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
rediff.com on Thursday, tax expert
Vikas Gandhi replied to many such readers' queries. Here is the transcript:
Vikas Gandhi says, Good evening friends and welcome back to tax chat session.
IndianBull asked, I have earned around Rs. 75000 from the stock market in year 2007-08. will i have to pay tax @10% or being the small amount i won't get noticed, henc eno need to pay tax?
Vikas Gandhi answers, at 2008-01-24 15:59:57Any income you earn, you have pay tax for the same. You won't be having only this income. There will be other income also, which will make your total income above the exemption limit. Hence you will have to pay tax on the same. However if such gain from stock market is on account of long term holding (i.e you kept the shares for more than 1 year and then sold) the entire profit of Rs.75,000/- is exempt from tax.
tapan asked, My total income is 240000.I am paying 30000pa against house loan and 35000 LIC still then i have to pay tax.What more should I do pay nill tax
Vikas Gandhi answers, Based on the information given, your net income works out to Rs.1,75,000/-. For you to pay no tax, you will still have to invest Rs.65,000/-. You can either invest this amount in PPF or NSC or bank fixed deposit. If you have risk bearing capacity you can even go for ULIP or ELSS.
prss asked, is it possible toclaim both HRA for living in rented house, as well as house loan exemption, on the ground that the house i have bought is too far away frm my office and hence only my parents stay in it while i stay at a rented house?
Vikas Gandhi answers, You can certainly claim both the deduction.
anand asked, Hi Mr Vikas, If I sell a share within six months of purchase should I pay Short Term Capital Tax. Pl Clarify. Thanx and Regards, A. Ananda Rao.
Vikas Gandhi answers, YOu certainly have to pay Short Term Capital Gain tax. Assuming that you intend to sell such shares in open market, you will have to pay tax @10% on such profit
Arun asked, what are the other options of tax saving investments other than Insurance and Mutual funds where i can get my funds back in a short period
Vikas Gandhi answers, Other instruments which you can for a short term is Bank fixed deposit which has lock-in-period of 5 years or N.S.C wherein lock-in-period is 6 years. If you are looking for higher returns and having capacity to bear risk, ypu can for ELSS, wherein the lock-in-period is 3 years.
VINAY asked, hi vikas: Iwork at MUMBAI WHERE AS MY FAMILY STAYS AT NAGPUR DUE TO MY DAUGHTER'S EDUCATION . I HAVE SPEND GOOD AMOUNT ON MY AIR TRAVEL TO NAGPUR TO UNITE WITH THE FAMILY. DOES INCOME TAX HAS ANY PROVISION TO SHOW THESE EXPENSES AD DEDUCTION FROM MY TAXABLE INCOME? PL GUIDE ME
Vikas Gandhi answers, Sorry to answer but income tax law does not provide for any exemption on such expenditure.
kumar asked, Can we claim Monthly postal RD Savings as tax exemption
Vikas Gandhi answers, No. Monthly postal RD savings are not eligible for any tax savings. Only Term Deposit with Banks and NSC issued by Postal Department are eligible for tax exemption.
anand asked, Bangalore has been declared A1 City frm October 2007. To calculate the taxable HRA should we consider 40% of basic or 50% of basic kindly clarify as I have to rework all my collugues taxable salaries.
Vikas Gandhi answers, Although Bangalore has been declared as A1 city, the Income Tax Rules have not been amended to that effect. It still speaks of only four cities and hence for HRA calculation you will have to consider 40% of salary only.
srwearwe asked, is there limit of LTA to be exempt from tax (provided receipts are submitted) with respect to basic salary. For example if my basic 20k and I configure my LTA as 40k and have airtickets for 40k will the total 40k would be eligible for tax deduction.?
Vikas Gandhi answers, The exemption on account of LTA is minimum of amount spent or actual LTA granted to you in your Annual CTC. Thus irrespective of your Basic Salary, you can claim entire amount of airfare, provided it does not exceed the amount of LTA granted to you by your employer.
Pradeep asked, Hi! I had received a prize money of 3000 Euros for my PhD thesis from French Embassy and SAFRAN (a group of French companies). Is this amount taxable? If so what will be the taxable amount? Thanks.
Vikas Gandhi answers, Since you are a resident Indian, any income you earn whether in India or outside India, is taxable in India. Since as per Income tax Act, winnings is also considered as income, you will have to pay tax on such winnings also.
ramkumar asked, Do we need to pay the short term capital gain tax for selling the shares with in a year even though my total income is less than Rs1,50,000?
Vikas Gandhi answers, Although the income is less than Rs.150000/-, it is more than the exemption limit and hence you nedd to pay tax and file return of income.
aditya asked, SIr, I wish to know what is the income tax I have to pay if I sell shares within one