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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, Wish you all a happy new year. Good evening friends and welcome back to the tax chat session.
sanjay asked, Can i avail home loan princ. and interest benefit if i rent that house and stay in rented house in same city and avail HRA benefit also
Vikas Gandhi answers, at 2008-01-03 15:55:52 YOu can certainly get home loan principal and interest benefit for the house which you have given on rent. However if you give your own house on rent and stay in a rented house in the same city, according to me you won't be eligible for HRA benefit. In my view the dual deduction is available only in the situation where you have to stay out of the city on account of your job.
sid asked, Whether profit from mutual fund if invested for 3+ years is exepmted from i.t. and also profit in shares for more than one year is it exempted too?
Vikas Gandhi answers, The period of holding is more than 1 year for mutual fund to become Long Term capital asset. In such a situation only equity oriented units of mutual fund will be exempt provided it fulfills following conditions- a) The units are sold in open market b) You have paid Securities transaction tax on sale of such units. Similar conditions apply for shares also for getting such exemption.
rohit asked, Hello SIR, I just want to know that how much HRA can be exempted from TAX...please reply
Vikas Gandhi answers, For knowing how much of HRA is exempt from tax, you need to first find following three values - a) Actual HRA received b) 50% of (Basic Salary + Dearness Allowance) -- if house is situated in Mumbai, Delhi, Kolkatta & Chennai, else 40%. c) Rent paid - 10% of (Basic Salary + Dearness Allowance) Once this three amounts are known, the least of the three amount is exempt from tax.
nikhil asked, I AM SALREID PERSON WITH ANNUAL INCOME OF 4 LAC. WHAT IS THE I/TAX I NEED TO PAY HOW MUCH IS THE TAX ON EQUITY SHARES BOUGHT AND SOLD WITHIN ONE YEAR ? REGARDS NIKHIL THAKKAR
Vikas Gandhi answers, On a taxable salary of Rs.4 lacs, you will have to pay an approx tax of Rs.71,000/- including education cess. As regards sale of shares within one year of its purchase you have to pay tax @10% on the profit, provided you have paid securities transaction tax on sale
jack asked, Hello Sir, Can i avail tax concession for the amount spend for my wife's education.
Vikas Gandhi answers, NO. you cannot claim any concession for the amount spend for your wife education.
KUMAR asked, Can we claim last years Investment for tax saving,if the same i have not claim last year?
Vikas Gandhi answers, You can claim only current years tax saving investments for the current year income tax. Such brought forward provisions are not available in Indian tax laws.
lb asked, I have a flat in joint name with my husband. I want to give my flat on rent. Can I take the rent cheque in my husband's name to avoid tax
Vikas Gandhi answers, In my view, since you are the first owner of the house, the rent income will be taxed in your hands and cannot be considered as your husbands income even if you take cheque in the name of your husband.
Sdevi asked, Dear sir, i am a house wife and have no income recently i bought some shares and sold it within one year to make a profit of 20000 rs, i want to know how to pay the capital gain tax, my total income for the year is only this profit. which form to fill to pay capital gain tax and where to submit regards Sdevi
Vikas Gandhi answers, Your total income is only Rs.20000/- which is well within the exemption limit and hence you are not require to pay any tax. Further you are also not required to file your returns for the year as the income is below the taxable limit. Any income earned by you upto Rs.1,45,000/- will be tax-free.
TARUN asked, IAM A SALARIED EMPLOYEES & HOUSE IS IN MAE OF MY FATHER IF I WILL PAY RENT TO MY FATHER .IS THEIR ANY PROVISON UNDER WHCIH I WILL RELIEF SIR
Vikas Gandhi answers, In my view you can pay rent to your father and claim exemption from HRA. However see to it that you pay rent by cheque to your father and get a rent receipt for the same.
Suresh asked, I am in job at delhi & receiving HRA but my family residing at Udaipur (Raj). They are paying rent there more than me. Can i claim HRA for Udaipur. Thanks
Vikas Gandhi answers, No. since you are working in Delhi, you can claim HRA exmeption on rent paid for Delhi property and not for Udaipur property.
dinesh asked, Hello Sir, If i girt some money to my sister is there any tax benifit to me.
Vikas Gandhi answers, There are no tax benefits for gift given to relatives or to any other person.
