It's that time of the year again. Time to get ready with your investments and taxes.
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 there 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 Thursday, direct tax expert Vikas M Gandhi offered some valuable tips. Here is the transcript:
KRavi asked, Is new Form 16 mandatory for the Asst Year 20009-10
Vikas Gandhi answers, at 2009-05-07 15:40:21According to my view, new Form 16 is applicable for Asst. Year 2010-2011. This is on account of two counts - 1. the information asked in Form-16 is applicable from current financial year. This information is not available for the last financial year. 2. Department has clarified for tax challans that they are applicable for making payments for financial year 2009-2010. On the same analogy, Form 16 although issued in the current financial year, contains data of last financial year and hence old Form-16 should only be applicable for A.Y.2009-2010. In any case clarification from Department is awaited.
ravie asked, Sir what is the amount of tax i should pay if i sell the stocks within one year... pls let me know. Is it too complicated Thanks...
Vikas Gandhi answers, Stocks sold within 1 year of purchase attract short term capital gain tax. Assuming that these stocks were sold in a recognised stock exchange, the profit that you earned on sale of these stock will attract a tax @15%.
rd asked, I am Govt. employee and my income is below the taxable limit. I am filing IT return for the past few years. Is it necessary to file ITR when my income is below the taxable limit? Can I stop filling this year onwards until I am liable to pay the tax?
Vikas Gandhi answers, As per the law, if your total income before deducting your tax-saving investments is within the exemption limit (i.e.Rs.1,50,000/-) you are not required to file income tax return.
pankajarora asked, i sold my only owned residential house while i held for 7 years,can i invest in more than one residential house to save capital gains tax
Vikas Gandhi answers, Yes, you can invest in more than one residential house to save capital gain tax arisen on sale of a residential house.
Himanshu asked, How can i file IT returns, can you please suggest me, this is the first time when i have paid taxes, and i don't have nay idea about this.
Vikas Gandhi answers, For filing your income tax return, you can either approach a Chartered Accountant or a Tax consultant OR visit online tax preparation and filing site. there are various sites available today in India, whcih guide you prepare your Return in a simple manner, even though it is for the first time. www.taxsmile.com is one of such site.
Naveen asked, Hi, My in laws are NRI and give money to my wife and kids at times either in dollars whcih I deposit in account or cash, do i have to pay any tax on this amount recd and what is the limit of this amount I can take with zero tax.
Vikas Gandhi answers, In your case there is no Income tax implication. The gift received will not be taxed.
dnb2000 asked, I had changed my job in financial year 2006-07 in Jan'07. My tax computation in old company had done for first 9 months basis my declaration. However my new co deducted tax basis 3 months salary instead of entire year. This affect my TDS due to lower slab. Now I.Tax office have come back and asked me pay the entire amount with interest under section 143 (1). Also I am unable to arrive at their calculation. Can anything be done to a) avoid penal interest and b) how to get details / break up
Vikas Gandhi answers, You were surely liable to pay additional tax at the time of filing income tax return, which you didn't. Department is right in demanding the additional tax alongwith interest. You will have to pay it immediately or else interest meter will go on increasing. As far as calculation of additional tax and interest is concerned, you will have to contact a Tax Consultant who will do the needful.
SURESH asked, Hello sir, In FY 07-08 i had earned almost Rs 10 Lacs from stock market(short term trading) but didnt pay any advance tax in that year. Now in FY 08-09 when stock market crased, i was left with no money to even make the tax payment for last year gains. what should i do now?
Vikas Gandhi answers, This cannot be an excuse for not paying the taxes. You will have to pay tax and there is no alternative available. Pay tax as early as possible before Department catches you.
