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Were you prudent with your investments last year? Did they help you save tax? Or did you end up paying more than you could afford?
What investment mistakes did you make last year? Are their ways to rectify them? What investment options should you go for this year?
What should you do to bring your tax liability to the minimum level?
Direct tax expert Vikas M Gandhi spoke to readers during an hour-long chat on rediff.com on Thursday. Here is the transcript:
Vikas. Gandhi says, Good evening friends and welcome to the chat session relating to your tax issues.
RahulGandhi asked, Is Home Loan Pre-Payment(Partial) exempt under Section 80C?
Vikas. Gandhi answers, at 2007-12-20 15:55:00According to me, as far as you are repaying your principal amount of home loan, you are eligible for claiming deduction u/s 80C for that amount.
raghavan asked, Hi i just wanted to know the i have taken mortageg house loan from icici bank. three house let out . shall i claim the deduction
Vikas. Gandhi answers, Interest paid on loan taken on mortage of house property will not make you eligible for claiming the same as deduction from rental income. Interest which is paid for loan taken for purchase or reconstruciton of house can only be claimed as deduction from rental income.
Dolly asked, Hi Vikas, I have just sold some of my shares that i was aloted in a IPO and got 45% profit in a span of 3 months, just want to know is this amount taxable, i earned thry my trading account in icici.though i have an account in icici for trading my salary account is with another bank that i use for tax filing.
Vikas. Gandhi answers, Yes, since you have sold the shares within 3 months of its purchase, the profit earned will be termed as Short term capital gain and is liable for tax. However since you sold the share through stock exchange, you will have to pay tax a concessional rate of 10%
rad asked, Hi, Recently I purchase house thru homeloan. I want to know the complete tax exemption details including stamp duty, registration charges etc. Please help me
Vikas. Gandhi answers, For home loan, you get following tax exmeption- The EMI you pay every month comprises of Principal repayment of loan and also interest on loan. Interest amount paid upto Rs.1,50,000/- can be claimed as deduction from total income. As regards your Principal repayment of loan, the same has to be inlcuded with other tax saving investments viz: LIC [Get Quote] Premium, PPF, NSC, etc, total of which restricted to Rs.1,00,000/- can be claimed as deduction from total income. YOu will need to have a certificate from the bank or institution grating loan, certifying the amount of principal and interest paid during the year.
satyanandac asked, can i get housing loan tax benefit for a 2nd house in my name in Pune as I have already repaid the loan for my 1st housing loan taken for my current residence at Thane
Vikas. Gandhi answers, Certainly you can get the benefit. However in case of two house properties in your name, one of the property will have to treated as if it has been rented out and accordingly you will be taxed on such notional income, after deducting interest paid on such housing loan.
Nidhi asked, Hi,I am single n live with my parents in our own house which is on my father's name. can i claim HRA and show that i am giving rent to my father.he is retired person n gets a pension of 3k per month.
Vikas. Gandhi answers, You can certainly claim HRA exemption, provided you actually pay rent by cheque to your father and produce rent receipt duly stamped. You may also have to provide PAN no. of your father.
Rajat asked, What about the tax benefits for the shareholders of the merged company? I am a shareholder of a small company n own 10000 shares that I have owned for 2 years. On merging, I am getting only 1000 shares with denomination of 10000 rs. I want to sell them immediately. What kinds of taxes I have to pay?
Vikas. Gandhi answers, Since you have held the shares for more than 1 year, profit earned on sale will be treated as Long Term Capital Gain. If these shares are quoted on stock market and you are selling the same in the stock market, the entir capital gain on such sale will be exempt. However if the shares after merging are not quoted in stock market, you will have to pay tax @20% on the profit earned.
Rakesh asked, Hi Vikas, if i open a demat account in the name of my mother and do trading with that, so i get tax benefit of 1.45 lpa. My question is, does the question where does the money come from for trading when she is not earning?
Vikas. Gandhi answers, Certainly the source of investment will be asked, if there is an enquiry from Income Tax Officer. However in such a situation you need to explain that you have given loan to your mother for doing this type of trading, which will well be accpeted by the Department. So you need not worry. DO show some repayment from mother account to your account to prove the stand.
Sherman asked, Are the amount gained after selling off Bonus Shares are taxable.
