Dear Friend,

Thank you for visiting my Blog. Not all of us were born in a rich family and we always think about retiring as a CROREPATI. Thinking is one thing, have you done anything to achieve that dream?

In order to become rich, you have to invest and do it wisely. For that you need knowledge and ideas. There are a few good books that I have published which you can buy for a nominal price which can help you with that.
With the New Year on the horizon, the price of all the books have been slashed by 50% or more.

To know more about these books, their price and check out a sneak preview, please Click Here...


Best Wishes!!

Anand

Indian Income Tax

The following are the posts in this blog that are related to Income Tax in India. Please click on the links to read more about them.

Indian Tax Laws & Rules:

1. Indian Income Tax - Explained
2. Changes in Tax Laws for the financial year 2010-2011
3. Budget 2011 and Income Tax Policies
4. Are you a Innocent Tax Evader
5. Common Tax Filing Mistakes
6. Good News for Tax Payers in India
7. Section 80G
8. Section 80G for NGOs

Budget 2012:

1. Budget 2012 - Income Tax Slabs Revised in India
2. India Budget 2012 - How the Change to Tax Slabs Affect Us
3. Budget 2012 - Income tax and Life Insurance
4. Budget 2012 and Impact on our Healthcare & Medical Expenses
5. Budget 2012 - Sec 80CCF Scrapped
6. Budget 2012 - Change to Wealth tax Rules in India
7. Budget 2012 - Service Tax and Excise Duty Increased

Saving Income Tax:

1. How to Save Income Tax
2. Lifestage Based Tax Saving
3. Thoughts to Ponder before filing your Income Tax
4. Best Tax Saving Options Available for Investment

For Non Resident Indians:

1. Income Tax Liabilities for Non-Resident Indias

180 comments:

  1. Hi,
    I have query about EPF account.
    Initially I joined a company say "X". i did not withdrawl or transfered my EPF.
    After that I joined company "Y" then "Z" then again "Y". Now, Everytime I did transfer of my EPF.
    More than 5 years has been passed after relieving from my first company "X".
    Then what is the right thing for my EPF amount of company "X".
    Should I ask for transfer or better to withdrawl. I want to do the best legal way to perform.
    Please guide.

    ReplyDelete
    Replies
    1. Anonymous,
      Legally - both withdrawing or transferring is fine and can be done based on your wish.

      Having more than one PF Account simultaneously is not correct. So, you should submit a request to either withdraw from or transfer all these PF accounts that are currently defunct.

      The one account into which your current employer 'Y' is putting money every month must be the only active account and you can use it if you want to transfer all the old PF account money.

      Anand.

      Delete
  2. Hi Anand,
    Plot Loan from HDFC Bank (576- RESIDENT PLOT PURCHASE LOAN-VARIABLE RATE-MONT) can get IT Exemption for both interest and principal part. If not, how and when can make it exempt? Please suggest ASAP.

    ReplyDelete
    Replies
    1. There is no tax exemption for purchase of plot/land via loan.

      Delete
  3. Hi Anand, I need your advice on this:-

    When a registered trust u/s 12A donates to another trust which is not registered whether it is an allowable expense?
    Whether the AO can impose penalty u/s 271(1)(c) in the case of trust without requesting the CIT for cancellation of its registration?

    ReplyDelete
    Replies
    1. Hi Anonymous,
      Sorry, I do not have much idea about taxation of trusts and their donations for charity. Apologies.

      Anand

      Delete
  4. Hi Mr.Kumar.
    I am very confused about how to calculate what i will be liable to pay as tax.
    I have started working from 1st june2012.
    1)Tax will be calculated on gross or net salary?
    2)My salary fluctuates quaterly, so do i need to multiply monthly gross or net salary?
    3)Do we need to save 5 or 10 times the taxable amount?
    4)I pay annually Rs.8065/- in lic, so only 20% of this will i get benefit?
    5)I am covered under NPS, so i will this be deduted?

    Kindly help.

    Thanking you
    abishek



















    ReplyDelete
    Replies
    1. Hi Abishek,
      See my answers below:

      1. I am not sure what you mean by gross or net salary. Whatever income you earn as part of employment (Including all bonus & perks) will constitute taxable income
      2. You need to sum up all the salary amounts paid out every month over a 12 month period to calculate annual salary
      3. Not sure what you mean by 5 or 10 times taxable amount. You can save tax up to the allowable limits under each section. For ex: Up to 1 lac under Sec 80C
      4. You have not mentioned what type of policy yours is. So, the amount of tax benefit you will get will depend on the type of policy. Read this article on Insurance and Income Tax to learn more about it.
      5. Yes, the money saved under NPS gives tax benefits. Read the following articles on NPS to learn more about the scheme:

      National Pension Scheme - All your Questions Answered!!!
      National Pension Scheme
      Is National Pension Scheme (NPS) A Worthwhile Investment Option?

      Anand

      Delete
  5. Thank you for replying so promplty, the information is definitely helpful.
    One of my friends told me that, if my taxable amount is 2000/- then to save that amount I need to invest 2000 *5=10,000/- or 2000*10=20,000/-. So, is it 5 times or 10 times ?

    ReplyDelete
    Replies
    1. Hi Aj,
      No, the calculation is not like that. If you are in the 20% tax slab and your taxable amount is Rs. 2000 you need to save 10,000 whereas if you are in the 30% tax slab you need to invest around 6500 to save the same 2000 rupees.

      Based on your total taxable salary and the provisions available to save tax, the amount you need to save will vary.

      Anand

      Delete
    2. What if 2000/- falls in tax slab of 10%?
      In 30% tax slab the amount is it 6500/-? How come the amount is reduced from tax slab of 20%?

      20%-- Rs.2000*5=10,000/-
      30%-- Rs.2000*3.25=6500/-

      Delete
    3. Hi Aj,
      The amount you can save at the max is Rs. 1 lakh per year. Based on your tax slab, how much tax you save varies. So, assuming you save 1 lakh, for the person in 10% slab, he will save Rs. 10,000 whereas the 20% tax slab guy will save Rs. 20,000 and the 30% tax slab guy will save Rs. 30,000.

      Since you were doing the reverse calc, to save 2000 tax, based on which slab you are in, you need to save a total of Rs. 20,000 if you are in 10% slab, Rs. 10,000 if you are in 20% slab and Rs. 6500 if you are in 30% slab.

      Get the picture? Please read the articles on income tax calculations as outlined in the article titled Indian Income Tax Explained and Changes to Tax Slab in budget 2012 to understand how the tax calculations work.

      Anand

      Delete
  6. Thanks all the information. Thanks.

    ReplyDelete
  7. I am planning to travel around 20th March 2013 . can you please advice me how and when can i claim my LTA . and also for which Block will it be considered.

    ReplyDelete
  8. Hi
    need your help...
    I was working with an MNC from March-2008.
    Then in June-2011 I was transferred out of India.
    For first three-year I filed my return and from 2012 I stop filling my return.
    Is it OK or do I need to file my return.

    Please help.

    ReplyDelete
    Replies
    1. Hi Abhishek,
      As long as you do not have any income in India you need not file your returns.

      In case you have income in india but it is less than 2 lakhs per year, it is not mandatory to file your returns. However, in such cases, it is a good idea to file your returns but it is not mandatory.

      Anand

      Delete
  9. Hi Anand,
    I have some queries regarding fixed deposit and its effect on tax.

    1. Suppose I get an annual salary of Rs260000, and interest from fixed deposits Rs24000.
    So total taxable salary is Rs 284000.
    Now i go for an investment of Rs 100000 under 80/c in fixed deposit for 1 year , let suppose it will give an interest of Rs12000.
    So, in this case ex bank will deduct a TDS of Rs1200.
    Now the query is , can I submit form 15 G as my taxable salary will be Rs 184000 (284000-100000), which is falling under tax exemption.

    2. Also, while calculating the taxable amount for the year , would I also take the interest Rs 12000 in account. which will be coming from the current fixed deposit.

    3. When we book a fixed deposit for 3 years, do we require to take the interest accrued for each year into other income for calculating net taxable amount.

    Please respond.

    Thanks,
    Sumit

    ReplyDelete
    Replies
    1. Hi Sumit,
      Answers below:

      1. When you submit form 15G if you accept to declare the interest, the bank will not deduct TDS. Even if they deduct TDS, that would be advance tax paid against your name. And so, you can deduct that from your total tax payable at the end of the financial year. The bank will deduct TDS only if the interest they are paying you is above Rs. 10000 in one year and if you havent submitted form 15G or PAN CARD. So, if you submit both, they wont deduct TDS and your taxable salary would be your net salary from employment + interest earned from bank.

      2. Yes, the interes of Rs. 12,000 will be considered as taxable salary

      3. Yes, the interest accrued each year has to be considered as other income for tax calculation and will be included to your taxable salary.

