Finance minister Pranab Mukherjee has enhanced the Income Tax slabs. The Union Budget 2011-12 has proposed some tax relief for individuals, but there are quite a few things that still are a bit confusing.
So what exactly has the finance minister done?
How do his tax proposals affect you?
Do you gain anything?
Or will you lose this time?
What would be the best investment options at this juncture?
In an hour-long chat on rediff.com on Wednesday, experts Vinay Mahajan and Devang Mehta offered some valuable tips.
Here is the transcript:
Vinay says, Welcome Friends!!!
ashish asked, I am in teaching profession, how i can save my tax
Vinay answers, at 2012-03-21 15:58:13Dear Ashish, there are various ways to plan for tax. Some are part of your salary components and some through investments in tax saving instruments.You need to see tax benefits under section 80C, 80D, 80CCF, interest payments on housing loans, HRA etc. What is more important is that you plan holistically well in advance so that you not only save tax but also maximise your returns on investments.
sss asked, How an individual tax payer can save more tax with new budget?
Vinay answers, Dear sss, these are however budget proposal but it favours individual investors like you. Increase in tax slabs, preventive health care and rajiv gandhi equity scheme announced.
samiir asked, As per the recent Amendments in Sec 80C in the proposed Budget. Does it mean that even existing Life Insurance Policies with premium more than 10% of the sum assured will not be allowed as deduction in 80C?
Vinay answers, Dear Samiir, it is applicable prospectively from 1st April 2012.
Mehta asked, I am receiveing commission ( only the source of income) can i adjust all my office expenses against this..
Vinay answers, Dear Mr. Mehta, expenses which is used in connection to the business to generate income, expenses can be offsetted. However you need to consult your tax advisor with specific details.
ravi asked, what are the implications of this budget with employee with salary between 3-6 lacs and 5-10 lacs
Vinay answers, Dear Ravi, please refer my previous post, in general it benefits the individual with higher income tax slabs. Additional Tax Saving via preventive health check-up and Rajiv Gandhi Equity Scheme.
suryanarayana asked, hai pa i earned the 450000 how to save the tax
Vinay answers, Dear Suryanarayana, you have to be very specific about the income source. However you can refer the previous post, you will get fair idea on tax saving intruments.
ketan asked, can i claim deduction from HRA by showing rent payment to parents or relatives what are the conditions for the same
Vinay answers, Dear Ketan, Tax laws allows you to plan for tax in a legitimate way, in case you are actually paying the rent you can do that.
Mad asked, Hi I am getting 4.8 lacs p.a how much tax can I save in a year in what ways?
Vinay answers, Dear Mad, please refer the previous posts.
Anil asked, Hello Sir, I am having 10+ Lacs salary. What should i do to save tax. I dont have home loan.
Vinay answers, Dear Anil, It depends on your salary structure like HRA, PF Deduction, Reimbursemens and various allowances. Also you can save tax under 80C, 80CCC, 80D, 80CCF & Rajiv Gandhi Equity Scheme.
DROP asked, if you were to have options to decide your HRA/LTA/Med/Other Allowances - what would be the best slicing for one to save tax
Vinay answers, Dear Drop, The HRA would provide you the deduction from monthly income. However, it depends on company's policy to pay these allowances.
SATISH asked, ANNUAL INCOME RS. 4,65,000 LESS: INVESTMENT LIC 1,25,628 P.A. MEDICLAIM : 35,000 P.A. HSG.LOAN 48,000 P.A. INFRA BOND 20,000 P.A. NEED OTHER INVESTMENT FOR TAX RELIEF
Vinay answers, Dear Satish, you have exhausted your investments under 80C, 80CCF and 80D, Sec 24. Please check your reimbursements, if you can claim some tax relief and section 80E (interest on education loan).
umesh asked, Suppose I am having a house in Ahmedabad which is rented out, and I am staying outside Gujarat state where I have rented a flat.The rent paid is more than the rent received, How to claim house rent benifit in IT
Vinay answers, Dear Umesh, One would be the income from housing property and for later you need to see your HRA amount to claim tax exemption.
sidneyjcad asked, Hi, How can we claim the Rs 5000/- meant for preventive check ups when ; 1) Most doctors/clinics do not give us any bills for consultation. 2) Are there any limits as to the number of visits one can pay to the doctor ?
