My daughter has investments in dividend option of a mutual fund scheme. Should she inform the AMC about her NRI status? – The Economic Times

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Every week, guest experts answer queries from readers of ET Wealth on various topics ranging from tax to investments to insurance and more.

My daughter is working in the US. She has an investment in the dividend option of a mutual fund through which she received Rs 5,000 as dividend in the last financial year. How should this dividend be treated? Should she inform the AMC about her NRI status?

Rushabh Desai, AMFI registered mutual fund distributor, replies: The AMC should be informed about her NRI status. She will need to update her KYC, submit a letter to the AMC about the change of status with necessary supporting documents. She will also need to fill up the FATCA form and depending on the AMC, a change of bank details form (NRE / NRO). The distributed dividend needs to be treated as income and will be taxed as per her tax slab. If your daughter has not updated her NRI status with the AMC, the TDS charged by default if any by the AMC will be 7.5% – 10%, but if her NRI status has been updated then a TDS of 20% would apply (surcharge and cess will be applicable on both).

I am 36, my spouse is 33 and we are both government employees. We have taken a home loan in which we are co-applicants as well as co-owners of the property. Can we share the HBL principal and interest between us for income tax deduction?

Amit Maheshwari, Partner, AKM Global, replies:
 If the home loan is taken jointly, each of the co-applicants can claim the deduction of loan interest up to Rs 2 lakh each under Section 24(b). Each co-applicant is also eligible to claim the deduction of Rs 1.5 lakh under Section 80C towards the repayment of the principal amount of the loan in their individual tax returns. However, this deduction is allowed only if they are the co-owners of the said property. The amount paid as principal as well as interest shall be allocated between them in the ratio of their ownership for the deduction purpose. You can assume an ownership of 50:50 if there is no evidence to the contrary.

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