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, direct tax expert
Vikas M Gandhi answered to many such readers' queries. Here is the transcript:
Vikas Gandhi says, Good evening friends and welcome back to the tax chat session
rakesh asked, Hi What can be problem if no interest is given on unsecured loans appearing in a firm's balance sheet?
Vikas Gandhi answers, at 2008-05-08 15:40:34In my view there should not be any problem if you don't pay any interest on unsecdured loan. From Income Tax point of view, problem may arise only if you are paying interest on unsecured loan and not receiving any interest on loans given to other parties.
vkj asked, I have taken Home loan on my name & my father name.the property is on the name on my father name. As my father is not coming under income tax bracket. to Avail the tax benifet like principal & interest for me, what we have to do ?? like chane of propery on my name please suggest
Vikas Gandhi answers, Since the property is in the name of your father, you won't be getting any tax benefit for the housing loan taken.
ak asked, I was NRI in AY 2007-2008 (total 4 years aborad). I have a property in UAE. My query: 1. If I sell it will I have to pay capital gain on the same. 2. If I rent it will I have to pay tax on the rental income in India.
Vikas Gandhi answers, The answer to your question depends upon your Residential Status for the year. If your Residential status is Resident & ordinary resident, both the income will be taxable in India although the income has been generated outside India. However if your status continues to be Non-Resident, none of the above income will be taxable in India.
SachinW asked, I have just purchased a new house. Cost is 18 lakhs. My EMI is 14,300/-. I wanted to know how can I get tax benefit. I am a salaried person with gross 34,000/- .Thanks
Vikas Gandhi answers, You have to break-up your EMI into interest payment and principal loan repayment. You will be able to claim total interest paid (Maximum: Rs.1,50,000/-) as deduction from your taxable income. You also get deduction for Principal loan repayment u/s 80C which has an overall limit of Rs.1,00,000/-.
mailmepap asked, my question is exgratia taxable
Vikas Gandhi answers, Yes, exgratia amount received from the employer is taxable.
Abhisekh asked, HI Vikash, I am not able to submit my investment proof during month of Feb 2008 in my company. So they have deducted tax from my feb and Mar 2008 salary. How can I show those investment proof now and get benifit from those investmnt proof. Please help me out
Vikas Gandhi answers, There is no problem at all. Just while preparing your income tax return, include the amount of Investments, you missed to submit to your employer and recalculate the tax. this will possibly result into refund. File your return thereafter claiming such refund.
rsrirams asked, I am paying rent to my brother. He is a NRI. He gives this money as expenses to my parents. How is tax applicable to him.
Vikas Gandhi answers, Although your brother is a NRI, since the rent income is arising in India, he will have to pay tax in India on this Rent income. Accfordingly he will have to file his return of income also. However we won't be getting any benefit for the amount of expenses he pays to your parents.
chiru asked, Hi Vikas, Could you please listout the deductions for a salaried under all applicable sections like 80C,...
Vikas Gandhi answers, If you want pure sections, the same are as follows - 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80G, 80GG, 80GGA and 80GGC
nrb asked, sir I have taken pan card for investment in mutual funds but my income is far less beyond taxable limit do I have file return I w
Vikas Gandhi answers, No if your total taxable income before taking into consideration the eligible deductions is within the exemption limit, you are not required to file income tax return although you are having a PAN
SRK asked, I got a letter from Income Tax Dept that I will get a tax refund of 4000 for 2006-07, so they asked for bank details. I sent it to them long back but havent yet get the money back. What should I do?
Vikas Gandhi answers, Contact the same Income tax Officer, from you received the letter and find out the status.
Deep asked, hi vikas...an article on rediff mentioned that if we buy a second home then the entire annual interest payment is deductible (unlike the cap of Rs 150,000 on the first home).My question is what if this is my second home but my first home loan.what happens in this case.is the interest limit then 1,50,000/-?
Vikas Gandhi answers, The article is correct but you have not understood the same in the correct sense. A person is allowed to have only one property as a Self-occupied property. If he is having more than one self occupied property, he has to select one property as Self-occupied and all other properties will be treated as having been let-out and accordingly notional income is charged to tax. Against this income you get deduction of housing loan interest and hence you are able to claim entire interest as deduction. The limti of Rs.1,50,000/- is only for Self-occupied Property and not for property which are let out or which have been treated as having been let-out.
arunkumar asked, Hi Vikas, My friend's mother is getting pension for past two years.she is earning about 15K
p.m this year they took one month salary as tax. Is it possible
Vikas Gandhi answers, By this year I presume you mean financial year 2007-2008 and accordingly my answer. If your friends mother is receiving Rs.15K p.m as Pension, her total incoe claculated to Rs.1,80,000/-. This is a taxabel income provided she is not a senior citizen. On an income of Rs.1,80,000/-, a female would have to pay a tax of about Rs.6,700/-.
sameernics asked, I am working as a full time consultant for a company, wfor which I get Rs.40000 p.m. TDS is deducted @ 10.3%. How to calculate my income tax. Whether my home loan interest and 80C benefits can be availed?
