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How to get tax benefits

October 24, 2008 14:14 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 there 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 rediff.comdirect 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.

SS12 asked, In which year the interest income from FDs be taken for tax calulations at the time of investment or at the time of maturity?
Vikas Gandhi answers,  at 2008-10-23 15:32:14Although the answer to this question, normally depends upon the method of accounting followed, this is a question to every individual who does not or are not required to maintain books of account. In such a case, in my view I always prefer to offer the income for tax on year to year basis instead of offering the same in the year of maturity. By doing so I am spreading my income over the years and accordinlgy tax is also spread among the years of investment. Secondly in the case tax is deducted on such income, the same is deducted on year to year basis. Hence it is advisable to offer the income on year to year basis.
VikaasGaandu asked, Vikaas Ji Plz tell Me The way How Can I remove My Income Tax returns After Filing It.
Vikas Gandhi answers, From your query, I assume that you have e-filed your return. In such a case you can login to the Income Tax efiling site using your login-id and password. On the screen that follows, you have an option of My Account. Click on this option and select My Returns. You will be able to download copy of your ITR-V or acknowledgement (as the case may be) from this section at any point of time.
sk asked, What is the meaning of Tax Saving FDR's & How we can get the tax saaving on it?
Vikas Gandhi answers, Tax Saving FDR are nothing but fixed deposit with banks with minimum lock-in period of 5 years. Investment in such FDR entitles you to claim deduction u/s 80C (within the overall limit of Rs.1,00,000/-).
RK asked, Hi i have 480000 as salary income and 140000 as consultancy income. How i can reduce the tax burden
Vikas Gandhi answers, Although there is very little scope to reduce tax burden on Salary income, you can reduce tac burden on your consultancy income by claiming all the expenses that you have incurred during the course of and in connection with earning the consultancy income.
kishor asked, what is secton 80 DD
Vikas Gandhi answers, If any of your family member is handicapped (physically / mentally) and is totally dependant on you for his / her livelihood, you are eligible to claim a flat deduction of Rs.50,000 u/s 80DD from your income.
birupakshyas asked, If I take a housing loan for a house where my parents are staying and I stay in a rented house in some other city can I get the tax benefit for both HRA benefit and house loan intrest payment of 150000 limit?
Vikas Gandhi answers, If the house that you own is in a different city which is far off to travel from your place of occupation, you can claim both the benefits.
minu asked, i am minu hi mr vikash, My Q is i hv given 5 Lac Rs (Int free)to my wife stating in both book as unsecured loan. Now my wife has giben Rs 7 Lac to my brothers firm with int @12% p.a. Pl tell me such int is my income or my wife only. I hv read in Economics times that in my case it will be my wife income only. cos this is not a gift & it is Loan. Plz important for me.
Vikas Gandhi answers, In my view the income will be taxed in the hands of your wife and not in your hands. This would have been done if you had gifted the money to your wife, who in turn would have given it on a loan to a third person. However since you have advanced a loan to your wife, the clubbing provision according to me is not applicable. You can relax.
Vikas Gandhi answers, The answer to your question depends on whether the loss that you have incurred is a Long term or Short term. If the loss is long term, the same cannot be adjusted. However if it a short term loss, you can adjust the same against any other Long or Short Term gain during the year. And if the gain is not sufficient to adjust the loss, you can carry forward the unadjusted loss to subsequent year and adjust against next years capital gains. However this is only possible if you file your return on for before the due date.
arvind asked, Does the Postal Monthly Income Saving comes under Tax Saving Vikas
Vikas Gandhi answers, No. Amount deposited in Post office Monthly Income does not qualify for tax deduction u/s 80C.
saradhi asked, my company
is giving me as rs.19000/- as conveyance allowance , how to save tax on this
Vikas Gandhi answers, For claiming exemption on account of conveynace allowance, you have to spend such amount and provide proof to your employer. This is because Conveyance Allowance is exempt to the extent it is spend (irrespective of the amount you receive as allowance).
nandinipatel asked, Hi i am nandini I earn approx 100000 rs per month though various sources, do i need to pay tax ?
