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 replied to readers' queries in an hour-long chat on rediff.com. Here is the transcript:
Vikas Gandhi says, Good evening and welcome to the tax chat session
Ashish asked, My package is 3.8 lacs per annum. I have given a declaration to the company tht i will be investing 1 lac (LIC,MF etc...) and 15K as Medical. Even after this investment ,they deduct 600-800 ass income tax per month. How can i save the money which they are deducting for income tax?
Vikas Gandhi answers, at 2007-10-04 15:58:09According to me you are already availing the exemption kitty you are entitled to by the Income tax Act and hence there is no further scope. Besides saving taxes you will also have to consider your day to day expenses. Hence according no further planning is required.
Taxpayer asked, What's the GIFT tax implication for both the donor (Father-in-law) and the donee (son-in-law) if the amount of gift is Rs. 12 Lakhs ? Son-in-law falls in the highest tax bracket right now.
Vikas Gandhi answers, If a person is receiving gift from a relative than there is no tax on such gift, irrespective of the amount gifted. Gift received from father-in-law falls within the definition of "relatives" and hence there would be no tax implication on the gift received. However since the gift amount is high, creditworthiness and capability of your father-in-law for such gift may be questioned by the Income Tax Officer.
subramanian asked, i have a property worth 23 lakhs. i intend buying another for 30lakhs,which i intend using as self-occupied. i am aware that i should pay wealth tax on 23lakhs property. my slab is 30 percent. what exactly is the quantum of wealth taxpayable . thanks and best regards
Vikas Gandhi answers, Wealth tax is exempt upto Rs.1500000/-. Any excess wealth will attract tax @1% of the net wealth. This rate is irrespective of the slab rate of income tax in which you fall.
sparshganju asked, Hello Mr. Vikas, I have two queries regarding 'Income from House Property'in calculation of Income tax. 1) For self-occupied property, is the maximum limit of 1.5 lakhs (or 30000) for interest paid on housing loan dependent on the date of construction of property (date of issue of occupancy certificate by the municipal authorities) OR the date of availing loan. e.g. If I buy a 20-year old property in this year by availing housing loan, how much maximum deduction is admissible to me? 2) For let-out property, is there a limit on the housing loan interest which can be claimed for deduction? I am told it is subject to the maximum of the annual value of the property. Is it correct?
Vikas Gandhi answers, For self occupied property the maximum amount of interest that can be claimed is Rs.30,000/-. However if the home loan is taken after 01/04/1999 and the possession or construciton of house is completed within 3 years of availing loan, then the maximum amount of interest claim increases to Rs.1,50,000/-. As far as let-out property is considered there is no such limit for interest. the entire amount of interest can be claimed against the rent income.
mukesh asked, what to do after getting a secunity notice from I T DEPTT
Vikas Gandhi answers, On getting a scrutiny notice from the I.T.Department, you need to visit the Officer on the appointed date and time. If he has mentioned any particular documents for verification, you need to carry them alongwith you when you make a visit to him. He will guide you subsequently what additional details he requires to complete the assessment of your income tax return.
bpg asked, Ipurchased a property in the name of my wife for 22 L and sold another property in my mame with Long term capital gain of 20 L in this financial year .Can th eCapital gain be off set by the value of the property purchased in my wife's name
Vikas Gandhi answers, Since the property is purchased in the name of your wife, you won't be able to claim the exemption of such property while calculating your capital gains on sale of property.
kanna asked, Hi I have a salary credit account with a bank. However that account is a joint account with my wife who is a housewife. My question is if she invests in shares or in MF, which has any short term capital gain axes, how to pay that. She has to submit seperate IR returns or jointly with my IT returns? She has to pay the tax even if her short term capital gain taxes for one financial year is below the taxable income (standard detection of 1.45 lakh)?
Vikas Gandhi answers, Your wife will have to file aseparate income tax return for the capital gains earned by her. However if her total taxable income including the capital gains is below the taxable limit then she does not have to pay any tax.
Bigheart asked, Hi, I am an NRI since April 2006; Do I need to have a NRE A/C to file retruns in India.
Vikas Gandhi answers, This is not a necessity for filing your tax returns.
deepak asked, Hi, can please let me know whether recurring deposit income is tax-free or not?
Vikas Gandhi answers, Income from recurring deposit is not tax free
kanna asked, If I save more than 1 lakh in tax savings investmens, then is it possible to carry forward this excess amount to next financial year?
Vikas Gandhi answers, You cannot carry forward such excess investments. There is no such facility in Income Tax at present.
jeet asked, Hello Rahul..... What is basis of paying tax ?