Vinay answers, Hi, This is the budget proposal for the financial year FY12-13 and we need to wait for a while to get complete clarity on this proposal.
sadiq asked, What is the maximum house rent allowance eligible for income tax deduction
Vinay answers, Dear Sadiq, it is minimum of the following conditions: 1. Actual HRA Received from company. 2. Rent Paid - 10% of Total Basic Salary. 3. 40% of non-metro and 50% metro of basic salary.
pankaj asked, my income is 960000pa.How can i plan to save more tax
Vinay answers, Dear Pankaj, It depends on your source of income/salary structure. Avenues wherein you can save tax in are: 1. HRA 2. 80C 3. 80D / 80DD / 80DDB / 80U / 80E 4. 80CCF 5. Interest on Housing Loan 6. Reimbursements & Allowances by the employer
samir asked, Are Infra bonds under Sec 80CCF available in FY 2012-13
Vinay answers, Dear Samir, No, it is not there as proposed in current budget.
TaxGuruRaja asked, my salary is 8L tell me various investment I can do to get more return and also want to make my tax NILL
Vinay answers, to save tax you can refer to earlier posts and maximize returns invest in equity oriented schemes.
sidneyjcad asked, Is it confirmed that an individual whose annual income is less than 5 lacs,does not need to file returns ?
Vinay answers, Hi, No this is not the case, however you may plan to save tax to make your salary completely tax free.
Rohit Sahni asked, Good Afternoon Sir, I am working in private job & my ctc is Rs.2.20 lacs, please suggest how can I save money.
Vinay answers, Dear Rohit, According to new budget proposal salary upto 2 lakhs is exempted from tax. You need to invest Rs. 20,000 under section 80C to save your tax. You can invest in either ELSS, PPF, Insurance etc.
asaas asked, Which health insurance policy is the best for family floater plan?
Vinay answers, Hi, It depends on number of family memebrs to be covered and amount of cover needed. you need to see the services available/support available incase of claim.
venkat asked, My annual income from salary is about 12 laks.How much can ,I save and How much i have to pay income tax
Vinay answers, dear venkat, please refer previous posts for details.
PAREKH asked, how to avoid paying taxes???
Vinay answers, Dear Parekh, You should plan you taxes and must not avoid it.
mahesh asked, NSC can save tax?
Vinay answers, Dear Mahesh, it saves tax under 80C, however the interest income from NSC is taxable.
ravi_kann asked, Hi Sir, I want to know is there any increase in home loan premium & Interest amount exception?. Thanks
Vinay answers, Dear Ravi, In the present budget proposal there is no change in the limits for interest on housing loan and principal repayment.
sanjay asked, what is the main benefit of rajiv gandhi equity scheme
Vinay answers, Dear Sanjay, In the present budget proposal, this scheme gives you tax saving of 50% of amount invested subject to maximum of 50000 amount invested. However, equity markets do carry an embedded market risk and calls for investor prudence before making an investment decision. In the long run, equity markets outperforms other asset classes.
Shailesh asked, what is new method to save tax apart from last year?? only tax bracket is increased?
Vinay answers, Dear Shailesh, In addition to this you have preventive health care and rajiv gandhi equity scheme.
gautam asked, i want to invest in share market.how can i save the tax if i earn profit from shares
Vinay answers, Dear Gautam, Invest in equity markets to maximize returns.
CHINTAN asked, I have heard that the investment of Rs. 20,000/- in infrastructure Bonds is no more exempted. So apart from Rs. 1.00 Lacs in 80 C and Rs. 15000 in Health Insurance, what is other option for investment with tax saving ?
Vinay answers, Dear Chintan, You got other avenues to save tax. Please refer earlier posts.
KING asked, HOW IS RAJIV GANDHI EQUITY FUND ?
Vinay answers, Dear King, The budget proposal has announced Rajiv Gandhi Equity Scheme and we need to wait for the modalities for implementation of the same. However it is not a fund.
DK asked, Is it still okay to invest in EPF through voluntary PF facility as they reduced the interest to 8.25% or shall I look for other types of investment
Vinay answers, Dear DK, It is true that returns got reduced by 1.25%, however EPF has its own benefits. Other investment avenues which you can explore for better returns are equity markets for a long horizon based on your risk appetite.
Vinay says, Thank you friends. Due to time constraint we could not answer all the questions. You may write your queries to firstname.lastname@example.org.
Union Budget 2012-13: Complete coverage