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Disabled dependent eligibility for income tax deductions requires relatives or HUF members to be wholly or mainly dependent.
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Disability definition sets qualifying conditions and severity thresholds for income-tax deductions for specified impairments under tax law.
Definition of disability for income-tax deductions under sections 80DD and 80DDB follows the Persons with Disabilities Act, 1995, listing impairments such as blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, mental illness, autism, cerebral palsy and multiple disabilities; a person is considered disabled when impairment is not less than 40%, and severe disability is an impairment of 80% or more, which determine eligibility for the specified deductions.
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Health insurance deduction allowed when employee bears premium paid non-cash and obtains employer certificate confirming the deduction.
A deduction under section 80D is available where the employee has paid medical insurance premiums for himself and/or his family by a non-cash mode; the employee should obtain an employer's certificate confirming deduction of the amount for medical insurance purposes.
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Deduction under section 80D requires payment from taxable income; payments from exempt income or loans disqualify.
Deduction under section 80D is available only where the payment is made out of income chargeable to tax; payments from tax-exempt income or from borrowed funds do not qualify for the deduction.
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Medical insurance deduction under 80D varies by parental senior citizen status, affecting combined family and parental premium allowances.
Deduction under 80D allows an individual who pays medical insurance premiums other than in cash to claim a deduction for premiums for the assessee, spouse and dependent children as one component and for parental premiums as a separate component; the total allowable deduction depends on whether any parent is a senior citizen, with a higher combined deduction if a parent is a senior citizen.
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Deduction under section 80D: contributors who pay health insurance premiums non cash may claim proportional deductions
Contributors who partly pay health insurance premiums may each claim a deduction equal to the amount they actually paid, provided each share is paid directly to the insurer and by a mode other than cash; in such cases each payer may claim the deduction against their respective taxable income.
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Deduction under 80CCG limited by eligible investment percentage and income threshold, with recapture on scheme violation.
Deduction under the Rajiv Gandhi Equity Savings Scheme is computed as a percentage of eligible investments in listed equity shares and equity oriented fund units but is restricted by a monetary ceiling; sale of previously qualifying units can breach scheme conditions and cause partial recapture as taxable income; exceeding the prescribed gross total income threshold disqualifies the taxpayer from claiming the deduction for that year.
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Deduction under section 80CCE limits combined 80C and 80CCC claims for contributions to savings instruments.
Contributions to Public Provident Fund and an annuity policy eligible under Section 80CCC are deductible but subject to the aggregate ceiling under Section 80CCE; when combined eligible deductions across Sections 80C and 80CCC exceed the statutory limit, the deductible amount is restricted to that ceiling and any excess is disallowed.
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Aggregate deduction under section 80CCE limits combined 80C and 80CCC contributions to the statutory overall ceiling.
Contributions to a public provident fund and annuity policy premiums are aggregated and the deductible amount is the lesser of the combined eligible contributions and the statutory aggregate ceiling; when the combined total exceeds that ceiling, the deduction is restricted to the statutory limit.
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Deduction under 80C: eligible life insurance premiums allowed up to policy ceilings; excess disallowed; one policy's maturity taxable.
Deduction under Section 80C allows life insurance premiums up to policy wise ceilings based on a percentage of the sum assured. Policy A (sum assured 200,000) with a ceiling of 20% permits the full 25,000 premium as deductible; Policy B (sum assured 100,000) with a ceiling of 10% permits only 10,000 of the 12,000 premium as deductible. The total deduction equals the aggregate of eligible premiums, and Policy B's maturity proceeds are not exempt from tax.

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Reopening of assessment - Substance over Form - Failure to disclose material fact - Duty of the AO to make an enquiry to test the correctness of the disclosure made even if the statutory forms signed and certified by the Chartered Accountant

10 July, 2019

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2019 (7) TMI 415 - MADRAS HIGH COURT

2018 (10) TMI 442 - MADRAS HIGH COURT

Reopening of the assessment for the year 2010-2011. - Whether ingredients of Section 147 r.w.s 148 are satisfied?

