» Business » 'Investments must be goal oriented, tax relief incidental'

'Investments must be goal oriented, tax relief incidental'

March 15, 2013 08:46 IST
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TaxWith the financial year 2012-13 almost coming to an end, are you still grappling with options to save taxes at the last minute?

To help our readers with all their tax queries, Rediff Business arranged a chat with tax experts Mr A N Shanbhag and Mr Sandeep Shanbhag on Tuesday (March 12) and Thursday (March 14).

Here is the transcript for the March 14 chat:

Shanbhag says, Hello everyone - lets get started straight away.

Kiran Kumar asked, Hi All, Can anyone tell about MF? How i can spend money in MF.
Shanbhag answers,  at 2013-03-14 16:07:29MFs are one of the best investments that you can make - to that extend we don't spend money while investing in an MF - you instead put the money to good use. would recomend availing of the services of a good financial planner to get started.

Shanbhag answers, don;t get fooled by gimmicks like declaration of dividend etc. dividend is your own money coming back to you. In other words, the NAV falls to the extent of the dividend. Just the best thing to do is identify a good MF scheme and stay invested for the long term in the growth opeition for the maximum potential of capital appreciation

Binoy asked, i have an apartment in mumbai on loan and my family stays there..i live in a rental apartment in coimbatore where i work..can i get tax benefit for both rent as well as housing loan?
Shanbhag answers, Yes

neeraj asked, Hi, If i had invested earlier in Shares / MF.. & not done any investment last year.. can i take benifit of RGESS
Shanbhag answers, RGESS is only available for a fist time investor. you are not afirst time investor so you are not qualified to invest in rgess scheme.

satya asked, I want to save tax on sec 80D , using health check ups for my parents and wife.. is it valid??
Shanbhag answers, Yes as per budget 2012 amendment amounts paid for health checkup of self and of family are deductible under the over all limit

Ashish asked, Hi Sir, what are the tax benefits on second propertry?
Shanbhag answers, Entire amount of interest paid can be setoff against the rental income. this is the only major tax benefit of second property. Therefor it follows that if either the property is not rented or not taken on morgage interest the benefits cannot be used

paisewalla asked, I have a ULIP policy issued by Birla Sunlife. I have paid premiums for 4 years and the total value of the policy as of now is less than the sum total of the premiums paid. Do I continue with this policy or surrender it?
Shanbhag answers, In the case of Ulips the best strategy is to look before you leap.(U-lip)the question asked has no easy answers. Generaly, it would be better to surrender the policy and start afresh investing the premium that you would have otherwise paid, in a diversified equity fund. however, it all depends upon the indivdual facts of the case and consulting with a professional financial planner is advisable.

Vinod asked, Whether gift (more than Rs. 50000/-)made by nephew to his uncle (brother of his father) or vice-versa is taxable
Shanbhag answers, There is strict definition of the term relative in the case of exempt gifts. If you see, gifts from nephew to aunt or uncle would be taxable but not vice versa.

av asked, Tax Deduction in NPS...whether it is within 80C (1 Lakh) or excluding 1 Lakh...please inform...
Shanbhag answers, Under 80C

Rohit asked, I have a saving of 3.5 Lakhs, I earn Rs 10.5 Lakhs, I have no loans, have my parental home for me, how should I split up my savings while investing for my future?
Shanbhag answers, best achieved by employing services of professional - however, given the information, exepensess of 7 lakhs seem high - effort should be taken to increase savings. Invest only in mfs and if not having dependants, desist from buying insurance policies

Harsh asked, Hello Sir I hv opened RD for 10 yrs.Can i pay tax on the amount interest earned yearly instead of paying tax after 10yr.
Shanbhag answers, Yes you have the option of payihg tax yearly

PRANEET asked, I have never invested in MF what is the best way to start I ma 35 year old and I have investible suplus of 25 k per month
Shanbhag answers, Always be guided professionally also do you own homework by reading material from the web and industry magzines - soon you will be able to do it yourself.

sn asked, My HR did not considered HRA & tax is deducted. can i claim this for tax benefit from govt?
Shanbhag answers, Yes you can do so - in all probability the tds deducted would have been extra - so claiming hra while filing a return would result in refund

Kapil asked, I have Rs 25,000 medical bills of my wife and child.Is there any tax benefit to use it?
Shanbhag answers, if you are salaried, you will get a ddeductio of rs 15,000

mamsshs asked, Is it necessary of NRI file returns every year
Shanbhag answers, just like in the case of resident, nris too do not have to file tax return unless their taxable income is above the basic exemption limit of 2 lakh

mamsshs asked, Can NRI start new PPF account? Or he can invest in existing PPF account started when he was resident
Shanbhag answers, new ppf account not allowed. already opened ppf account can be continued and invested in till maturity

ketans asked, I wish to claim LTA exemption. I am travelling to Perth via Chennai and returning by the same route.Can I claim exemption to the extent of travel fare from Mumbai to Chennai and back from Chennai to Mumbai (within India travel)Do I need to stay in Chennai or even a halt is enough? If so, in case I am unable to get separate fare for the travel within India, can claim to the extent of usual fare for that route.
Shanbhag answers, normally, this is not possible as per the rules. However, employer companies have been known to liberally tweak the lta policy for the benefit of the employees so it would be best if you get this ratified from your employer.

