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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?
In an hour-long chat with rediff.com, direct tax expert Vikas M Gandhi replied to many such readers' queries. Here is the transcript:
Vikas Gandhi says, Good evening friends and welcome back to Tax Chat session
Sudhan asked, Hi, Good Evening. For short term gains, to pay tax should we need to get any kind of statement from demat account and attach along with IT returns form?
Vikas Gandhi answers, at 2008-05-15 16:00:47Alongwith Income Tax Return, you are not required to submit / attach any documents. However do preserve all the relevant documents for future use.
arunm asked, Vikas is there any tax deduction on payment of stamp duty on commercial property which is in individual name
Vikas Gandhi answers, No. You don't get any deduction for stamp duty paid on purchase of commercial property, although it is in individual's name.
Bibhuti asked, Sir, Goodafternoon, my question is, Can a person file his return of 05-06 & 06-07 today
Vikas Gandhi answers, You can file the return for F.Y.2005-2006 and 2006-2007. However it is upto your Income Tax Officer to accept it or not. If at all he accepts the return, your case will be selected scrutiny assessment.
RahulT asked, Hi Vikas..2 questions would like to ask. 1) I will be taking a home loan shortly..Since it is my first time taking any kind of a loan, would like to know how is tax calculated on my home loan and what is the best way to minimise taxes. 2) I have salary account and recuurring deposit account in ICICI [Get Quote]. If i take a home loan from ICICI, can having a RD account help me minimise my taxes?
Vikas Gandhi answers, There is no tax on home loan. Infact on account of home loan, you get certain deductions, which reduces your tax. Your loan repayment consists of Interest and Principal component. For the interest repayment you get deduction upto Rs.1,50,000/- from your total income. Further your principal repayment also gets entitled for deduction u/s 80-C, within the overall limit of Rs.1,00,000/-. Further there will be no effect if you have RD account or not.
JAM1 asked, Is there any tax deduction on payment of stamp duty on residential property which is in individual name
Vikas Gandhi answers, Yes, you can claim deduction u/s 80C for stamp duty paid for purchase of residential property.
arunm asked, if one has a second house which is not let out is there any notional income associated with it
Vikas Gandhi answers, Yes, if you are having two houses, none of which are let-out, you will have to offer notional income for any one house at your selection.
Anand asked, Whether the income from shares, mutual funds are taxable and if yes how to save.
Vikas Gandhi answers, There are two ways in which you get income from Shares and Mutual funds. First is Dividend and this is exempt from tax. The second type of income arises out of sale of such shares and mutual fund. If the profit on sale is Long Term Capital Gain, the income is exempt if you have paid Securities Transaction Tax on sale of such shares / mutual fund. If the gain is Short Term Capital Gain, the profit will be taxed @ 10% if securities transaction tax is paid on sale.
anjali asked, I have recieved a notice from the Tax Office that reads: Please furnish original TDS Certificate Challans / Form 16 so as to process your return of income and issue refund / demand notice. I have not asked for a refund and have been paying my taxes thru the accounts department at my office. Why has this been sent to me?
Vikas Gandhi answers, Possibly the data of TDS certificates mentioned in your income tax return is not matching with the database of the Department and hence to cross check and find out whether the credit for the tax deduciton should be given or not, the documents might have been called for. this is one of the possible reasons. If there is any other reason, you will be able to know only when you mett the Officer.
bobbyy asked, how does you deduct STT from the profit earned on stocks and caluculate short term capital gains
Vikas Gandhi answers, For calculation of Capital Gains, you are not supposed to deduct the Securities Transaction tax paid.
RKG asked, What is the last date for filing income tax return for individual in the current financial year?
Vikas Gandhi answers, If your books of accounts are not required to get audited under Income tax Act, the due date of filing return for you is 31st July, 2008. Otherwise the date is 30th September, 2008.
Ganesh asked, suppose, currently I am working in bangalore, some project work I need moved to chennai during time of file return. whether I need to return the filing in bangalore or chennai itself?