Vikas Gandhi answers, For calculating your income-tax, you will first have to prepare your Income statement, claiming all expenses against the income. As far as home loan interest and 80C benefits are concerned, you will of course get the same.
Vilas asked, Hi Vikas Atwhat age a person becomes Senior Citycon.What is required to prove, that you are sineor cityson
Vikas Gandhi answers, A person is called a Senior citizen, if he/she has completed 65 years of age as on 31st March of the financial year. Except the Date of Birth, you don't have to submit anything for substantiating the same.
PRATIK asked, I AM GETTING HRA FROM MY COMPANY. I STAY WITH MY PARENTS IN CHEMBUR.I HAVE OWNED MY HOUSE IN THANE AND PAY EMI TO HDFC BANK MANTHLY.I CLAIM TAX BENEFIT ON HOUSING LOAN. THE PROPERTY WHICH I BELONG IS NOT LET OUT. SO CAN I CLIAM HRA IN SUCH A SITUATION.
Vikas Gandhi answers, You cannot claim HRA benefit and Hosuing loan benefit both together.
Ranjith asked, Hi Vikas, I work in an MNC (not listed in India) and I sold my stock options after 2 years in USA. Am I supposed to pay tax on that?
Vikas Gandhi answers, Yes, presuming that your Residential Status is that of a Resident, you will have to pay tax on such sale, although the same has been sold in USA.
Ajay asked, Hi Vikas, I have purchased a flat costing me 35 lacks in my name. I havent taken any housing loan. I got advances worth 25 lacs from my uncle who is in US. how will I show this money in my next return. I am salaried class person having yearly salary of 7 lacs.
Vikas Gandhi answers, YOu are not required to disclose anywhere in the return that you have receivced advances worth of Rs.25 lacs from your uncle. However since the cost of the flat is more than 30 lacs you will have to declare the same in the Income Tax Return under Schedule-AIR
rahulk asked, Hi Vikas. I didn't file my IT return for the year 2006-2007. Can I do it now ? I have paid excess tax and have to get a refund. Thanks
Vikas Gandhi answers, Yes you can file your income tax return for financial year 2006-2007. However if Income Tax Officer desires, he may levy a penalty of Rs.5,000/- for not filing before 31/03/2008.
ravikumar asked, Hi Vikas. Last year I have made short term profit of about 80K by doing trading shares.Exact gain is not calculated.However how to get exact gain/loss on trading activity.What is my tax liability.Please suggest me what to do.
Vikas Gandhi answers, Since you have traded in shares, your income will be considered as Business income. Hence you will have to prerpare a Profit & Loss account, similar to that prepared by a Trader and cliam all the expenses that you incurred for purchase and sale of shares. However while doing keep in mind that you will not be able to claim Securities Transaction Tax (STT) as expenses from the income. For the amount of STT paid, you will be able to claim rebate u/s 88E.
Pramit asked, Hello sir is pan number of Lanlord required to claim HRA exemption?
Vikas Gandhi answers, In a way Yes. This is because many times Income Tax Officer makes such requirement and hence it is better to have PAN of your Landlord
venugopla asked, Hi, I worked in PUNE till April 2008 and I now I am currently working in BLore. Where I need to file the tax returns for the year 2007-08? I filed last 3 years Tax returns in PUNE? Thanks Venugopal
Vikas Gandhi answers, Since in March'2008, your employer was based at Pune, you will have to file your return at Pune.
abhay.kumar asked, Hi Vikas,Is Savings from abroad kept in a NRE Account becomes taxable in India after returning back to India and loosing NRI Status
Vikas Gandhi answers, Yes. The same becomes taxable once you attain a status of Resident.
bkc asked, Vikas, I pay tax on my salary income, do I need to pay tax on Saving account interest ?, what if I don't show interest from my Saving account during incometax return filing?
Vikas Gandhi answers, This is a mistake commonly made by all salaried employees. All your income is taxable and hence there is a tax on savings bank interest also. Whatever small amount it may be, you are evading tax on that income and hence in the eyes of the Income Tax Department it is oyur black money. The Income Tax Officer may even to the extent of declaring your bank account as unaccounted and accordingly levy penal consequences.
venugopla asked, Hi, I forgot to add the shares short term capital gain as my income & I didn't pay the tax on short term capital gain in the last year tax returns(2006-2007). If income tax officer finds then how much they might fine for me? Thanks Venugopal
Vikas Gandhi answers, The officer will treat this income as a concealed / unaccounted income and accordingly levy a penalty which may be any thing between 100% of the tax evaded and 300% of the tax evaded. If you know you have missed out this infomration, it is better to revise your return by including this gain and paying additional tax on the same.
Vikas Gandhi says, Thankyou friends. It's time to end the session. So good-bye, chat you in the next session.