      Hope this clarifies.

      Anand

      Delete
    2. Hi Anand,
      Thanks for the response.
      Most of the doubts are clear by now, but what I actually wanted to know from my first question is:
      If you are submitting form 15G, that means your taxable salary falls in the category of tax exempted slab.
      So in order to know my annual taxable amount, do i need to deduct the investment made under different sections, e.g 80C or only my net taxable salary is my annual taxable amount.

      Thanks

      Delete
    3. Hi Anand,
      Thanks for the response which had cleared most of the doubts but what I wanted to ask through point 1 was sth different.I am clarifying it again,please respond.

      --> If an individual submits Form 15G, it means he declares that his taxable income is in the category of tax exemption. So, when he calculates his annual taxable amount, should he take into account, the deductions under various sections e.g 80C. or only his annual taxable salary.

      --> What kind of documents are required in order to submit form 15G as a validation to the declared taxable amount.

      --> At the time of booking an FD and submitting 15G is it mandatory that the individual had invested in section 80C instruments, or is it upto him that he can invest in 80c till the end of financial year.

      Thanks.

      Delete
    4. Hi Sumit,
      Form 15 G is meant for general investors who want to declare to the bank that their income from all sources is less than minimum amount subject to tax (2 lakhs as of today). If you are 100% sure about the amount of money you are going to save under Sec 80C and are sure that your total taxable salary at the end of the year after considering all your section 80C savings, you can go ahead and submit form 15G. This means that the bank need not bother deducting TDS because your total income is lower than the minimum limit.

      However, if your taxable salary at the end of the year crosses the 2 lakh mark then whatever you did above is illegal because you claimed that your income will be lower and refused the TDS.

      Form 15G is a self declaration form and you need not provide any proof or anything. It is just a simple declaration where you truthfully agree that your income does not cross the minimum taxable salary. So, dont submit it if you are not sure how much you will save under Sec 80C.

      If you are anyways going to file your tax returns at the end of the year, you can always let the bank deduct TDS and claim a refund along with your other tax refund.

      Anand

      Delete
  10. Hi Anand,

    I am working in the KPO, I have got the form 16 from my employer and had prepared my own tax return filling using "ITR-1" but when I fill up all require information according to from 16 and hit the "calculate tax" it only deduct 1.80 lacks from the total income and calculate the tax on the remaining amount. Is there any wrong with the ITR-1 excel or I am missing something?

    Regards,
    Shrenik

    ReplyDelete
    Replies
    1. Hi Shrenik,
      Check the version of the ITR-1 excel you are using. It may be outdated. Try to use the services of any of the tax return filing websites. It would be easier and hassle free. They may charge you a couple of hundred rupees for their services but that will be much easier than doing it yourselves.

      Best Wishes
      Anand

      Delete
    2. Hi Anand,

      I have checked with the website mentioned here "https://incometaxindiaefiling.gov.in/e-Filing/Portal/DownloadUtil/2012/ITR1_2012.zip". Please correct me if I am wrong, Is it the official site of "Income tax dept, Govt of India". I have tried it in April then I thought that it might be old one so after some days i.e. in the month of may I tried the same but I am getting the same result. Please check and verify.

      Thanks and Regards,

      Shrenik

      Delete
    3. I checked the file and it says for year 2012-13 and looks right. I seriously doubt if this spreadsheet is correct because I took some time and entered some dummy data and did the calculate tax and it is doing as you said - taking 1.8 lakhs as standard deduction. so, guess the spreadsheet is outdated.

      As I said before, Try to use the services of any of the tax return filing websites. It would be easier and hassle free. You can at least be sure that whatever calculations are applied on our income are correct.

      Best wishes
      Anand

      Delete
  11. Thanks Anand, for verifying this for me. Can you tell me one more - Is it possible to edit the XML file? because at the end of all we are going to upload XML file on website. I have seen the XML file and I think it is possible to edit it.

    Regards,
    Shrenik

    ReplyDelete
    Replies
    1. You are welcome Shrenik. I dont think editing the XML File would be a good idea. Maybe the website has some tracking to see if the XML is edited and then reject your filing or do something else :)

      Anand

      Delete
  12. Hi Anand
    I work with a Navratna PSU.... recently few of our employees got refund through CA..... the CA claims that our empployer deducts more than that supposed to be ..... when i saw their ITR ... their salary figure is lesser than their form 16 figures.... for this exercise the CA is charging some hand some money ...ppl with 15L salary got 70K refund ..Is it possible ...... please respond

    ReplyDelete
    Replies
    1. Hi Karthik,
      Unless I exactly know what that CA is doing to get that type of refunds I cant really comment on that but, there are many auditors in India who know some loopholes in how the taxes are to be calculated in order to gain most benefit for the tax payer (u and me) and they sell that service for a charge. Usually it is like they charge 10 or 20% of your refund as their fee.

      They may manipulate some numbers in your form 16 and arrive at higher than normal returns. If the auditor is actually taking out parts of your salary or adding up imaginary expenses (which you havent really spent) it may end up biting you because such things arent legal.

      Sorry for not being able to be too much help because I cant really comment without knowing what that CA is doing. But in 3 out of 4 cases, these kind of cases dont result in major issues and you can end up with a good refund. It is the other 1 out of 4 cases that i am worried about. But again, if the CA is a reputed guy from a reputed firm the chances of him doing the wrong or illegal things are highly doubtful because they wont want to ruin their or their company's good name.

      Best of luck

      Anand

      Delete
  13. hello anand.
    What percentage of tax are we liable on The land acquired by govt and the compensation received.
    The land is agricultural and is acquired for construction of road.
    t

    ReplyDelete
    Replies
    1. I think sale of Agricultural Land does not attract Capital Gains Tax. So, you should be fine. See this article about land sale from "The Hindu" website - http://www.hindu.com/pp/2004/04/24/stories/2004042400070300.htm


      Anand

      Delete
  14. Hi anand,
    I have one query kindly help me out.
    I have done FD of RS 100000 in financial year 2013-14 for tax saving.
    My query is as the lockout period for this FD is 5 years can i use this same FD for tax saving in 2014-15 financial year or I have to make a new FD of RS 100000 for tax saving for the year 2014-15.

    Hoping for your kind response
    Thanks and regards
    Arindam

    ReplyDelete
    Replies
    1. Arindam - The Tax Saving FD that you opened this year is valid only for this year tax returns. Yes, for next year 2014-15 you need to open a new tax saving FD for 1 lakh to save tax next year

      Anand

      Delete
  15. but anand i have heard that we have to invest the income from sale of agricultural land in purchase of agri land, or else tax have to be paid.

    ReplyDelete
    Replies
    1. Yes Aj, I was under the impression that by default you will be getting newer Agricultural land in place of the one that you are selling. Sorry about that.

      Anyways - Yes, if you sell agricultural land, you need to buy new Agricultural land within a period of 2 years othrwise the amount is taxable. If you buy new agri land but not to the entire value then, the difference will be considered capital gains and will be taxed.

      Anand

      Delete
  16. Hi Anand,
    I don't earn yet (I'm a student) and your blog posts only seem to target the theories of income tax, where to save, where to be safe all of which seems to attend to the topics of saving money and yet a law abiding citizen.

    But I don't understand a few things:
    1. When we pay the tax, do we also need to *prove* how much we've earned? Or do we calculate everything ourselves, pay and keep our proofs ready should they come check any day?
    2. I heard that most companies deduct income tax and pay employees. Should such employees do nothing about this income? And do they get some *proof* that the company has paid for them?

    I'm a little intimidated by the practicalities of banking and income tax.
    Thank you,
    Manu

    ReplyDelete
    Replies
    1. Hi Manu,
      See below the answers to your questions.

      1. If you are a salaried employee (like a majority of us) your employer will calculate your annual salary and do the tax calculations as well. At the end he will give you something called a "Form-16" which will summarize how much you earned, how much tax you need to pay etc. That should be enough to prove how much you have earned. There are many provisions in indian tax laws which allow us to reduce our tax liability - for ex: Rs. 15,000/- on medical expenses for self and dependents. For this you need to submit actual medical bills to your employer who will validate it and make corresponding entries in the eventual form 16 that he will give you. As long as you have the form 16 copy you should be fine.

      2. Yes, it is mandatory for all companies that employ more than 20 individuals as permanent employees to deduct income tax and pay the same to the government. As I said for point no.1 above, your company will calculate tax based on default provisions and as & when you submit proof for tax benefits the company will make adjustments and give you a final form 16 that will tell how much you need to give the government or how much refund you should get. In 99% of the cases the company will deduct more tax from your salary than what you are supposed to pay and you need to file your tax returns to get the refund.