Do I understand it correct? Any individual whose annual income is above 1 lac is liable to pay tax, however he can save tax upto 1 lac if he invest in LIC, PPF, MF, Mediclaim etc...If his annual income crosses 2 lac regardless of any investment he makes, his tax paying is inevitable. Please advise
Vikas Gandhi answers, Income tax is payable on net taxable income. Net taxable income is calculated after deducting your eligible investment (Rs.1 lac) from the gross taxable income. This Net taxable income if exceeds Rs.1,10,000/-, then you are eligible to pay tax.
k asked, I have an annual income of 320000, how much is tax which i need to pay if i donot make any investements
Vikas Gandhi answers, On annual taxable income of Rs.3,20,000/-, you will have to pay tax of Rs.46,350/- (excluding interest). This tax is calculated for male tax payer who is below the age of 65 years of age.
Ashu asked, In my company i have opted for employee provident fund,is it already exempted from tax ?
Vikas Gandhi answers, For Employee Provident Fund, the contribution that the employer makes to your account is exempt upto 12% of your Basic Salary + Dearness Allowance. Your contribution to this account is eligible for deduction u/s 80C (within the overall limit of Rs.1,00,000/-)
KS asked, Hi Vikas, I recently quit my job and asked for my PF, Superannuation and Gratuity to be paid out. Do I have to pay income tax for these, since I have actually not retired?
Vikas Gandhi answers, These emoluments are exempt but subject to fulfilment of certain conditions and certain upper limits.
ajeya asked, My friend has made some short term capital gains dealing in mutual funds. he says it is not necessary to declare this as he is already declaring his interest income in his return. Is this correct?
Vikas Gandhi answers, If your friend has sold mutual funds during the year and earned profit on the same, he need to declare the same in his income tax return.
anandpankaj asked, I am presently in 0% tax bracket. Recently I had some short term capital gains because I sold mu MFs in less than one year. Will my short term capital gain be taxed at 10% or wiill short term capital gain be clubbed with my salary income and taxed at 30%. I asked you this question the last time also? Please do reply this time.
Vikas Gandhi answers, Short term capital gain on transfer of mutual fund is taxed @ 10% only if Securities Transaction tax have been paid at the time of sale of such mutual fund. At present only equity oriented mutual fund are subject to Securities Transaction tax. Hence if you have earned short term gain on some other mutual funds, then such gain will have to be included with other income and than tax will have to be calculated.
sathish asked, My wife & i have a joint home loan - emi paid from my wife's a/c. i heard both can claim interest deduction. is it so?
Vikas Gandhi answers, Yes. Both of you can claim deduction provided both of you are equally funding the home loan from individual funds and filing returns.
rajaram asked, i would to know whether i can take the benefit U/s 23 wrt Interest on borrrowed capital, if i borrowed the money from my mother which was inturn taken from the bank by mortage of her property. Where is it mentioned in the Income Tax Act,1961 that interest cannot be claimed if i borrow from an UNAPPROVED Institution. Sec 23 is Different from Sec 80C in this aspect.
Vikas Gandhi answers, Your interpretation os correct. You can claim deduction for interest paid to your mother provided you have used that loan specifically for the purpose of purchase / construction of house. Your mother will have to give a certifcate to the extent of the interest payment.
vnk asked, What proofs are required while declaring the short term/long term capital gains from the sale of equities?
Vikas Gandhi answers, While filing return of income, you are not required to attach any proof for the declaration of short term / long term capital gains. However for any future enquiry you have to preserve the brokers bill and contract notes. Your demat statement will also add an additional source / proof.
sparshganju asked, Thanks Mr. Vikas for your clarification. Does it mean that for the 20-year old property which i plan to purchase now (Occupancy certificate issued in 1990) with a housing loan, I will get Rs. 1.5 lakh as admissible deduction in case of self-occupied property?
Vikas Gandhi answers, Yes you are correct and go ahead with your planning.
mail_ravi2007 asked, i have made share trading during the FY2006-07. atthe end of the year how could I know the exact price of each shares to be taken in Balance Sheet.
Vikas Gandhi answers, While preparing your Balance Sheet you don't have to show your investments at market value. they have to be booked and showed in Balance Sheet at the purchase price itself.
narendra asked, I have two propeties, one is commercial and being used for my business purpose & another is for my self residential purpose). Do I have to declare notional rent for any of one in my I.T.return.
Vikas Gandhi answers, Since you are using one property for own business purpose and other for your residence, you don't need to declare any noitonal rent for any of the property in the I.T.Return.
gaurav200@rediffmail.com asked, I have two bank accounts interlinked with each other, funds transfer between them is subjected to any taxes?
Vikas Gandhi answers, Inter-bank transfers are not subject to income-tax.
Vikas Gandhi says, God-bye friends and have to good week-end.
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