Taxation queries

I took a home loan and have been paying the EMI from April 2006. I will get possession of my flat this year, but till then I’ll have to stay in the rented house. Can I claim the benefit of both HRA and home loan this financial year? — Sanjay Jadhav

You will get the benefit of HRA under Section 10(13A), under the head of ‘salary for the relevant period for which you were staying in rented premises’. You will get deduction of interest paid on housing loan under Section 24 (3) under the head ‘income from house property and repayment of principle amount under Section 80 C’.

Are the dividend from Reliance Industries Ltd, and interest received from IDBI Flexibonds-22 exempted from tax? If so, kindly advise the Section under which it is exempted. — jbmackdani@yahoo.co.in

Dividend received from Reliance Industries Ltd is exempted under Section 10(34). Interest received from IDBI Flexibonds-22 is not exempted.

I am getting Rs 15,000 per annum as medical benefit from my organisation without submitting hospital/medical bills. However, I had spent around Rs 20,000 on this in 2005-06.  Kindly explain whether the receivable amount is eligible for computing income tax rebate for the AY 2006-07. — Manoj Nair

The value of reimbursement of medical expenses to you by your company is exempt from tax under the first proviso to Section 17 (2) up to Rs 15,000 in the previous year. Therefore, the balance Rs 5,000 out of the Rs 20,000 received by you shall be taxable as salary in your hands.

I have not received the IT refund for AY 2005-2006 yet. Please tell me the procedure for getting the refund. I have sent two reminders to the ITO, last one on April 25, 2006. — Nigel D’mellow

This is a typical situation where you have no other option but to keep reminding the assessing officer. However, you may personally or through your authorised representative, appear before the assessing officer and request him to expedite the matter as early as possible.  

(The author is a chartered accountant with Bhana Shah Doshi & Co.)