Vikas Gandhi answers, Since you are working in Bangalore, you are suppose to file your return in Bangalore.
rawat asked, A am having a homeloan for last 3 yrs 6 months.I am getting tax benefit of Rs.1.5Lacs on it.Now I want to sell my house.Do I need to return back my TAX deduction benefits of last three yrs if I sell this house within 5 yrs??
Vikas Gandhi answers, There is no such law in the Income Tax Act. You can sell your house at any time.
global asked, Are interests earned from Fixed deposits for terms more than a year tax exempted ?
Vikas Gandhi answers, Interest earned from Fixed Deposits are totally taxable, irrespective of whether the FD is kept for more than 1 year or less.
manoj asked, hi, I had lent 1 lakh to my sister , if she sends me that money through western union from us, will that money be taxable
Vikas Gandhi answers, Basically this the repayment of loan that you are getting back and not your income. Hence the amount won;t be taxable provide you are able to prove that the loan was given from proper sources.
Sajag asked, Hi Vikas, Good day. I have not filed my tax returns for past 3 years though from my salary there has been consistent deduction. 1. Will it create a problem? 2. Could you please tell how much fine I have to pay (or is it dependent on your income)? 3. I am @ Bangalore. If you have any office, could you please inform? Thank you. Sajag
Vikas Gandhi answers, This is the notion among many of the employees which is wrong. Form 16 is not your Income Tax Return. You have to file your income tax return although there is no additional income or any additional tax. There is of course penalty for non-filing of returns which has to be decided by the Income tax officer.
prasad asked, what is Section 80D of medical insurance ? does the 1 lakh included section 80D amt also or it will be added to 1 lakh as savings?
Vikas Gandhi answers, Deduction under section 80D is in addition to what you get in Section 80C (Rs.1,00,000/-).
ramji asked, if one gets gift from others and if the total income along withthe gift if below the taxable slab what will be the tax implication
Vikas Gandhi answers, Since your total income is within the exemption limit, there will be no tax implication.
skmahajan asked, My wife has annual income of Rs 1 lac. She has profit of 50000 from shares this year.Does she need to pay short term capital gain tax?
Vikas Gandhi answers, If the profit of Rs.50,000/- is in addition to the annual income of Rs.1 lac, yes there would be some amount of tax that would have to be paid.
pranit asked, Hi Vikas, If a person earns Rs. 2 lac as profit through Short Term Capital Gain and he don't have any other source of income. Will he be taxed Income tax as well as @10% for short term capital gain. Isn't it double taxation.
Vikas Gandhi answers, There is only one tax and hence there would not be any double taxation. You will be paying only 10% tax on the Short Term Capital Gain and that too after reducing the basic exemption limit available as you don't have any other income
krish asked, Sir, Good Evening.. Sorry I am late, but please please do reply to this imp question. For a self employed person, what are the different sources to be treated expenses to reduce tax liablity. Many are givng me advices for electricity bill and telephone expenses since i work from home. Again I took help of my dad for assisting with my work. Friends advise me to put a lumpsum each month say 5K per month and treat that as expense after preparing and taking sign in vouchers. I am confused. Self employed working from home. Please help. Krish
Vikas Gandhi answers, A self employed person have the privilege to claim all type of expenses as against an employed person. However this expenses should be genuine and should have been incurred for the purpose of your business / profession.
gandhi asked, Hi Vikas, Whenever bank issues interest statement,whether it includes Fixed deposit interest also????
Vikas Gandhi answers, In normal case your fixed deposit interest is not reflected in your savings bank. However if you have instructed bank to credit the interest of FD amount to your savings a/c, the same does get reflected.
sandy asked, I have taken home loan, and the property is still under construction I will get the possession in Feb 2009 . Am I eligible for HRA benefit as I am stil living in rented house.
Vikas Gandhi answers, Yes, since your house is still under construction, you can claim the benefit of HRA.
Vikas Gandhi says, That's all for the day friends. Good bye and have a happy week-end.
Chat with Vikas every Thursday at 4 pm!
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