Financial Cocktail Samosas: Bitesized money morsels for YOU, 21/04/2021

Financial Cocktail Samosas_ Bitesized money morsels for YOU, 21_04_2021

Not yet received your tax refund? Check the status.

The deadline to file Income tax return for the financial year 2019-20 ended on 31 Dec 2020. Typically, the income tax department processes the refund within 2 weeks to 3 months from the date of filing the return. However, if you have not yet received it, you can check the status of your refund online through www.incometaxindia.gov.in or www.tin-nsdl.com. Log on to any of these two websites and click on “Status of Tax Refunds” tab – enter your PAN and the assessment year (AY) for which your refund is pending.

If the department has already processed the refund from their end, you will get a message on your registered mobile and the email ID mentioning the mode of payment, a reference number, status and date of refund. If the refund has not been processed or has been declined, the message will say so. You may have to wait for a few more days if it is not yet processed or if it has been declined before taking an action.

Deduction limit against health insurance premium is up to Rs 1 lakh u/s 80D

We hope and wish that you and your family members are healthy and doing well in this uncertain time. The need for medical assistance and hospitalization is on the rise. In this difficult time, having an adequate health insurance policy is a must, in case you do not have access to a Govt provided health care plan as it can provide big respite as far as finances are concerned.

Just for your information, premium paid for health insurance policy incidentally also provides tax deduction under section 80D of the Income Tax act 1961. Under this section, you can claim a tax deduction of up to Rs 25,000 in a year for medical insurance premiums paid for self, spouse and children, and an additional Rs 25,000 for premiums paid for parents. However, if your parents are senior citizens and you are paying medical insurance premiums, you can claim an additional deduction of up to Rs 50,000—taking the total deduction to Rs 75,000.

Besides that, if you are also a senior citizen, you can also claim a deduction of up Rs 50,000 for yourself. So, if you and your parents both are senior citizens, the total deduction available under section 80D is Rs 1 lakh.

Do you know the difference between super area and carpet area?

If you are planning to buy a house, make sure you have a clear idea about how much space you are getting against the purchase amount. Typically, developers or real estate agents mention the super area of the house or apartment while describing how big the house is. But the space you get for your personal use may be far different from the size mentioned by real estate agents or developers.

Basically, the super built-up area consists of the apartment area and proportionate area of common areas such as elevator, stairs, lobby, clubhouse, play area, park and other amenities available in the project. On the other hand, carpet area is actually the space you get for your personal use (the space in which you can spread your carpet on!).

As defined under the Real Estate Regulatory Authority (RERA) guidelines issued in 2016, carpet area is the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or veranda area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.

Typically carpet area is 30 -35% or more lower than super area. For instance, if an apartment is said to be the size of 1,500 sq. ft, the actual usable area, or the carpet area, will be 975-1,050 sq. ft. Hence, while buying a house, be more insistent in knowing the carpet area of the house rather than the super area – you may get two flats with same super area but vastly different carpet area.