Will gifts help avoid tax?

ou have a question about house rent allowance, medical allowance, or even a general tax query.

Here's where we step in with our experts, Relax With Tax.

• Got a question for Relax With Tax? Please write to us!  

I am unable to obtain Form 16 from my previous employer despite reminders. What can I do? Can I lodge a complaint anywhere?

- Vikas Girdhar

An employer is supposed to issue the TDS certificate (ie Form 16) compulsorily in case tax has been recovered from the salary of the employee.

Also, if the salary earned with the employer is in excess of Rs 50,000 but below Rs 150,000, the employer may issue Form 16AA.

If you are referring to Form 16 for the financial year 2004–'05, the employer has time up to April 30 (ie Form 16 should be issued within 30 days of the end of financial year).

You could put in a written request to your company for the TDS certificate. If your employer refuses to issue the certificate you could send in a grievance letter along with relevant proofs -- like payslips, to the grievance cell of Income Tax department requesting them for a clearance to file the IT return without the TDS certificate.

Before you take such steps, you would need to understand from your company if there is any genuine/practical difficulty in issuing TDS certificates. If so, when they can send it.

• Make Form 16 work for you

I had a bond with my previous employer whereby I paid him Rs 100,000. Can I show this as a deduction in the financial year in which I made the payment?

- Vikram  Ruparelia

In this case, a bond has been executed between the employer and the employee. It means you have to complete certain terms as specified in your employment contract. If you do not, your employer can withhold part of that payment since you have not kept part of your contract.

This amounts to a separate payment made by you to your employer. So it is not allowed as a deduction to the employee in terms of computing income tax.

• How to apply for a PAN

I applied for a PAN number online but haven't got it. Now I am told that there is already an application in same name though I never applied for one earlier. What must I do?

- Rajiv Menon

You could provide the reference of the acknowledgement number that would have been generated during the process of making your online application.

This number will enable the UTI processing team to identify and locate your PAN, which could be verbally communicated to you.

You will then be required to make another application in hard copy format (incorporating the PAN available with you), with UTISL. This will help you get a new PAN card.

• All about gift tax

Can I give a gift a cheque to my dad (senior citizen, not employed, doesn't file returns), and get a deduction on my taxable income for that amount?

- Vinod Menon

Salary earned is liable for taxation. How you use it or plan to use it -- household expense or gifts -- is irrelevant.

The exemptions and deductions as specified in the Income Tax Act are applicable in determining the taxable income of an individual. Unfortunately, a gift is not covered in terms of deduction from income.

Got a question for Relax With Tax? Please write to us!

Note: Questions may be edited for brevity. Due to the tremendous response, all queries will not be answered.

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Illustration: Dominic Xavier