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.com on Thursday,
direct tax expert Vikas M Gandhi replied to many such readers' queries:
Vikas Gandhi says, Good evening friends and welcome to the tax chat session.
ashwin asked, FDR in banks that us 80c, is it a good option
Vikas Gandhi answers, at 2008-12-11 15:19:20Looking to the current equity market conditions and the rate that is been offered on Post Office Savings, according to me FDR in banks is a better option, if you are looking for safe investments
himanshu asked, sir i have made a fd for 40k with ICICI bank for 10 years. the same can i claim for 80c rebat
Vikas Gandhi answers, For claiming benefit u/s 80C, you should be investing in FDR with authorised bank and this deposit should be with a minimum lock-in period of 5 years. Since you keeping the deposit for 10 years, the investment will surely be eligible for tax benefit, provided the deposit is with authorised bank.
asutosh asked, Is PPF good to invest?
Vikas Gandhi answers, If you are looking for safe investment with tax free returns, of course, PPF is a good instrument to invest in. the interest amount as well as the principla amount if totally tax free. Further your investment is totally secured.
SATYASAI asked, Hi Vikas Can you please expalin me on section 80(D) how much benfit and how can i invest?
Vikas Gandhi answers, Conditions for claiming deduction u/s 80D is as under - a. A person can claim deduction u/s 80D, upto a maximum of Rs.15,000/- for medical insurance premia paid during the year for self and family. If any of the mem\ber is a senior citizen, the limit is extended upto Rs.20,000/-. b. In addition to above, if you have also paid medical insurance of your parents, you can claim additional deduction upto 15,000/-. and if any of the parent is a senior citizen, the limit is extended to Rs.20,000/-. However to claim the benefit, the payment of premia should not be in cash.
hrishikesh asked, Hi Vikas i have to make the tax saving investment of Rs. 60000 for the current fin. year.It is my first job. I know all the avenues for Sec. 80 C investments. Can you give a suggestion on investing this amount? i dont want to invest in Mutual Funs (ELSS)
Vikas Gandhi answers, Since this is start of your career, you will be having a good risk apetite. If this is the case you can surely go for investing in ELSS. However please do not all the amount in one ELSS itself. Select 2-3 different fund and then invest.
mith asked, I've made a FD for 1 year in ICICI . I am not sure how m gonna pay tax for that ? will bank deduct tax or i have to do something?
Vikas Gandhi answers, Bank will deduct tax only if the interest amount is more than 5,000/-. Even if the bank deducts tax it will be only @ 10%. Hence irrespective of whether bank has deducted tax or not, you have to offer the interest income for tax and claim credit for tax deducted if any. Balance tax payment you have to make.
Pradeep asked, Hello Vikas, I am working in Bangalore with a software MNC. My 2008-09 earning will be 11 lacs. My PF contribution for this period would be close to 60K. Then I have 2 insurance investment policies, one from ICICI Prudential and other from Birla Insurance for 50K each (one in my name and one in wife's name who is not working). Assuming I can claim for investment under my wife's name as she is not working, I already have more than 1 lac investment. Is there any other option for me to invest to reduce tax knowing 1 lac is the maximum under 80C, 80CCC etc. If I invest some more money in my wife's or kid's name can I save some tax. Please advice. I also have my kid's education expense (tution and admission fees) to claim, is that outside this 1 lac limit ? Thanks - Pradeep
Vikas Gandhi answers, Unfortunately your limit of Rs.1,00,000/- is alreadt exhausted and hence whatever investment you make will not qualify for deduction, not even your children education expenses.
sagar asked, I have taken a home loan and paying principal and interest since November'08 The possession of property is on 31st March 2009 In the meantime I am staying on rent at some other place and paying hra. I want to confirm that 1) I will be eligible for hra since the property is not yet delivered to me and hence I cannot stay in the new house. 2) And can claim the interest and principal since the property is going to be delivered to me in the same financial year i.e, Apr-March'09 (assessment year Apr-March '10)
Vikas Gandhi answers, For the financial year 2008-2009, you will be able to claim HRA as well as housing loan benefit. However, this will be true only if you get the possession of property by 31/03/2009, as mentioned in your question. If the date of possession is differed, you will be able to claim benefit of HRA only.
