Income tax saving tips and advice

Income tax Advice

Tax Saving Tips and Advice

To get the maximum benefits and save tax you would need expert guidance. IncomeTaxReturnIndia.com provides professional and expert Income tax guidance. To get more details you can reach us any time. Our tax experts will help you reduce your tax liability. You can save Income tax through multiple options couple of them have been discussed below:

– House Rent Allowance( HRA)

– Interest on Housing Loan

– Investment in house property to save capital tax again

– Investment under section 80C

– Tax exemption from Investment Bonds

– Give Donations to trust etc and get tax benefits

– Gifts

– Tax Free Incomes

Que). I am paying rent of just Rs 15,000/- P.m . Till last year , My employer did not ask for PAN copy of landlord, but this year they want PAN card copy of landlord. Please advice is my employer correct in asking for PAN copy.?
Ans: As per Income tax department has issued circular dated 10.10.2013, PAN no is compulsory if Rent during the year exceeds Rs 1,00,000/-.

Download HRA Calculator here

Que). How much can I save through House Rent Allowance (HRA) ?
Ans: House Rent Allowance (HRA) is exempt up to a certain limit if you are actually

Que. Can I save income tax by Housing loan?
Ans: When ever you take housing loan. You repay housing loan through monthly EMI. This EMI has got 2 components -Interest and Principal. Both are deductible, but separately.
Maximum Interest that can be claimed as deduction to the tune of maximum of Rs 150,000/-, if the property is not let out.
Principal amount repaid can be claimed as deduction under section 80C with overall limit of Rs 1,00,000/-

Capital gain on sale of House

Que: I have sold my Residential House and at profit. Want to know how can I save income tax on such capital gain?
Ans: If the house was held by you for more than 3 years then, on sale of such asset you can get income tax benefit, if you fulfills following conditions:
a) You have either purchased another residential house, one year before the Date of Sale or

b) You plan to purchase another residential house within two years from the date of sale; or

c) You plan to construct another residential house within three years from the date of sale.

In case of (b) or (c), you need to deposit the amount of Capital Gain in a Capital Gain Account Scheme before the due date of filing your income tax return.

Que: I am going to purchase property above Rs 50 lacs, please advice if any TDS is to be deducted? If yes, who can it be deducted?

Ans: Yes, since you are buyer you need to deduct TDS on property if total value exceed Rs 50 lacs. Please note following points:

  • TDS is to be deducted by you @ 1% of value.
  • Your are not required to have any TAN no
  • Only PAN no of your and Seller is to be mentioned filing depositing TDS.
  • TDS can be deposited online.
  • TDS need to be deducted by you at the time of making the payment to the seller and has to be deposited within a period of 7 days from the end of the month in which the deduction has been made.
  • Form 26QB has been prescribed for making such payment and the form for  doing the same has been uploaded on the following website of NSDL: https://onlineservices.tin.nsdl.com/etaxnew/tdsnontds.jsp
  • Issue of TDS Certificate: The TDS Certificate shall be issued in Form 16B within 15 days from the due date of deposit.
  • In case the PAN Card No. is not given by the seller, TDS would be required to be deducted @ 20% under 206AA

Tax Saving under Section 80C

Que: What are Tax Saving Instruments available to me under section 80 C?
Ans: Under Section 80C benefits, you can get an exemption of up to Rs 1 lakh on contributions to a wide range of investments. These include :
– Employee Provident Fund (EPF),

– Deposits in Public Provident Fund (PPF),

– Investments in National Savings Certificate (NSC),

– 5-year bank fixed deposits,

Life insurance policy premium (LIC)

(For purpose of investment under section 80C premium paid for dependent or independent , major or minor children are eligible for deduction)

– Investment in equity-linked savings schemes (ELSS), and

– Unit linked insurance plans (Ulips), among others.

– You can also claim a deduction for the school or university tuition fees you pay for your children provided they are enrolled in a full-time course at any institute in India.

Home loan principal repayment also qualifies for deduction under the overall limit of Section 80C.

Investment Bonds/Infrastructure Bonds

Que: Can I get Income Tax exemption from Infrastructure Bonds?
Ans: Rs. 20,000 tax exemption is provided for investments in certain Infrastructure Bonds. This is in addition to the already allowed exemption (Rs. 1,00,000) in certain savings instruments. Effective for AY 2010-2011, Ay 2011-2012 and Ay 2012-2013. This is no longer applicable for Previous year 2012-13 (ie Ay 2013-2014)

Donations

Que: You can save tax when you make donations?
Ans: You claim tax benefits on donations you make. Deduction is available under Section 80G of the I-T Act in respect of donations made by an individual to certain funds and charitable institutionsThe rate of deduction, is either 50 or 100 per cent, depending on the choice of trust. Besides, donations must be made to registered institutions only. Only donations of upto 10 per cent of your total income qualify for such a deduction.

