Tax queries answered by Dilip Lakhani, Senior Chartered Accountant

My mother's salary is not taxable.But she pays premium of Rs 70,000 annually for 3 life insurance policies - one is health policy and 2 wealth builder policies. Does she need to file her ITR (income tax return)?
Preeti
If your mother's income is nil or below the basic exemption limit, she is not required to file return of income. Just because she has paid insurance premium, she is not required to file ITR.

I am an NRI, having US citizenship, residing in the US. I would like to sell my shares from my NRO demat account in India. These were invested 20 years ago. Do I have to pay any tax on the capital gains?
Paresh Thacker
I understand that you have made investment in the shares of listed companies in India. Since the said investments are held for more than 12 months from the date of purchase the resultant capital gains will be long-term capital gains. If the shares are sold on the floor of the exchange by paying securities transaction tax, the resultant long-term capital gains will be exempted under Section 10(38) of I-T Act, 1961.

If the shares are unlisted, then the resultant long-term capital gains will be taxable at 20% with indexation benefit. You will be liable to pay tax in the US on Indian income even if the income is tax exempt in India.

I inherited a property after the death of my father who passed away when I was a minor. Till I became a major, the entire rent went into my mother's account. Since I am 18 years and hold the PAN card, can I claim a share in the rent income? Also, can I avail standard exemptions and deductions (80C to 80TTA)? If I buy a house now with a home loan will the interest be entirely deductible within the limit of Rs 2 lakh?
Atul Gorane
You will have to offer your share of rent income in the return of income. You can avail the deduction at 30% under Section 24 of I-T Act. You can also claim eligible deduction under Section 80C to Section 80TTA. If you acquire property for self-occupation with borrowed capital, then you can claim deduction of interest up to Rs 2 lakh under section 24 subject to the conditions laid down therein.

(Please send your queries on Tax to et.tax@timesgroup.com)