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, Good evening friends and welcome back to the tax chat session. Wish you all a very happy & prosperous new year.
kapil asked, i want to claim ded u/s 80c ,so which is the investment in which the lock in period will not be too long and the return is tax free
Vikas Gandhi answers, at 2008-11-06 15:28:06If you are looking for a lesser lock in period with tax free returns, in my view you can go for investing in NSC. the lock in period is about 6 years. The returns though taxable are further eligible for deduction u/s 80C, which in a way assumes the character of tax free returns.
biru asked, How to get tax benefit on Sodex meal vouchers if the employer does not provide this.
Vikas Gandhi answers, You cannot claim any tax benefit on account of Sodexo meal coupons, if your employer is not providing for the same.
biru asked, Can I get the tax benefit on the loan taken for buying plots/land for constructing house?
Vikas Gandhi answers, Loan taken for purchase of plot of land does not enjoy any tax benefit. The tax benefit is available only for loan taken for purchase / construction of house.
Vignesh asked, Hi, We(Me and My Wife) jointly have taken Home Loan and we are paying full EMI for that.But the thing is the Flat we are purchasing is only be ready for occupation by March 2011.Can me or my wife claim tax deduction for this fiscal year?! Can we claim Home Loan tax deduction and HRA at the same time?
Vikas Gandhi answers, Since you have not yet received the occupation of the house you will not be able to claim any tax benefit for the loan taken. However you can accumulate the amount of interest you pay till the year you get the possession. In the year of possession you can claim 20% of such accumulated interest in addition to the interest paid during that year within the limit of Rs.1,50,000/-. Further since currently you will not claiming any tax benefit on account of home loan, you can certainly enjoy the tax benefit on account of HRA.
dyna asked, Can I calim tax rebate on the expenses incured to look after my mentally retarted uncle. He is dependent on me for all his needs. He has no heirs. If so under what section and what is the upper limit? Thanks in advance.
Vikas Gandhi answers, Although deduction for such expenditure is available under the law, it is only for the expenditure incurred for family members. the definition of family members does not cover uncle and hence you won't be able to claim any tax deduction on account of such expenses.
bhavin asked, hi, what is the exemption limit for medical reimbursement from empployer
Vikas Gandhi answers, There is no limit for getting medical reimbursed from the employer. However only Rs.15,000/-reimbursed by your employer is exempt. Excess if any received will be taxed in your hands.
firstname.lastname@example.org asked, I want to know whether income from capital gain(Long Term) i.e from sales of share is exempted under income tax means share purchased and hold for more than 1 year please reply above query.
Vikas Gandhi answers, Yes, provided you have sold the shares through the Stock exchange.
PArvez asked, How helpfull is PPF
Vikas Gandhi answers, PPF is very useful and according to me it is advisable to all. Following are some of the benefits - 1. Secured returns. 2. The returns are tax-free 3. Minimum lock-in period of 15 years, hence serves as a long term investment. 4. In an event of bankruptcy, no one can touch your PPF balance, not even Government of India.
Narendra asked, Hi Mr.Gandi I have opened an FD in co-operative Bank and bank is no longer exist. My question is can I adjust FD amount + Interest amount as a loss against my actual income for tax calculation?
Vikas Gandhi answers, Unfortunately you cannot claim such loss against yolur taxable income.
sanjeev asked, Is it must to file the IT returns once you have a PAN -- although you dont have any income for the current year??
Vikas Gandhi answers, As per Income tax law, having a PAN does not necessarily means that you have to file your income tax return. A person is required to file income tax return if his / her total income before claiming any deductions exceeds the exemption limit.
JAGADEESH asked, Please inform whether the principal amount in FD for 5 year term will provide Income tax deduction under 80C for the principal amount? Also inform whether monthly interest on this will attract income tax if I am a tax payee?
Vikas Gandhi answers, Yes, amount kept in term deposit with notified bank for a minimum period of 5 years do qualify for deduction u/s 80C. Further interest received on such term deposit is fully taxable.
sandeep asked, Good Evening, I recently joined another company in Sept'08. The new company has not taken into account my earlier employment and thus they consider that i am employed from Sep-April for this financial year. How do i pay the taxes saved - should i show the income from earlier company to current company OR should i take care of this when filing IT returns?
Vikas Gandhi answers, It is better that your current employer takes into consideration your salary from previous employer, so that proper tax is deducted and you do not have to pay any additional tax at the time of filing return. However if current employer does not consider this salary, you can always declare the same while filing income tax return and pay additional tax and interest if any.
kedar asked, Can I claim LTA from my employer for journey undertaken by my family only or is it necessary for me to travel also If so, do we need to travel together
Vikas Gandhi answers, Exemption on account of LTA is available only if you have travelled along with your family.
rrk asked, Seen the tax saver term deposits are better than NSC as some banks are giving interest rate upto 9.5% and compounded qtly (NSC-half yearly). Will it be better to go for such deposites
Vikas Gandhi answers, Although the return is higher on term deposit, if you calculate post-tax return, you get about 6.5% return out of term deposit as against 8% from NSC. this is bsed on the assumption that you fall in higher tax bracket and that accrued NSC interest gets eligible for deduction u/s 80C.
Venkat asked, I bought a flat and am paying EMI of Rs. 17000 pm and principal and interest has been taken for tax exemption for the past one year. Now i have shifted my location due to another job at b'lore and continue to pay EMI as my family lives here and also the rent at B'lore for myself. can i get the tax rebate for both.
Vikas Gandhi answers, Yes you can certainly get tax benefit for both.
apoorv asked, Hi Vikas Gandhi......Gud afternoon...i am working as a free lancer for IT field, and my income is more than 4 lacs, so do i need to pay any income tax, means, for free lancers, do we have to pay any income tax?????
Vikas Gandhi answers, Since you are working as a free lancer, against the gross reciepts, you can claim all the expenses that your have incurred for earning the income. You will be taxed only on the net income.
Subrat asked, Hi, i left my previous company during end of the year and i could not able to produce the HRA exemption related document while leaving my previous company, In my current company i produced the all document, but the HRA related tax has been deducted from the previous company,so now the question is where i need to submit these relevant document to get my money back to me.
Vikas Gandhi answers, In such a case, you can calculate the amount of HRA that is exempt and include the same while preparing the income tax return. You can keep the relevant documents with yourself and produce the same to the officer, if and when demanded.
kvsinghal9052 asked, my employer get medical policy for all the employees and their families. The premium has been deducted from our salaries. Can we get the deduction under section 80D
Vikas Gandhi answers, In a way, you have only paid the mediclaim premium and hence you can claim the tax benefit.
rahul] asked, i have short term gain in selling shares & short term loss in selling land.can i adjust this to each other
Vikas Gandhi answers, Short Term Capital loss can certainly be adjusted against Short Term Capital Gain.
goel39 asked, For Clubbing of Income of minor child, income of that parent is considered whose"TOTAL INCOME" without such clubbing is higher. My question: 1. What does "TOTAL INCOME" mean? 2. My wife has income higher than me yet she is out of tax net while I pay tax. Income of my minor daughter will be clubbed with whose income ?
Vikas Gandhi answers, In my view total income would mean total taxable income and hence in your case, the income of your child will be clubbed withn your income.
bh asked, hi, can i claim tax benefit if i finance my younger brother's education (i am not married as of now) ?
Vikas Gandhi answers, You can not claim any tax benefit on account loan advanced to or expenses incuured on your younger brothers education.
Vikas Gandhi says, That's the end of this session, friends. Chat with you next week.