AskTheExpert

Question:

What is my tax liabilities from the loss or profit from my mutual fund investments from differenent types of schemes like equity, balanced, or monthly income plans (all 'GROWTH' options). Please give details if the investments are for more than a year or not. How TAX is calculated? If I do not have taxable income from my salary then do I have to pay tax from the gain of mutual funds?

Answer:

We suggest you subscribe to our Tax Tutorial; all aspects of personal taxation are explained in a simple and concise manner: http://www.investmentyogi.com/Tutorials/Taxes/Welcome.aspx

You may find this useful: http://www.investmentyogi.com/taxes/income-tax-rates-fy-2012-13-ay-2013-14-ready-reckoner.aspx

Question:

I work in an education institute in Greater Noida and my employer has provided me single's accommodation in a boys' hostel. my family lives in Agra in a rented house. Since I pay the rent, can i avail income tax benefit on it?

Answer:

If your employer is providing your HRA allowance, then you can claim HRA as you are paying rent to the hostel. However, you need to minus the food charges (if any) from the total payment made to hostel.

Question:

Due to change in Calculation of EPF (Employee Provident Fund) Contribution: if the salary structure is BASE(6000)+Kitty Allowance(3000)+ Conveyance(800) + HRA(2500) + Sundry Medical(1250) + LTA(3000) + Personal Allowance(30000) + Variable allowance(8000) what would be calculation of PF/EFP ? Also, from where we can get this validated if organisation is paying PF only on base(6000)??

Answer:

Previously, the term ‘salary’ for computing EPF contribution included basic + DA (dearness allowance). As per the new rules, ‘salary’ will include basic + DA + allowances that are ordinarily, necessarily and uniformly paid to employees.

Example: Suppose your monthly salary particulars are as follows: Basic: INR 30,000 p.m. Conveyance allowance: INR 5,000 p.m. Medical allowance: INR 5,000 p.m. As per previous EPF rules, an amount of 12% on Basic (Rs.30,000), i.e. INR 3,600 was the employee’s contribution. As per the new rules, an amount of 12% on Basic + Allowances (Rs.40,000), i.e. INR 4,800 would form the employee’s contribution.

Please enquire with your HR if kitty allowance is part of salary for computation of EPF contribution

Question:

Dear Sir, I have by mistake filled my ITR for assessment year 2012-13 under 2011-12 on 30-09-12 and got to know about the same when i got a letter from CPC that my return has been transferred to local IT authorities. Please advise what should I do now. Thanks

Answer:

You need to file a revised return with the correct Assessment Year. The process of e-filing a revised return is same as the original return. All you need to do is select the return as 'Revised return', make the corrections and send the ITR-V acknowledgement to CPC Bangalore by speed post

Question:

I strictly followed financial blogs on net and started to have emergency fund for myself few months ago. Now i have 3 months expenditure ready in my hand.Unfortunately it is not earning any interest for me since i kept in my wardrobe. Actually found no time to plan for that. Now i want to park it in any good liquid fund. I dont want to keep it in savings account.  Question is how do i choose a good liquid fund? And what are the implications? Please advice.

Answer:

You may consider parking your emergency fund in a bank multi-deposit account and/or a liquid mutual fund.

Liquid mutual funds are good investment option for near-term (upto 6 months) cash requirements. The interest earned on the same is little higher than bank savings account.

You may find this useful: http://www.investmentyogi.com/investing/liquid-funds-an-ideal-option-for-short-term-investments.aspx

Question:

I had obtained a home loan for 25L in 2008 from SBI and I am paying EMI of 25,500.

Currently in couple of months my old investment of 10L is getting matured.

Pls suggest

Option 1: Divert the investment to reduce the EMI.

Option 2: Re-invest the investment so that the return (interest) can used as part of my EMI and I will continue to pay my EMI.

Answer:

Assuming you are paying 10.5% interest per annum on your home loan, you should earn at least 10.5% p.a. or more on your matured proceeds to make it a meaningful investment. Otherwise, you may consider part-payment of your home loan to lower your debt burden.

In the present scenario, there are not many investments that earn you 10.5% p.a. return instantly. Therefore, it would be wise to make part-payment of your home loan and lower your debt burden as much as possible, unless you have other financial goals for which you need to allocate money.

Question:

We are paying Tuition fee @2000 pm for 2 kids. Both of us are working. I(husband) is taking reimbursement @ Rs1250 pm. Can my wife include total fee of Rs48000 for exemption under section 80C or partially or not at all ? Kindly reply urgently

Answer:

You can claim deduction to the extent you have incurred the cost but cannot make a profit out of it. Therefore, you can claim exemption for the balance Rs 750 per month under Section 80C

Question:

Hello sir I am NRI lives in Nigeria. Wants a retirement policy which can give me Rs 50000 per month from the age of 58 to till life. My age is 45.

