If you are filing income tax returns during 2007-2008 for the previous year, do collect the new Tax Deduction at Source certificate from your employer.
The changed TDS certificate has to be attached with the tax return form. However, tax returns can be filed on 2D or saral form. There may be some changes in form 2F, later on. Till then you can file your tax returns on the old form.
My 18-year old had earnings of Rs 145,000 from commodity trading. Will these be treated as short-term gains? He also pays an annual LIC premium of Rs 20,000. Secondly, what could be the sources of income for an Hindu Undivided Family?
Income from commodity trading are business gains and can't be treated as short-term gains. Your son will have to pay 10 per cent income tax and 2 per cent education cess on Rs 125,000 tax after claiming a tax deduction of Rs 20,000.
An HUF can have income from various sources. Its income is the same as that of an individual, except that an HUF can't include income from profession, direct commission or salary.
The HUF can, however, have rental income, stock market income, interest income and dividend income from mutual fund.
Can I claim tax deduction on the amount I pay when breaking the employment bond with the company I am working with?
Ankur Gupta, software engineer, Bangalore
If an employee leaves a job before the end of his contract period with the company, he will not get tax deduction against the money he pays to the company as penalty. This amount paid by you is penalty and wouldn't be deducted from income.
I have never filed income tax returns. But I want to start filing now. Can I start now? I earn 12,000 per month.
Massiah Parzada, Mumbai
Your annual income is Rs 144,000 and therefore you are required to file tax returns. First fill form no. 49A for the allotment of a PAN card, which will be sent to your address in another 15 days.
The PAN number is used for filing of income tax returns. File your tax returns on a form where you also mention your PAN number. If you are a salaried person, your employer must have deducted income tax. Now you need a PAN to file tax returns.
Can both husband and wife claim tax deduction for housing loan? What if they already have a self-occupied property and want to buy a second house?
Rabia Patel, Mumbai
They will get a maximum tax deduction of Rs 150,000 on interest payment of the home loan each. Both will get tax deduction for the repayment of loan also. If you and your husband jointly want to buy a house, first define the percentage of ownership held by each of you. If the first house is on rent, you get its tax benefits.
But if both the properties are self-occupied, you can't claim tax benefits. If the second house is on rent, you can avail tax deduction for rental income. If the second house is self-occupied, each one of you gets tax deduction of a maximum Rs 1.50 each on the interest payment of loan.
I have saved a sum of Rs 600,000 in the past 32 years. What is my tax liability? I don't have a PAN card.
If you can't give proof for the source of money, the entire sum will be taxed. However, you can avoid tax by investing the money in a bank account and by giving proof for the source of money. Also apply for a PAN card.
What tax deductions is a government employee whose child is physically/ mentally disabled, entitled to?'
Ashok Dhawan, Noida
As per the provisions of 80 DD of the IT Act which are similar for government or non-government employees, if you spend on a relative or a dependent who is inflicted with a disability, you get tax deduction of Rs 50,000 and Rs 75,000 for severe disability. You have to attach with the return form another form 10 IA.
But if the taxpayer himself is suffering from a disability, he/she can claim tax deduction under 80U of the IT Act. What is the maximum limit of tax deduction under 80CCC of the IT Act?
B Singh, Vadodra
It deals with the investment in a pension plan. You can invest up to Rs 100,000 in a pension plan in one year. Under 80C of the IT Act, you can invest up to Rs 100,000 in insurance, PPF and NSC. But the total deduction you can claim is Rs 100,000. If you want to invest in a pension plan, invest Rs 100,000 and then don't claim under section 80C.