Ask The Tax Expert

ITR, LTCG in USA, TDS on Bank Deposits

Yogi — Fri, 20 Jul 2012 09:08:39 GMT

Question:

I have recently file an ITR but some little mistake I had found in it. Then, how can i submit the correction ?

Answer:

If you have already received ITR-V acknowledgement for the original return, then you need to file a Revised Return now where you can make necessary changes to the ITR form.

You can file a Revised ITR 1 or 2 for FY 2011-12 (AY 2012-13) from our site. Just select 'Revised Return' instead of 'Original return' in the Welcome page (after logging into TaxYogi) and proceed. The remaining procedure is the same as Original return process.

Question:

I am 22 years old.I started my career last year.My annual income is 3 lakhs. And I don’t have any TDS deductions in my company.So i have to plan all my tax saving things myself.Give me some advice on this.I want my tax saving investments to support my marriage expenses at age 25.

Answer:

You can find some useful information here: http://www.investmentyogi.com/oi_planning/planning-for-financial-freedom.aspx
You should first consider purchasing adequate health insurance cover for yourself in case your employer is not providing currently. Apart from that, we suggest you utilize our FREE online Financial Plan to analyze your future money needs and plan for the same accordingly.

Check out our FREE Financial Plan here: http://www.investmentyogi.com/FinancialPlans/home.aspx

Check out our many useful and Easy-to-use calculators here: http://www.investmentyogi.com/FinancialCalculators.aspx

Question:

How to calculate LTCG & STCG for ESOP allotted shares sold in USA? What is the role of indexation & exchange rates?

Answer:

ESOP

1)Short-term Capital gains tax – 15% on the difference between the Current Marketprice of shares and the Offered price of shares.
2) Long-term Capital gains tax - NIL

Indexation is allowed only for LTCG, although the same is tax exempt in this case. Exchange rate would be the rate on the date of transfer.

Question:

I am a senior citizen. In the Fy 2011-12, (AY 2012-13) I have total income of about 9.50 lacs. Of this about Rs. 4,25,000 is accrued interest on some special term deposits. These deposits have not matured as on 31.03. 2012. But my bankers have deducted a sum of about Rs.45,000/- as income tax on 31.03.2012 ( probably as tax on the accrued interest) and have remitted the sum to Govt.. in April 2012. This has been shown in AS 26 statement under my PAN. My doubt is that in as much as the interest income has arisen only on 31.03.2012, am I liable to pay any interest to Govt..for the IT under the above sections on the principle that 90% of tax has not been paid on the income by 15.03.2012 I shall be thankful for the considered opinion of the experts in the matter

Answer:

The interest of bank deposits is fully taxable either at the time of maturity or on yearly basis. Since your bank has already deducted TDS of 10% on the interest for the year 2011-12, you need to pay the balance 20%.

You can e-file your ITR through us which will compute the balance tax payable in this case. Then you can make the balance tax payment online and e-file your ITR.

You can get information here on online payment of tax: http://www.investmentyogi.com/taxes/procedure-for-e-payment-of-tax.aspx

TDS at Bank and Number of concurrent life insurance policies.

Yogi — Wed, 18 Jul 2012 07:00:46 GMT

Question:

Hi ,

As I know bank deducts 10% as TDS on interest earned on FD. My question is, do I need to recalculate the tax for interest earned based on my annual income tax slab or TDS deducted by bank itself is ok.

Answer:

Whatever your tax slab, bank deducts TDS at flat rate of 10% on the income earned on deposits if such income in a bank branch exceeds INR 10,000 p.a. If you belong to a higher tax slab, then you need to pay the balance tax at the time of ITR filing.

Question:

I have taken a 5 lakhs term insurance from LIC for which I paid around Rs.22000/- one time premium for a cover period of 25 years. Of late, I have been thinking of taking additional cover of Rs.25 lakhs from HDFC Standard life for which the premium is about Rs4700(for smokers) for a tenor of 30years. Since, I am a smoker, so I believe in taking additional term cover to keep my parents safe and my future would be wife and children. Kindly advice.

Also, I want to know, as to how many no. of term policy can an individual take at the same time? What if I take 2 term policies from 2 different companies, is there any clause within their policy taking guidelines, which requires me to acknowledge this fact to both the companies? And if its yes, how the same is done when buying the policy online with the new co.. Also, will I have to fill some additional form to acknowledge my new policy with my previous company? Please suggest.