Gifts

Que. Is Gift received from Relatives Taxable? Also gifts received form other taxable?
Ans:Gifts received from specified relatives are exempt from income tax, and there is no upper limit also.
– Gifts of any amount and from anyone received during your marriage are totally tax-free.

– Similar is the case with the gifts received under a Will or by way of an inheritance,

– From a registered charitable or education organisation or in contemplation of death of the donor.
Tax Free Incomes

Que. Income sources where in I don’t have to pay income tax?
Ans:There are couple of sources from which you can earn income and dont have to pay tax as well, They are-
– Agricultural Income

– Dividends from equity mutual funds and stocks

– Long-term capital gains on stock transactions are not taxed if you have paid the securities transaction tax on the sale

– Interest earned on PPF

– Amount received on Maturity of LIC Insurance Policy

Gifts Received from relatives. (See Relatives)

25 Responses to Income tax saving tips and advice

  1. PRASHANT says:

    Me and my wife are co-owners of house. We pay annual interest of 2.8 lakhs. will the whole amount be used as deduction benefit from my as well as my wife Income.

  2. Anup says:

    Very useful informations.

  3. Pallavi says:

    Pl. let me know that the Accrued interst re-invested in Bank FD for 5 years under cumulative scheme is exempt under 80/ C ? Pl. let me know. Thanks

    • Income Tax Buddy says:

      Pallavi interest received from any bank Fixed deposit is taxable and need to be added in your total income while file Income tax return

  4. subhajit says:

    Pls tell me which ITR is applicable for me from the below mentioned details. Sale- 45,03,244, Net profit – 2,36,250/-, O/Source Income Rs. 31,602/-, 80C Rs.43140/- & Bank HB Loan Interest Rs.20052/-. Tax liability Rs. 480/-. Am I liable to audit / tax audit and where can show my HB Loan Interest Amt. in ITR ? Pls reply soon.

  5. PRASAD says:

    I have paid the LIC premium for 2013-14 Ist half year in February, 2013. Whether I can claim the portion of LIC premium from April to June for IT rebate for the FY2013-14?
    Please tell be the IT rule provisons also.

    • Tax Dost says:

      Since LIC premium is paid in Feb 2013,, you can take tax benefit in financial year 2012-2013 only. LIC premium is allowed on actual payment basis.

  6. Milind says:

    Interest on Saving bank account is exempted in Financial 2013-2014?

  7. ranjan mahapatra says:

    I am service in LTd company. can I save tax for 80G for donation in Charitable trust ???

  8. Hi says:

    To claim “Loss from housing property Letout” do I need to submit “Rental agreement” as a landlord? My organization is asking for this. What to do????

  9. Manish says:

    i am working in a pvt company for 41/2 years and contributing in recognized PF account. Now. i am planning to join a govt job. Can i transfer PF amount to NPS account to save tax? If I complete 5 years of job ( out of which I didn’t contribute for 2 months due to leave without pay), withdrawl from PF will attract TDS?

  10. Himadri Sircar says:

    I have booked a flat in Gaur yamuna city in June 2013 at pre launch rate. Kindly advice when should I sell the flat to save on Long term capital gain. Kindly also advice whether I should purchase tax free bonds to save any tax and whether the invested amount in bonds should be profit or the entire sale amount.

  11. kurkure vijay says:

    my gross taxable earning before exemption is 1,097,537 pa and in hand salary is 85000 per month without tax deduction,and I have taken education loan Rs.900000 at 10.75% interest rate ,till august it is simple interest and then it will become compound interest. So I want to know shall I prepay my education loan or not

    • Tax Dost says:

      Since your total income is below taxable limit, you will not be getting an tax benefit from education loan. IT make sense to pay ht loan and save interest.

      • kurkure vijay says:

        How it is below taxable limit my gross taxable earning before exemption Rs. 10.97,537 /- per annum

  12. puneet says:

    I have got entry for withdrawl EPF in Form 26AS ,but i didnt get any FORM16 for that ,so would the EPF be a part of Gross Total Income and how would i calculate it to add in gross income .Please guide.

    • Tax Dost says:

      No form 16 is required. You can file return on basis of form 26AS only.

      • Puneet says:

        So EPF is a part of gross income and please guide about as in FORM26AS the entry specifies 21k but i have recieved 48K with tax deducted 4k.How much i do add to gross total incom 21k or 48k.With this i have got leave encashment of 15K ,so do i have to fill ITR2 Form instead of ITR1?
        Thanks for replying!

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