Two houses? Can claim tax rebate on both

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Two houses? Can claim tax rebate on both

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September 08, 2008 08:57 IST
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 on Friday, 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.

SUNIL asked, I HAVE RECEIVED PROCEEDS OF MY UTI ULIP..AM I REQUIRED TO PAY CAPITAL GAINS TAX ? THE STATEMENT OF ACCOUNT SEND TO ME BY UNIT TRUST OF INDIA SHOWS BOTH SHORT TERM AND LONG TERM CAPITAL GAINS...HOW CAN I SAVE CAPITAL GAINS TAX ON THESE AMOUNTS...I MEAN CAN THE PROCEEDS BE INVESTED IN SOME SPECIFIED SECURITIES TO SAVE SUCH TAX ?PLEASE GUIDE.
Vikas Gandhi answers, at 2008-09-05 15:43:56Kindly refer to the statement received. If securities transaction tax is levied on the proceeds, then there will be no capital gain tax on Long Term Capital Gain and you will have to pay 10% tax on short term capital gain. However if this is not the case you will be paying tax on both the types of Capital gain. To save paying tax on long terk capital gain, you can invest in Capital gains bonds issued by the NHAI or REC.

sandeep asked, PPF or NSC which is a better optio to invest money in .
Vikas Gandhi answers, Both the investments come under safe investment. Rate on interest also is same from both the investments. The difference is the period of holding. You cannot withdraw amount from a PPF account until 15 years, whereas NSC has a maturity of 6 years. If you do not have a liquidity problem, according to me PPF is a better option, as interest received from the same is tax free as compared to NSC interest and also, no one touch your PPF account, not even the Government.

TDP asked, Pl clarify the insurance amount eligible for sec 80-D excemption for self and aged dependents
Vikas Gandhi answers, For the financial year 2008-2009, the deduction available under sec 80D is as under - a) Premium paid For self, spouse and children is deductible upto Rs.15,000/-. If any of the member is a senior citizen the amount increases to Rs.20,000/-. b) In addition to above, if you have paid premium for dependent parents, you cabn claim deduction uptio Rs.15,000/-. If any of the parent is a senior citizen, the limit increases to Rs.20,000/-. To claim benefit for medical insurance, you should pay the amount through cheque. Cash payment made does not qualify for deduction.

Tampa asked, can i take two home loans simultaneously and avail the tax benefit for both
Vikas Gandhi answers, There is no limit on the number of home loans that a person can avail. For the income tax purpose, what matters is the amount of loan repaid during the year. Against one self occupied property, a person cannot claim deduction on account of interest for more than Rs.1,50,000/-, irrespective of the number of home loans. Similarly deduction for the amount of principal loan repaid during the year cannot exceed Rs.1,00,000/-, within the overall limit of section 80C.

sunnysun asked, Hi. Please advise me on the tax implication on long term capital gain by selling a property. Where can I keep the capital till i invest it in procuring another property?
Vikas Gandhi answers, If you have hold the property for more than 3 years, the property will be regarded as Long Term Capital asset and hence the profit earned on the same will be treated as Long Term Capital Gain and will be taxed @20%. Else it will be considered as Short Term Capital Gain and will be taxed at normal rate of tax. While you have to pay tax if it is Short Term, you can avail exemption from Long Term Capital Gain. Property purchased one year before or two years after or contructed within three years of the date of sale is eligible for exemption. If you intend to purchase a property in near future, you can deposit the capital gain amount in Capital Gain account scheme to be opened with a Bank, before the due date of filing the income tax return.

RK asked, On PPF is the interest paid yearly and does it get compounded
Vikas Gandhi answers, On your PPF balance interest is credited on every 31st March. It does get compounded.

