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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 replied to readers' queries in an hour-long chat on rediff.com.
Here is the transcript:
Vikas Gandhi says, Good evening friends and welcome back to the tax chat session.
Ujjwal asked, At what rate profits from Future and options are taxable i.e 10% or 30%?
Vikas Gandhi answers, at 2007-10-18 15:57:19Profits from Futures and options are considered as Speculation Profit and not Capital Gains. Hence the profit from Futures and options will added to your normal income and taxed on the basis of slab rates applicable to you.
nadeem asked, hi i have taken a personal loan of 50000 for 2 yrs. emi 3000 per month will i get tax deduction on interest paid
Vikas Gandhi answers, No. Personal loans are not eligible for any deductions and hence whether you pay interest or repay the loan, you won't be able to claim any deduction against your Taxable Income
Sachin asked, Hi, me and my sister jointly have an inherited house from my mother. We want to sell it. Will we need any tax on the income we earn? What are wealth tax and capital gain tax?
Vikas Gandhi answers, Yes you will have to pay tax. The profit you earn will be considered as your Capital Gains. The Capital Gains will have to be apportioned between you and your sister and then determine the amount of tax to be paid
RAHUL asked, HI, I HAVE QUESTION THAT I HAVE TAKEN LOAN FROM BANK & MADE MY WIFE CO-APP. PROPERTY IS IN MY NAME. cAN WE BOTH TAKE TX BENEFITS
Vikas Gandhi answers, Since the entire property is in your name, your wife cannot claim any tax benefits although she is a co-applicant to the loan.
Puneet asked, Sir , I've joined a company , and worked there for 2 months,then I left the job . They deduct TDS , but didnot issue any certificate . Is it possible that I hide this income and save tax.
Vikas Gandhi answers, There is no question of hiding income. If TDS has been deducted on your salary income, assuming the same has been paid to the Government, Income tax Department already has the information about your salary income through your PAN. Hence you should not hide any income. By doing this you will be calling Income Tax Officers to your house. As far as Form nO.16 is concerned, be in touch with your previous employer and get it. May be you get it after completion of the year when everybody else will get.
Joe M asked, what is the limit for investment under section 80-G?
Vikas Gandhi answers, There is no specific limit for investment under section 80G. However while calculating the deduction under this section the amount of donation is restricted to 10% of the total income (Gross Total income less deductions under all other sections). On such amount you are granted 50% deduction
gfhfgs asked, If I sell shares alloted in IPO on the listing day, what would be my tax liability.
Vikas Gandhi answers, Profit / loss on such sale will be considered as Short Term Capital Gain / Loss.
shankar asked, Hi Gandhi, Good Evening I would like to know, whether Post Office RD is exempted from tax.
Vikas Gandhi answers, No. Any interest received from Recurring Deposit kept with Post office is not exempted from tax.
vikas asked, Can self and my wife both apply for the housing loan and get the 1 lacs for principal and 1.5 lacs for intrest as TAX exemption in the respective Salary . do we jointly get 2 lacs principal exemption and 3 lacs intrest exemption ?
Vikas Gandhi answers, Yes. Both of you would get the deductions. However the property for which loan is being taken should also be in name of both parties. Only then you and your wife will be able to claim the tax benefit.
Arun asked, Hello Vikas, I am a freelancer and I wish to register a company as a Sole Propeitorship. So I need to file income tax returns to get a Current Account in bank. I have got my PAN card now. Please advise how do I proceed with the income tax return filing and what all documents do I have to give to the agent. I tried taxsmile.com, but they said that they don't have option for freelancers :(
Vikas Gandhi answers, You need to consult either a Chartered Accountant or a Tax Practitioner and get your return filing done. The concerned person will guide you as to what other documents will be required.
Raj asked, Hi Vikas, if i sell the shares that was purchased 1 year back, do i need to pay the taxes on the profits?
Vikas Gandhi answers, If the period of holding of such shares is more than 1 year and you have sold such shares through Stock Exchange, then your profit will be exempted and you won't be needed to pay any tax.
Prasanna asked, Hi, I am a House wife. I am doing Share trading. What is the tax amount I have to pay for the Govt. Whether I will get a Tax relief for first 1.45Lakhs.
Vikas Gandhi answers, All females have been granted the basic exemption limit of Rs.1.45 lacs, irrespective of the fact whether she is a working woman or a housewife. As far tax on profit from Share Trading is concerned, the same has to be worked out and only then you will be able to know whether you need to pay any tax or not.
harish asked, Dear Vikas, I hv taken Rs.9.5 lakhs House Loan last year and 2.6 lakhs Car loan 4 years back.Car will be completed by Nov 2008. I can make a part payment of Rs.5.0 lakhs now. Is it advisable to close car loan or House loan? Since i hv the consultancy, i get depreciation on Car Loan.