Answer:

There is no limit on the amount of life insurance cover one chooses to purchases as human life value cannot be measured in money terms.

We suggest you to first figure out the adequate life insurance cover you require at this point in time. You can find that out here: http://www.investmentyogi.com/insurance-calculator.aspx

You may also find this useful: http://www.investmentyogi.com/themes/yogi/Widgets/Calculators/LifeInsurancePolicyPlanner.aspx

Tax Refund

Yogi — Mon, 16 Jul 2012 04:31:14 GMT

Question:

I want to get refund of tax deducted since I could not produce proof of Infrastructure bond investment in time to my employer. While filing returns can I attach the receipt of bond I heard that no attachments are allowed with Return forms. Otherwise how to provide proof of my investment in bond.

Answer:

You can claim deduction under section 80CCF while filing your ITR. You do not need to attach any proofs with the ITR form but remember to keep the payment receipt in case the ITO asks in the future.

Increase Gross Total Income

Yogi — Mon, 16 Jul 2012 04:24:09 GMT

Question:

How can I increase my gross total income without increase my income tax after taken LIC ?

Answer:

You can do this my including more tax exempt allowances in your CTC - such as HRA, conveyance, medical reimbursement and such.

Question:

I have recently file an ITR but some little mistake I had found in it. Then, how can I submit the correction ?

Answer:

If you have already received ITR-V acknowledgement for the original return, then you need to file a Revised Return now where you can make necessary changes to the ITR form.

Tax Benefit on Mediclaim for Parents u/s 80 D

Yogi — Fri, 19 Aug 2011 06:14:29 GMT

Thank you for writing in to us. Below is the answer to your query

Question

I have two mediclaim policy for my parents whose age is not above 65 years, & i paid for this Rs.17500/-totally. In this case how much Tax benefit i get....?

Answer

Dear Asif,

As per Income Tax guidelines, you will be eligible for an additional deduction of Rs. 15,000 if you have taken a mediclaim policy on your parents (in case your parents are senior citizens then the Tax benefit will extend to Rs. 20000). In your case, since your parents are not senior citizens, you will be eligible for tax exemption of Rs.15000 u/s section 80D.On remaining amount i.e. Rs. 2,500 (17500-15000), you cannot claim any tax benefit

For more information on Tax Deductions Click here

[You can now purchase mutual funds online through InvestmentYogi for Zero fees! All you need to do is to fill in a form online and our team will get in touch with you. Click here to get started!]

Cheers,
The Yogi

Tax on Equity Mutual Fund Dividends from April,2012

Yogi — Wed, 17 Aug 2011 06:28:09 GMT

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Question:

As per DTC, from 1st April 2012, will the dividend from equity mutual funds be taxed in the hand's of the tax payer. Also, what about the investments done in mutual funds before 1st April 2012, will their dividend also be taxed. If yes, what is the rate of taxation? Many thanks

Answer:

With effect from April,2012, dividends received on equity mutual funds is taxed at the rate of 5% on dividend paid in the hands of the investors. As long as there is no notification/circular with respect to Tax on dividends from equity mutual funds, it is assumed that the Tax Implication would be prospective which means the new tax rate would be applicable only on Equity mutual funds bought after April,2012.

(You can open a free account with us where you can transact mutual funds online at free of cost.To know more Click Here)

Cheers,
The Yogi

Taxation of Mutual Funds

Yogi — Thu, 11 Aug 2011 15:32:00 GMT

Thank you for writing in to us. Below is the answer to your query

Question:

How much Tax calculated on Mutulfund Income ? Interest of Savings A/c is Calculated in total income or not ?

Answer:

Dear Sundeep,

Taxation of Mutual funds are as follows
Dividend Income:
Exempt in the hands of investors for both equity and debt schemes. However, AMC is liable to pay DDT in case debt schemes.
Capital Gain Tax on Equity Scheme
LTCG - Exempt subject to payment of STT
STCG - Taxed at 15% plus cess/surcharge subject to payment of STT.
Capital Gain Tax on Debt Schemes:
LTCG - Taxed @ 20% (with Indexation) or 10% (without Indexation) – Plus applicable surcharge and Education cess
STCG - Taxed at the normal rate of tax as applicable to the assesse

Interest on savings bank account is included in the total income and taxed as per the slab rate you belong

(You can open a free account with us where you can transact mutual funds online at free of cost.To know more Click Here)

Cheers,
The Yogi

EMI V/s Pre-EMI: Tax Benefits

Yogi — Wed, 10 Aug 2011 09:23:37 GMT

Thank you for writing in to us. Below is the answer to your query

Question:

I've taken house loan in 2009. The apartment is still under construction. Yearly interest portion of my EMI is 1.1 lac and principal payment is approx. 35000. I want to know-
1) Am i eligible for exemption on interest?
2) Which income tax return form should i fill?
3) If eligible, Where should i mention the rebate on interest in income tax return form?