      Dont worry - millions of Indians do this salary and tax calculations part every year. First finish your studies properly and get yourself a good job. You will learn these things with experience.

      Best wishes
      Anand

      Delete
  17. Hi Anand,
    I found your blog very informative and have something to ask for your comments.
    I stay in abroad and earn fellowship which is tax free in this country. I have a savings bank account in India and I transfer my fellowship money to this account on a regular basis. Very recently, my savings account has been credited with an interest of around Rs. 21,000. I want to know whether this would come under income tax? If yes, how the tax would be calculated?

    Thanks in advance
    Prakash

    ReplyDelete
    Replies
    1. Prakash, the interest you earned - this Rs. 21,000 is considered an Income in India and will be subject to taxation as per the prevailing tax slabs. So, as per the latest tax slabs - http://anandvijayakumar.blogspot.com/2012/03/budget-2012-income-tax-slabs-revised-in.html

      any income up to 2 lakhs is tax free and until your interest income crosses this 2 lakh mark you are good. Once you come back to India and get employed here, this interest will be added to your net annual income and the total amount will be taxed.

      Anand

      Delete
  18. Hi Anand,
    I have a query regarding Form 15-G submission to bank. Is it like , one needs to submit a form 15-G once in a financial year at any time of the year, or do we need to submit a form 15-G every time we open a new fixed deposit with the bank.

    For e.g I submitted the form 15-G when I opened a FD in the month of August, now if I again open a FD in January, am I required to submit again. Also, I read in some of the blogs that one needs to submit form 15-G in the beginning of the financial year. Is that true?

    Awaiting for your response.
    Thanks,
    Sumit

    ReplyDelete
    Replies
    1. Sumit - It would be once at the beginning of every financial year.

      However, before you rush to submit the Form 15G or 15H, make sure that you are eligible. An individual or HUF must satisfy two conditions. First, the estimated taxable income for the financial year should be less than the basic exemption limit. This is Rs 2 lakh for individuals below 60 years and HUFs, Rs 2.5 lakh for senior citizens, and Rs 5 lakh for very senior citizens above 80 years.

      The second condition, which is applicable only to Form 15G, is that the total interest income from all sources (read all banks) should not exceed the basic exemption limit (Rs. 10,000). Senior citizens have been exempted from this condition because most retirees get the biggest chunk of their income from interest.

      so, if you are eligible - go ahead and submit your form 15G. If your income is above the minimum limit, then the bank itself will deduct 10% of your interest (20% if you havent submitted your PAN details) and issue you a TDS statement at the end of the year which you can use for tax filing/returns purposes. The TDS deducted by the bank will be clubbed with the TDS deducted by your employer and you can claim a refund (if applicable) on the overall TDS amount.

      Hope this helps

      Anand

      Delete
  19. Hi Anand,

    My previous employer not given my FORM16 for the year 2012-13. I requested lot times no response from there side.
    Do i need to inform income tax department or what needs to do? Pls advise.

    I checked in Income tax website's FORM26AS the amount which employer deducted and paid government is correct.
    Now i'm in need of FORM16 to file ITR. Do I get any duplicate form16 from government.

    Is it possible to file ITR with out FORM16?

    Expecting your kind response.

    Rgds
    Shankar M

    ReplyDelete
    Replies
    1. Shankar - It depends on whether your employer deducted TDS from your salary. If so, he is obligated to give you the form 16 as proof that he deducted XYZ amount as TDS from your salary and remitted it to the IT Department.

      If he deducted TDS and is not giving form 16 you can report the matter to the income tax ombudsman with all the details and copies of your request letters to the employer. The Form 16 can only be generated by employers. Government will not give it.

      You can also submit your tax returns without your form 16 by just specifying the income received using your monthly payslips. Submit all your payslips to a tax consultant or auditor and they can help you file returns without form 16. Even in the case your employer deducted TDS the TDS details will be in your salary slip and you can claim that amount as tax already paid. The IT Department will take necessary action against your employer in case he failed to remit that money to the IT department.

      Hope this clarifies

      Anand

      Delete
  20. Hello,
    Employer has provided bachelor accommodation in which 4 employees are staying.Employer has added accommodation cost (15 % of income) in Prequisites which is added in taxable amount. This is the mistake done by accounts .This has happened in only my case.The same is getting reflected in form 16.Accounts persons is telling to file ITR & i will get refund.
    Will i get refund as the employer has already shown it in form 16 .This has happened for for both years(2012-2013) & (2013-2014) financial years.Is there any way of getting the refund as the amount is more.
    plse suggest me.
    Regards,
    Kumar.T

    ReplyDelete
    Replies
    1. Kumar,
      Your query is a little unclear. So, your employer gave you accomodation. Did he deduct the money from your salary or not?

      If the Rent he deducted is shown as HRA in your form 16, then it should be fine. But, unless we take a detailed look at the form 16 its difficult to advise.

      Anyways I would suggest that you consult a Chartered Account with the form 16 that was given to you by your employer and explain the case. They will tell you exactly whether the current form 16 is enough of if you need any additional documents from your employer. They usually charge a fee like 250 or 500 rupees and since you say the amount is large, I think it should be ok.

      Best of luck
      Anand

      Delete
    2. Anand,Thank u for the reply.
      Employer is giving accommodation in two types:
      1) Family Accomodation: where he is deducting HRA & some percent of basic
      2) Bachelor accomodation : Where he is not deducting any thing & rent or lease given by the company to the
      owner is non taxable for the employee.

      In my case they have added the rent given to the owner in taxable amount which is mistake done by accounts.
      I consulted the CA,He is telling to modify the TDS which can be done by the employer .Weather it is possible to modify TDS ?
      Any supporting document for that

      Regards,
      Kumar

      Delete
    3. Kumar - I think the CA is asking for a revised form 16 which clearly mentions how much TDS was deducted so that he can use the same to get you a refund for the amount that was deducted in excess - which is standard procedure.

      Talk to your employer and get a revised form 16 which explains that the TDS that was deducted was in excess and then you can get a refund.

      Anand

      Delete
  21. Hi Anand

    I am sending this email to seek your inputs on outstanding tax demand by income tax office.

    1. Income tax office has reported outstanding tax for my account for AY 2005-06,2006-07, 2007-08 and 2008-09. I understand that the tax demand would be due to tax credit not available to my account for multiple reasons. The refund amount is getting adjusted to my current refund amount.
    2. I have sent a request to assessment officer back in September 2012 to check with necessary documentary evidences for tax credit ( TDS Certificates, Tax Payment Challans)
    3. At later stage I had sent a representation to Nodal officer in May 2013.
    4. Till date no action has been taken from Income tax office, I can find the outstanding tax demand on efiling webiste.

    With above facts :

    1. Are there any escalation paths to expedite the matter when Income tax office hasn't taken any actions to our request for 11 months.
    2. How do we claim the refund of the current years once the outstanding tax demand is corrected from Income tax office.
    3. Can we request a status of the application under RTI act

    thanks and regards,
    Kaushik

    ReplyDelete
    Replies
    1. Kaushik - Yes, any government department in India comes under RTI and you can make an RTI application to check your status. RTI is your best bet in such cases.

      I would suggest you contact a qualified chartered accountant to get this matter resolved. Since your situation spans multiple assessment years, chasing up people and getting things completed would be complicated plus there will be a lot of delays. Those people know whom to contact and what to do, to speed up the process.

      Best of luck
      Anand

      Delete
  22. Hi Anand,
    Can you please help me as regards how to obtain the legal heir certificate required for adding my client as the registered legal heir of his father..I uploaded the death certificate,pan copy of deceased,pan copy of my client which was self attested and an affidavit stating that my client is the legal heir of his father,,However the same was rejected stating that legal heir certificate is not a valid one.Pls help..

    ReplyDelete
    Replies
    1. Hi Anonymous,
      Please contact a qualified Lawyer. They can help you with it.

      Anand

      Delete
  23. Dr. Manas Kanti HladerSeptember 11, 2013 at 11:59 PM

    Hi Anand!
    Thanks in advance for your help!
    I am a West Bengal State Govt. Employee, working as Medical Officer of Rural Hospital. Our TDS is deducted every year, but Treasury did not given us any document(book no. etc) and so our DDO could not submitted TDS (quarterly) Statement in last few years correctly.
    And ultimately the IT Deptt's website is showing that there are huge amount of Outstanding Tax Demand of me. I have got all the genuine Form 16 of these TDSs. Do I need to do anything else??
    As I am a Govt. servant, and TDS had been deducted from me, and I have all the valid proof of giving tax (Form 16 by DDO), anything should I do?? Or I have nothing to worry??
    Please help me!! Thanks again!!

