In the case of interest payable on bank fixed deposits held in joint names by two adults, whose income would be considered for income tax purposes? Will the sale of bonus shares after one year of allotment attract long-term capital gains tax?
Srinivas Mitra, Rourkela
The income tax liability for the interest income will be on both the account holders if they are separate assessees. But, suppose the husband holds a fixed deposit account jointly with his spouse, who is a housewife, then the interest income will be accrued to the husband and he will have to pay the income tax. As regards to bonus shares sold after one year from the allotment, there will be no long-term capital gains tax because equities are exempt from long-term capital gains tax liability.
I am a pensioner, aged 65-plus. My annual income is Rs 1,76,240, including interest income from bank fixed deposits. I usually submit Form 15G to the bank. Should I submit income tax return?
S.P. Singh, Joka
Under sub-section (1C) of Section 197 A of the Income Tax Act, an individual who is aged 65 years or more should make a declaration through Form 15H for claiming certain receipts without any deduction of tax at source. Thus, you should submit Form 15H, and not Form 15G, for non-deduction of tax at source on your interest income from bank deposits. When an individual submits Form 15H or 15G, he/she thereby makes a declaration that his/her annual income, including the interest income, will be less than the basic exemption limit for the financial year in which the income will accrue. Since, your annual income will be lower than the basic exemption limit, you need not submit income tax return unless you need to claim refund of tax already paid. In case you have claims for tax refunds you shall have to submit income tax return.
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