|Tax deduction on education loan taken for higher studies|
TAX TALK-27.02.2017-THE HITAVADA
CA. NARESH JAKHOTIA
Tax deduction on education loan taken for higher studies
I have the following queries:
“Education is our passport to the future, for tomorrow belongs to the people who prepare for it today.” ― Malcolm X
Education loan carries a tax benefit U/s 80E of the Income Tax Act-1961. It is subject to various terms & conditions as under:
In your specific case,
Kindly clarify whether the interest of Kisan Vikas Patra is taxable or not under Income Tax act? [firstname.lastname@example.org]
Unlike PPF, interest on Kisan Vikas Patra (KVP) is fully taxable.
I have a query regarding income tax exemption for Transport & Travelling Allowance received by a physically handicapped person for assessment year 2017-18. Please guide about the deduction admissible. [email@example.com]
Realizing the hardship, inconveniences & challenges faced by handicapped, Income Tax Act has incorporated few concessional & beneficial tax provisions for the disabled like higher deduction u/s 80D towards medi-claim policy, deduction U/s 80DDB towards treatment of prescribed disease/ailments, u/s 80DD towards maintenance of a dependant with disability, U/s 80U to person with disability, U/s 64 by exclusion of clubbing provision in respect of income of minor etc.
Coming to your specific query, it may be noted that there are different tax treatment for travelling allowance vis a vis transport allowance received by an employee. Travelling allowance (Leave Travel Concessions/Allowance) is eligible for tax benefit u/s 10(5) whereas Transport allowance is eligible for deductions u/s 10(14), as under:
Leave Travel Concessions (LTC):
LTC is the most common element of compensation adopted by employers to remunerate employees due to the tax benefits attached to it. Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTC is exempt. LTC is eligible for exemption if the employer provides LTC to employee for travel to any place in India undertaken by the employee for himself & his family. Such exemption is limited to the extent of actual travel fare incurred by the employee. Travel has to be undertaken within India. Overseas destinations are not covered for exemption. No special benefit / deduction is available to handicapped taxpayer u/s 10(5).
Transport or Conveyance Allowance:
Conveyance allowance, also called Transport Allowance, is a type of allowance offered to employees to compensate for their travel from residence to and from respective workplace location. Conveyance allowance is paid by an employer only if the there is no transportation provided by the employer. Such conveyance allowance is exempt from tax up to Rs. 1,600 per month (Rs. 3,200 per month for blind, deaf, dumb and handicapped employees) u/s 10(14).
If I do not submit Form 15G to my employer while withdrawing PF amount. TDS would be deducted from my PF amount. So can I claim the deducted TDS from my PF amount at the end of the year while filling Income Tax return if my total income is below tax slab? [firstname.lastname@example.org]
Deduction of tax by the payer (TDS) is merely payment of tax by the payer on behalf of payee, credit of which is available to the payee at the time of filing their income tax returns. You can get the refund of the TDS amount by filing income tax return if your ultimate tax liability is nil.
[The author is a practicing Chartered Accountant from Nagpur. Readers may send their direct tax related queries at
SSRPN & Co
10, Laxmi Vyankatesh Apartment
C.A. Road, Telephone Exch. Square
or email it at email@example.com]