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Saving need not be taxing
June 12, 2007 08:29 IST
Does your salary amount to more than Rs 250,000 per annum? Then PPF (Public Provident Fund) and ELSS (Equity Linked Savings Scheme) for short periods, are a good bet. (Source: Tax Guru)
Non-residents Indians are entitled to a number of tax concessions in the country. They give tax only on the income earned by them in India and not on the earnings abroad. Indian citizens staying in India for less than 182 days, qualify for the NRI status. But if an NRI has rental or other income in the country, he has to give tax on it. However, there is no tax on the money sent back home or kept in NRE (Non-resident External Rupee Account) or FCNR (Foreign Currency Non Resident) account. Income from it is also tax-exempt.
Should I change my current bank investments? I am an Israeli citizen. And do I have to file tax returns?
If your income in India is less than the exemption limit, you need not file income tax returns. Tax exemption limit for individuals is Rs 110,000, for women Rs 145,000 and senior citizens Rs 195,000.
Can I submit tax return on the old form?
Old forms 2D and 2F are outdated. New forms have been issued for 2007-2008. You have to file tax returns on that form.
What are the methods of saving tax? What should be the proportion of investment in LIC [Get Quote], SIP and fixed deposit to save tax under 80C? How is the remaining sum taxed?
It is your personal decision to decide on the investments. Those who fall under the higher income group (more than Rs 250,000) should not make investments in bank fixed deposits as the income is taxed in FDs. Secondly, they should invest in the savings instruments where lock-in period is short and income tax-exempt. I suggest you invest in PPF and ELSS having a lock-in period of three years.
What should one do if he or she has more than one PAN card?
If you have a duplicate PAN card, surrender it to the income tax department by writing application to the department. There is a penalty of Rs 10,000 for keeping two PAN cards.
Why is PAN quoted?
This is to help check tax evasion. If you have a PAN card, quote PAN instead of filling form 16 for bank transactions.
I have earned Rs 70,000 from equity shares. What supporting documents should I give at the time of filing tax returns?
This year you don't have to give any supporting documents with tax return forms.
How is day trading taxed?
Income from day trading is called speculative income. Income from business in derivatives, futures and options is treated as business income and is not taxed separately. It is taxed after clubbing with other income.
What is the tax exemption limit for women above 65 years of age? Are they entitled to twin benefits?
I have been blessed with a daughter. How should one plan tax for minor children? How much tax can be saved by investing in a trust for minor? Tell me about minor trust.
Make a trust for minor- be it daughter or son. I suggest that if you have a minor child, don't invest in his/her name. Invest in 100 per cent specific beneficiary trust for the minor child. If you make a trust in the name of a minor, you should mention in the documents that money from trust wouldn't be spent on a minor child as long as the child is a minor. This way the income wouldn't be clubbed with that of parents.