Answer:

Dear Sidharth,

As per income tax guidelines you cannot claim Tax exemption on house which is under construction .You may be wondering then how to claim the tax exemption, here the pre-EMI term comes into the play. The real loan repayment will start only when the entire loan amount is disbursed to the builders.

1. You can use the home loans for tax savings only when the construction is completed. In this case, pre-EMI is paid while the house is under construction. So, you cannot use the pre-EMI as the tax deduction source. Once the construction is completed, the total pre-EMI interest paid is shown in the five equal installments in the subsequent years

2. You need to file ITR-1 form

For example, if you have paid Rs.100000 as the pre-EMI, then Rs.20000 will be shown in the next five years as tax deduction. Note that pre-EMI is only the interest paid during the period. If you have paid any principal amount, that is not eligible for the tax deduction. That is lost for ever.

(You can open a free account with us where you can transact mutual funds online at free of cost.To know more Click Here)

Cheers,
The Yogi

NRI Taxation

Yogi — Mon, 27 Jun 2011 04:51:31 GMT

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Question:

One of my relatives is an NRI in US. He has not opened any NR accounts in India. He transfers funds to his existing resident account, and invests in banks.At present his income in India does not exceed the taxable limit .
Is it compulsory that he should have an NR account?
If his income exceeds the taxable limit, can he make investments to avail the benefits of sec 80c?
When his income gets taxable, can he file return here
as any other resident?
Could you please clarify these doubts?

Answer:

Hello Sobhana, it is mandatory for every individual to inform the banks or companies where he got investment about the change of its residential status within a reasonable time. It is illegal for a NRi to hold a normal bank account in india.

So, it is compulsory that he should get his existing bank accounts converted in to NRO account
Like other residents, he will also be allowed to make investments to avail the benefits of sec 80C
Yes, he can file his return in india like any other resident

Cheers,
The Yogi

Service Tax Registration

Yogi — Mon, 27 Jun 2011 04:48:18 GMT

Thank you for writing in to us. Below is the answer to your query

Question:

For professional, what is the min limit for service tax registration

Answer:

Hello, every individual who has provided a taxable service of value exceeding Rs. 9 lakhs in the preceding financial year is required to register with central excise or service tax office having jurisdiction over the premises or office to which he belongs

Cheers,
The Yogi

Professional tax in Andhra Pradesh

Yogi — Mon, 30 May 2011 08:40:31 GMT

Thank you for writing in to us. Below is the answer to your query
Question:
What is the rate of interest for Profession Tax Payment for Financial Year 2009-10 & 2010-11 in andhra pradesh?

Answer: Hello Savan, Professional Tax is State matter and is levied in respect of any profession, trade, calling, and employment undertaken in the State. The set of professional tax slabs in India are different for all the 28 states in India and some of the states have formulated different professional tax slabs for men, women, and the senior citizens of the respective states.

Professional tax levied in AndhraPradesh is as follows

For Financial Year 2009-10 and 2010-11

Cheers,
The Yogi

Taxability of Interest on Provident Fund

Yogi — Fri, 27 May 2011 07:24:39 GMT

Question:what is the taxability of interest on Provident fund deposits ?

Answer:Hello, the tax treatment of interest on Provident Fund is as follows

Recognized Provident Fund:Interest on provident fund is exempt up to 9.5%. Interest exceeding 9.5% will be added to employee's salary income
Unrecognized Provident Fund: Not Taxable
Statutory Provident Fund: Fully Exempt
PPF: Fully exempt

Cheers,
The Yogi

TDS on Fixed Deposits

Yogi — Wed, 25 May 2011 11:02:36 GMT

Question: Dear Sir/Madam,I am a regular reader in your site and it is very informative. i would like to ask about a question about TDS on FD deposit:
1. I have a some fixed deposits in the name of my wife at Federal Bank in Kerala and there some TDS Tax deducted on deposits. Is there any way to claim that TDS tax as she doesn't have any other income and she has PAN card as well ? Is there any way to avoid such TDS in the future ?. She is having investment in mutual fund-ELSS. whether it will be helpful to claim that TDS ?