HYD asked, I want to donate some money to Annadanam, Shirdi Sai Temple, Shirdi. To get the excemptions to like donations any cap for max amount or upto any amount we wish?
Vikas Gandhi answers, Basically the caption limit for donation under Income Tax Act is restricted to 10% of your total income. On this amount you get tax benefit on 50% of such amount.
hari asked, EDUCATION FEE CHILDEREN LIMIT TO EXEMPT
Vikas Gandhi answers, Deduction on account of Education fees of children is covered under section 80C. the overall limit of this section is Rs.1,00,000/-. There is no specific limit on education fees separately.
pran asked, Can the net total loss ( capital gain/loss) during a financial year be offset against the Salary income for the year? And can the loss be carried forward to next year income?
Vikas Gandhi answers, Capital Loss during the year cannot be offset against any other income. It can only be adjusted against capital gain. If you are not able to adjust such loss during the year you can carry forward such loss to subsequent years till 8 years.
rajesh asked, Is the incentive which I am earning in my company is taxable. if yes at what rate.
Vikas Gandhi answers, Incentives are fully taxable. it has to be included in your total income and then tax has to be calculated on such total income.
RS asked, I am investing in KVP and NSC and claim NSC from the Tax return in the year of investing. After that i am not claiming any thing on account of interest in the subsequent years for NSC. IS amount received on maturity on NSC and KVP is taxable or not.How can we save Tax on it.
Vikas Gandhi answers, Both the interest on NSC and KVP are taxable, when received on maturity.
JPRCIPL asked, Hi Vikas, Happy New Year! My take home salary is Rs. 1.50 L p.a. and short term capital gain of rs. 15000.00 for the year. My PF deducted is Rs. 7000 p.a. and I have LIC [Get Quote] for Rs. 22000.00 p.a. I would like to know, what amount I'll have to invest to save my tax?
Vikas Gandhi answers, On the basis of facts given, you still need to invest Rs.26,000/- to save your tax. Alternatively you have to pay tax of Rs.2600/- only, which according to me you should pay and enjoy the balance money.
Mahesh asked, Hi Vikas. I have bought a flat last year Feb and since Aug im paying EMI. Now I have shown HRA and loss on housing loan for my tax calculation. Can I get both benefits for this year? As I was paying rent till Aug of 07?
Vikas Gandhi answers, I presume that you got the possession of the new flat after August and as a result of this you had to stay in a rented premises. In such a situation you can certainly claim both the benefits in your income tax return.
Nandita asked, Hi Vikas, I would like to know how much can I claim under section 80? Will the whole be exempted from Tax?
Vikas Gandhi answers, Under section 80C you can invest upto Rs.1 lakh and get deduction for the entire amount. Further you can also go for medical insurance premia which you can claim deduction upto Rs.15000/-.
sumit asked, I am working on contract basis with a co and getting the compensation as lump sum amount, please suggest in which form I should file the return, though theuy are deducting the TDS on income.
Vikas Gandhi answers, YOur income will be treated as profession income and hence you will have to file return in ITR-4
ccc asked, Hi Vikas, I am a salaried person living in arented apartment and claiming the HRA benefit for the same. I pay rent in advence for entire month. My Qs. is that from 15th of Jan I am shifting to a new apartment and will be paying half months rent there also. Can I claim the HRA benefit for both the rents paid i.e. full moth rent paid for current apartment and half month rent paid for new apartmen?
Vikas Gandhi answers, Exemption on account of HRA is given after calculating certain figures. According to me you have to total up entire rent paid during the year in the forumula and find the exemption amount.
rajes asked, Sir, i get something called a special allowance as a part of my salary. Is there anyway to save tax on this component of my salary? Also, i have a LTA component in my salary as well. I have heard that one can claim LTA in a block of 2 years. So i wanted to know if i need to claim it this financial year only, or can it wait till the next year?
Vikas Gandhi answers, Special allowance is totally taxable and there is no way you can save tax on this component. As regards LTA the current year block is from 01/01/2006 to 31/12/2009. Within this four years you can claim the LTA concession in any two years. You can decide when you want to claim such exemption.
Vikas Gandhi says, That's all for this session, friends. See you next week. Till then good-bye.
Chat with Vikas every week!
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