Uday asked, How are Profits in Equity Derivatives treated for taxation purpose? I alreday get Salary from my employer.
Shanbhag answers, profits in equity derivatives are treated as business income and not as capital gain.

VPV asked, Can the house registration amount been used for 80C?
Shanbhag answers, yes certainly

desiraj asked, I haven't filed the returns for year 2010-2011, but have form 16 given from my company. Now if i want to get a home loan, will it be huddle, if yes, how can we go about this.
Shanbhag answers, you can still file the return for 10-11 before 31st of march 2013. in any case the home loan market is very competitive and i am sure you will find a provider who is willing to accept form-16 and not insist on a tax retun

Amit asked, sir my sister had jus sold her flat for 20 lac taken in 2008 for 5 lac and repaid loan of 5 lac. how muc capital gain tax she has to pay or if she takes another room of 15 lac in 1 year from now does she still hav to pay C G tax
Shanbhag answers, i don't even have to calculate the capital gain since you mention that she has bought a room for 15 lakh her entire capital gain tax will be exempted.

Atif asked, i could not submit the investment proofs to my HR. now my taxes has been deducted basis that. Can i still submit investment proofs and claim tax benefit?
Shanbhag answers, i am afraid this is not possible. however, you can claim the deduction of having made tax saving investment while filing your tax return and claim refund of extra tax paid.

Hiru asked, Hello: Can you guide on deduction under section 80DDB ? Whether it is applicable to private salaried individual ? How to avail deduction under 80 DDB?
Shanbhag answers, A Resident assessee shall be allowed a deduction of up to Rs. 40,000 (Rs. 60,000 for senior citizens) if he has, during the previous year, actually incurred an expenditure for the medical treatment of specified diseases or ailments for himself or a dependant relative in case of an individual or for any member of an HUF in the case of an HUF. The assessee has to furnish a certificate from a prescribed authority

krish asked, I have filed as well as sent hard copy of ITRV for the year 2010-11, but i am getting the mail and SMS saying that you are not filed for the year, what shall i do?
Shanbhag answers, you can write to your AO by registered post enclosing the itr-v (not bangalore CPC)keep all records with youself carefuly

mamsshs asked, What are the best options for savings for NRI'S? Fixed deposit or any other investment should they look into?
Shanbhag answers, NRIs can freely invest in indian equity, mutual funds, insurance, bank deposits, gold and property. normally a mix of all of the above is recomended

Jayesh asked, How important is term inusrace? Which one should i take if i my family is dependent on me?
Shanbhag answers, buying term insurance is one of the most important things that you can do for your family. you can opt for any term plan from a reputed insurer that suits your budget. the important thing is buying the term plan and not being seduced by other insurance products

KSREDDY asked, Hi all ....Please make sure you invest for future...not just for Tax saving
Shanbhag answers, well said - investments should be goal oriented - tax benefit should be incidental

min asked, what is the maximum amount which will be considered for tax deduction if one invests in "New pension Scheme". I guess it is out of teh 1 lakh limit as well.
Shanbhag answers, NPS investments are under 80CCD however, the limit is rs. 1 lakh.

min asked, what is the maximum amount which will be considered for tax deduction if one invests in "New pension Scheme". I guess it is out of teh 1 lakh limit as well.
Shanbhag answers, the limit is rs. 1 lakh for 80C, 80CCC, 80CCD put together.

ran_jay asked, I have availed home loan and the the possession is in june. Can i claim any exemptions for principal this year.
Shanbhag answers, you cannot claim any exemption this financial year. however,in the next financial year 13-14 you can start claiming interest deduction. also any interest paid prior to geting possession can be deducted in 5 equial installments begining from the year you get possession

vijay asked, I invent 1 lac in my ppf. I want to put 1 lac more into my ppf account. This is not for 80C but to save the tax on interest
Shanbhag answers, the maximum you can invest in PPF is one lakh. however, you can contribute 1 lakh of rupees to the accounts of your major children and wife each provided they themselves are not contributing to the same.

bhagwan asked, can we gift to our son, is it gift tax payable.
Shanbhag answers, yes you can gift any amount no gift tax is payable however, if your son is minor, any income he earns from the gifted amount will be clubbed in your hand for tax purpose

gururaj asked, Since 2010, I have been investing Rs. 6,000 every month in mutual funds. At first, I had 3 funds in my portfolio, but now am planning increase my holdings to 6 with Rs. 18,000. I want to build a portfolio for my kids education with the fallowing funds for 10 years via SIP, 1. ICICI Foc. Bluechip Eq-2000, 2. Quantum Long term Eq. -2000, 3. IDFC Premier Eq. -2000, 4. SBI Emr. Bus.-2000, 5. Reliance Eq. Opp.-2000, HDFC Prudance- 2000 and IDFC GSF Inv.- 6000. The funds that I am planning to discontinue are, Reliance Regular Saving Equity and DSPBR Top 100, but I still have Rs. 1 lakh invested in them. Is my portfolio diversified or does it need any changes?
Shanbhag answers, the important thing here is to continue investing the way you have been doing. its been only 2 to 3 years since you have started the investment. The real effect of the same would manifest when sufficient period of time (10 to 15 yrs) has elapsed. As far as the portfolio is concerned, going ahead you may wish to add franklin india bluechip, a couple of MIP funds and also gold in order to make your portfolio well rounded and well diversified

Shanbhag says, The chat was a real pleasure and we hope that you found it useful for your tax and investment related issues. we hope to see you very soon. good bye for now.


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