Since none of these conditions are fulfilled in the case of incentive commission of UTI, the answer is a definite `no'.

I have a peculiar problem which, I am sure, very few assessees might be facing. Last year, my wife who was an officer in a central government office, expired. I am now receiving a family pension of Rs 50,000 from the central government. As a manager in a multinational company, I have a decent salary income. Will I be allowed to claim standard deduction separately on the pension and my salary?
-- Sandeep Dastur, Mumbai

Pension has a direct nexus with salary which an employee was earning while he was in service. Therefore, the income tax treatment for salary and pension (as well as SAF-linked annuity of LIC) is the same. In other words, if the salary is exempt from tax (as in the case with the employees of UNO), the pension is also exempt. Similarly, if the employee was entitled to standard deduction, the pension that he receives after his retirement does not lose this entitlement. However, for any income to be treated as salary, there has to exist an employer-employee relationship. Since no such relationship exists between the spouse of an employee and the employer, the pension received by the spouse loses its character as a salary. Standard deduction cannot be claimed by the spouse on family pension.

The authorities realised that this is unfair to the recipient of family pension and the Finance Act 1989 introduced clause (III) in Sec. 57 granting deduction of 33.33 per cent or Rs 15,000, whichever is less. It may be noted that this is almost identical with standard deduction. The only difference is that in the case of family pension, the ceiling is Rs 15,000, whereas it is Rs 20,000 for standard deduction.

These provisions have a curious fallout. Those assessees who earn not only normal but also the family pension can take double benefit. You are lucky, enjoying both the benefits simultaneously.

During the periods from April 1, 1997, to May 31, 1997, and June 1, 1997 to January 31, 1998, I have received dividend of Rs 16,000 and Rs 14,000, respectively, from domestic companies. Kindly let me know whether the amount of Rs 16,000 is taxable and if so, the deduction I can claim u/s 80L.
--Nevil Chinoy, Mumbai

The Finance Act 1997 has taken any dividend declared, distributed or paid by a domestic company on or after June 1, 1997, out of the tax net. Very strangely, it took out the dividend from any Indian company out of the umbrella of Sec. 80L w.e.f. April 1, 1998. This has resulted in a weird situation. Co-dividends have become fully taxable between April 1, 1998, and May 31, 1998. As I have observed many a times, the left hand of authors of legislation do not know what the right hand is doing and of course, vice versa.

You will have to pay tax on Rs 16,000 without the benefit of Sec. 80L and Rs 14,000 would enjoy total freedom from taxes.

Suppose, a housewife having no independent income, avails of bank loan/overdraft in her name against the security of fixed deposits standing in the name of her husband and invests in shares and some other investments. She pays interest to the bank out of this interest and she also redeems a part of the loan out of this interest.