How to claim money after the death of principal depositor? Answers to your personal finance queries

BANGALORE INDIA June 3, 2019 :People talking in front of the Indian bank ATM and Punjab national bank ATM at Bangalore railway station

BANGALORE INDIA June 3, 2019 :People talking in front of the Indian bank ATM and Punjab national bank ATM at Bangalore railway station  

Readers can send in queries on personal finance and investing to

Q. Must nominees submit legal heirship certificate and consent letter from related persons along with death certificate while claiming money after the death of the principal depositor?

N.R. Santhanam

A. Nomination in the bank account is only for the limited purpose of operation of the account in case of death of the account holder. Further, the nominee becomes custodian of the funds after the death of the account holder and he acts as a trustee in distributing the money lying in the bank account to the legal heirs of the account holder. The bank is right in asking for the legal heir certificate and no objection letters from other persons mentioned in the legal heir certificate for entitlement of the amount lying in the said bank account.

Q. I am a retired State government staff who is receiving pension. I have been an assessee for three decades. As a pensioner also, I am paying I-T. I also get a monthly honorarium of ₹20,000 from an institution. There is no employee-employer relationship. Can I show this as income from other sources?


A. Honorarium is generally a payment given for services that are rendered nominally without charge. Therefore, honorarium received by a person is chargeable to income tax under the head “Income from Other Sources” as there is neither employee and employer relationship nor is it a profession run for profit/gain. Irrespective of usage of such honorarium received by the person, it is taxable in their hands. It has to be disclosed in the applicable ITR under “other income detail” by describing the source appropriately under “Income from Other Sources”. Further reasonable and justifiable expenses incurred for earning this honorarium can be claimed against this honorarium.

Q. I'm now staying in rented accommodation. I don't own residential property. I get rent allowance and there is no HRA. Am I eligible to claim deduction for rent paid? Kindly guide me on how to include it in I-T returns

Ajay Mohan

A. Rental allowance, popularly known as HRA (House Rent Allowance or by whatever name it is called) can be availed as an exemption on satisfying conditions prescribed. HRA is an allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee. Exemption available is the least of the following — a. actual amount of such allowance received b. rent paid minus 10% of basic and DA or 50% of basic and DA (in case of Delhi, Mumbai, Kolkata and Chennai) c. 40% in other cases. It is also required by the assessee to possess relevant proof of rent paid and rental agreement. It is advisable you get in touch with HR department to ensure they process your Form 16 appropriately.


Q. I work for SBI. I have availed a housing loan of ₹40 lakh jointly with my husband. The self-occupied property is in my husband’s name. Who can avail housing loan interest exemption of ₹2 lakh and repayment of principal? Loan repayment is from my salary.

S. Sree Priya

A. To claim interest deduction under Sec. 24 of the Act, you must be an/the owner of the house property and the housing loan is to be availed in the name of the owner/s. In your case, though the loan is borrowed in a joint manner, the property is in the name of your husband. Therefore, interest and principal wholly paid by you towards the housing loan during the assessment year cannot be claimed as a deduction under Sec. 24 and Sec. 80C, though the loan is jointly borrowed.

(The author is a partner, GSS & Associates, Chartered Accountants, Chennai)

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Printable version | Feb 19, 2020 3:30:50 AM |

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