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 their 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?
Direct tax expert Vikas Gandhi replied to many such readers' queries. Here is the transcript:
Vikas Gandhi says, Good evening friends and welcome back to Tax Chat session.
deep asked, I have paid tax around 35000. I have loss in shares & F & O . what is to be done to show this & get the tax paid return
Vikas Gandhi answers, at 2008-04-03 15:49:11Loss incurred in shares and F&O cannot be adjusted against any income. Hence there will no reduction in your income on account of such loss and hence no tax refund. In the Income Tax Return that you file, you will have to carry forward such loss and set-off against similar income in subsequent years.
Lakshmi Prasad asked, Can i get benifits of supporting education for my brother.
Vikas Gandhi answers, By supporting education of your brother if you mean claiming his tuition fees u/s 80C for tax benefit, you are incorrect. You cannot claim this deduciton. Tution fees of only children is available for tax benefit and not for brother or sister.
notax-2008 asked, I want to open a demat a/c on my mother's name. She doesn't have any other earnings. Should she still be paying short term capital gains and other taxes in that context?
Vikas Gandhi answers, If for the current financial year if her profit from sale of investments does not exceed Rs.1,80,000/-, she won't be paying any tax on such income.
jain asked, sir, I am having lot of shares in physical form from last so many years. Now I have find a buyer who is ready to buy in physical form at a discounted price. Sir. my profit will be treated as long term gain or not, since i am holding from last 12 years.
Vikas Gandhi answers, YOur profit will of course be termed as Long Term Capital Gain. However the same will not be exempt from tax, since you will not be paying any Securities Transaction Tax on sale. The profit you earn will be taxed @20%.
Gandh asked, Hi Vikas, there is an IT rule which says that you have to pay 10% surcharge on the IT payable if your salary is above 10L PA. Please tell if 10L PA is the taxable salary or gross salary?
Vikas Gandhi answers, Your information is partly correct. There is a surcharge @10% if the total income exceeds Rs.10 lacs and not total salary. This total income id total of all your taxable income less all eligible deduction. If the balance income is more than 10 lacs, surcharge @10% will be levied on tax calculated.
bharat asked, can i invest both in ULIPs and ELSS.i wan to invest 25000 in each
Vikas Gandhi answers, Yes you can invest. There is no such restriction.
KD asked, Kindly tell me one thing. if my earning for a financial year is 80000 only. i have invested Rs 25000 in ELSS schemes and earned 15000 as short term capital gain from transaction of shares through my Demat account. so will i pay any tax. if yes than why and if not than also let me know why?
Vikas Gandhi answers, With the facts and figures stated, you won't be paying any tax. For an individual, upto Rs.1,10,000/- (for F.Y.2007-2008) there is no tax. Since your total taxable income is less than Rs.1,10,000/-, you won't be paying any tax.
Khalil asked, I switched two companies in single year , but I did not filled tax returns , even though I paid tax in both the companies ( but only in 20% bracket) , while my total income fails in 30% , what all penalties I have to pay , please tell me Sir . ...
Vikas Gandhi answers, Of course your tax calculation would have resulted in paying additional tax, which you have not paid. Hence in addition to the tax, you would be liable to pay interest (for late filing of return, for non-payment of tax etc). In addition to this your Officer might levy a penalty of Rs.5,000/- for not filing return in time. Further if you don't file income tax return and your Officer find out this fact, in addition to above he may also levy penalty for concealment of income.
jo asked, Can i claim tution fees u/s 80C
Vikas Gandhi answers, YOu can claim tuition fees of your children only and not of your wife.
Srikanth asked, My package for this year is rs.3.8 lakh, can you tell me what is my taxable income and what is my tax amout for the year 2008-09
Vikas Gandhi answers, Assuming that the amount of Rs 3.8 lakh is your taxable income, tax for the financial year will calculate to Rs.31,000/-.
Swap asked, Hi Vikas , My company is not giving HRA facility , Can i claim deduction separately . Pls advise .
Vikas Gandhi answers, No if your salary component does not consist House Rent Allowance, you cannot claim the same separately in your return of income.
luv asked, Hi Vikas What courses qualify for education loan repayment tax benefit. Is it only for post graduation or graduation also? Is the tax benefit available on principal repaid also? Thanks
Vikas Gandhi answers, Any education loan taken for full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure science qualifies for deduction u/s 80E. The tax benefit is available only for the interest component and not for principal repayment.
venugopal asked, Hi, I worked for one company from APR 07 to June 07 in PUNE and working for current company from Jul07 to till date in Bangalore. Last 3 years I have filed the IT returns in PUNE. Now where I need to submit my IT returns? Please answer. Thanks Venugopal
Vikas Gandhi answers, Since your current employment is situated at Bangalore, you will be filing your return in Bangalore.
googl asked, Sir, I live with my parents and they are dependent on me. My father is retired and his only income is interest income. We live in a rented place and the rent is about 4000/-. My HRA component is 10000/-. To lessen my tax burben, Can I make a payment of 10000/- to my dad which he will show it as his income and from this 10k he will give 4k to the landlord. Is it possible
Vikas Gandhi answers, No. you cannot do so. The property is not owned by your father and hence you cannot pay any rent and claim House rent allowance.
jags123 asked, For salaried persons, the IT declaration for this year(to be submitted to employer) can be kept same as last year right, since the exemption limits of 80C, 80D are the same as the last year
Vikas Gandhi answers, Although there is no change in the limit of 80C, there is of course change in limit of sec 80D.
siva asked, to get benifited from tax what is the maximum amount we cn invest in fixed deposits for how many years
Vikas Gandhi answers, The tax benefit for fixed deposit comes in the overall limit of Rs.1,00,000/- in Section 80C. There is no individual limit for Fixed Deposit. However such fixed deposit should be for minimum period of 5 years and the deposit should be in a scheduled bank
gg asked, I want to gift 1 lacs to my parents, under which section I need to show this and will I get the Tax exception against this amount ?
Vikas Gandhi answers, Gifts given are not allowed as claiming expenses or deduciton from your income. Hence there will no tax benefit to you on giving a gift. Ofcourse the gift received by your parents will be exempt in their hands.
tanveer asked, can i save short term property gain by bond investment (Capital Bond)
Vikas Gandhi answers, No. you cannot. You cannot claim any exemption from short term capital gain.
manish01 asked, Vikas, I invested in a MF on Feb-08 and submitted the receipt copy to the company for the final deduction of Tax. But due to some lack of information the MF gets cancelled now. Can i change it in IT Return without any issue?
Vikas Gandhi answers, Yes you can certainly do that. In this case you may have to pay additional tax.
rahulkhanna asked, Hi Vikas. I missed filling my IT return for yesr 2006-2007. Can I still file it ?
Vikas Gandhi answers, Yes you can still file your return. However the Officer, at his option, may levy a penalty of Rs.5,000/- in this case.
Vikas Gandhi says, That's all for the day friends. Good-bye and have a happy week-end.
Chat with Vikas every Thursday at 4 pm