Vikas Gandhi answers, Of course, you have to pay tax. You are earning Rs. 1 lac per month, whcih totals to Rs 12 lacs p.a. You do have to pay tax on such income.
adube_1 asked,  I have given my income to my wife and she had kept it in FD in her account and on her name. The generated income will be on whose name? please reply
Vikas Gandhi answers, In your case you have gifted an amount to your wife, who in turn have deposited in Fixed Deposit and earned interest income. this interest income will be treated as your income and you will have bear the tax burden.
Ramani asked, Sie, My father wants to give a gift of Rs.5 lacs to me. Will it affect his liability, if I invest in my name and receive interest periodically?
Vikas Gandhi answers, While by gifting an amount of Rs. 5 lac, your father will not be able to claim any tax benefit, there will not be any additional tax burden either on your receiving interest income. The interest income will be your income and your father won't be taxed on the same.
Mujahid asked, Hi Vikas, Apart from section 80C , how can we save tax on section 80 D ??
Vikas Gandhi answers, You can start paying medical insurance premium for youself and your family (spouse and children) and claim tax benefit upto Rs.15,000/-. In addition to this you can also pay premium for your parents and claim additional benefit upto Rs.15,000/-. If either of your parent is senior citizen, the limit increases to Rs.20,000/-.
nirav asked, if my child is below 18 yrs then i can obtain his pan or not ?
Vikas Gandhi answers, Minor's are not required to file income tax return and hence there is no need for them to apply for PAN. However if the minor is having any income from his / her own skills / talent, even they have to file income tax return and hence PAN is required. on this analogy, you can apply for a PAN card for your minir child.
our maohan asked, is the loan on buying a plot has tax exemption?
Vikas Gandhi answers, Loan taken for purchasing an open plot of land does not enjoy any tax benefit.
Gagan asked, I live on a rented place. However I did not submit the rent receipts to my company but now I am about to file my returns, some people say that I'll need the PAN number of the owner of the place... I have the rent receipt, but I am not sure if the owner will provide me his PAN number.
Vikas Gandhi answers, While filing income tax return, you are not required to know the PAN of your landlord. So you can go ahead and file your income tax return claiming the HRA exemption. As far as PAN of landlord is concerned, you may need it if the Assessing Officer calls for the same in future. Though the chances are less, it would in your benefit to get the PAN of your landlord and keep it for your own record. This is advisable.
Sayandeep asked, Hi, My mother is a housewife, i pay her monthly 5000 Rs, do i have to be part of HUF to claim tax rebate? or i can claim rebate as an individual?
Vikas Gandhi answers, Neither as a member of a HUF, nor as an individual, you can claim rebate for the amount you pay to your mother for monthly household.
Jayaprakash asked, I am a co-applicant to my brothers housing Loan. Totally we pay 3 lakhs interest per year. can we both claim tax exemption for that?
Vikas Gandhi answers, Besides co-applicant, both of you should be co-owner of the property also. If this is a case, you both can claim tax exemption for your share of loan repayment.
ajay2010 asked, with reference to 80DD, as u said for a physically handicap family can get tax dedection of 50k...what certificate we need for that
Vikas Gandhi answers, You will have to obtain a certificate in Form No.10I from a government authorised medical practitioner, certifiying the severity of the handicapped person. Besides if need arise you may to have to substantiate that the member is totally dependamt on you for livelihood. asked, Whether personal loan taken for construction can also be considered eligible for claiming exemption under IT Act.
Vikas Gandhi answers, Personal loan are not eligible for any tax benefit, even if the same is used for construction purpose.
Vikas Gandhi says, That's all for this session friends. Chat with you next week. Till then Good-bye and wish you all a very Happy Diwali and a Prosperous New Year.