You are worried that you have not filed tax returns for the last five years. Don't worry. You can still do it now.
But do you know the correct procedure for filing your tax returns? Do NRIs need wealth tax assessment for properties owned in India?
What is the HRA calculation criteria for tax deductions? Can you set off losses made in the stock markets against your taxable income?
Are credit card loans taken to finance vacations taxable?
Tax expert Mahesh Padmanabhan of RelaxwithTax answered these and other tax related queries in a chat with Get Ahead readers on March 21.
For those of you who missed the chat, here is the transcript.
Part I - March 31? Tax returns can be filed by July 31
rocky asked, Though as a salaried individual I have been paying taxes for the last six years, I haven't filed returns so far. What is the correct procedure to remedy my negligence?
Mahesh Padmanabhan answers, You are right in your understanding that regardless of having paid all taxes, you need to file your income tax return. The remedy to the issue of non-filing of returns would be to file a belated return. However, there are certain time restrictions as to filing of returns and you could at best file returns maximum upto 2 financial years backwards. Hence you could currently file upto March 31, 2007, the returns for 2004-05 and 2005 -06.
Sathyaprakash asked, I am an NRI and so far I have not filed my returns as I don't have any income so far. But I have properties. Do you think I should file the returns ? Thank you very much !
Mahesh Padmanabhan answers, You would need to file returns in India only if you do have income that is taxable in India. Moreover, you would need to take an assessment if you are liable to any wealth tax in India on your properties.
Atendra asked, I am a salaried executive. My 80C contribution is more than Rs 100,000. My querry is 'If I include Interest accrued on NSC in my Gross Income, how much exemption could I get u/s 80C as the total contribution towards 80C is much more than Rs 1 lakh. Pls help.
Mahesh Padmanabhan answers, The limit of Rs 1 lakh applicable under sec 80C includes the interest on account of NSC investments and accordingly you would not be eligible for any extra deduction for such interest. However, you should also note that such interest on NSC is taxable as income without any exemption/deduction currently and you would be taxed for the same.
kannan asked, i have invested around Rs 35,000 in LIC and Rs 50,000 in PF. Still how much can i invest to get tax benefit?
Mahesh Padmanabhan answers, The amount of investment that you need to make is dependent on the taxable income that you have before availing the deductions for the investments.
Suppose we consider that you still have taxable income left after making the mentioned investments in LIC and PF, then at the maximum you can further invest Rs 15,000 in terms of sec 80C and upto Rs 10,000 / 15,000 under sec 80D for mediclaim premium etc.
rajaravi asked, I am into business and I have a gross earning of Rs 2,50,000. I am paying LIC Rs 15,000 PA. and Rs 10,000 PA to ULIP. School Fees Rs 5,000. How much more should I invest in LIC/Bajaj or any others to save from paying more tax?
Mahesh Padmanabhan answers, Considering the amount of investment that you have already made you still have an open option of investing upto Rs 70000 under sec 80C.
However, you need to consult your tax practitioner to understand the taxable profit or net income that you would declare in your IT returns to arrive at the correct amount of investment. Also, such investment needs to be made before March 31, 2007.
PrabahaSanyal asked, What is the last date of submission of Income Tax Return?
Mahesh Padmanabhan answers, In case of individuals not subject to tax audit, the date is July 31, 2007 for the income earned during financial year 2006-07.
Rajesh asked, Hello Mahesh, What is the HRA calculation criteria for the deductions as a non-taxable income as i am paying house rent of Rs 4,800 where as in salary slip they pay me Rs 3,200 only.
Mahesh Padmanabhan answers, The exemption available to an individual for HRA is the least of the following: HRA received 50 per cent of salary (Basic+DA) or rent paid in excess of 10 per cent of salary.
ppj asked, SHARES : can losses booked in shares during the current financial year be adjusted against taxable salary ?
Mahesh Padmanabhan answers, No you cannot set off the losses made in share transaction against salary income
rajiv asked, Hello Mahesh I have taken a loan against my ICICI CC of Rs 199,000. Will this be taxable since I am using this to finance a vacation?
Mahesh Padmanabhan answers, Loan taken that is repayable is not treated as income and hence is not taxable.
Mahesh Padmanabhan says, Dear Viewers thanks a lot for your response, due to time restriction we would be signing off now. Thanks and have a nice day.
Part I - March 31? Tax returns can be filed by July 31