Pandiyarajan asked, Hi Vikkas, How to deductions from 80D
Vikas Gandhi answers, The law for claiming deduction under section 80D
is as under. Deduction under this section is provided for paying Medical insurance premium. Deduction is available only is the payment is made through cheque or demand draft (no cash payment). The amount of deduction available is as under - a. If the premium is paid for self, spouse and children - Maximum Rs.15,000/-. If any of the person is a senior citizen, limit extends to Rs.20,000/-. b. In addition to above, if premium is paid for parents, Maximum Rs.15,000/-. If either of the parent is senior citizen, the limit extends to Rs.20,000/-.
suraj asked, Sir, my bank had provided me provisional but wrong figures of housing loan interest (Rs.81000) and loan pricipal (rs.43000) during Jan 2009. I had submitted these figures to my company for tax purpose, on the basis of which my company has deducted TDS and finalised Form 16. Now bank has informed me the correct details as housing loan interest (Rs.87000) & Principal (Rs.27000). This will now result in fresh tax liability of Rs.1000. How shall I prepare my IT return? How can I show correct figures as these figures will differ from Form 16? How can I show this tax of Rs.1000? Kindly guide.
Vikas Gandhi answers, Form-16 is not your income tax return. hence don't panic. Rectify the mistake that has been done in Form-16. Prepare your income tax return with proper figures and file the same. Take help of a tax consultant or prepare through online tax site. You will get proper results.
leelamahesh asked, Hi Vikas , I have 2 housing loans one is at home town and second Hyderabad both self occupied can I get tax benefit for both loans. I am paying 40000 interest for first loan and 160000 for second loan can I get tax benefit for both ( 40000+ 160000).
Vikas Gandhi answers, Yes. You will be able to claim tax benefit for both the home loans. But this is not the end. Since you are having two self-occupied property, one of them will have to be treated as Deemed let out and accordingly notional rent income will be taxed against which you will be able to claim the home loan interest.
Test asked, Hi, I have additional income from FD Interest in addition to normal income. After calculating the new income tax, should i be including any penalty while paying additional tax, since i did not pay any advance tax ?
Vikas Gandhi answers, You won't be paying any penalty. However you may have to pay interest for not paying advance tax. This will be the case only if the net tax payable after deducting the tax already deducted exceeds Rs.5,000/-.
abhay asked, Why is it mandatory to file returns for an employee of private company whose tax is deducted at source?
Vikas Gandhi answers, Compulsion to file return is not only for employees. This is probably a wrong notion that you are carrying. Infact this compulsion is for all the tax-payers whose income exceeds the basic exemption limit.
66 asked, Is income from Saving Bank Account interest taxable. what all bank interest are taxable and exempted??
Vikas Gandhi answers, Any interest received from bank, whether on saving bank account, or on fixed deposit or on term deposit. All these interest is taxable. Only interest received on PPF A/c is exempt from tax.
Kuldeep Sharma asked, Hi Vikas as right now i am here as an NRI ecause came to Grman in June 2008 and will be here till Dec 2009. i am in deputation, as i told you earlier i am getting Salary in India and Allowance in Germany, for both i am paying IT to Both places. Now if i am going to send money from Germany to INdia to my MOM, will my Mom needs to pay IT for that ammount or not.
Vikas Gandhi answers, There is no tax on transfer of money. The money that you are sending is already taxed and since it is a gift for your mother, the same is not taxable.
ashish asked, I like to give 10 lacks as a gift to my father for buying a house on own name... please tell me can i make a gift like this... and rentasl income from the house will be treated as my income?
Vikas Gandhi answers, No, clubbing provision for such transaction is not applicable and hence you can give as much gift as possible to your Father for buying the house. the rental income received from such house will be his income and he will be paying tax on such income.
Chidu asked, Hi Vikas, Do NRIs need to file Tax Returns?, If yes, I stay abroad, Can I file returns file returns online?
Vikas Gandhi answers, NRI's have to file return in India, only if they are having any Indian income. Otherwise they are not required to file returns in India. As far as filing is concerned, they can file online. Visit www.incometaxindiaefiling.gov.in for further details on online return filing.
Vikas Gandhi says, That's all for this session, friends. Chat with you next week. till then Good-bye.