    ReplyDelete
    Replies
    1. Dr. Manas,
      I am a little confused here. Usually a form 16 shows details like the salary paid out to you and the TDS that was deducted from your salary. Since you work for the government technically the money should have reached the IT Department by default. It is possible that the IT departments website is wrong.

      check your form 16 for the tax payable amount - is it a positive number or a negative number? If it is positive, it means you still owe some money to the tax department and if it is 0 or negative you need not pay the tax department anything. If the number is negative then there is nothing to worry.

      I would suggest - you consult a chartered accountant with your form 16 so that they can double check with the IT department to ensure that everything is fine.

      Anand

      Delete
  24. In relation to above..Getting a succession certificate will cost me around 20000 which is far more for an assessee having an income of less than 200000..

    ReplyDelete
  25. Hi Anand,
    I have an assessee whose id and password has been set up by someone not known to him..I tried using the 3 options listed under the forgot password option:
    1)Provide e-filing acknowledgement number and bank details - this is the first year so no acknowledgement number can be provided.
    2)Upload Digital Signature-Cannot upload digital signature as the same was not registered by the one who made the id and password..
    3)Secret Question- Cannot answer the secret question as the id is not made by me..
    After that i forwarded a mail to validate@incometaxindia .gov.in giving all my details i.e pan number,date of birth,address,however the same will be sent to the registered id..
    So how can i cancel the registration or get a new password,
    please help..last date of return filing is coming..

    ReplyDelete
    Replies
    1. Hi anonymous,
      Your situation is peculiar. Does the website have any contact number that you can call up? did you try to register once again?

      Anand

      Delete
  26. Hi anand...I pay around 2.5 lakh tax for income of about 12 lakh. I spend rs.8 lakh towards all expenses related to treat my wife for end stage renal disease...can I get
    tax relief ......and suggest me how do I go about....

    ReplyDelete
    Replies
    1. Hi Rajendran - I think you can utilize Section 80DD and 80DDB but they will require a detailed medical report and some supporting documents from the doctor. See this article: http://anandvijayakumar.blogspot.com/2010/04/income-tax-in-india.html

      There are limits on how much tax relief you can get using these two sections but I think something would be better than nothing. I also suggest you consult a good chartered accountant or tax consultant who can help you prepare your tax returns efficiently and utilize any other tax exemptions that may be available (unknown to the common man like you and me)

      Best wishes and my prayers for your wife's recovery

      Anand

      Delete
  27. dear anand,
    pl. help me, my mother in law expires on 29.05.2011, before her death at the financial year 04.04.2008 she sold her house 15 lacks but did not file any return to the income, she have income tax, she also have a pan card, today a income tax officer phoned me that the huge amount shows in my Mother in laws account and called me to the Income tax office, i told him that the amount collected after selling the house and also told me bring the sell deed of that house, what can i do?

    ReplyDelete
    Replies
    1. Hi Santanu - Sale of a property attracts income tax depending on when the property was purchased.

      If a house is sold within 3 years of purchase, the entire profit will be added to your annual income and taxed as per the prevailing tax slabs.

      If a house is sold after 3 years of purchase, the indexed amount of profit will be taxed at a flat 20%.

      Sale price - Indexed cost of house = profit. Out of which 20% has to be paid as tax.

      Index cost of house = original cost of purchase * (indexation rate for year of sale / indexation rate for year of purchase)

      May be the IT Officials want to check when the house was purchased, what the profit was etc. I would suggest you talk to them find out more details before handing over any documents or paying any money. Better consult a good chartered accountant for good advise on how to handle the situation

      Delete
  28. Hi Mr. Anand, I am a retired C.G.Officer & Pensioner. I own a Residential Property in my name and have let out a portion of my house for rent& furnished my PAN and accounting the Rent received in my Income. Can I claim deduction for the property Tax paid& for Rs.30,000/= for the repairs done during the F.Y.concerned ??? ; RAJAMANI

    ReplyDelete
    Replies
    1. Mr. Rajamani - No, you cannot. As per our tax laws only 70% of the rent you receive is taxable and the remaining 30% is for you to meet these repairs or taxes.

      Read this article: http://anandvijayakumar.blogspot.sg/2013/07/everything-you-ever-need-to-know-about.html

      It will help you understand about house rent and taxation. Also, I recently wrote a book about Indian Income Tax that explains everything you need to know about the various Taxation laws in our country. You can check it out here: https://www.distribly.com/product/1688?aid=15702

      Anand

      Delete
  29. Hi Anand, good informative article. I have a question. I received my IT returns through a cheque. I was out of station so asked my dad to deposit the cheque in Hdfc bank,chengalpet(kancheepuram dist). I believe the cheque is from sbi but not sure of the place. It is more than 15 days and it is not yet encashed. I will ask my dad to go and check in bank but do you have any idea how long it takes for cheque from IT dept to clear?

    ReplyDelete
    Replies
    1. Anonymous - Most cheques clear within 3-5 working days. I think there is some prob in the cheque. Please ask your dad to visit the bank and find out what went wrong.

      Delete
  30. hello anand
    I have a question
    Can I take a tax saving 5 year fixed deposit now( i.e in feb ) and show it as a tax saving source through my returns in end of march for this financial year

    ReplyDelete
  31. Hi anand , thanks for the awesome post .
    I've read all the coments and you've helped every user query , much appreciate for tht .

    hope ill also get reply fot my questions .

    Im a blogger and most of my income is from online . I havent paid income tax for last year ( 2013 ) .

    My question is , if my total amount earned in 2013 is 14 lakhs , which i've spent around 1lakhs for hosting , domain and design expenses .

    I staying at rental room paying 2000 per month , also I bought assest laptop , mobile , gadgets to help increae my revenue .

    So how much tax should I need to pay ? Can get tax exceptions for the expenses ?

    Also do I need to hire a CA for this ? If yes , how much would I need to pay ..

    What would be the ladt date to pay taxes for last year ?

    Im new to this income tax , sorry for too many questions ..

    Waiting for your reply .

    ReplyDelete
    Replies
    1. Manivasagam - I would recommend you buy my new book which will answer almost all your questions. Download the preview from this link: https://www.distribly.com/product/1688?aid=15702 and you can read it to decide if you want the book which I feel will be very useful for you.

      Yes, you should definitely pay taxes and not paying taxes for an income of 14 lakhs is totally wrong and you can fined as well as jailed for it. Anyways - the first one or two years you may get overwhelmed with things which is fairly normal which is why I wrote the book. Check it out.

      Anand

      Delete
  32. Hi, anand ,thanks for much informative blog ..

    I want to know, if i haven't attached PAN Card to the bank account in which most of the tansactions are made, am i still monitored by govt officials ??

    How do income tax dept know , a person is earning this much, and he didn't pay taxes so far ..

    If i haven't paid tax for last year, but paying for this year, will they check or collect information whether he has evaded from paying tax ?? what will be the fine or punishment ??

    Waiting for your reply

    ReplyDelete
    Replies
    1. Yes Mani vasagam - Tax officials have more than enough resources to track our bank accounts. Your name, date of birth, address and a whole bunch of personal information is more than sufficient to link your bank accounts and your PAN/Tax related info. How they know is something that they will not tell us but they can find which is a fact.

      Yes, they will definitely check if you are evading your taxes and if so, they can penalize you, put penalties and even jail you if the amount you evaded is a big number.

      Anand

      Delete
    2. Thanks @Anand for your kind reply :)

      Delete
  33. Hello Anand
    I am 90 years old and I want to transfer my shares to my children. I am a non tax payee but I file my returns regularly. Could you please let me know the legal implications that I should know.

    ReplyDelete
    Replies
    1. Please refer to this article - http://anandvijayakumar.blogspot.sg/2012/11/how-to-gift-shares-to-our-family.html

      It should answer your question.

      Thanks

      Delete
  34. Thanks so much Anand. This has really helped me.

    ReplyDelete
  35. Hi,
    I have a flat in Bangalore and registered with my name.
    Currently I am living in UK
    I am planning to give my flat for rent, can I take rental agreement on my wife name ? (to avoid income tax)
    If not what could you please suggest some tips.

    Thanks,
    User

    ReplyDelete
    Replies
    1. Hi Anonymous - No you cannot. The rent will be considered as received by the person on whose name the property is registered.

      Delete
    2. Hi Anand,

      Thanks for your quick response, and I would like to know how much is going calculate tax for 18,000/- for month.
      Can I get exempt If I show insurance policies which I am having in india ?
      Thanks,
      User

      Delete
    3. For this rental income - you will need to pay taxes in India as well as any applicable taxes in UK if they tax income earned by the person who is working in UK from other countries.

      You can check out my book that talks about income taxes and how you can reduce your taxes. https://www.distribly.com/product/1688?aid=15702

      One thing you need to remember is that NRIs do not get these tax benefits for insurance policies or investments (Sec 80c) like resident indians.

