Daljit Singh: My father passed away in December 2007. Being a senior citizen, he has been filing his income tax returns regularly. Please confirm whether we are still required to file income tax return on his behalf for this year also. Please note his income is more than normal exemptions allowed for senior citizens in form of interest etc.
Anish B Mehta: You will have to file the return of income for your deceased father for the period upto December, 2007. In respect of the period after December, 2007, a separate return of income will have to be filed by the legal heirs. The returns of income for the subsequent year(s) will have to be filed till the date of final distribution of the assets of your deceased father. After the final distribution of assets, the income earned on relevant assets will be taxed in the hands of beneficiaries.
M Balusamy: This is with respect to the reply by Anish Mehta to a question by H Bhat in the Hindustan Times issue dated Jaunary 11, 2008, regarding the taxation as perquisite for concessional accommodation provided by the employer to the employee.
For the employees of PSUs like BSNL, the residential quarters are being allotted and no HRA is paid to those who have been allotted accommodation and in addition the standard license fee is also being recovered. In the question raised by H Bhat, he mentioned as HRA deducted but actually HRA is neither drawn nor deducted. If the employee is not occupying the quarters he should have been paid the HRA at 30 per cent and in this particular case whether it can be taken as the HRA deemed to have been recovered for the purpose of taxation as perquisite.
Anish B Mehta: If you are not occupying the quarters and are in receipt of HRA, the entire amount of HRA will be taxed in your hands. As per the provisions of section 10(13A), the exemption in respect of HRA received can be claimed under section 10(13A) only if the house occupied by that person is not owned by him and has paid house rent. In a case, where concessional accommodation is provided by the employer, the notional value of perquisites computed as per Rule 3 of the Income-tax Rules, 1962 is taxed in the hands of the employee. As mentioned in the reply to the question in the the HT issue dated Jaunary 11, it can be contended that since the standard licence fee recovered by the employer for allotment of residential quarter is greater than the amount worked out as perquisite, the taxable value of perquisite would be Nil.
(Anish B Mehta is the Member of ICAI)