Sujay asked, Hi Vikas, Can I get home loan tax benefits for investing in two different properties
Vikas Gandhi answers, You
will, of course, be able to claim tax benefit for loan taken for both the properties. However since you will be owning two properties, one of your properties will be taxed on notional income.
nitin asked, who is a senior citizen? At age 60, 62, or 65
Vikas Gandhi answers, For the purpose of Income Tax Act, a person is said to be a senior citizen, if he or she has completed 65 years of age as on 31st March of the financial year.
VIJAY asked, Can I use the premium paid for my wife's insurance in my calculations for exemption under 80C ? She is a housewife and has not been filing any tax return.
Vikas Gandhi answers, You can certainly claim deduction for premium payment of your wife, since she is not claiming it separately in her return and the payment is made by you.
jas asked, I had pension plan when it was covered under 80ccc, pl confirm if it is still there over and above 1 lac in 80 c , if no then shall i surrender the policy, pl suggest
Vikas Gandhi answers, Investment under 80CCC is also covered under overall limit of Rs.1,00,000/-. As regards surrender of policy, you are the best person to decide.
Pradeep asked, Vikas, if my wife and kid not working and i make some investments in their name, will that count in my 1 lacs maximum limit, or I can get 1 lacs extra for each dependent if they don't have earnings if I am filing joint tax returns.
Vikas Gandhi answers, There is no concept of joint tax returns in India. You will able to claim tax benefit u/s 80C, even if the investments are in the name of your wife or children. However, please bear in mind that whatever income thety generate out of these investment will be treated as your income and you will be paying tax on the same.
maparmar asked, Which Fin year...if he is going to complete 65 on 31/03/2009, then can he qualify as Sr Citizin for 2008-09?
Vikas Gandhi answers, Yes, if a person completes 65 years as on 31/03/2009, he will quailify for the benefit of a senior citizen while filing return for financial year 2008-2009.
sourav asked, Hi... if my earning is less than the taxable income, is it necessary for me to return tax file. Also if I have made any short term capital gain in share market, is it compulsory to show those as tax has already deducted from the source?
Vikas Gandhi answers, There is a difference between taxable income and total income. If your total income (income before claiming any deduction) is within the exemption limit, you are not liable to file an income tax return. As regards taxability of short term capital gian, you are required to offer the same as income and pay tax. there is no tax deducted at source on short term capital gain. The tax that you pay is Securities Transaction Tax which is different from Income Tax. However since you have already paid Securities transaction tax, you are taxed at concessional rate while paying income tax.
pankaj asked, Sir, I have taken interest free loan of Rs. 45000/- from my employer during F.Y. 2008-09. O/s balance as on 31.03.09 would be Rs. 20000/-. This is a taxable perquisite for current year. Will it be a taxable perquisite for F.Y. 2009-10 under current provisions? Will your decision be differ if o/s balance as on 31.03.2009 would be Rs. 19000/- or Rs. 21000/-?
Vikas Gandhi answers, In my opinion, although the outstanding is Rs.20,000 as on 31.03.2009, since the amount of loan is Rs,45,000/-, there will be taxable perquisite for the current year. However for the financial year 2009-2010, there will be no perquisite since the amount is Rs.20,000/-.
sutirtha asked, Hi Vikas, I have to pay house rent 3500/- per month but my landlord never give me any document. can I claim the tax benefit for house rent without any slip provided by my landlord? if yes then how much.
Vikas Gandhi answers, You won't be able to claim HRA benefit without a rent receipt. Try to get a rent receipt from your landlord. In absence of the receipt the Income tax Officer may deny the benefit if claimed in the income tax return. Of course you can claim that the payment is made thru cheque and may also provide the details of landlord, to substantiate your claim. However it will be on the discretion of the officer to allow or deny the benefit.
yashdhani asked, Sir, my income is Rs 4.2 LPA. MYSELF AND MY WIFE BOTH ARE HANDICAP. WHAT IS INCOMETAX BENEFIT TO US SINCE I WILL BE FILING TAX RETURN FOR FIRST TIME?
Vikas Gandhi answers, Since you and your wife both are handicapped, you will be able to claim tax benefit u/s 80U & 80DD. However before claiming this benefit it will be in your interest to get a certifiacte in form No. 10-I from a authorised medical practitioner. You have to keep this certificate on record.
ddd asked, how uch money can be gifted to my wife so that there is no tax burden to her or myself
Vikas Gandhi answers, There is no restriction on amount of gift that can be given to wife. However please bear in mind that any income that is generated out of the amount gifted will be treated as your income and you will be paying tax on same.
Vikas Gandhi says, That's all for this session. Chat with you in the next session.