      Delete
  36. Dear Sir,

    Income Tax amount of Rs. 12K is being deducted from my salary every month. I have Voluntary PF account in which I save Rs. 5K every month. So, this 5K and the PF deducted from my employer adds to Rs. 1 lac of tax saving. Is there a way that I can invest more and still save on tax?

    ReplyDelete
    Replies
    1. Hi Banu - There are numerous options to save tax. I published an ebook last year which will help you save tax and build a crorepati retirement portfolio. You can buy the book from this lin: https://www.distribly.com/product/1688?aid=15702

      You can pay via credit card and download the book instantly. Alternately if you want to pay in Rupees, drop me an email at anandvijayakumar007@gmail.com and I will pass on my bank account details as well as the price of the book in rupees.

      Thanks
      Anand

      Delete
  37. Hi

    I have provided a house rent agreement but my office tax consultant is not accepting it without notarized.
    Rent is 8000 and period is 11 months. Can this be challenged??

    Or is there any other way

    ReplyDelete
    Replies
    1. Anonymous - A formal rental agreement (on Stamp paper) which is signed by witnesses is required to claim the hra relief. By notarized I am guessing he is referring to a formal agreement.

      Delete
    2. Yes .. is it required to notarize the rental agreement (100 RS Stamp paper)

      Delete
    3. Dear sir
      I am working in an semi govt. Organisation,where the the D.D.O. herself is disclosing her extra allowances given in cheques. Moreover with a false medical certificate another colleague is enjoying relief year after year . Both of them have strong connection. What to do?

      Delete
    4. Anonymous - Maybe you should file a police complaint or contact the corruption/vigilance cell. I am not the best person to advise here...

      Delete
  38. I am a salaried person and paid a consolidated amount. I received Form 16 from my employee indicating deduction of amount 9050/- for TDS. I have file ITR online at income tax authority website myself and claiming TDS and have entered my house rent amount for which the software indicate monthly benefit @ 2000/-. I received ITR-V. Now I seek your opinion before posting it to ITR Authority whether I need to accompany any document with ITR-V or not. In case yes, please suggest name of document(s).

    ReplyDelete
    Replies
    1. Pankaj - Yes, if you have entered a house rent for which you are getting a benefit, you have to attach proof to substantiate the fact that you are actually paying the rent as you are claiming. A rent receipt or a rental agreement signed by your landlord that has his/her PAN Card number will be required to claim house rent tax benefit.

      check out my book on Income tax and retiring rich, it will give you all the info you need about our taxes. Check it out here: http://anandvijayakumar.blogspot.com/p/books-by-this-blog-author.html

      Anand

      Delete
  39. Hi,

    My name is Sireesh. I have a query on my income tax.

    I was working in a company called Ness till May 2013. In the year 2012 I claimed relocation expense of 28531/- and my employer even deducted tax on this.

    When I resigned they collected 28531/- back in my final settlement but they didn't mention this deduction in my form-16. Due to this my total income paid by employer is reflecting more than what actually I was paid.

    Now due to this I have to pay tax again on the amount which I repaid.

    Can you help me whether is it employer responsibility to mention the recovered amount in form-16?

    Thanks,
    Sireesh
    8552936324
    shireesh_123@yahoo.com

    ReplyDelete
    Replies
    1. Shireesh - If they recovered it, they would have given you some sort of documentary evidence for the same - right? You can use that to claim the fact that te amount was repaid.

      Yes, it is the employers responsibility but mistakes do happen. If the transactions happened during different financial years then, claiming the deduction becomes tricky. That is why i recommend you consul a good chartered accountant or tax filing service they can help you with it.

      Delete
    2. they have mentioned it in my Full and final settlement. They even didn't consider HRA receipts and medical bill. Can i claim tax for this?

      Delete
    3. If you have proof for HRA or medical bills, sure you can claim. Just consult a good chartered accountant or tax filing service. they wil help u

      Delete
  40. I held some options of my former employer. They informed me around 20-April that they are buying them back and sent me a cheque for the relevant amount. The cheque got credited in May.
    To my surprise, they sent me the Form 16 for the FY 2013-2014(AY 2014-15) and showed this amount as a part of that FY.Since I was not aware that I would be getting this amount by 31-Mar, I now find that I have to pay interest on the delayed amount if I show it as a part of FY 13-14(AY 14-15) My Form 26AS online also shows this amount as a part of FY 13-14.
    Why should be forced to pay interest on the delayed tax. How can I move it to the current FY 14-15(AY 15-16).
    Thanks in advance for your help.

    ReplyDelete
    Replies
    1. Anonymous - If an income was earned during a financial year where the tax was not paid, the interest would have to be paid. The Why it was not paid is immaterial for tax authorities. Anyways, consult a good chartered accountant. Maybe they know some provision in our tax laws that can help you.

      Anand

      Delete
  41. hi anand
    i have a home loan from april 13. i have been paying interest on it from that period and have started paying EMIs in Apr 14. As per income tax rules, i can claim the interest paid on the loan since start of home loan in five equal installments. My doubt is can i claim this deduction in filling the itr now. i will receive the possession of the house next month (Aug 14).

    ReplyDelete
    Replies
    1. The moment you start paying back the bank your loan, you are eligible to avail tax benefits. Since the house is not yet under possession, you cannot avail benefits under Section 80C on the principal but the exemption on the interest - you can start availing right away (from the month you started paying the pre-emi)

      For more details on indian taxation laws, you can check out my book. For more details check: http://anandvijayakumar.blogspot.com/p/books-by-this-blog-author.html

      Delete
  42. Hi Anand,
    I am really in need of help and I hope you can provide me quick help. I am currently working in NORWAY , sent here by my Indian organization - SPAN Infotech. I get my Indian Salary and Norwegian Salary both credited to my account separately. While Span provides the TAX details for there part of salary. The information about Norwegian Salary is not shown in any PaySlips as such.
    We do have a TAX information from Norway counterpart which shows amount and tax deducted.
    -----
    Now the problem. The Norwegian Salary is provided to our Indian organization and then they credit the amount to us after many other deductions as per company.
    Suppose our Norwegian Salary is 50,00,000INR, which is sent to SPAN in India ; of this we get 12,00,000 INR.
    Now how do I show this in FSI of ITR2 ??
    I know Norway has DTAA with India. Main problem is filling -"TAX PAYABLE ON SUCH INCOME UNDER NORMAL PROVISION IN INDIA " column of FSI ITR2. If I show 50Lakh then I have a tax liability . If I show 12,00,000 then I don't have tax information on this.
    ---------------------------------------
    I can provide you with the Norwegian Tax document I have but there is no attachment option here .

    Please help.

    ReplyDelete
    Replies
    1. Harneet - I am a little confused here. almost all companies DO NOT give indian salary to its staff who are deputed abroad. do you pay taxes in Norway? Why is SPAN Norway sending money to SPAN india and why are they deducting so much? 50 lakhs to 12 lakhs seems like a steep cut.

      Where do you live - currently? Norway or India? If Norway, you are an NRI. Any money you send to India - after paying taxes in Norway is exempt from taxation in India. However, the indian income your SPAN india credits to your bank account is over and above your Norway income you have to pay taxes for this amount also.

      You have to pay taxes only on the amount that got credited into your account. On paper if it is 50 lakhs but you only got 12 lakhs, you need to pay taxes only for 12 lakhs. Can you talk to your employer and try to understand where the 38 lakhs is going?

      If you dont get a satisfactory response, consult a good labor lawyer.

      Delete
  43. Dear Anand ji,

    I was a Central Govt. employee and retired on 31/03/2014. My date of birth is 16/03/1954. Will I be considered as "Senior Citizen" for the AY 14-15 and eligible for tax rebate for 2,50,000.

    Please reply at the earliest.

    ReplyDelete
    Replies
    1. Dear Uncle Ji,
      As per my knowledge. you are eligible for senior citizen tax slabs only if you completed 60 before the assessment year. Based on your date of birth, you completed 60 years only in March 2014 which coincides with your retirement year as well as the end of financial year 2014. So, this year you will not get senior citizens benefit. From next year onwards (financial year - April 2014 to March 2015) you can avail this.

      Anand

      Delete
  44. Hello Anand, I am filing e-return on the government website, In Deduction Under section VI A —> C.7 80DD, I am adding 50000 amount but in the final Refund, amount doesn’t change. i.e. if I add or remove 50k under 80DD (Dependant Handicap) the refund amount is same. How the refund works in this case
    Please advice.
    Thanks

    ReplyDelete
    Replies
    1. The refund will only be updated if you are eligible for a refund. If your employer deducted TDS this year 40,000 rupees and your tax liability after entering this section tax benefit is only Rs. 30,000 the refund will be 10,000 rupees. If you havent paid extra taxes, you wont get a refund.

