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 on rediff.com on Thursday, direct tax expert Vikas M Gandhi offered some valuable tips. Here is the transcript:
Vikas says,
biru asked, Hi Vikas, Can I get the income tax benefit on the Hosing loan for reconstructing the house which is on my father's name? And as well as can I get the benefit of the HRA as I am staying in a different city?
Vikas answers, at 2009-04-02 15:49:01To avail Tax benefit oo Housing loan you need to yourself own the property. Deduction will not allowed on your Father's property.
ranjeet asked, how much amount i can invest u/s 80D for health plan for me, wife, 2 kids and parent. tax benefit will be full amount of investment or some percetage.
Vikas answers, The Premium you pay for Medical insurance is available deduction U/s 80D. The maximum amount deductible is Rs.15000/- for an individual who is not a senior citizen. Senior citizen being a person who completes age of 65 years. The limit for senior citizen is Rs.20000/-. However, though you are young but if you pay premium for a senior citizen then the limit of Rs.20000/- is applicable. From FY 2008-09 onwards if you pay premium for your family policy as well as pay for your parents policy (two policies) then both can be claimed with the limits as explained above.
av asked, I have been filing returns every year,have not got the refund for the extra TDS i paid. Where and how can i check the refund details. I had given my Bank account details while filing for returns for direct fund transfer.
Vikas answers, You have to file a reminder letter to your Income tax officer enclosing the photcopy of your filed acknowledgement.
sathy asked, i have to submit revised ITR for the financial year 2007-2008. When is the last date for the submission? What if i submit after the due date?
Vikas answers, You have to file your revised return before 31-03-2010. Your return will not be accepted after this date, if accepted by mistake the return filed will not be valid.
shri asked, I have paid the Mediclaim premimum of my parents age 69 & 64, how much deduction can I avail under section 80 D ? 15000 or 2000?
Vikas Gandhi answers, In my opinion, the deduction of premium paid by you for a combine medical policy of your Parents should be maximum up to Rs.20000/-since one parent is a senior citizen.
nikhil asked, Hi....i have bought a flat recently for which i have done full disbursement as it is in near completion state....i will get possession of my flat in Sept 09... i staying in rented house... can i claim my Home Loan EMI as well as rent for period Apr09- sept09....in oct09 i will be moving to my own flat?
Vikas Gandhi answers, The total interest paid by you upto the date of possesion is pre-construction interest, hence only 1/5th will be allowed every year for 5 years starting from the year in which you got possession. The interest payable after possession for the year will be deductible in current year separately. For the same period you can also claim the HRA as you are paying rent.
asb asked, how does one claim tax benefit under sec 80 e for education loan, who can claim student or co apllicant like father etc
Vikas Gandhi answers, If an Individual takes a loan for himself or his child and the individual taking the loan pays for the interest only then he can claim the deduction U.s 80 E.
Boli asked, Sir, I have a KVP in my Minor's name. Is it compulsory to show accrued interest in every year's income ? or we also have a option to show full interest only in the year of Maturity ?
Vikas Gandhi answers, The declaration of your minor's accrued interest on KVP can be declared on accrual basis or in the year of maturity. If you are decalring your income from Other Sources (interest etc)on accrued basis then in my opinion minor childs interest on KVP should also be declared on accrued basis. Also note, in my opinion declaring income on accrued basis spreads the tax liability over the years unless your minor child is becoming major before the maturity date, because then the minor will pay the tax as he has become major.
rajesh149 asked, i will shift base from mumbai to bangalore. want to know if i take a home-loan for a flat in bangalore, how can i save tax, when i already have a home-loan for my mumbai house. what are the tax implications
Vikas Gandhi answers, You can take home loan benefit for the next house also. The difference will be that one will be considered as Self occupied & other as demeed let out under Income from house Property, hence the deductiblity will be different.
PRASHANTS asked, I am getting 4=0 lakhs from an ancestral property sale , where to invest that money to get good return aswellas savings in Tax?
Vikas Gandhi answers, If you have inherited a property or share in it and on sale you are receiving an amount then what you earned is long term capital gain (presuming the propery is more than 3 years old). The way to save tax on the long term capital gain is to either invest in a residential property which is not possible in this amount then the only investment is Capital gain bonds U/s 54EC for which only two options (1) NHAI bonds (2) Rural Electric bonds. You will have to invest in these bonds within 6 months from the sale date else deduction will be denied.
prit asked, Hi...The interest on education loan will be deducted from the total taxable income or the tax equal to the interest amount will be saved directly?
Vikas Gandhi answers, The interest will be deductible from the income and not from the tax.
CD asked, Interest earned in PF account of minor child (UG of Partents) will be taxed at maturity or shall be tax free.
Vikas Gandhi answers, In my opinion the interest earned on the minor's PPF account is exempt from tax.
KGupta asked, Hi Vikas, I am paying income tax for last 4 years. Infact my employer is deducting it from my salary and I am getting form 16 every year. I have not filled IT Return any year, tell me what is the advantage of filing IT Return, because this year I am thinking my employer has deducted more tax.
Vikas Gandhi answers, Please understand Income tax return is not to be filed for any advantage, the law requires you to file the same and it is compulsory, if not complied you can be penalised for not doing so. As regards your current year you also have an advantage since according to you the tax deducted is more and hence by filing you can get your excess tax deducted as refund once you file your return. PLEASE ABIDE BY THE LAW. However there are some other ancillary advantages like your credentials are establised by the Income tax return while applying for a home loan, visa etc.
Vikas Gandhi says, That's all for today, Thank you.
