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 and welcome back to tax chat session.
dbdelhi asked, sir if i did'nt fill return yet & want to start filling return what i have to do & i do'nt have any correct record of my past & trade in shares also & holding mutual funds & shares how can i tart from now
Vikas Gandhi answers, at 2007-09-20 15:59:21At the outset if your gross total income is exceeding the exemption limit than you need to file your income tax returns. So assuming that you fall under tax bracket, you will first have to gather all your income and investment information. The best way to start with is prepare a summary of your bank account transaction, classify them into categories of income and investment made. Do this excercise of atleast last 3 financial years. Once this is done consult a tax practitioner who will help you finalise your income tax return.
R asked, Hello, Myself & my hubby are co-owner of house & co-applicant of house loan, Can we claim interest of 1.5 lac each(total 3 lac) if our actual interest is 3.5 lac?
Vikas Gandhi answers, Yes, both of you can claim deduction of interest from your total income, provided both are financing the house and both ar co-owners of the house as mentioned in the question. If you are maintaining books of account, both will have to show the property as 1/2 share in Residential property.
yogesh asked, CAN I OFFSET MY SHORT TERM EQUITY LOSS AGAINST DERIVATIVES INCOME?
Vikas Gandhi answers, Short Term Capital Loss can be set-off only against Short Term Capital Gain or Long Term Capital Gain. Income from Deriviatives is not considered as Capital Gain and hence you will not be able to set-off your short term loss against this income.
pooja asked, CAN U TELL ME I SHOULD BUT MUTAL FUND OR SHARE
Vikas Gandhi answers, Gievn an option of buying shares or mutual fund, according to me you should go for mutual fund. By investing in mutual fund your risks get divided in various companies and hence loss if any incurred is minimum.
raju asked, My Salary is Rs.1.76 lac per annum. kindly let me know the tax liability and how to save tax if any. your advice pl raju
Vikas Gandhi answers, On a net taxable income of Rs.1.76 lacs you will have to pay a tax of Rs.9,476/-. In order to reduce your tax liability you can invest in either PPF A/c or purchase NSC from post office. You can also go for fixed deposit with scheduled banks for minimum period of 5 years. Since income upto Rs.1.10 lacs is exempt for the current year, you should not invest more than Rs.66000/-. However so consider your household withdrawals before investing the entire 66000/-.
charan asked, my wife is earning approx 3.6 lac PA as a salary...she is having just 1 lac of LIC.every month they are deducting 4000 as a TDS.Sugest me how to save...
Vikas Gandhi answers, Since your wife has already invested Rs.1 lac in LIC, she has exhausted the deduction availabel u/s 80C. No more deduction can be claimed by her. In order to further save the taxes, she can contact her employer and see if any changes can be made in the salary structure which would result in lower tax liability. Normally this is done by increasing allowances and reimbursements in the CTC component. Beyond this nothing else can be suggested or sone.
aks asked, Hi I have recently switched jobs so can I show i ex-employer a medical bill of 5000/- and my current employer a medical bills of 15000/-.
Vikas Gandhi answers, No. Reimbursement of medical expenditure is restricted to Rs.15,000/- per tax payer per year. Hence irrespective of the number of employers, you cannot claim exemption on account of medical reimbursement in excess of Rs.15,000/-
Hemant asked, Hi Vikas, My Company Deduct TDS and I have filed my return, By what time I will get my extra charged money back and Is their any way to check your file return status online?
Vikas Gandhi answers, There is no statutory limit for issue of refund and hence nothing can be said about it. You just have to wait and watch. However if the refund is long due, you can contact your Income Tax Officer and request for early issue of refund. As far cheecking your return status online is concerned, it can be done only if you have filed your return electronically. Here also you will just know whether the return is filed or not and on which date the same is filed.
ashu asked, i am working in an mnc ,my sal is 4 lacs per annum,where i have to invest for saving the taxes.
Vikas Gandhi answers, YOu can reduce your taxable income by Rs.1.0 lac by investing in any of the following - a) LIC Premium (Self, spouse, children) b) PPF c) NSC d) Fixed Deposit with Bank (min 5 years) e) ELSS You can go with a mix of all or any of the above categories.
Suraj asked, Mr.Gandhi, Good afternoon, I am employed, i want to reduce my tax burden. I want avail a loan to purchase a Plot to construct house . Can I get IT benifit on this loan? Pl. explain.
Vikas Gandhi answers, Loan taken for purchase of plot of land will not be able for tax exemption. Loan taken for construction of residential house qualifies for exemption. Further interest paid on loan during the construction period will have to be accumulated and will be able to claim the same in 5
equal instalments once the house is constructed.
roshan asked, the land is gifted to me by father. We are going to develope in joint venture.Is any restrioction on value to introduce it as stock in trade of JV?