Answer:

We can definitely help you with your Retirement plan. Kindly check out our list of customized Services here: http://www.investmentyogi.com/services/Financial-Services.aspx/

All our services can be purchased online and we provide our services through phone and email.

Question:

I had transferred money to my mother via cheque as a gift. What kind of documentary proof/affadavit is required - just in case it is required to be shown to income tax department in case of scrutiny ?

Answer:

Gift to mother is exempted from income tax. Therefore, you needn't bother about affidavit or documentary proof

Question:

I want to take Health Insurance for my family, Can it will eligible for Tax deduction above 1 lakh?

Answer:

Payment of health insurance premium for self, spouse and dependent parents and children is allowed as income tax deduction under Section 80D of IT Act. This is over the INR 1 lakh limit  under Section 80C.

You can get the details here: http://www.investmentyogi.com/oi_taxes/tax-benefits-under-section-80d-80dd-and-80ddb.aspx

Question:

I have two MIS account in Post office for Rs. 330000/- each earning Rs. 2200/- as monthly interest on both of them.

1. In first MIS account First name is mine second name of my wife.

2. In second MIS account First name is my wife's and second name mine.

My Query is am I to include interest earned on both accounts in my income for tax calculation purpose or can I avoid including the interest income of the account in which my wife's name is first ? My wife is 'HOUSE WIFE".

Answer:

Usually, the earnings on MIS account should be split in the proportion of the individual's holding in the account. Alternatively, you can show your primary account interest earned in your name and your spouse's primary account interest in her name. This way, she can make use of the maximum income tax exemption limit of INR 2 lakhs p.a. as well.

Question:

I am an NRI residing in U.A.E. I intend selling a piece of land in chennai that is in my wife's name (WIFE is also an NRI) with an idea to reinvest the entire proceeds of the sale to purchase a new apartment in chennai. As per my understanding, if the sale proceeds are fully reinvested within one year, the same is exempt from capital gains tax.Is my understanding correct....there is also another problem that the land buyer who is a flat promoter is only taking power from my wife and is not registering the land in his name...kindly advise what precautions i need to take in this case and also whether it is advisable to register the new apartment in my wife's name alone or jointly with me.

Answer:

The sale proceeds from original property must be utilized to purchase another residential property within 3 years of sale of original property, or else, long-term capital gains tax applies.

If you are referring to the sale deed registration (the document which entails you as the owner of the property), the same is signed only when the house is ready and you have paid your final settlement. The deed is registered with the sub registrar of the area to include your name in the local municipal records.

Apart from this, stamp duty as mandated by the government would have to be paid. At the time of registration, costs of sinking fund, maintenance deposit etc., are to be paid to the builder.

Question:

Hi - out of my salary 15K goes in HRA, as I m living with my parents so can i give them rent & give rent receipt on this basis........also my mother is housewife, so does she need to file ITR on this basis......as getting rent from me (15K x 12 months = Rs. 1.8L)????

Answer:

You can claim HRA deduction while residing with your parents as long as your parents own the property and you are paying rent to them.

Yes, your mother would have to show the rental income in her ITR. However, if her total taxable income is less than INR 2 lakhs p.a., then she need not file her ITR.

Question

my mother got 2 cr rupees from her parental property after death of her father, we just put the amount in fixed deposit as we couldnt think of anything else for the time being , it is at 9% for five years , as she is not filling returns as she is a home maker so what will be the tax for the income from this intrest and what will be tax deductable from the source and how that will be adjusted while filling the final return please guide me sir

Answer:

The interest earned on the Fixed deposit is subject to TDS if that interest crossed INR 10,000 per annum in a bank branch. If you're mother is a senior citizen (over 60 years of age), then annual income upto INR 2.5 lakhs is tax exempt in a year. 

To reduce your mother's tax liability, we suggest you buy another residential property and also make use of tax saving investments suitable for your mother such as senior citizens savings scheme and 5-year tax saving fixed deposits that give tax deduction upto 1 lakh and also provide regular interest income. The interest earned ts is fully taxable.

Question:

I want to know

    1.Trading in stock market i.e buying and selling of stock is subject to show in income tax.

    2.Is there any limit of investment or time at which I have to show or not to show in income tax form ?

Answer:

There is no limit to the amount of investment one can make in the stock market. Short-term capital gains (for shares held for less than 1 year) are subject to Income Tax at 15% on the gains  made. Long-term capital gains (for shares held for more than 1 year) are tax exempt.