Taxation: Kuldip Kumar

Kuldip Kumar, partner and leader, personal tax, PwC India, answers your questions

If I claimed tax benefit on my leave travel allowance (LTA) last year, can I do so this year as well?

Section 10(5) of the Income Tax Act, 1961 read with Rule 2B of the Income Tax Rules, 1962 provides an exemption in respect of an allowance or assistance received by an individual from his current employer or former employer for himself and family in connection with proceeding on leave to any place in India. An employee can claim the exemption in respect of any two journeys in a block of four calendar years. The current block is 2014 to 2017. Where an employee has not availed the exemption in respect of LTA in a particular block, then such employee can avail the exemption of one journey in the following calendar year falling in the next block. If you have not claimed LTA in 2014 or if you have not carried forward LTA exemption claim from the previous Block (2010-2013), you can claim the LTA exemption this year (2016).

If I gift my retirement benefits to my children, will they have to pay tax on it?

There is no gift tax in India, although section 56 of the Income Tax Act, 1961, prescribes that gift of money and/or property exceeding Rs 50,000 is taxable in the hands of recipient. But, gifts received from a close relative is fully exempt. Therefore, the sum of money (retirement benefits) gifted by you to your children shall not be taxable in the hands of your children.

The views expressed are expert's own. Send your queries to yourmoney@bsmail.in