Facts of the case

In the present case, deduction u/s 10B of Income Tax Act, 1961 was allowed to assessee (100% EOU) on the basis of Form No.56G. In the said Form in Column No.8 it is mentioned as 10th year of claim, but, in Column No.7, the date of commencement of manufacturing is mentioned as 28.03.2000. Thus the Assessing Officer stated that the year under consideration happens to be 11th year. The Assessing Officer also referred to the copy of the Form 56G for the assessment year 2001-2002. Accordingly the Assessing Officer informed the assessee that the assessee has exclusively extended its 10B holiday period to the 11th year and hence become ineligible for deduction under Section 10B.

Submission of the assessee

There was no opening stock as on 1.4.2000. The first invoice was raised only on 31.05.2000 to UNICEF, New Delhi. With regard to the date of commencement of manufacturing activity, the assessee stated that the firm came into existence on 20.03.2000, registered as an EOU on 29.03.2000 and has commenced manufacturing activity only after 01.04.2000.

With regard to the discrepancy pointed out by the Assessing Officer in the notice dated 25.01.2017, the assessee stated that the substance over Form is required to be taken into consideration and mere reporting of the date in the Form 56G does not give a conclusive picture as to the date of starting of manufacturing activity which is only in the month of April or which only in the assessment year 2001-02 which has been clearly claimed as the first year of exemption. Therefore, the assessee requested to drop all the assessment proceedings and reopen the assessment.

Single member bench [2018 (10) TMI 442 - MADRAS HIGH COURT], while entertaining the writ petition, has observed that:

Every non disclosure of material facts will not or cannot be a justifiable reason for reopening sustainable under judicial scrutiny.

On the other hand, such non disclosure of a material fact must be of such nature that, but for such non disclosure, the income, relatable to such material fact, would not have escaped assessment. In other words, it should lead to an irrebuttable conclusion that by the conduct of the assessee, either by providing wrong or incorrect particulars or by not providing the full and correct particulars, he should have made the Assessing Officer not to bring a particular income to tax, which is otherwise liable to be taxed. If this test is applied to the present case, I am of the view that the Revenue has to fail.

Revenue took the matter before the division bench of the High Court [2019 (7) TMI 415 - MADRAS HIGH COURT] wherein it was observed that:-

There can be no escape from this fact and the assessee should accept this mistake.................It may be true that the assessee can now take a stand that substance over form is to be considered but what is important is that the assessee at the first instance had a duty to give proper and correct details. We may say that the assessee failed in doing so. Be that as it may, what is required on the part of the Assessing Officer is not to go mechanically by the details disclosed by the assessee in the statutory form and or for that matter signed and certified by the Chartered Accountant. The Assessing Officer being cast with a statutory duty an enquiry is required to test the correctness of the disclosure made in such statutory forms. This is why the concept of substance over form was always preferred by Courts while dealing with such matters.

The second mistake which the assessee committed, which had invited the problem, was not mentioning the correct date of commencement of commercial production in its reply dated 02.02.2007 and this again was submitted through the very same Chartered Accountant. In the reply, there is a vague statement with regard to the commencement of manufacturing activity and what has been stated is that the assessee commenced manufacturing activity only after 01.04.2000. Thus, we are of the view that the assessee appears to have not been very seriously contesting the matter at the relevant point of time. Wisdom dawned upon the assessee only after the appellant passed the order dated 13.02.2017. It is thereafter the assessee through their Chartered Accountant gave the exact date of production/manufacture as 25.05.2000.

Keeping aside all these issues, we have examined the correctness of the order passed by the learned Single Bench and we note with approval the findings of the learned Single Bench in paragraphs 16 and 17 of the impugned order. The above finding rendered by the learned Single Bench is just and proper.

As pointed out by the learned Single Bench every non-disclosure of material facts will not or cannot be a justifiable reason for reopening an assessment. We reiterate that what was required to be considered is that, substance over form.

Therefore, we are of the considered view that the learned Single Bench was perfectly right in allowing the writ petition which had been done after thorough examination of the facts and the legal position. In our considered view the revenue has not made out any grounds to interfere with the order passed by the learned Single Bench.

 


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2019 (7) TMI 415 - MADRAS HIGH COURT

2018 (10) TMI 442 - MADRAS HIGH COURT

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Acts Income Tax