      Check out my book on indian income tax where I have explained about how to calculate your taxes. It will help you. http://anandvijayakumar.blogspot.com/p/books-by-this-blog-author.html

      Delete
  45. I am a salaried employee. I have filed tax returns on time. After filing returns, recently, I have received a ledger document (in the Excel form) from my broker, containing loss in options and shares trading. Now, I want to file revised returns. Please clarify below questions.
    Where I can show this loss in revised returns?
    What form I can use for revised returns?
    Can I allocate part of the loss this year and remaining next year. If yes, how I can show it.

    ReplyDelete
    Replies
    1. Offsetting losses is not straightforward and its better if you consult a good tax filing service or chartered accountant. They can help you.

      Delete
  46. I am salaried employee,Due to some reason i could not file the return for AY 2012-13 on time and but the tax was also due for AY 2012-13.
    On 19/9/2014 i have paid the taxes due including interest for the year AY2012-13
    But not able to submit return online as it shows the message that time limit for AY 2012-13 is over
    Please tell what to do now?

    ReplyDelete
    Replies
    1. Hi - Filing of online returns is not available for previous years. Contact a good chartered accountant or visit the IT Office in person to file your returns

      Delete
    2. Thanks for the quick reply

      Please let me know whether there would be any penalty on filing the income tax return late

      Delete
    3. Hi - If there is no outstanding tax due and you are just filing your taxes late, then I dont think there is any penalty. But, if there was a tax outstanding that you should've paid in that financial year, you will be penalized depending on how much money was due as taxes

      Delete
  47. Hi Anand,

    I resigned from Company 'A' on Sept 5th, 2014 and will join Company 'B' on 20th Oct, 2014 as a contractor (3 months till 18 Jan, 2015). My
    monthly income will be Rs.24,600.

    Please confirm the following:

    a) Is the employer 'B' supposed to deduct tax or is my income exempt as I am a contractor? He has told me that P.F would be deducted and there
    would be no tax deductions.

    b) When I file my IT returns next year, does it need to include the contractual income of 3 months from company 'B'?

    Regards,
    Jimmy

    ReplyDelete
    Replies
    1. Deducting Tax is optional for small companies with very limited headcount of employees/contractors. So, irrespective of whether they deduct epf or not, you will need to file your tax returns and include that income your tax calculations.

      Read my book on indian income tax to learn more about it: http://anandvijayakumar.blogspot.sg/2013/12/your-complete-guide-to-indian-income.html

      Delete
  48. Hi Anand,

    When a person resigns and does not work for a few months or even for a year, how does he make sure that there are no unwanted notices
    from the IT department at the time of IT returns filing? As per my understanding, the IT department is not aware that I have resigned and hence would
    expect me to file my returns every year. My unemployment period would be 6 Sept,2014 - 19 Oct, 2014. I am going to work as a contractor for 3 months from October, 21 and there are no tax deductions.

    Regards,
    Jimmy

    ReplyDelete
    Replies
    1. Irrespective of whether you are employed throughout the year or not, if you have any income for the year you will need to file your tax returns promptly - every year. If you had no income during the financial year - April 1st to March 31st of next year, then you can choose to NOT FILE your returns.

      Delete
  49. Please confirm if the tax guidelines are the same for freelancers.

    ReplyDelete
    Replies
    1. The guideline is the same for all people irrespective of how you earn - salaried, business, trade, freelance etc. As

      Delete
  50. Hello Sir,
    I am a research scholar and availing fellowship from government of India for doing my Ph.D. I am getting HRA of about Rs. 8400.00 (Rupees eight thousand four hundred only). I am living with my brother (who is a permanent staff at the same institute in 5200-1900-20200 payband with rupees 7900 only as basic pay ) in government staff quarter in the same research institute. My brother is paying the HRA (30 % of his basic pay i.e. rupees 2391 only) as per rules. Institute is giving me HRA, is this is wrong or right ? if it is wrong then what can i do for saving my HRA ?

    ReplyDelete
    Replies
    1. Sadiq,
      Since your brother is claiming HRA and since you are not paying any rent to your brother (it is a govt staff quarters and your brother may get into trouble if he tries to sub-rent the place) the amount you receive as HRA is fully taxable. There is not much you can do to save tax under HRA. However, there are other options using which you can save tax.

      For more tax saving options, you can check out my book. For more details check here: http://anandvijayakumar.blogspot.sg/p/books-by-this-blog-author.html

      Delete
  51. HI Anand,
    I am working as Senior Finance Executive in a recruiting researcher firm in Dubai. They want to establish a setup in India. May we treat that office as Cost center for taxation point of view? Also what type of entity is beneficial for my organization i.e Partnetship, Sole business or Company. He is foreigner as per residential status.

    ReplyDelete
    Replies
    1. Hi - Pls consult a good chartered accountant who specialises in company income tax. I am not qualified enough to advise on such matters.

      Delete
  52. Hi Anand,

    I have gone through a medical treatment which cost me around 2 lakhs,I got reimbursement for only one lakh,remaining amount can be eligible for tax deduction?Please share your ideas on this.

    ReplyDelete
    Replies
    1. No the full amount will not be tax deductible. You can use the bills to deduct 15000 rupees from your medical expense bucket but for the rest of the money that you could not reimburse, you have to bear it. You cannot avail any tax benefits on that.

      Delete
  53. Dear Anand,

    I have made TWo FD investments in FY 2014-15 in my wife's name in two Banks. My wife submitted Form 15G with the Banks and Tax was not deducted on the interest accruals of the FD's in her name.However, the interest accrual on the FD's with Bank and deductor TAN details are on display in my wife's form 26AS.

    The interest accruals on the FD's in my wife's name are taxable at my hands for the FY 20145-15.

    My query is : do i have to mention the interest accrual, Bank and TAN deductor details for the FD's in my wife's name in the Form ITR1 (pg2) while filing my ITx return for the Incm Yr 2014-15/Ay 2015-16.

    ReplyDelete
    Replies
    1. If your wife is a home maker and does not have any other income, then Yes you have to include that income in your tax returns. IF she is employed, then she can include that interest in her tax returns

      Delete
  54. hi anand,
    I am having a home loan for an underconstruction flat at kolkata(only property i have). The loan is taken on march 2015 and the probable date of completion of flat is dec 2016.Due to my employment i reside at secunderabad( govt quarters) .right now, i am not getting any tax benefits as it is underconstruction.
    .If i lease the flat on rent as soon as i get possession. What will be the tax benefits i can avail?
    regards,bijaya
    sahabijaya@yahoo.co.in

    ReplyDelete
    Replies
    1. Yes, you can avail tax benefits for a rented out property. You can find more details on how to avail this tax benefit plus the various other tax saving options in my book. Check it out here: http://anandvijayakumar.blogspot.sg/2015/03/your-complete-guide-to-indian-income.html

      Delete
  55. Hi Anand,
    I got a job in Singapore in feb 2015 and will be here till may 2015,so i wont qualify as an nri in either of the financial years.Could you please tell me by when do i have to pay the income tax in india for the two months income i get here of this financial year since i'll be returning only by june?Also please note that i will be taxed at 15% for this period i am here.So what concession do i get as per DTAA and do you have a page where you explained that,since they'll be deducting that only in may when i leave this country as they follow a jan -dec financial year i guess for tax purposes.
    Thanks and Regards,
    Ajay

    ReplyDelete
    Replies
    1. Ajay - As long as the income you earn in Singapore is tax paid to the govt of singapore, you dont need t pay taxes to India on this income. However, as you are here only temporarily, you will have to follow the regular tax year per Indian laws. you will get a form 16 for the income you earned in india from April 2014 to March 2015 and you will need to file taxes in Q3 of 2015 once you are back.

      Delete
  56. HELLO SIR,
    have a great day ahead !!
    i want to transfer 6000 euro to my retired father saving account in india? is there any tax issue for him in india? can u help me in accordance to this?
    thank you in advance.

    ReplyDelete
    Replies
    1. As long as this 6000 euros was properly tax paid income from whatever country you are in, your father need not pay income tax on the receipt of the funds.

      However, once the money reaches his account and he starts earning an interest on his bank account, he would have to pay tax on that interest income

      Delete
    2. thank you sir, for your advise,

      Delete
  57. Hi Anand,
    I wanted to declare investment in my current company, and related to that I had few queries, as mentioned below:
    1. I have my annual CTC as 9 LPA, and the annual basic component is 3.3 LPA approximately. So, what would be my taxable income & take home income, annually and monthly ?
    2.Based on my taxable income, how would be the tax % are calculated?
    3. Out of my taxable income, how much would be tax free amount? And will that tax free amount limit can be stretched further by showing my PPF & HRA ?

