It's that time of the year again. Time to get ready with your investments and taxes.
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, direct tax expert Vikas M Gandhi offered some valuable tips. Here is the transcript:
Vikas Gandhi says, Good Evening Friends
atul asked, Hi Vikas, I am in France and want to send money to my brother. Is that going to be taxable for him?
Vikas Gandhi answers, at 2009-04-23 15:46:26Certain relatives are exempt from tax on receiving gift. Your real brother (not cousin) is covered under this definition hence on you gifting him any money will not be taxable either in his or your hands
skk asked, If I already own one house, can I invest in second property to save on capital gains?
Vikas Gandhi answers, You have only one residential house and now you are investing the 2nd residential house to claim capital gain exemption. In my opinion you can claim.
skk asked, Got a part of ancestral house after the death of my mother in 2003 as per her will. Have sold it out recently to my brother for Rs. 15 lacs. I have been told that because I have inherited the property valuation of my share of the house in 1981 will come into play for calculation of capital gains. Now at that time the value was close to Rs. 50 thousand. Even after applying the indexation cost, the capital gain is huge. Just one year before the sale of this property I have built my own house and have utilised this entire money to prepay part of my loan. Your well considered advice about saving the capital gains tax. I am at a loss to understand when I am getting the house in 2003, why the indexation cost of 1981 should come into picture?
Vikas Gandhi answers, 1) The cost of the inherited property is that of the original owner. If original owner has purchased the property before 1981, then the value as on 1-4-81 can be substituted as cost in place of the original cost, you may choose whichever is beneficial. 2)If the residential house you purchased comes within one year from the date of sale of this property then you can claim cost of that property for exemption. 3) If the above does not help and you still have taxable longterm capital gain then only option left to save tax is to invest in Capital Gain Bonds (U/s.54EC).
Sandip asked, I purchased two houses (under home loan), expecting to get prosession end of current year. none of them will be self occupied. How & when i can get tax benifit
Vikas Gandhi answers, In my opinion you will get the following tax benefits on possession of your properties (say Dec'09). Since they will not be self occupied, I understand you will be giving them on rent. Hence the rent income is taxable under House Property as "Let out". Even if you do not give on rent, also then it will be taxable as "Deemed let out". Now the total interest from begining of Housing Loan upto 31-3-09 will be available as pre-construction interest, i.e.1/5th every year for 5 years. The whole interest from 1-4-09 to 31-10-2010 will be available against the rent income, on reducing if it results into loss then your can adjust that loss against other income. The principal re-paid for 1-4-09 to 31-3-2010 is available under 80 C. The pricipal re-paid for earlier peirod is not available. This will be same for both properties
amar asked, my daughter is 2 years old and i've taken her admission in a reputed play-group where annual fees is 18000. whether i'll be able to get any benefit of the same in my tax filing?
Vikas Gandhi answers, The fees paid for child should be tution fees only then it is deductible under Income Tax Act. In my opinion the play groups generally do not give tution fee receipt, hence will not be deductible.
Joseph asked, Hello Vikas ! justed wanted to know that i had bought a property on 16th May 2006 and now I have sold the property on 31st March 2009 the agreement has been registered but I have recd only part of the amount rest of the amount will be recd on 2oth May 2009.
kindly let me know if any short term capital gain has to be paid? Also I have purchased a new house against this though the agreement is still not registered and the entire deal is still to go thru.Kindly advise
Vikas Gandhi answers, The property you sold you have already registered the document, but if you have not given possession of the property, then in my opinion the transaction is not complete. If you complete the period of 3 yrs before giving possession then you will be eligible to long term capital gain. Your investment in new residential house will be exempt only if the above transaction is long term. However, if the above is not true then your transaction is short term and you should pay tax on the short term capital gain before filing your return for year ending 31-3-09.
amar asked, good evening mr gandhi... my aunty has a mentally challenged son. whether she has any benefit available in taxation? pls quote exact provision.
Vikas Gandhi answers, Please check the Section 80U for claiming the deduction relief for mentally challenged person. Please ensure that you obtain appropriate medical certificate required.
shikhanshu asked, I am at Thane Maharashtra. Last year I filed my return. I was to get a refund of Rs. 12,000. Till date I have not received the same. I consulted assessing officer who said that refund is in process. Can you lett me how long it takes for refund?
Vikas Gandhi answers, Generally the returns are processed within 12 to 15 months from the date of filing. Instead of verbal discussion you should file a reminder letter of refund not received with your assessing officer.
jyoti asked, i have not filled my return for last 2 consecutive years as I stopped working in the first year and didnot file for the second year by mistake. This is 3rdyear which is due now. How do I file these pending 3 years return now. What will be the documents required.
Vikas Gandhi answers, In my opinion you will be able to only file the current year due and the year before that. The last date to file the first year in your example was 31-3-09, hence you will not be able to file the same. Now no documents are to be filed with return only the correct return form duly filled is required to be filed.
Klaud asked, Does govt pay us interest on the income tax refund?
Vikas Gandhi answers, You will get interest on the refund due to you, only if your refund amount is in excess of 10% of your total tax amount. The rate of interest is 0.5% per month.
ssambit2000@
rediff.com asked, Hello Viaks, My father had taken a lon to purchase a house after his demise I am paying the loan amount the house is not in my name.Is it possible to get income tax benifit.
Vikas Gandhi answers, To claim the tax benefit of paying interest of a housing loan you have to be an owner (even joint owner is Ok)only then it is available.
Birendra asked, Mr.Vikas I want to know whether NSC AND kishan vikas is tax exempted
Vikas Gandhi answers, Investment in NSC can be claimed as deduction U/s 80C. Kisan Vikas Patra can not be claimed. Interest in both cases is taxable. However, if the interest on NSC is declared every year on accrued basis, then the same for 1st 5 yrs can be claimed U/s 80C as re-investment. By showing interest on accrued basis every year the tax liablity (if any) also get spread out.
ac asked, in my PAN card adress is in Ahmedabad , from last 3 yrs i am in Mumbai & file tax return from Mumbai only. but i haven't rcvd. last year refund till date. are they send refund cheque to Ahmedabad adress as in PAN card Ahmedabad address is mentioned. pls. tell whom to contact for that--
Vikas Gandhi answers, You need to apply for change in address in your PAN record by filling in the appropriate application form. You can approach NSDL or UTI who offer this service. check their website for more info.
Vikas Gandhi says, Thank You Friends, thats all for today