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?
Direct tax expert
Vikas M Gandhi replied to readers' queries in an hour-long chat on
rediff.com. Here is the transcript:
Vikas Gandhi says, Good evening friends and welcome back to the tax chat session. It's 13th of September and hope all those who are required to pay advance tax have done so and if not please do at the earliest. The last date is 15th of September.
manoj asked, hi Vikas Good afternoon,pls tell us how much standard diduction one can get on HRA in taxable income if we are staying in rented house?
Vikas Gandhi answers, at 2007-09-13 15:59:14To calculate the exemption amount of House Rent Allowance, you need to consider following three factors and the least of the three factor is exempt from tax. a) Actual HRA received b) 50% of (Basic + Dearness Allowance). If the house is situated other than at metro cities, the rate is 40%. c) Rent paid in excess of 10% of (basic salary + DA) Calculate the above figures and know how much of your HRA is exempt
Kamlesh asked, my income is 7lac PA, how do i plan so that i need not have to pay tax
Vikas Gandhi answers, With an annual income of Rs.7 lac it would be difficult to pay Nil Tax. However at first you can avail the benefit given under section 80C. You can invest in various options such as LIC, PPF, NSC, Fixed Deposit with Bank, ULIP, ELSS, Pension plan. Amount invested in such options can be exempt upto Rs.1,00,000/-. For further reduction in taxable income, you can consult your employer for restructuring your Salary, wherein more emphasis should be given on allowance and reimbursements.
abhi asked, hi vikas. I am 28 yr old and have one son of 7 month. I want to invest for education of my son. What would you suggest that will save tax also. Is it ULIP or mutual fund ?
Vikas Gandhi answers, Given an option between ULIP and mutual fund, according to me you should go for ULIP. However do consult some financial consultnat before investing, as there are various options available today in the market, which would help you in planning and securing your childs future.
Vivekchand asked, Sir, My salary is 2,00,000 per annum (8500 basic, 4450 HRA, 800 conveyance, 1250 medical) Do I fall in incometax bracket. In what instruments how much amount I should invest if I fall in tax bracket. Can you recommend some good investment options by which I can earn good returns too. Thank you very much for your valuable advice.
Vikas Gandhi answers, Your answer cannot be answered fully. For this I need to know how much of HRA is exempt. Further the answer will be subject to the fact that you produce proper medical bills for claiming exemption of medical reimbursement. Assuming that other than basic salary all other emoluments are exempt, you would be within the exmepmtion limit and need not pay any tax. However in other case, you will have pay some tax and save that tax, I would suggest you to go either for Insurance premium or NSC (taking into consideration your payscale)
dfd asked, Hi vikas, my income is 4.15 lacs PA.i would like to know the sec 80c investment (1 lac).Plz let me now where to investwmnt which will benefit to me.
Vikas Gandhi answers, Your answer depends on how much risk bearing capacity you have. The normal and safer options of investment for claiming benefit are - a) Life Insurance Premium b) PPF c) NSC d) Fixed Deposit with Banks However if you have the capacity to take risk. you can even go for either investing in ELSS or Mutual Funds. However the maximum limit is Rs.1,00,000/-.
umes asked, hi i am from bangalore we have a house but it is in my fathers name and i am the only son i want to take a loan for renovating the house am i eligible to take all the benefits from incometax under sec80C as taken for housing loan or should i ask my father to transfer the documents to my name which is better
Vikas Gandhi answers, According to me there should not be any problem in claiming the benefit, as far as the loan documents are in your name. However the financial instituition should be ready to give loan in your name, as the property is in the name of your father.
vikasfan asked, Sir, I availed Housing Loan during 2005 and subsequently when I applied for addl loan, they granted same but the entire loan under "Mortgage Loan". Am I eligible to claim the benefits ?
Vikas Gandhi answers, Accroding to me Mortgage loan won't qualify for the benefits under Income Tax.
Anupam asked, hi vikas, nice to know that you are supporting using technology..my question is that i am earning 6.84 lakhs per annum and need to plan for my investment for tax planinng can you give be a board tax applicable value and how can i save using tax saving instrumnets..?
Vikas Gandhi answers, Income upto Rs.1,10,000/- is exempt from tax. Besides this you can further reduce your tax liability by investing various schemes, for which you get exemption upto Rs.1,00,000/-. Such schemes are given below. You can select any mix of option, keeping in view the risk factor, earning factor and your requirement of funds in future - 1. Life Insurance Premium 2. PPF 3. NSC. 4. ELSS 5. Mutual Funds 6. Fixed Deposit with Bank 7. Pension plan 8. Tuition fees of children 9. Principal payment of home loan. Besides this you can avail further deduction of Rs.15,000/-(maximum) by paying medical insurance premium. In addition to this if you are a salaried employee you can consult your employer for restructuring the salary package, wherein you claim more allowances and reimbursements. Beyond this nothing else can be done.
ajay asked, Hi,for my tax planing,i want to invest 24k either in PPF or in pension funds like franklin pension fund.Pls advice which will be a good choice.My age is 25.
Vikas Gandhi answers, This
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