    ReplyDelete
    Replies
    1. Avinash - I have explained how to calculate your taxable income as well as tax liability in my book. Based on the info you provided, it is very hard to suggest the tax amount.

      http://anandvijayakumar.blogspot.sg/p/books-by-this-blog-author.html

      Check out the book here. You will get a lot more info about tax saving.

      Delete
  58. Hai Anand,
    I have undergone PG studies on deputation from July 2012. So i have drawn salary from 3/2012 to6/2012 in FY 2012-13 and returns was filed with nil tax. In FY 2013-14, no salary was drawn. But return not filed. My deputation benefits were sanction by Govt only in May 2014. So I claimed salary from 7/2012. While claiming salary for 2/2013, the Treasury officer insisted to pay tax amount for 2012-13 through chalan. hence i paid Rs 36,531 on 4/12/2014 through chalan. Similarly while claiming salary from 2/2014, again tax amount for FY 2013-14 of Rs 31,139 was paid on 2/1/2015. My 26A form shows the above.
    My question whether shall I file return for FY 2014-15 with salary for 2012-13 and 2013-14 received as arrears. My Form 16 from Treasury is like that.
    Or Whether I should file returns for FY 2012-13(revised) and for FY 2013-14 now?

    ReplyDelete
    Replies
    1. Ajith - Ideally, returns must be filed separately for each year but in your case you are saying the form 16 is combined.As this is a complicated situation, I would recommend you consult a good chartered accountant or tax filing service.

      Delete
  59. Hi Anand, I will be filing my returns for my salary income this july. After leaving the company last year where I worked for 4 years, I got the PF. Then, I worked for 2 months in a contract job in a different company and the salary was tax free. All this was received last year. Please advise how I add these two incomes (PF and income from contract job) in my returns (under which section?) in addition to the returns for my earlier job

    ReplyDelete
    Replies
    1. You need to add them both to the Salary/Income component of your tax returns. As there are multiple items to be included to ur tax returns, I would suggest you enlist the help of a tax filing service for easier filing.

      Delete

  60. Hi I am 88 yrs old and received a gift of common stock of an unlisted foreign co operating here in India, by its founder who is my nephew, ie, my brothers son who is an American citizen. Would this constitute a relative? How would this be taxed in the year of receipt if it wasn't sold? And when I sell it?

    ReplyDelete
    Replies
    1. Your brothers son would not constitute as your blood relative so you would have to pay gift tax on the value of the shares in excess of 50,000 rupees. Check this article:http://anandvijayakumar.blogspot.sg/2012/11/how-to-gift-shares-to-our-family.html

      You would also have to pay capital gains tax on the stocks when you actually sell them. depending on when you sell, you may have to pay either long/short term capital gains

      Delete
  61. As a follow up to my previous question, And if I have not disclosed these gift shares in previous returns, how is it to be disclosed now? As it happens the company was sold to another company in April 2015 and the proceeds are to come in installments, some now, some in late 2016. Under the new foreign asset bill? Do I have to pay 30% on the fair market value I should have paid on receipt plus the penalty of 30% in the current returns under the new bill for 2014-15? And another flat 30% short or long (?) term capital gains in next years returns?

    ReplyDelete
    Replies
    1. Please consult a good chartered accountant or tax consultant for help. I am not too sure about this foreign assets situation. Apologies.

      Delete
  62. Hi Mr. Aand I want to file my e return, you know there is a non taxable allowance as transport allowance exemption according to rule 2bb under clause 14 of section 10 @ 800 /- per month earlier but now from 01-04-2015 it is @ 1600 /- per month. For FY 2014-15 , AY 2015-16 at what rate should I claim?

    ReplyDelete
    Replies
    1. This rule is only applicable from 1st April 2015. So, if you are filing your e-returns for the financial year ending 31st March 2015, you have to use 800. For next years efiling for the financial year 1st April 2015 to 31st March 2016, you can use 1600.

      Check out my book on Indian Income tax for more info on tax saving in India: http://anandvijayakumar.blogspot.sg/p/books-by-this-blog-author.html

      Delete
  63. Does giving money to your in-laws in form of cash/check/neft is taxable?

    Dear Mr. Anand,

    I am a working women and working in private MNC. I have cash that I received from my parents, some from my hubby and rest I earned myself.

    I am planning to buy a land for my family and for that we have saved 18 lacs in cash(mixed saving of myself, my husband, my mother-in-law and brother-in-law) and 40 lacs in savings account. Since we never had proper financial planning we never made any fix deposits until June 2014.

    My in-laws lives in other state and I gave this savings money to my mother-in-law and brother-in-law to buy property last year June 2014. Since property deal did not happened for some reason we were unable to make the purchase. My brother in law deposited cash amount to his bank saving account to keep it safe and made fix deposits of the same. From last year I started transferring my salary to my mother in law account every month so that she can save it as we usually spent money in unnecessary things. My mother in-law saves my money I gave to her into Recurring Deposits and FD’s. This also helped save money and gain 1% extra interest as she is a senior citizen.

    Now I am not sure how income tax department will respond to this scenario. Although its my money but what if income tax department ask my in-laws for these transactions; how are they supposed to answer them? We did not gave any thought to this situation at that time and made NEFT from savings and also deposited cash to savings and made FD’s.

    Though we always pay our taxes in time and open to pay any applicable taxes. I have verified that my mother-in-law and brother-in-law’s income on FD and RD does not comes in tax slab. Me and my husband already paying taxes regularly on time.

    My question here is:
    1)… If income tax sends any notice can my in-laws show my financial data(salary statements, income tax returns) for NEFT transactions made from mine and my husband account?
    2)… We are saving money since past 13 years in gold and mostly cash. Since my brother-in-law deposited whole cash into his bank savings account in Fixed Deposits. How is he supposed to answer Income tax department. We saved 5–10000 every month in cash and never touch cash savings and kept it for emergency or natural calamity. But how to prove that to income tax people?
    3)… Will they consider my income statements for my mother-in-law and brother-in-law or do we need to pay taxes on all the money? Or should I ask them to transfer all money back to me?

    Best Regards,
    Seema Kansal

    ReplyDelete
    Replies
    1. Firstly, when the person earning the income is paying taxes on the income the amount is not taxable if given to a close family member like brother/sister/parents/parent in laws. So, if you and your husband paid taxes on all your income and then this money was transferred to your mother in law or brother in laws account for legal purposes, then they do not need to pay tax on the amount. However, whatever interest that was earned on the amount (through FD or RD or savings acc) is fully taxable.

      So, your brother in law has to pay taxes on the interest he earned from the 40 lakhs FD but the 40 lakhs is not taxable as long as you paid taxes while saving up 40 lakhs. Same for your mother in law.

      All financial transactions are monitored by the tax authorities. As long as you have a valid explanation for why funds were moved and have paid taxes on the income and interest, you have nothing to worry about.

      Delete
  64. Hi Anand,

    Iam in a catch 22 situation and need your inputs on how should I tackle it. I have been filing tax since 2005, however, for the assessment year 2011-12, I missed filing return. My gross income was 502000 (includes deduction and investments). TDS was deducted. So in a way I did pay the taxes but the return was not filed. I got a note from the Income tax department stating that they are unable to locate my return and would like to know my inputs.

    I guess, in 2012, there was a change in IT law regarding filing returns. Income of 500000 (after deductions), there is no need to file returns. Since I received a note few months back, should I file the returns, or should I state that my income after deduction was less than 500000. I usually get my return filed by one of the employees in the finance dept. of my firm. He has suggested me to just state that the income was less than 500000, but Iam skeptical about this. Please guide. Thanks.

    ReplyDelete
    Replies
    1. Usually tax laws dont apply retrospectively. You can consult a good tax consultant and ask them to help you. You should explain that you missed filing and since you already paid the TDS, you will most likely be warned and ignored. If you had tax dues then you would have been in bigger trouble.

      The minimum amount is 2.5 lakhs and not 5 lakhs

      Delete
  65. Hi Anand,
    Last month my sister gifted me rs 2 lacs cash, shouid I have to pay tax for that?

    Thank You.

    ReplyDelete
    Replies
    1. For the first 50,000 - No

      Remaining 1.5 lakhs has to be added to your annual income and tax has to be paid according to the tax slab you fall under

      Delete
    2. Hi Anand, Gift of any amount from blood relatives are exempt from tax rite?

      Thanks

      Delete
  66. Dear Anant, I need a quick advice, how serious is to manipulate rent agreement to get tax benefits and what are the probability to get caught. I had always submitted correct document but many of my colleagues are making fun of mean and suggesting me to make alittle modification in my registered rent agreement to save tax (I can easily save 20 thousand if I change actual rent paid with HRA amount). I am in dilemma and felling like a stupid when everyone next to me is saving money by small change in document. They claim what is the probability of HR or IT department to verify your documents when there are crores of tax payers?

