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A N Shanbhag answers your tax queries
August 25, 2006 09:53 IST
The A N Shanbhag NR Group specialises in tax and investment advisory services for Residents and Non-Resident Indians.
A N Shanbhag and Sandeep Shanbhag spent over an hour on the Rediff Chat on Thursday, August 24, responding to readers' queries on tax and investment issues.
Here's the illuminating chat transcript:
SHANDU asked, Is it mandatory to file return by Form-2E for this year?
manoj asked, hi i m working in egypt, my company is indian and getting salery in india in INR in my indian bank, my comapny also deducting income tax but as i supposed that i will get tax exempted as i have been out of India for more than 183 days. No tax is deducted in egypt for me. Please confirm the facts.
vikas asked, Sir, i want to know the best options for saving a tax which are missed by common man ... i am aware of NSC and PPF, HRA, Insurance etc. Apart from that is thier anything through which we can save tax ... thanks
bhalotia asked, hello sir, my brother is on abroad assignment from indian employer with family, for a year, he is getting salary in $, my question is (1) should he transfer those earning to india by converting in rupee or there is any option to invest there itself or hold (save) in $. (2) in india or u s what is the best available options for investment considering tax & return & growth, kindly give your valuable advice. palakbabul
ankur asked, sir, My salary structure has Rs. 40000/- as Education reimbursment. I would like to know if I produce bills in evidence (like original reciepts for course I am persuing), then is this amount taxable?
k asked, hello...good evening can you please clarify me on the following iam a salaried professional what will be my long term capital gain tax when i sell a)shares b)mutual fund units if i have paid capital gains tax will the remaining amount added to my income and be taxed for income tax? thanks
smarajit asked, i just (2 month ago) started working online for an american website and am being paid in dollars by monthly cheque. Will my income tax pattern be any different than what is mentioned in the slabs for a salaried individuals?
dev asked, Hi, i am 23 year old, i am working in an MNC, next year i would like to sponsor my higher education abroad,but all tax saving scheme have atleast 3 years locking period.Where do i put my money in to get this problem solved.
SHANDU asked, am paying LIC premiums for my father who is retired and dependent on me. Can I submit those receipts for my tax exemption? Also, does he have to file a return? Will he fixed deposits attract tax deducted at source (TDS)?
kamatarun asked, what is the tax treatment of ULIP from insurance companies on repurchase/maturity?
slkapil asked, sir, I have a house jointly held by me and my wife. Can I claim HRA for the full house from my company after taking the receipt from my wife. What are the tax obligations
rudra asked, i have not filed my it return for this year, i am planning to file now, do i have to fill the new from or i can fill the old form of Saral
Karan asked, Hi,is the taxation policy same for balanced funds as equity funds?
Ax asked, Sir, if my company has not taken my NRI status into consideration while computing tax, then how can they rectify it? This happened in 2005-06 and the Form 16 has been issued and I've filed my return with incorrect Form 16 as well.
Nikunj asked, Sir, if a person is a salaried employee and deals in shares,F&O as a trader/investor, then how tax will be calculated in his case. Whether income from shares/F&o will fall under capital Gains/Speculation Business/Normal Business. Further, whether he can get set-off for STT?
itisme asked, When you are allotted PAN number, is it a must that you have to file IT return. I am a day trader, is it a must I have to file tax return. Or is there a limit on income beyond which you have to file return.
Shankar asked, what is the best option for tax savings with better returns compared to PPF or NSC
girish asked, If expenditure can be shown to reduce tax then what commodities come under these category?
Mohank asked, Sir, recently I got a good ESOP package from my company. Is there any way we can save tax on the same?
Yogesh asked, Sir, I went to Belgium for a post doc research work for two years and have not filed taxes for the past two years. Will I have to pay a big penlty if I file the returns now?
Raghu asked, hi..if im getting a wire transfer from abroad to my account. Is that amount taxable?
TANUJ OBEROI asked, hai give me some information about fringe tax.
sd1 asked, Dear shangvi can u please tell me How u get the tax benefit on home loan,i.e whether tax will be calculated on total EMI paid per year or on total interest paid per year.
tanaaz asked, if one wishes to give one's parents, siblings, aunts etc. cash as a gift are there any tax implications for the receiver and the giver? Would it be better to give cash on make investmetns in their name? Your advice would be appreciated
Where any sum of money exceeding Rs. 50,000 is received without consideration by an individual or an HUF from any person, the whole of such sum will be charged to income tax of the recipient under the head, Income from Other Sources. "Provided that this clause shall not apply to any sum of money received a) from any relative; or b) on the occasion of the marriage of the individual; or c) under a will or by way of inheritance; or d) in contemplation of death of the payer. e) from any local authority. f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in Sec. 10(23). g) from any charitable trust or institution.
