I will be turning 60 in February 2013. I want to know whether I will be treated as a senior citizen for the purpose of filing returns for the assessment year 2013-2014. Further, my son who is living abroad completed his MBA and got a job this month.

Am I eligible under Section 80 C to claim deduction for insurance premium, PPF and interest on educational loan ( all in his name) paid by me on his behalf?

— T Umarani

Since you will be completing 60 years of age in assessment year 2013-14, you will be regarded as a senior citizen. Please note that this age limit to qualify as a senior citizen was lowered from 65 years to 60 years with effect from assessment year 2012-13 onwards.

Deduction under Section 80C can be claimed by you for payments made by you, in the name of your son to effect or to keep in force an insurance on his life, and as a contribution to Public Provident Fund.

We understand that the education loan is in your son's name and you are a guarantor for the loan.

Further, the EMIs are paid by you and not by your son. Therefore, the deduction under Section 80E can be claimed by you for any amount paid by way of interest on loan taken by you for the purpose of pursuing higher education of your son.

I sold a residential plot in May 2011 which was purchased in 1979 in Hyderabad. I propose to avail the I-T benefit under Section 54F. One alternative I thought is as follows: I have a flat under construction for which I have already paid five instalments starting in 2006. The details are as follows:

Rs 5.0 lakh - July 2006

Rs 2.5 lakh - June 2007

Rs 3.3 lakh - November 2008

Rs 2.5 lakh - September 2009

Rs 5.0 lakh - November 2010

It may cost a further Rs 10 lakh for registration, furniture and is expected to complete by December 2012.

To avail Capital Gain Tax benefit for the second house how much money should I deposit in Capital Gain Account Scheme in type A and B accounts in nationalised banks. Or please suggest similar cases if any or should I keep the entire amount of sales proceed in CGAS a/c so that I can buy another residential house or construct within the prescribed time.

—Appa Rao

In this case, reference can be drawn to various circulars, which comment on cases where the allotment letter is issued on payment of the first instalment of the cost of construction and the payment of instalments is only a follow-up action and taking the delivery of possession is only a formality.

According to the circulars, for the purpose of capital gains tax, the cost of new asset is the tentative cost of construction, and such cases are to be treated as cases of construction.

Under Section 54F benefit can be claimed provided the assessee has within a period of three years after the date of transfer constructed a residential house.

Accordingly, your flat which is under construction may also fall under the same category and benefit under Section 54F may be availed by you.

Alternatively, the total amount of net consideration (i.e. full value of consideration less any expenses incurred in connection with the transfer) can be deposited in a CGAS before the date of furnishing the return of income i.e. July 31, 2012 and you may choose to invest the same for purchase/construction of a residential house within the prescribed time limit.

Please note that the benefit under Section 54F cannot be availed for purchase/construction of more than one residential house out of the net consideration received on sale of a long term capital asset

Further, the benefit under Section 54F can be claimed provided the assessee does not own more than one residential house, other than the new asset, on the date of transfer of the original asset. Hence, please ensure that this condition is satisfied to claim benefit under this section.

Mail your queries to taxtalk@thehindu.co.in

(The author is a practising chartered accountant.)

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