Swa asked, Hi Vikas - Interest, on savings account is taxable or not .My total income comes under taxable bracket . Pls advise
Vikas Gandhi answers, Of course interest received on savings account is fully taxable.

sameer asked, i have filed my IT returns in e-return format on net and got the acknowledgement is it necessary to get the ack signed my IT officer? the ack is digitaly signed.
Vikas Gandhi answers, If while e-filing your return, you have attached your digital signature, then there is no need to get the acknowledgement copy signed by the Income Tax Officer. The filing process is complete

JAIN asked, my employer has not deducted any tds from my salary. should I pay as self assessment tax or what?
Vikas Gandhi answers, If your salary comes under tax bracket, and your employer has not deducted tax on the same, you should pay advance tax to save yourself from paying interest. However before doing so, confirm as to why tax is not being deducted. It might be so that your employer mioght deduct tax at a later stage, which will then result into double tax payment and you will have to claim refund. This is because it is the duty of the employer has to deduct tax from salary and hence first consult your employer and then take necessary action.

ramesh asked, i want to take a home loan...which is shared by my brother and me....can we both avail tax benefit or not?is it 100% for both or less?
Vikas Gandhi answers, If the property is jointly owned by you and your brother, loan is jointly taken by both of you and both of you are repaying your share of loan then you can avail tax benefit for the portion of interest and principal amount of loan repaid by you individually.

rakesh asked, What is the max i can save under 80-D is it 15K for self spouse and children Plus 20K for parents i.e total of 35K. Please clarify
Vikas Gandhi answers, Yes, this is the maximum amount specified in the section. Further the limit of 20K is applicable only if any of your parent is a senior citizen, else it is 15K.

SUNIL2 asked, Is interest on KVP and PO MIS Taxable ?
Vikas Gandhi answers, Yes, interest on both the schemes, viz: KVP and Post office MIS is taxable.

REKHA asked, IF I GET MONEY FROM MY MOTHER IS TAXABLE?
Vikas Gandhi answers, If you are receiving this money as a gift, then the entire amount is tax free.

lucy asked, Hi Vikas, recently most of the banks are offering 10% interest on the FD's. Pl explain the tax implications on the same, planning to invest 5lacs as FD. How do i take care of the interest earned while filing my IT returns. I am a salaried person filing ITR 1.
Vikas Gandhi answers, The interest received on FD with Bank is fully taxable. It is wise to offer this interest on accrual basis, so that tax burden gets divided among the number of years of fixed deposit.

Nilesh asked, My company give me a special rewards sepertely from Salery . If it is count in my income it is taxable but company will not included in Form 16 so it is taxabale or Not ?
Vikas Gandhi answers, Of course the income is taxable. Since your company will not be including the same in your Form 16 you will have to show this income separately while filing income tax return. You may include this income under Income from other sources.

spk asked, In 2005, I purchased a car and paid back car loan before resigning from my job in end of 2007.The company(X) in which my husband works has made an agreement with me for "Car Hire" since 2005. Till 2007-08, no TDS was deducted by company (X) on Car Hire. Recently, Car Hire agreement has been revised to Rs 12000 per month. Company(X) now deducts TDS from monthly payments. Presently, I am not salaried- age 40. My incomes in 2008-09 in addition to Car Hire are "Interest in bank a/c " and "Income from kids tuition". Which ITR Form should be filled by me in 2008-09 to get TDS back from IT deptt. I would make savings u/s 80C to reduce income tax liability to zero. Upto 2007-08 , I filled ITR2 each year.
Vikas Gandhi answers, The only difference between your last years income and current years income is that you won't be having any salary income. Since you were filing ITR-2 all these years, it means that you showed the rental income from car as income from other sources. Hence this year also you will be filing ITR-2 only.

Mohit asked, What is term deposit? is it beneficial? Should i have to pay Short term Capital gain on it?
Vikas Gandhi answers, Term Deposit is nothing but Fixed Deposit. On maturity only interest amount received is taxable. there is no capital gain on such term deposit.

Abbas asked, Hi Vikas, I am handicapped claiming benifits under 80U, my spouse also is handicapped, can i claim benifits under 80DD if there are no medical expenses OR spending on her insurence under other plans than mentioned scheme(i have opted for other plan from LIC [Get Quote] for her). Also let me know what all documents need to be procured while filing returns/TDS
Vikas Gandhi answers, If your wife is not an earning member you can claim benefit u/s 80DD for the medical expenses incurred on her treatment. For claiming the benefit, you will need a certifiacte in Form no. 10-IA from a medical authority certifying the extent of disability.

Vikas Gandhi says, That's all for this session friends. Chat with you in the next session.


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