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How to save tax smartly

June 29, 2009 16:03 IST

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 rediff.com on Thursday, direct tax expert Vikas M Gandhi replied to many such readers' queries. Here is the transcript:

Vikas Gandhi says, 
Hi, Good Evening Friends and welcome back to Tax Chat session


VIjay asked, Is it a must to file the TAX returns when I have the PAN card even there is no income
Vikas Gandhi answers,  at 2009-06-25 15:35:18It is necessary to file Income Tax return only if Total Income before allowing any deductions under chapter VIA (tax saving investments)is more than Rs. 150000. The limit is Rs.180000 in case of female and Rs.225000 in case of senior citizen (Age >= 65 yrs as on 31st March of Financial Year)
Naveen asked, how HRA is deducted, can you pls give some idea
Vikas Gandhi answers, HRA is Exempt to least of the following: 1) Actual HRA Received 2) 50% of [Basic Salary + Dearness Allowance (in terms)] (For Mumbai, Delhi, Kolkatta, Chennai) 40% of [Basic Salary + Dearness Allowance (in terms)] (In case of other cities) 3) Rent paid - 10% of [Basic Salary + Dearness Allowance (in terms)]
samant asked, I had taken a bank FD in April 2007 in my wife name instead of Joint names for 36 months @9.25% interest. In 2010 the FD will matured and bank will deduct TDS, can I save TDS money? If Yes How ?
Vikas Gandhi answers, You can claim TDS only if you clubbed (include) the income earned by your wife in your own income. However, if your wife is disclosing the income in her income tax return, than you cannot claim the TDS and your wife will cliam the same in her return.
sreekanth asked, Hello sir, i have made some profit in intra day shares. My income does not cross 1 lac. should i pay STCG?
Vikas Gandhi answers, The profit made by you is "Speculative Business Income" and it is not Capital Gain. The taxability will depend on your Total Income as the tax will be calculated as per slab rates.
muna asked, I want to repay a part of principal of my housing loan, appx .1 lacs. What is the tax saving?
Vikas Gandhi answers, You can get deduction from your taxable income upto maximum Rs.1,00,000 under section 80C for Principal repayment of home loan.
manoj asked, I am having a FD, with my back. which will be matured which will be matured in march 2010. Its interest will be 22000 rs. Bank will deduct TDS. Is there any way to save tax on this?
Vikas Gandhi answers, In case your total income from all the sources (including Interest on Bank FD) is below the basic exemption limit, than you can submit Form 15G to your Bank. In this case, your Bank will not deduct TDS from your Interest Income
SKDhingra asked, I have two houses and I am paying interest on loan taken on both the houses. One house is residential and the other is on rental. Can I offset rental income against the interest I am paying? If yes then to what extent under which section?
Vikas Gandhi answers, You can claim Interest for both the houses. The maximum amount of interest allowed for house used for own residence is Rs.150000 whereas there is no limit for claiming interest on house rented. So, your rental income will get set-off against the interest claimed by you. The interest can be claimed under section 24(b).
sreekanth asked, Hello Sir, i got PAN card from chennai, now i am moved to hyderabad. Where should i file my tax. thanks.
Vikas Gandhi answers, As per the current return filing process,i would suggest you to E-File your return. In case you e-file your Income Tax Return without using Digital Signature, than you need to mail (courier) one signed copy of ITR-V received on e-file to Income Tax Department, CPC, Bangalore irrespective of place of work or place of issue of PAN card.
veenitbhayana asked, Hello Vikas, I have joined a new company and they gave me some joininig bonus on which TDS was done.I haev to pay the bonusback in case i leave the company before 1 year.Can i claim the TDS during my IT return.please suggest.Thanks in advance
Vikas Gandhi answers, Yes, you can claim the TDS as you need to disclose the Bonus received by you as your Income.
r123 asked, Can one avail HRA deduction if some one has a home loan .. and he is taking benefit on that?
Vikas Gandhi answers, Yes, provided the house for which the home loan is claimed is situated at a place different from the place where you reside ie., the house that you have taken on rent
Vikas Gandhi says, Good Bye