Tax related queries…

I am a pensioner. I am staying in Chennai in a rented house at a rent of ₹10,000 per month. I have my own house in my village which has been rented out. In this scenario, I wish to know whether I am eligible for any tax exemption for the rent that I am paying in Chennai. Am I eligible for any tax exemption for the amount spent for the maintenance of my own house in the village (presuming the maintenance expenditure is ₹21,600,which is 30 per cent of the deemed rent of ₹6,000*12=72000)

SCK Pillai

An individual can claim deduction for rent paid by him for his own residence under Section 80GG subject to satisfaction of a few conditions. One of those conditions provides that the individual should not own a residential accommodation himself or by his spouse or minor child at the place where he ordinarily resides. Assuming that your close family do not own an accommodation in Chennai, you are eligible to claim a deduction for financial year 2016-17 up to ₹5,000 per month.

As regards your second question, since the property in your village is vacant and cannot be occupied by you or your family members, the annual value for the said property would have to considered as nil. Hence, you are not eligible to claim standard deduction of 30 per cent on repairs and maintenance.

I had invested some sums in KVP when I was unemployed a few years ago. Now, all my KVPs will begin maturing from January 2017 onwards. What is the tax treatment for this investment? I am now in the 10 per cent tax slab.

Madhumitha Mandal

The interest received on KVPs is fully taxable on maturity under the head ‘income from other sources’. Such interest income will be subject to tax at progressive slab rates applicable to you.

There will not be any tax deduction at source on the interest amount paid on maturity. Hence, you should discharge the taxes on interest income through the advance tax mode to avoid any penal interest cost or pay it as self-assessment tax at the time of filing the tax return, along with applicable interest.

If you are currently taxable at 10 per cent, depending on the quantum of interest, you may move to 20 per cent or 30 per cent slab rate.

Credits The Hindu Business Line

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