The deadline for filing your Income Tax returns is almost here. If you don’t already know, it is 31st July, 2017. You still have time to get your doubts regarding filing taxes cleared. Here, we try to answer some of the most common questions about filing taxes. Ready? Here we go.
Can I claim HRA for rent paid to parents and spouse?
Before we answer that question, let’s understand HRA a little better.
If you are living in a rented accommodation, you are allowed to claim House Rent Allowance (HRA). This will be equal to the least of:
| Actual rent paid or |
| Your basic pay minus 10% of the rent or |
| 50% of salary if you stay in a metro |
HRA can be claimed by filling up Form 10BA. However, note that you need to actually ‘pay’ that rent. The Income Tax department might ask you for proof.
Here’s what you need to know when claiming HRA for rent paid to your parents or spouse:
Parents: You can claim HRA if you pay rent to your parents, provided your parents own the house. You cannot claim HRA paid on behalf of your parents. Be ready with the proof of rent paid.
Spouse: Recent court rulings state that you can claim HRA for rent paid to your spouse. But this comes with several conditions:
- The house should be in the name of your spouse and not your name.
- The house should have been purchased by your spouse out of his or her own income.
- You both need to file separate tax returns.
- Your wife should show the rent received as income from house property.
Phew! All conditions satisfied? The, you can go ahead and claim the rent paid to your spouse as HRA.
BB Tip: Did you know you can claim HRA under Section 80GG even if your company does not provide you with HRA benefits? Yes, it’s true!
Where should I mention my HRA while filing my IT return?
Annual rent will not reflect directly in the ITR 1 form as it is used only for the purpose of calculating your HRA exemption. What you need to do is mention your net salary (salary minus HRA exemption) when you are filing your returns.
How can I get a TDS refund?
Was the Tax Deducted at Source (TDS) much more than what you actually needed to pay? You can get it back by filing your returns. Once this is done, the amount that you are eligible for will be refunded back to your bank account.
Can I e-verify my return anytime?
Sorry, that’s not possible! You will need to e-verify your returns within 120 days of filing your returns. However, note that once you have generated the Electronic Verification Code (EVC), you need to submit it within 72 hours.
Can I claim medical reimbursement if I have not submitted bills to my employer?
No. Unfortunately, you cannot claim medical reimbursement as a tax deduction unless you submit your medical bills to your employer. The onus of verifying the medical bills lies with your employer. So, submitting it to the Income Tax department is of no use.
I have income from salary as well as capital gains from stock trading. Which ITR should I use?
In this case, you should use ITR 2. Note that if you just purchased shares and there are no capital gains, you can use ITR 1. Also, if you want to carry forward your losses, you will have to use ITR 2.
Can I claim both medical reimbursement and Insurance premium paid?
Yes, you can claim both. While medical reimbursement is tax free under Section 17 (2), you can claim your Life Insurance premium as tax deduction under Section 80C of the Income Tax Act. Note that medical reimbursement is different from medical allowance. Medical reimbursement is tax free while medical allowance is fully taxable.
I have medical bills but my employer does not provide medical reimbursement. Can I use them to get a tax deduction?
There are some medical expenses incurred for certain ailments that are exempt under Section 80DDB. These ailments include dementia, renal failure, cancer and Parkinson’s disease, among others. Deductions can be claimed up to Rs. 40,000 by individuals who are below 60 years of age. The deduction can go up to Rs. 80,000 if you are over 80 years of age. Note that this is only valid if you receive no medical reimbursement from your employer or an insurance company. You also need to get a prescription from a doctor stating the ailment to claim this deduction.
I have withdrawn from my PPF this year. Should I mention it in my return?
Even though PPF has an EEE (exempt, exempt, exempt) status where income from PPF as well as the maturity amount is tax-free and you can claim a tax deduction for the amount invested. However, you need to mention it under the exempt income category in your ITR.
Can I subtract the Rs. 10,000 exemption for Savings Accounts from my FD interest?
No. The interest earned on your Savings Account can be claimed as an exemption under Section 80TTA and you cannot mix this with your Fixed Deposit (FD) interest. Your FD interest is totally taxable as per your Income Tax slab. You might also have to pay TDS on it.
Where do I enter my Home Loan interest details in ITR 1?
You need to enter the details of your house property under section 24B. Usually this is entered with a minus (-) sign in your ITR. Note that earlier, for let out property, there was no limit on the amount of interest you can claimed. Now, this is capped at Rs. 2 lakhs. If you have a self-occupied property, the limit for that will be Rs. 2 lakhs too.
I made an error in my ITR. Can I revise it?
Yes. It is possible to submit a revised return under Section 139 (5). The procedure will be the same as filing a return. However, you will need to mention that it is a revised return and provide the acknowledgement number for your original return. You can revise your return as many times as you want in a year. It should be done within 1 year from the end of the relevant assessment year. Once you file the revised return, the original return will be substituted with the revised return and the revised return will be assessed. It is best not to e-verify your return if you know that the ITR filed by you has errors.
Got a question? Feel free to write to us using the comments section below. Yet to file your IT return? You can follow our step-by-step guide to filing your return online. Happy filing!