you mainly for your business, depreciation for same can be claimed at the rate 15% irrespective of its price. Though Rolex gold watch is considered as personal asset not eligible for depreciation, you should still claim it for the following reasons. Your luxury attire by way of tailored suit and shoes is deductible if it qualifies as uniform / professional attire required for profession like lawyers’ black-gown and neck-band or doctor’s apron u/s 37(1) of IT Act, since it is wholly and exclusively used for profession. Since your luxury apparel is not mandatory, it cannot be considered as uniform. Inspite of this, you should claim this and depreciation on watch as plant and machinery as tax deductible and contest till highest legal forum if you can afford paying lawyers’ fees. Irrespective of the result, you will be benefited since your status and brand value will be known to larger audience in a dignified way.
Q. I am a single person aged 89 years confined to bed and living in senior citizen home run by nuns. I receive pension from Central Government and interest on bank deposits on which tax is deducted at source. Is there any way I can get relief from filing income tax return?
Joaquim Baptista Souza, Siolim
Income tax Act does not grant any exemption from filing tax return on account of physical or mental condition or age. However, w.e.f. 01-04-2021, there is one exception u/s 194P to get exemption from filing tax return only subject to following conditions:a) Individual should be of 75 and above and resident in India; b) He should get pension and bank interest from same specified scheduled bank; c) If he wishes to opt for deductions for investment in PPF etc. u/s 80C – 80U under old regime, the bank will give effect to such deduction and thereafter will calculate and deduct tax due. Once this is done, he will not be required to file tax return u/s 139.
Q. We are a Goan couple doing bakery business in Calcutta. We are governed by Communion of Properties as per Portuguese Civil Code. We have been filing our returns separately declaring individual income through a tax consultant in Calcutta who was not aware of applicability of section 5A to us which can reduce our tax liability significantly. Can we now file tax returns claiming benefit of Section 5A of Income Tax Act, 1961?
Richard James Rodrigues, Bada Bazar, Calcutta
Provisions of section 5A is applicable to any erstwhile citizen of Goa, Daman & Diu governed under Communion of Properties residing anywhere in India and not necessarily in Goa. Since you are governed under Portuguese Civil Code u/s 5A of I.T Act, hence-forth you can file tax returns for you and your wife separately after clubbing income of both under different heads except salary and dividing the same in equal shares and claiming all deductions u/s 80 from gross income in equal shares. However, it is advisable to claim TDS in the name of respective spouse to tally with Form 26AS.
Q. I have got job in Silicon Valley, USA under H-1B work-visa as AI professional. Kindly inform what things I must do before I leave India.
Dr. Jayesh Pai-Panadikar, Margao
Following is check list to follow: 1) Ensure that validity of your Passport is more than 6 months; 2) Close your all saving/ FD bank accounts and open one NRO bank account to deposits Indian income if any. 3) Open Non-Resident External Bank account to deposit foreign earnings. Interest is exempt from Indian income tax; 4) Covert your share Demat account to NRO Demat account; 5) Change your Mutual Fund folios to Non-resident as TDS rate is different; 6) Give General Power of Attorney to your close trusted relative to handle your legal, financial, property(except sale) matters as the cost of traveling and time required is prohibitive. 7) Keep your PAN active. No issue if Aadhar remains. 8) Take USA health insurance, since US medical costs are extremely high.
Q. I am CEO of a pharmaceutical company. I have taken on lease a villa for my personal residence on monthy rent of Rs. 70.000? Am I required to deduct tax from rent payments?
Ajaykumar Sharma- Verna Industrial Estae, Verna
Yes. With effect from 01-10-2024, an individual under provisions of section 194-IB if monthly rent exceeds Rs. 50,000/- is required to deduct 2% TDS once in the last month of the financial year or last month of tenancy. He should deposit the same using Form26QC and issue Form 16C to landlord. PAN of landlord is mandatory. If landlord does not provide PAN, TDS is 20%.
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.