2. Regarding My Case, I am an NRI and I have some NRO deposits in Federal Bank. It attracts TDS @10 % or something in that range even after mentioning my PAN card.Ipay Rs.10000 every year as Life insurance premium to LIC. Is there any way to claim this TDS, too? Kindly note that we dont have any other income from anywhere and both of us have PAN card. We do not come under high tax bracket as we dont have any other income. We would appreciate if you suggest the ways to claim these TDS and ways to avoid such TDS Tax.

Answer: Yes, there is a way to avoid TDS i.e. by submitting the 15 G form to the Banker. As per the Income Tax guidelines, banks are required to deduct TDS on deposits if the total interest earned in a given financial from all the deposits exceeds Rs.10,000. TDS Rate is 10% plus education cess 0.3% (3% on 10) total 10.3%.But, if your income is within the maximum tax exemption limit, then you may inform your bank about the same by submitting the 15G (form available at the bank).
Investment in mutual funds-ELSS will not help you in claiming TDS. The only way to claim the TDS is by filing a return showing taxable income within the tax exemption limit and then claiming the TDS through Form 16A which the banker issues when TDS is deducted.

For the Second question, an NRI can file form 15 G provided your income fall within the maximum tax exemption limit.
You can avoid TDS from your deposit by splitting your bank deposits in two or more banks or branches, so that the total interest earned at one branch or bank is less than Rs.10000 in given financial year.

Click here to check out the tax saving options for NRIs.

Cheers,
The Yogi

Non Receipt of ITR-V

Yogi — Wed, 25 May 2011 10:54:19 GMT

Question:i Have receive the below mail. What is its implication. I filled the ITR through a 3rd party vendor."Non - Receipt of ITR-V at Income Tax Department?-CPC, Bangalore ".
What should i do if i dont have an ITR-V. Also please help if i can get it from internet/IT Office

Answer: Hello Satish, in case an individual e-files his return with out digital signature then an ITR-V form will be generated which is nothing but an acknowledgement *** verification form. The tax payer has to verify the form and duly send the verified form to "Income Tax Department - CPC, Post Bag No - 1, Electronic City Post Office, Bangalore - 560100, Karnataka, " BY ORDINARY POST OR SPEEDPOST ONLY within 120 days after the date of transmitting the data electronically.

In your case the ITR-V form hasn't reached the Income tax department as mentioned above.So,you Contact your third party vendor and check up weather they have send across your ITR-V form to the department. If they have send across check the status here .

If in case they have not send across the form then you have to download the form from the website and send it across to the Income tax department, if not the return you have furnished will be considered as unfurnished return

Cheers,
The Yogi

Tax Exemption on Joint Home Loan

Yogi — Wed, 25 May 2011 10:06:32 GMT

Question:are planning to take a House loan jointly (father and me). The property is owned by father only. In this case will I get tax exemption?

Answer:Hello Velayudhanraj, As per the income tax guidelines only the co owners are eligible for tax exemption in respect of home loan repayment. In your case your father being the sole owner of the property, the tax benefits will be available only to your father. However, you can reap the tax benefits, provided if your father declares you to be a co owner legally by entering in to an agreement. This way you will become the co owner of the property and can avail the tax benefits in proportion to your share of ownership
For Example,

Cost of the House property: Rs 10,00,000
Ownership share: 60% (Father), 40% (Son)
Loan: Rs 6,00,000

Amount to be brought in by Father: Rs 6,00,000
Less actual contribution by Father: Rs 2,00,000
Father's share in the loan: Rs 4,00,000

Amount to be brought in by Son: Rs 4,00,000
Less actual contribution by Son: Rs 2,00,000
Son's share in the loan: Rs 2,00,000

Interest payment: The maximum limit of Rs 150,000 on interest paid will apply individually to both (i.e. the total deduction will be limited to Rs 300,000).

Principal repayment: The tax benefits on the principal will be shared in the ratio of 2:1 between the Father and Son since that is the share of the loan for Father and Son. The limit is Rs 100,000 for each.

Cheers,
The Yogi