If the gift amounts received by the donee from all the sources, other than mentioned above, exceeds Rs. 50,000, the donee has to treat the entire amount as income for the year and pay income tax thereon.
"Relative" means i) spouse ii) brother or sister iii) brother or sister of spouse iv) brother or sister of either parents v) any lineal ascendant or descendant vi) any lineal ascendant or descendant of the spouse. vii) spouse of the persons referred in clauses (ii) to (vi)." Obviously, his new gift tax has become donee-based. Note that the donor has to be a relative as per the above definition. Take the instance of Miss X whose mother's brother is Mr. Y. Yes, Y is a relative of X (mother's brother) but X is not a relative of Y (sister's daughter).
Ravikumar asked, Is income arising out commission by selling insurance policies is taxable?
swati asked, im a professional working as a project architect in a reputed firm in pune. here i'm not employed but a consultant. is advance tax applicable to me and how?
castortroy asked, sir, sebi is going to introduce the 'capital guranteed mutual fund'. is this going to be worth investing in?
Alagar asked, If a person getting salary income from his employer runs his own business firm in free hours (after office hours), and if he had not any profit from that business, under which category he has to file his income tax returns? Under "Salaried Employee" or "Business Professional"? (What is the situation if there is any profit on his biz?)
sai asked, What does EEP stand for and what does it mean in reference to the ULIP question?
prakash asked, Dear Sir, I use to travel abroad frequenty on a business visit from my Indian co. co is paying allowance of 50 $ per day for my expenses. they are deduction tax on this amount while I settle the travel account. Is this correct. Pl note I am not submitting any exp proff for this. Pl confir.
aad_amit asked, Sir, My wife and I , both, are working. My question is, can my wife claim LIC premium for tax benefit for the policy on my name?
binunice asked, How can I claim Tax benefits on Housing Loans?
The acquisition or construction should be completed within 3 years from the end of the year in which the capital was borrowed. It is possible to claim this deduction on two or more loans. In any case, the ceiling on total amount of deduction is Rs. 1,50,000 in a year. If the house is rented out, the entire interest payable without any ceiling can be deducted from the rent received.
The phrase used for availability of deduction is interest payable and not interest paid. Therefore, if the finance company collects the loan first and interest later, the borrower will be able to claim the deduction u/s 80C on a larger amount and also claim deduction of interest u/s 24 on accrual basis.
The interest payment can wait until the principal amount is collected. Some employers, especially PSUs and banks, follow this practice. Needless to observe that the deduction obtained on the basis of accrual cannot be again claimed on the basis of actual. It is necessary for the assessee to obtain a certificate from the lender that such interest was payable in respect of the amount advanced for acquisition or construction of the house, or as refinance of the principle amount outstanding under an earlier loan taken for such purpose.
Additional deduction u/s 80C, within the overall limit of Rs. 1,00,000 for the repayment made of the principal amount is available. This deduction is available only on loans for acquiring or constructing a housing property but the cost of any addition, alteration, renovation or repair carried out to the housing property is eligible irrespective of whether the funds applied are owned or borrowed.
his deduction on repayment of capital is available on loan taken from specific sources whereas for deduction of interest the loan can be taken from any source. The deduction u/s 80C and the interest u/s 24 are allowed only when the income from house property becomes chargeable to tax. In other words, the construction should be complete, the flat should be ready for occupation and the municipal annual value is known.
The interest for the years prior to the year in which the property was completed, shall be deducted in equal installments for the year during which it was completed and each of the 4 immediately succeeding years. Unfortunately, there is no corresponding provision for the capital repayment. This is an interesting feature. If the construction or acquisition is completed anytime in a FY, the interest paid during the entire FY is deemed to be the normal interest though a part of the FY is pre-construction period.
query asked, My company is listed in US stock Exchange. How will be capital gain qualify for long term gain?
rao asked, Sir, is the compensation amount received by me from my new employer taxable? Is the GPF, leave encashment, gratuity amount received by me from the previous employer taxable?
ravi asked, Sir, After change of our status to resident, can we put cash in � in my wifes name as RFC account to reduce tax burden, is it allowed, she was not on regular employment but an NRI. Also, is there wealth tax on our amount in deposits after change of our status to Resident. Thanks in advance.
bharat asked, Hi.Im working with a US based company.I am employed by them but working from home in Mumbai. I receive my Salary through remittance from Remit2India. The Amount is being taxed in US and sent to me. But i file my returns here and pay tax on it. Is my Salary non-taxable since its an inward remittance and India has a Double Taxation Avoidance Agreement with US ?
Prem asked, My previous company did not give me credit for the HRA that I incurred as rent in the Form 16 that they sent me. Can I claim exemption when I file the returns with the IT department?