Vikas Gandhi answers, The Depreciation you are getting is on the Car and not on Car loan. According to me you should close car loan first instead of House Loan. this is because for car loan you might be able to claim only the interest part as deduction from your business income. However for the home loan you will be getting deduction both for interest as well as principal amount and hence continuing home loan would be more beneficial.
abc asked, Hi, i wish to know what all documents are necessary for claiming HRA benefits. Please let me know.
Vikas Gandhi answers, For claiming exemption from House Rent Allowance, you will have to make monthly payments of rent through cheque and produce duly acknowledged monthly receipts to your employer for claiming the exemption benefit.
hh asked, hello sir, i have plan to invent in stock. i would like to apply PAN. Once i get the PAN then need to file income return every year? even my income is below 1 lacks?
Vikas Gandhi answers, Although you have PAN, you will need to file income tax return only if your total income is exceeding the exemption limit.
Raj asked, what are long term gains? is it 3 years or 5 years to avoid tax..?
Vikas Gandhi answers, For shares and units of mutual fund, if the period of holding such stock is more than 1 year, they are treated as Long Term Capital Asset. In repsect of other assets like, residential house, jewellery etc, the period of holding should be more than 3 years for them to be considered as Long Term Capital Asset. Any profit or loss incurred on sale of such shares is treated as Long Term Capital Gain / Loss
tax asked, If I gift my mother (working) in any form monetory etc. Will I be getting any tax benefit?
Vikas Gandhi answers, Giving a Gift is not considered as expenses and hence you won't get any tax benefit for giving such gift
jits asked, I do not have a pan but my employer where i work is deducting TDS 10.2% .. what do i do ?
Vikas Gandhi answers, You have to immediately apply for PAN and pass it on the same to your employer. Nowadays PAN is issued within a week or so and hence hurry up and get your PAN. In absence of PAN you will not be able to claim the credit of such tax deducted while filing your income tax return.
nssarva asked, Please tell if the income of X is 30000 and her short term capital gains tax is 40000/- in that year. Please tell whether x has to file the tax return at all
Vikas Gandhi answers, No. Since the gross total income is less than the exemption limit you will not be required to file your income tax return.
bik asked, Sir I am NRI . Sending money to my Savings accout(Regular). Will the money be taxable.
Vikas Gandhi answers, Transfer of money from one bank to another will not amount to income and hence the same will not be taxable.
kans asked, how much one can gift to their spouse per year and can such gift be deductible from the earnings for ITAX calculation purposes ?
Vikas Gandhi answers, There is no cap for gifting any amount to spouse. At the outset any gift you give whether to spouse or anyone else, it is not deductible from your total income. So don't see gift as tax deductible measure. Further as said earlier there is no cap on gift. However it should be reasonable and not an exaggarated amount. If you are gifting an amount to your spouse then keep in mind that any income the spouse earns from such gift will be treated as your income and accordingly you will have to pay tax for the same.
sushilthukral asked, Sir, I would like to know, whether Bank Deposit / FDs are eligible for deduction u/s 80C.
Vikas Gandhi answers, Term Deposits kept with Bank for a period of 5 years or more will be eligible for deduction under sec. 80C
ND asked, I own a house in ghaziabad which is being used by my family at present. i live in Delhi in a rented house. Can I claim exemption on account of rent outgo?
Vikas Gandhi answers, Yes, provided you are getting House Rent Allowance from the employer.
SIDDHARTH asked, i am it professional having a package of 4.8 lacs .The company gives me the liberty to accept some portion as perks ,coneveyance etc What should be the best way to save tax?
Vikas Gandhi answers, Since you are having a liberty to apportion your salary among perks etc, you may opt for a) Transport Allowance (upto Rs.9600/-) b) Children Education Allowance (if you are having children) c) House Rent Allowance (if you are paying rent for the house) d) Leave Travel Allowance e) Reimbursement of Medical Expenses (upto Rs.15000)
kshitij asked, Hi Vikas, with regards to your answer abiut post office RD. how is tax calculated I mean a person investing 1000/pm for 5 years will get money at end of 5 yrs. So does he show interest income vevry year or that is taxed as on lot at the time payment is received.
Vikas Gandhi answers, To avoid paying more tax in the year of maturity of Recurring Deposit it would be advisable to offer interest every year and pay tax. For the amount of interest, you can approach the Post Office at the year end and request them to issue a Interest Certificate for the year.
KISMATAJMAO asked, HELLO, SIR I HAD EARNED INCOME FROM SHARE FUTURE AND OPTION, AND HAD LOSS FROM SHORT TERM GAIN IN SHARE CAN IT BE SET OFF
Vikas Gandhi answers, Loss from Short Term Capital Asset can only be set-off against Short Term Capital Gain. Since profit from Future & Options is considered as Speculation Profit, you will not be able to set-off such profit against the Short Term Loss.
Vikas Gandhi says, That's all for the day friends. It's time to end the chat session and hence good-bye and have a Happy Dassera.