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?
In an hour-long chat with rediff.com, 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.
rajatmehta asked, Dear Mr. Gandhi Our partnership firm came into existence in FY 2007-08. Except for partners contribution (approx. 1 crore) into the firm's bank account and its utilization to acquire shares in a new company no expenditure (except petty expenses) or income has accrued in FY 2007-08 to the firm. Do we need to get the partnership accounts audited by a CA even though there is no turnover though the capital contribution is significant? The partners are regular assesses and no income has been received by them from the firm. Many Thanks Rajat Mehta
Vikas Gandhi answers, at 2008-09-11 15:39:54A partnership firm is required to get its books of account audited only if the turnover for the year exceeds Rs.40 lakh. If the firm is engaged in profession, the limit is 10 lakhs. From your query it is understood that there has been no income for the firm and hence you are not required to get your books audited under Income Tax law.
jatin asked, i am salary person & have home loan which form can i used? because some person told me you can used ITR-1,is it right?
Vikas Gandhi answers, Since you are having housing loan and claiming housing loan interest, you have to file return in ITR-2 and not ITR-1.
bp asked, Sir, are the dividend payouts received through direct investment in equities taxable?
Vikas Gandhi answers, No. Dividend received is totally exempt from tax.
bp asked, I am salaried. This financial year I have invested in mutual funds & shares with a long term perspective (3-5 years). Which ITR form should be applicable?
Vikas Gandhi answers, The selction of ITR is based on the nature of income you earned during the year. It does not depend upon the investment you made. Thus if you are having only Salary income, you have to file your return in ITR-1.
bp asked, If I apply for a home loan towards purchase of flat which is under construction & expect to get posession not before end 2010. My EMi wil start fom next month. Will I get IT benefit for the home loan interest? Can I claim HRA as well since till such time I get possesion of the flat, I need to pay rent on my current accomodation?
Vikas Gandhi answers, Since you will be getting the possession of your flat in 2010, currently you are not the owner of the flat and hence currently you cannot claim benefit for housing loan interest. However you can accumulate such interest amount and claim 20% in each five consecutive year from the year you get the possession. Currently you can claim HRA benefit.
piyal asked, Dear Vikas, If my bank refuses to give me a form-16A on the FDs , what should I do?Is it possible to pay my taxes without that? I have the Interest amount paid to me from my savings account statement. I also know how much TDS they deducted .But how to convince the tax people? Please help me to pay my Income tax.
Vikas Gandhi answers, Although you have the details of interest received and tax deducted, the information is insufficient from the tax return perspective. With the data available, you can calculate your tax liability, but the Department will not be able to give you the tax credit unless and until you provide other details like TAN, Date of payment, tax payment details by the bank. HEnce it is necessary for you to get Form No.16A from your bank.
ganesh asked, sir, I am the guardian for my cousin brother. shall I claim tax benefit for his tution fees?
Vikas Gandhi answers, Benefit for tuition fees can be claimed only if the same is paid for your children. Since you are paying fees for your cousing brother, you won't be able to claim any tax benefit.
das asked, hello sir, I have one simple question like can i show both House Rent and Home loan interest in my tax exemption ? I have home loan and got postion also. But i stay i rented house because my own house is far from my office ? Please answer
Vikas Gandhi answers, In my view, both the benefits can be availed only if oyur place of residence is situated in different city which is far to commute from the city wherein you are employed. Only in such a situation can you claim benefit of HRA & housing loan interest.
ganesh asked, currently I am working in S/w company. more over I am operating my own company. say Example MY taxabale income is 3 Lacs and COmpany Income is 10 Lacs how the calculation should be now.
Vikas Gandhi answers, The amount of Salary that you receive from your S/w company will be fully taxable. As such your employer will be deducting tax on this salary income. As far as income from your own company is concerned, the same will be treated as your Business income and against the gross income received your can claim all the expenses that you have incurred for earning the income. While filing return you will have to add your salary income and net business income for arriving at the tax liability.
vappy asked, DOES stamp duty registration of a new house purchased... give you benefir under 80C
Vikas Gandhi answers, Yes. You do get tax benefit u/s 80C for paying stamp duty and registration fees for house purchased.
Umesh Bansal asked, I m a salaried employee? I have derivative income from future of share. Whether it will cover under Business income or short term capital gain?
Vikas Gandhi answers, Derivatives income received from Future & Options will be considered as Speculation income and accordingly will be treated as Business Income.
vishy asked, I get rent for my flat that i have rented. How is the IT calculated for it. It would be on my salary plus the rent? How should i pay tax for it ?
Vikas Gandhi answers, From the rent you receive you can deduct the amount of municipal tax paid during the year for the flat. On the net value you get standard deduction @ 30%. You can also claim deduction on account of interest paid on any loan taken for the flat. the balance amount added with your salary income is taxable in your hands.
Maulik asked, I am salaried professional and HRA annually comes to around 80000 Rs. I stay with my parental owned flat. 1. Can I ask my parents to give me a receipt as monthly rental and will it save me from tax. 2. Secondly, does it mean that my mom will have to pay tax on that income since home is on her name and she does not have any other source of income. 3. Will it affect my balance sheet in future if I want to go for a Loan as my fixed expenses would be shown as increased due to rental amount?
Vikas Gandhi answers, Yes you can pay rent to your family member (owning the flat) and claim HRA benefit. It is advisable to pay such rent in cheque for substantiation. Of course your Mom has to offer this rent as her income and accordingly file return, pay tax. Since this will be your cash outflow, it will certainly affect your balance sheet.
rohaggar asked, If I get a property due to demise of my father, is there any tax liability when I sale this property as this will be considered gift property in blood relation?
Vikas Gandhi answers, Property received on death of a family member will be considered as gift and will be out of the purview of taxable income. However you will have to pay tax on the capital gain when you sell such property.
Vikas Gandhi says, That's all for this session friends. Chat with you next week. Good bye.