SHANDU asked, Does the NRI have to pay property tax if they buy property in India? Can a person fill a NRI in a income tax form if he has been out of India for six months though he is Indian citizen?
jnkar asked, How to take care of the capital gains w.r.t Shares
Ramesh asked, We have given free house to one employee. Since it would be H.R.Perquisite. Shall we deduct tax separately on H.R.Perquisite since it has to be shown in form 12BA and does H.R.Perquisite is liable to FBT. Ramesh
SHANDU asked, I live in a rented accommodation in Gurgaon and get House Rent Allowance. In June 2004, I booked a house (still under construction) with a home loan. Can I claim the HRA as well as benefits from the home loan?
Meena asked, Hi are the FDs invested in Banks for period of 5 years come under 80C?
kris asked, Sir,I have more paid income tax for the last, i filed saral also, when i will getting the extra tax that i paid,if i want to when i will be get what should i do for that
SubhashGaitonde asked, Sandeep, This is Subhash Gaitonde here. I wanted to find out how I can take Tax Exemptions for two house loans. Can I show nominal rent as income by not renting one of the houses out and self occupy the second one and claim exemption on both loans
deepc asked, What are the tax saving options for an individual earning above Rs 10 lakhs? Is there a way the salary straucture can be altered to reduce the taxable component?
pri asked, Is it necessary to submit the returns if there is refund in your form 16A
ak asked, Me and my wife have taken a (joint) housing loan last year and the property is on both our names(we didnt specify any share in the property). As I am abroad since last one year (and no salary in India), can my wife claim the whole tax benefit(as its she who is paying the EMI for this period). And once I am back can and start getting my salary in India I take up the entire EMI payment and I alone claim the tax deductions? (The total amt of loan taken is abt 65% of the total value of the property)
manishkeyal asked, loan taken & invested in shares,can interest be deducted out of short term capital gain and deduction of Rs 100000/-deposited in NSC availed.
raghss58 asked, is sec. 44 AB applicable to public charitable trusts whose main oblect is education and they are collecting fees and incoem is in excess of Rs. 40 lacs
anup asked, Good afternoon Sir, I work for a reputed Indian software company and they have deputed me to UK. They pay me the salary in India as and give me an allowance here in UK. The salary in India is taxable and I am filing IT Return for that income. The UK allowance is paid to me as a fixed amount every month. My employer pays the income tax to HMRC UK internally and they do not issue any tax certificate to me. If I take some of my saving from UK Allowances to India, will it be taxable in India ? What are the tax rates ? Please guide me. Thanks , Anup.
Balagopal asked, Is thee any stipulation that the tax exemption on housing loan instalment or interest is available for one house alone, or is it available for the second house also ?
bikashbiyala asked, For how long can an NRI maintain an RFC A/C??
ashok ve asked, what are the Capital gains charges applicable for mutual funds: long term r short term ? waht is the tax amount ? plz answer my question
malli asked, hello Sir My wife has just completed her studies. we both have on PPF account each. As of now, i am paying for both the accounts. I opened an account in her name only as asaving Can i claim tax benefits for the amount paid for her account also
aniljain asked, I'm a US citizen (currently on NROR status) living in India. I still hold investment assets in the US. I report my US investment income on my US returns every year. However, because of the US tax slabs, I'm able to escape without having to pay any "actual tax" on my US investment income. My question is about how the Indian tax authorities will treat my US investment income after I become an ordinary resident: Will I have to pay tax to India on income which was reported on my US return but did not attract any actual US tax?
december5 asked, Hello Sir, In case my new prospective employer pays for the shortfall in notice period to my existing employer...will IT department treat it as a income i received from new employer and tax me? What should i do to avoid it..may be treat it as a reimbursement?
gokul asked, hi, is it acceptable to stay in parents home and provide rent receipt from father to avoid tax?
malli asked, If i can claim tax benefit for the amount, paiud to her account, what are the steps to be taken , and what are the documents to be produced
firstname.lastname@example.org asked, what is implication of PAN no. for NRI like me who left India on 02.10.2001 and is still working here (24.08.2006). Also, I am planning to "return permanently" next year to India around July - August 2007. Will my Income (salary)in UAE from April to July 2007 will be taxable in India? 3.pl. seek advice then: Should i arrive in india on 1st October 2007 (i.e.01.10.2007) to avail NRI status for Assessment year 2008-2009? Thanks. Raj
PURI asked, My 15 years PPF account was matured in the month of March 2006. Neither i have extended it for further 5 years nor I have withdrawn the amout. I donot want to withdraw amount.Please inform - Wether my account will carry the benefit of interest.
Thank you folks for your patience. While it was our pleasure, hope the session was beneficial to all.
If you have any questions on Tax- or Investment-related issues, please mail them to email@example.com. We will have them answered by The A N Shanbhag NR Group.