    ReplyDelete
    Replies
    1. Firstly - The chances of getting caught are very low - less than 1% of the folks that do this kind of cheating actually get caught. Even the IT Officials know that most people cheat on this HRA thing but they dont have the time or resources to investigate every case.

      Secondly, on getting caught the penalties could be very severe and you may even have jail time.

      OF course, the decision is yours. I would recommend you consider saving taxes via the proper route rather than doing this cheating. Consider buying my book on Indian Income Tax and how to utilize the various options to legally save taxes.

      Delete
  67. Hello Anand,I am lecturer. I don't know about tax savings.One of friend of my brother is a CA he told that he will file my return and provide me maximum benefit but when I get mail there is lot of tax deducted which can be saved.
    I need your help can I file revised return to get excess tax deducted back.
    Waiting for your reply.

    With regards

    Praveen Kumar

    ReplyDelete
    Replies
    1. Praveen - If the tax filing was wrong, you can always do an amendment.

      I have published a book on Indian income tax which you can use to verify if all your tax saving options are used and use them if applicable. See here: http://anandvijayakumar.blogspot.sg/2015/12/new-year-special-offers-on-books.html

      Delete
  68. Hello Anand,

    I am looking forward to buy a site (vacant land) for investment, i have a regular job and also have some business income.

    Is there a way i can save on taxes on the interest/principal i pay for this?

    Thanks

    ReplyDelete
    Replies
    1. There are no tax benefits for buying land.

      You seem to have a lot of questions on Income Tax. I have published a book on Indian Income Tax that can help you with all these queries. Check here: http://anandvijayakumar.blogspot.sg/2015/12/new-year-special-offers-on-books.html

      Delete
  69. Hello Anand,

    Suppose if i have a tax amount outstanding to be paid however i don't have money in my hand to pay those taxes as the money was utilized and exhausted due to some other pressing needs.

    Can i file my tax returns and then pay the taxes later at a future date, may be with some interest?

    Thanks

    ReplyDelete
    Replies
    1. As far as I know, you have to make the due tax payment while filing tax returns.

      You seem to have a lot of questions on Income Tax. I have published a book on Indian Income Tax that can help you with all these queries. Check here: http://anandvijayakumar.blogspot.sg/2015/12/new-year-special-offers-on-books.html

      Delete
  70. Hello Anand,

    I have several bank accounts and have a tendency to transfer money within my own accounts as per needs. Also sometimes my brother and father sends me money to my accounts if i need it (this should not be taxed on me as they are my blood relatives).

    Now, my question is - will the income tax authorities get confused from these internal money transfers (within my accounts) and the money i receive from my close relatives? Is there a chance that they will miss understand this to be some kind of new income i am getting?

    If yes, is there anything i can do to avoid this?

    Thanks

    ReplyDelete
    Replies
    1. As long as the source of the income is not hidden and you pay tax on your income, transfer of funds between accounts should not be a problem.

      Even if there is an inquiry, you can always show your bank statement to substantiate the truth

      Delete
  71. I am a company that is currently splitting my employees’ wages into basic, special allowance, etc. for the purpose of tax. I need to show to the officer that this is allowed under the Employees Provident Fund Act and that it does not violate section 12. Is there any case law wherein a practice of splitting up the components of salary for tax purposes has been allowed by Courts?

    ReplyDelete
    Replies
    1. Sorry, I am not the best person to answer on organizational salary or tax matters. Pls consult a qualified chartered accountant

      Delete
  72. Hello ANAND
    If share of father's property's share is received in DD and cash, can I tell the income tax department the total amount I got in share?

    ReplyDelete
    Replies
    1. Sorry, am not sure I understand the Question clearly. There is no question of Can I, if you inherit property or income from sale of property from parents, the same has to be declared to the tax officials to avoid problems in the future

      Delete
  73. Hai Anand, iam working as a teacher with taxable income and shown the savings. Other than that through e tutoring iam getting nearly fifty thousand, the e tutoring company after deducting tax paying me the amount. I have given my true PAN no. to them but with a fake name of myself. Then how to show this income in my tax returns.

    ReplyDelete
    Replies
    1. This will be considered forgery - giving wrong information for tax purposes. I would recommend you give your correct name to avoid complications in the future

      Delete
  74. Hi anand,

    I know nothing about tax....recently i have started working in US and my salary is credited to JP morgan account open by the company however every salary that i received, i transfer to my account in india through western union....i want to know if i will be tax?

    ReplyDelete
    Replies
    1. If you are already paying taxes for that income in USA, India does not do double taxation. However, once that money reaches the india bank account and starts earning interest or if you invest that money, that income will be taxed per indian tax laws.

      to learn about income tax in india check out my book. see here: http://anandvijayakumar.blogspot.sg/p/books-by-this-blog-author.html

      Delete
  75. Hi Anand ,
    I have very small query. I am wondering if you could help me. I have query regarding Tax free FD.
    Lets say I have opened tax free FD of 1,00,000 in this financial year, can I open again new tax Free FD of 1,00,000 in next Financial year. Or there is limit of 1,50,000 for Tax free FD for 5 years?

    Thank you in advance

    ReplyDelete
    Replies
    1. You can invest up to 1.5 lakh every financial year.

      Delete
  76. Hi anand,
    Individuals with only pension from salaried income or individuals with only income from other sources- are tax preparation fees to accountants deductible?
    Thanks

    ReplyDelete
  77. Hi Anand,

    I have a query related to taxes.

    My wife is a new freelancer. Her clients mostly make their payments via Paypal. Initially she received some of her payments using my paypal id as she was not having a PAN card. I wanted to check if it will be a problem if my wife files the taxes for this amount (as it is part of her income).

    Thanks in Advance.

    ReplyDelete
    Replies
    1. Hi,

      Yes, paying taxes on someone else income is illegal. As the money came to your account, theoretically it could be considered yours and could cause problems to your wife.

      Ask her to apply for a pan card and use her own paypal acc and file taxes the proper way

      Delete
  78. hello anand ji
    i am Indian. i need your advice

    i am working in medical college at nepal and i am paying tax in nepal. please explain me how can i file ITR to show my income which is from nepal
    please give me some idea so that i can file ITR by my self

    ReplyDelete
    Replies
    1. if tax is already paid in nepal, you dont need to pay tax again in india. However if you invest that income in india to generate additional income, you need to file tax returns.

      you can do self filing in income tax dept website

      Delete
  79. Hi Anand,

    Thanks for the detailed answers on everything related to tax and investing.
    I have two questions:
    a. If I have my entire earning during a financial year in another country where I pay tax but I invest my savings in India and I dont sell my investment in that year. What are my tax implications?
    b. I earn in Saudi Arabia where there is no income tax. I transfer that earning to India and invest it. What are tax implications?

    ReplyDelete
    Replies
    1. The amount you invest is not taxable but the profits you generate are taxed. Profits like dividend, interest income, capital gains due to selling of assets etc need to be added up and tax needs to be paid on the same every financial year.

      If investments were not sold in the current year when you sell them in future, the profits get taxed accordingly. Check out my book on indian tax laws and how to save tax legally - https://anandvijayakumar.blogspot.sg/p/books-by-this-blog-author.html

      Delete
  80. Hi I am karthik. I have left India in Sep 19,2013 to take my masters in Taiwan and Finished it in July 2015. After that I have started working for a Taiwanese company from August 2015- Oct 2016. My contract period for first year was Aug 2015-August 2016 and next contract period was August 2016-Oct 2016. In between I have visited India only for 10 days in Feb 2016. After that I have been relocated for that company's India branch in Nov 2016. I have analysed my residential status and I am resident of India for the financial year April 2016-March 2017.My query is that the income I earned in Taiwan is taxable and if its so the whole income I earned will be taxable or the income for the second contract or the income earned from March 2016- Oct 2016.My company already have deduct my TDS and I dont understand them more clearly. Need help in this. ?

















    ReplyDelete
    Replies
    1. As long as the income you earned in Taiwan was tax paid, it will not be taxed again in India. Only the income you earn as part of your employment in India will be taxed.

      Delete

© 2013 by www.anandvijayakumar.blogspot.com. All rights reserved. No part of this blog or its contents may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the Author.

Google+ Badge

Google+ Followers

Followers

Popular Posts

Important Disclaimer

All the contents of this blog are the Authors personal opinion only and are not endorsed by any Company. This website or Author does not provide stock recommendations. The purpose of this blog is to educate people about the financial industry and to share my opinion about the day to day happenings in the Indian and world economy. Contents described here are not a recommendation to buy or sell any stock or investment product. The Author does not have any vested interest in recommending or reviewing any Investment Product discussed in this Blog. Readers are requested to perform their own analysis and make investment decisions at their own personal judgement and the site or the author cannot be claimed liable for any losses incurred out of the same.