Saturday, November 16, 2019

Posted at: Feb 11, 2019, 7:05 AM; last updated: Feb 11, 2019, 7:05 AM (IST)TAX ADVICE

Divorced daughter eligible for pension

SC Vasudeva

If both parents (government pensioners) of a divorced daughter are no more, is she eligible for pensions of both parents under these circumstances? Please advise. — Mohinder Sharma

The daughter would be entitled to receive pension being provided in respect of both the parents i.e. mother and father if it is in accordance with the service rules as applicable to both the parents.

I understand that for a merchant navy officer working on a foreign flagship receiving his salary in his NRE account needs minimum 183 days out of India to become an NRI in one financial year for the purpose of income tax calculation. If he remains 175 days continuously out of India on the ship and after spending 10 days in India, he goes out of India for 15 days as a tourist, completing 190 days out of India, will he be considered as an NRI for the purpose of income tax in India in that financial year? — SK Sharma

In the case cited by you, we understand that you are asking about a situation where a citizen of India leaves India as a member of the crew of an Indian ship as defined under Section 3(18) of the Merchant Shipping Act, 1958. Such person will be considered as a non-resident if his stay in India is for 182 days or less.  The period of stay of such person in India shall be computed as per Rule 126 of the Income-tax Rules 1962 (The Rules).  Rule 126 provides that the period for which an individual being a citizen of India and a member of the crew of the ship, the period for which he would be considered to have stayed in India shall be the period beginning on the date entered into the continuous discharge certificate in respect of joining the ship for voyage undertaking by a ship engaged in the carriage of passengers or freight in international transfer and ending on the date entered into the continuous discharge certificate in respect of signing off by that individual from the ship in respect of such voyage. Therefore, in case your son fulfils the requirements of the aforesaid rule, he will be considered to have stayed in India for the period of 182 days or less.  A period of 15 days of stay of abroad shall be taken into account for considering his residential status. After considering the aforesaid factors, if his stay in India, as computed under Rule 126, as well as 15 days of stay outside India is 182 days or less, then he would be considered as a non-resident.

I am an NRI and tried to file my income tax return this year. The system does not move until we fill Aadhaar number. Being an NRI, we are not eligible to get Aadhaar number.  Please advise how I can file the return. – Pawan Gupta

The system has now been modified.  It is possible for a non-resident Indian to file Income-tax return without Aadhaar number. However, such return cannot be signed electronically. A copy of return duly signed is required to be submitted to the Bangalore processing office of the Income Tax Department by ordinary post within 120 days of the date of filing of e-return.

One of my relatives was seriously ill and later became permanently disabled with 75% disability. Before illness, he was working with a reputed company. Since he was unable to perform his duty, the company relieved him of his duties in mutual consent with him. He was paid a considerable amount after deduction of TDS and the whole payment over and above his normal remuneration and other benefits is written as bonus in the statement.

My query is since he is permanently disabled now and cannot perform his duties for whole of his life, it is evidently clear that this is the case of loss of source of income and money paid over and above his normal remuneration is compensation for permanent loss of income and it is capital receipt in nature. As such why any tax is payable on that amount.

Further, if it is capital receipt in nature, can my relative demand refund of TDS by revising return as he has already filed return for the AY 2018-19?

Lastly, is the company right in terming the hefty amount as "Bonus" in place of compensation and deducting TDS on that amount. Please clarify. —Sarvjeet Singh

It may not be possible for your relative to seek refund of the amount of tax deducted at source in respect of the amount received from his employer. This is because the certificate issued by the employer mentions the additional payment as bonus on the basis of which the employer has deducted tax at source.  It may be added that any amount received by an employee from an employer at the time of termination of his service, whether voluntarily or otherwise, would be taxable unless otherwise exempt under Section 10 of the Income-tax Act 1961 (The Act).  Section 10 of the Act deals with the income which are exempt from tax and such exempted income include gratuity up to the specified limit, commuted value of pension, encashment of accumulated earned leave up to a specified limit and the retrenchment compensation under a scheme to be approved by the prescribed authority etc. 

The issue raised by you that it is a loss of source of income and, therefore, the amount received by your relative should be treated as a capital receipt may not be accepted by the department. He will, however, be entitled to claim permissible deduction under Section 80U of the Act from his total income provided disability is covered within the provisions of the said section and compliance of other formalities required under the provisions of the said section.


All readers are invited to post comments responsibly. Any messages with foul language or inciting hatred will be deleted. Comments with all capital letters will also be deleted. Readers are encouraged to flag the comments they feel are inappropriate.
The views expressed in the Comments section are of the individuals writing the post. The Tribune does not endorse or support the views in these posts in any manner.
Share On