Vikas. Gandhi answers, To calculate the profit the cost of Bonus shares is considered to be Nil. Hence the entire selling price will be your Profit. Whether it will be taxable or not depends on the period you held the shares. If you have held the bonus shares for more than 1 year, and then sold in stock market, the entire capital gain will be exempt. Otherwise the profit will be treated as Short Term Capital Gain and will be taxed @10%.
Sherman asked, Is divident taxable.
Vikas. Gandhi answers, Dividend received from shares of Indian Company are not taxable.
Domino asked, I have a home loan for self-occupied property and one home loan for rented property. Can I get tax benefit for both (principal + interest on loan 1 and interest Less Rent on loan 2)
Vikas. Gandhi answers, Yes you can get tax benefit for both the loans.
Sudip asked, Hi,Vikas, My annual Income Exceeds Rs1.2 lakh,I am paying Rs1000 P.M for rent purpurse.Can I get benefit of deduction from this (I am staying in a muncipal area) ?
Vikas. Gandhi answers, You can certainly get tax benefit for rent paid u/s 80GG, provided you fulfill following conditions - a) You are not in receipt of House Rent Allowance b) You or any of your family member does not own any house property.
veenitbhayana asked, hi Vikas is it necessary to produce a Rental agreement for the Rent paid to owner or only rent reciept in enough as a proof of rent paid.
Vikas. Gandhi answers, According to me it is a sufficient compliance if you provide rent receipt as a proof of rent payment for claiming HRA exemption.
A asked, Me and my wife have taken a housing loan and purchased an apartment. The apartment has been registered in joint name for both me and my wife. Both me and my wife are salaried personnel. For the loan I am the borrower and my wife is co-borrower. The per year interest repayment on the loan is more than Rs 3 Lakhs. Now the question is can both me and wife avail the Tax benefit on the interest paid. More specifically can I avail up to 1.5 Lakhs and my wife also avail up to 1.5 Lakhs making the total tax benefit availed upto Rs # Lakhs on this loan?
Vikas. Gandhi answers, Yes, both of you can claim exemption for interest paid, provided both of you pay your respective share of EMI towards loan.
niraj asked, Hi Vikas, My father deos not have any income other than 60k per year as pension. He earned 50k profit from IPO (less than a year he sold everything. How much tax he has to pay. He is 62 years old. Min slab anyway is 1.1 lakhs .. so no tax ... am i correct
Vikas. Gandhi answers, Your understanding is perfectly correct. Since the income is within exemption limit, your father need not pay any tax.
sltanwar asked, I am paying EMIs agains house loan, but I have rented out that house, can I get tax exemption over loan payments(Principle+Interest).
Vikas. Gandhi answers, Yes, you can claim deduciton on accout of interest on hsouing loan, against the rent income. Further you can also claim tax benefit on account of principal repayment of loan.
REKHA asked, hi, If get money from my NRI friend to purchase home as a gift, may I have to pay tax?
Vikas. Gandhi answers, Yes, certainly you will have to pay tax on such gift. This is because any gift received in excess of Rs.50,000/- from a person other than relative and other than certain occassion mentioned, is liable for tax. Here since you will be receiving gift for purchase of a house, I presume that the amount will be more than Rs.50,000/- and hence entire gift is taxable.
pravinkedia asked, This is regarding the Stock Gain short term vs long term gain tax. Suppose I bought some stock at Rs 50 in 2000. (SAY 1000 shares) and some more in 2007 for Rs 5 (Say 10000 shares). So average cost price for the 11000 shares is Rs 9.1. And I sold all 11000 stocks in 2007 at Rs 9.1. Do I need to pay any short term captial gain tax as we have bought 10000 shares in 2007 at Rs 5.
Vikas. Gandhi answers, Yes you will have to pay short term capital gain tax on sale of shares that was purchased in 2007. This is because you cannot calculate average price for calculating your capital gain. It has to be calculated on actual purchase cost and hence purchase cost for first 1000 shares will be Rs.50/- and another lot of 10000 shares will be Rs.5/- for calcualting capital gains.
Vikas asked, If my NRI brother sends me 10 lakhs rs in my account do i have to pay tax on it?can i do what ever i want to like investing in shares mutual funds or in land etc,?
Vikas. Gandhi answers, If he is your real brother, the gift received is totally exempt from tax and you can make any type of investments with that amount.
Vikas. Gandhi says, That's all for the day friends. Good-bye and wish you all a Merry Christmas, in advance.
Chat with Vikas every week!
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