Revised I-T rules make you senior citizen at 60

Please clarify few questions. As per the I-T rules, is Hyderabad considered a metropolitan city and whether 40 or 50 per cent of house rent allowance HRA is applicable here? One becomes a senior citizen at the age of 60 or 65 and if one crosses this mark in the middle of a year, which tax slab would be applicable.
B.G.Ray
via Mail

In case the accommodation is situated at Mumbai, Kolkata, Delhi or Chennai, the house rent allowance (HRA) of 50 per cent of the basic salary is allowable. If the accommodation is situated in any other place, 40 per cent of the basic salary is allowable as HRA. It is pertinent to note that for claiming the exemption under section 10(13A) there are other relevant conditions to be satisfied —
In case of a resident senior citizen who is 65 years or more at any time during the financial year to which the income pertains, have an increased threshold limit of `2,40,000 (for FY 2010-11).
However, from the current financial year, the age of 65 years mentioned above is reduced to 60 years. Further, from FY 2011-12, every senior citizen exceeding 80 years of age will be liable to pay income-tax only if their taxable income exceeds `5,00,000.

I suffered a loss of approximately `3,00,000 in futures trading (traded electronically through ICICI Securities) during the current FY. I also have approximately `6,00,000 business income (as a Service Provider of a BPCL COCO outlet which was allotted to me by M/s BPCL). Can I therefore set off the loss in trading against my business income.
Ravi Kumar
via Mail

The losses incurred in certain eligible transactions in derivatives can now be treated as normal business loss after the amendment to section 43(5). Therefore, the losses on account of such transactions can now be set off against other business income.

In December 2010 I sold a flat and the long term capital gain comes to `20 lakh. I already own a flat in which I am living. Am I eligible for 54F benefit and 54EC benefit for capital gains tax saving ?
S R Krishnamurthy
via Mail

You are eligible to claim the benefit under section 54 instead of section 54F wherein only the amount of long term capital gains needs to be invested and not the net sale consideration. Further, section 54EC benefit can also be availed along with the investment in a residential house under Section 54/ 54F.

My husband was a bank employee. I am receiving a monthly pension after his death. I want to know how is the pension income taxed? Am I eligible for any tax exemption?
Lalitha K
via mail

Your income shall be taxed under the head “Income from Other sources”. You shall be entitled for a deduction of 33.33 per cent out of your pension income subject to a ceiling limit of `15,000 under section 57 (ii) (a) of the Income-Tax Act.

(Kamal Rathi is a chartered accountant, representing Rathi & Malani, a Hyderabadbased accounting firm. Readers can mail their queries on income tax to kamalrathi.ca@gmail.com [1])