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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 on rediff.com on Thursday, 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 the Tax chat session.
dfs asked, Can we save TAX on any donation ??
Vikas Gandhi answers, at 2008-05-22 15:58:36You can certainly save tax by way of Donation. The Donation should be made to a charitable organisation. If you are making Donation for claiming tax deduction also, kindly ensure that the organisation has 80-G certificate and the same is mentioned on the receipt.
mk asked, How to know the taxes in case of Short term Capital gain and how to calculate it?
Vikas Gandhi answers, If you sell shares within 1 year of its purchase, the profit or loss you incur is known as Short Term Capital Gain / Loss. If you have sold this shares through stock exchange, the profit you earn will be taxed @ 15%. In any other case the profit will be added to your other income and will be taxed accordingly
Sanjay asked, Can I use my house rent reciepts and my parents rent recpeits for saving the tax.
Vikas Gandhi answers, YOu can claim only your house rent receipts for claiming exemption under House Rent Allowance. Parent rent receipts will not come to your rescue.
avin asked, Does HRA, Medical, LTA come under 80 C
Vikas Gandhi answers, No. HRA, Medical Reimbursements, LTA does not come u/s 80C. These allowances are exempt u/s 10 & reimbursement is exempt u/s 17.
SURENDER asked, hi vikas,can u telll what would be the tax exemption limit for 2008-2009
Vikas Gandhi answers, For the financial year 2008-2009, the basic exemption limit is Rs.1,50,000/-
shyamsundar asked, I have invested in shares. I would like to know whether I should declare for IT. Or since sale of shares gets deducted for TDS while making sales & no need for returns?
Vikas Gandhi answers, There are many misconception in your question. Firstly you file income tax return for the income youi earn. By investing in shares you don't earn any income and hence you are not required to declare in the Income Tax Return. However if you have purchased shares of one particular company thru IPO or right issue worth more Rs.1,00,000/- or more, you do need to declare such purchase. Secondly no tax gets deducted when you sale your shares. the tax called aqs Securities Transaction Tax is apart from Income Tax. When you sell your shares, you have to delcare the same in your income tax return.
den asked, If a salaried person own a House, car, computer etc can we claim some tax benefit on this? Is there any clause by which capital depreciation can be used in reducing tax burden?
Vikas Gandhi answers, A salaried person does not get the benefit of depreciation and hence you cannot get any tax benefit for these assets.
arun asked, i have two house both in joint name (me & my wife) In one we are residing the other is vacant what is the notional income to be assigned to other house
Vikas Gandhi answers, Very few people know that other flat is taxable. Good to know this. Firstly you have the option to select any one house as your self occupied property and value for this property will be Nil. this is irrespective of the fact whether you stay in that house or not. As far as notional income is concerned, you have to find out what rent is fetched by similar property in your locality and accordingly offer approximate amount as Rent.
Dinxie asked, HI Vikas, to add on to dfs Question, what are limits on the donations, i mean any caps or something? Can you please let the group know, Thanx in advance.
Vikas Gandhi answers, If you are donating amount to organisation like Prime Minister National Relief Fund or Defence Fund, you get 100% reduction of the amount donated from your income. However if you are donating to any other organisation, the same has to be restricted to 10% of your Taxable income. Of this amount you get deduction @ 50% from the taxable income
ajit asked, sir how can i fill up my itr 1 form ,inome form as technical faculty earn 88650 last , and 44400 form lic commission
Vikas Gandhi answers, LIC [Get Quote] Commission will be considered as your Business income and hence you will not be able to use ITR-1. For your case, ITR-4 will be applicable
wer asked, My parents have taken LIC for 20k. Can i show this for IT. Parents are not working. They are dependent to me.
Vikas Gandhi answers, YOu can claim deduction for premium paid for yourself, your spouse and your children. However you cannot claim benefit for premium paid for parents, even if they are dependent on you.
Ajay asked, MOST IMPORTANT : Hi, I have taken homeloan jointly with spouse (co owner as well), total interest is going over 3 lacks, can we share 1.5 lacks each for tax rebate
Vikas Gandhi answers, Yes. For the purpose of Income Tax calculation, you first have to find out your share of interest payment and then compare with the limit of Rs.1,50,000/-. The lower of the two can be claimed as deduction.
manu asked, Hello Vikas, How to calculate income tax on rental income from comercial property (Rs 1,24000 per year) ? Whether we can reduce 30% amount towards maintenance for calculating taxable amount ?
Vikas Gandhi answers, Amy property whether residential or commercial gets taxed under Income From House Property. Hence you can claim flat 30% deduction towards repairs and maintennace charges.
manu asked, Whether derivative trading gain (if STT paid) will be taken as short term capital gain & taxed at 15%
Vikas Gandhi answers, Derivative trading will be considered as your Speculation Profit and not Short Term Capital Gain. Accordingly the income will be added to your other income and taxed accordingly.
Lokesh asked, if any companys shares are with me for more than a year then it becomes tax free?
Vikas Gandhi answers, Yes, provided you sell such shares through recognised Stock Exchange and pay Securties Transaction tax on sale of such shares.
ranjita asked, How to treat STT /It is a deductible exps when claiming short term/Long term gain
Vikas Gandhi answers, No. Securities transaction tax is not a deductible expenses.
rv asked, If i sell my flat which was purchased in Sept 2005, what will be the tax implication and how to SAVE TAX.... since i want to invest the profits to buy a new flat...i stay in mumbai..thanks and regards.
Vikas Gandhi answers, Since you have purchased the flat in September, 2005, if you sell now, the profit will be treted as Short Term and you will be taxed as normal income. It would be advisable for you to sell the flat after Sept. 2008 after which the profit will be treated as Long Term Capital Gain and will be taxed @ 20%. You can invest the profit for purchase of another flat and claim exemption from entire Capital Gain. This is possible only if the gain is Long Term Capital Gain.
asdf asked, Can i give my house rent to my parents and show same for tax deduction as they are the owners?
Vikas Gandhi answers, You can pay rent to your parents only if they are the owners of the flat and not otherwise.
Nayak asked, How to claim TDS when i doesn't fall into any tax bracket? I received Form16As.
Vikas Gandhi answers, Although you don't fall under tax bracket, you will have to file return for claiming refund of tax deducted.
f asked, I am not getting TDS certificate from my previous employer can i still file an income tax return online as i have details of tDS on salary slips?
Vikas Gandhi answers, It is your obligation to file your income tax return. Although your employer is not providing you Form-16 it would be advisable for your file your return. While doing so just mention TAN of your employer to ensure that you get credit for the tax deducted frrom your salary income.
Abhinash asked, Hi, I have got 200K as a gift from my brother who is working abroad. If I invest that money in stock market for six month, Do I need to give tax? I haven't yet paid any income tax and just going to complete my MBA this year and will join a company in June. Thanks in advance for reply
Vikas Gandhi answers, If you are just investing the money in the stock market and not selling them, you are not required to pay any tax.
Vikas Gandhi says, That's all for today friends. Chat with you next week.
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