Vikas Gandhi answers, According to me you will have to get the land valued as on the date of gift and you will have to introduce such land with the value as yuor capital contribution. This may attract stamp duty also. Hence it is suggested to consult a tax practitioner before finalizing the matter.
Padma asked, Last assessment year,my employer didn't include registration(60k) and stamp duty charges(20k) for my flat purchasing in Form 16.My Tax deduction till the end of the year came to around 30k.I asked my tax consultant to include it in his final calculation.When he back the acknowledgement form after filing the returns,only 3400rs is the refund but as per my calculation it should have been more.My taxable income for the previous year was 3,60,000.Is 3400rs correct amount for refund?
Vikas Gandhi answers, Reply to your quesiton cannot be given with this much of facts and figures. Entire statement of income needs to be studied. However based on the facts mentioned it may be possible that you had already invested for various schemes for claiming deduciton under sec 80C. Although the total of registration and stamp duty charges comes to Rs.80,000/-, your tax consultant may not be in a position to adjust the entire Rs.80,000/-, within a given constraint of Rs1,00,000/- in sec 80C. Check your income statement or ask your consultant to explain
satish asked, I received notice u/s 142(1) for my credit card usage during the AY 05-06, I have filed the returns but I have no records of the credit card transactions because I have closed the account. Kindly suggest.
Vikas Gandhi answers, Since the Department has issued notice to you, you will have to reply to the notice and for this purpose you will need to explain the transaction of credit card as required by the Income Tax Officer. You will need to contact the credit card company and request them to issue your past statements. Meanwhile you can ask for some time from Income Tax Officer, giving the reasons for the same.
sachin asked, Can i get tax rebate on Carloan like house loan?
Vikas Gandhi answers, No. Car loan is not eligible for any tax exemption similar to that of house loan
rrtallekar asked, SUPPOSE I HAVE BOUGHT SOME STOCKS CAN I SHOW FOR EXEMPTION FOR INCOME TAX I WILL HOLD FOR 3 YEARS
Vikas Gandhi answers, Shares purchased thru public issue or from market are not eligible for any tax exemption.
Taxpayer asked, I saw ads in papers for paying Advance Tax, if net tax payable (subtracting TDS) would be greater than Rs.5000. What is the logic behind this? Given that a significant portion of my salary is variable (or I may have other income), how will I anticipate in Sep 07, if my Tax (minus TDS) for FY08 will be >Rs.5000? What if I assume now it will be less than 5000, and when filing returns it is found to be greater?
Vikas Gandhi answers, Advance tax is similar to paying loan in instalment. This is for the benefit of the tax-payer whcih avoid paying huge tax at the last minute. It is assumed that you are aware of your expected earnings during the year and hence on that basis you can estimate tax and pay it in instalments. If you assume that final tax liability will be less than Rs.5,000/- and it increases while filing return you will have to pay interest in addition to the taxes. Thus even if you cannot anticipate on 15th Sept your future earnings, you can surely know by 15th December or 15th March. Pay your taxes within that time and reduce your interest liability atleast.
sisi asked, Gandhi Jee,I think Short Term Capital Losses cant Be set off Against long term Capital gains
Vikas Gandhi answers, Short Term Capital Losses can be set-off against Long Term Gains, but viceversa is not possible. i.e. long term capital loss cannot be set-off against Short Term Gains.
NARASIMHA asked, Sir, I have availed Housing Loan of Rs. 24 lakhs from SBI. The loan is Jointly taken alongwith my brother. Request you to suggest us how we will go about for housing loan exemption in our Salary Income ?
Vikas Gandhi answers, If the name of your brother has been entered just from a security perspective, then the entire exemption will be available only to you and not your brother. However if he owning 50% share in the property and he is also investing in the property, then both of you will be able to claim deduction in your individual income tax return.
Unni asked, i am earning in 20000/m.i am not aware of my taxable amount.. even if not taxable can i invest in any MF.. since i can save 7000/m .. pls giude me
Vikas Gandhi answers, Certainly you can invest in MF or wherever you want. It is not that investment should be made only for claiming exemption or deduction. Thus invest as much as you want but within your reach, understanding the risks attached with various investments.
Kiran asked, Hi Vikas , Should I mention the earning which I earn from the stock market in a month of buy and sell transaction , where by we receive the money after deducting the taxes like STT and etc upto 0.65%
Vikas Gandhi answers, You certainly have to declare such transaction. Because if the transaction results in Short Term Capital Gain, it will be taxed @10% although you have paid STT and other taxes. Ofcourse if its long Term than you don't have to pay any taxes. Further if the transaction is speculative in nature it will be taxed at normal rates and you can claim rebate u/s 88E for amount of STT paid.
Vikas Gandhi says, Thank-you friends and Good-bye.
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