F.A.Q on Indian Income Tax Laws

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Cost Inflation Index For FY 2007-08 Notifed!
2007-08-04 18:03:00
News You Can Use The Cost Inflation Index for Fy 2007-08 is at 551 . For complete chart , read this post. The cost inflation index for FY 2007-08 was notified as under NOTIFICATION NO. 214/2007,... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
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How To Get Your TAN or PAN Cancelled?
2007-08-03 08:23:00
My ltd. company has acquired another company in Fy 2006-07.I would like to know the procedure of cancellation of TAN and PAN of the merged company since the acquirer company will now file all... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
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How To Comply With Income Tax Formalities In Case Of Deceased Person?
2007-08-03 03:10:00
In my company one of Director has expired on 27.03.07. He was earning income from salary, shares, interest. and he files return as individuals as well as HUF status.Now the query is: In case of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
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Is Interest On NRE Fixed Deposit Taxable?
2007-08-01 17:02:00
US dollars earned as NRI was converted into rupees and deposited in the bank within 3 months of arrival in India for the fixed period of 5 years @8% interest on an annualised basis . Is the interest... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
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Can Claim Of Dedcution /Exemption/Refund Be Made After Lapse of More Than
2007-08-01 03:26:00
I am working in an MNC and I have paid tax of 24,000 in the Financial Year 2005-06. I had actually made investments worth 90,000 before 31st March for which I didn't claim deduction. When I filed the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
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Saral Form 2D In Excel Format!
2007-03-30 19:25:00
As you must be aware , CBDT had introduced many new forms and abolished some of the old forms.If you do not know , click here. Sara l 2D the old form is still in practice and in my opinion, individuals (in fact non corporate tax payers can use this form.This form is really"Saral" because unlike new forms , you do not have to file cash flow statement. If you want to get Form 2d in excel format , click here.
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What Is The Diffrence between PIO and NRI?
2007-03-30 03:42:00
Hey your blog is excellent and way better than most sites i have seen keep it up !!what is the difference between NRI and PIO?Is there a different set of rules for PIOs?I have been filing returns as NRI for the last couple of yrs on income from other sources from moneys recd on death of father and grand mother.What does one do when his/her status changes from NRI to PIO ? When one takes a citizenship of another country are the rules same ? And what changes do i need to do in my returns ? trupticarny@.......com There is no difference between Non Resident Indian and Person of Indian origin as far as the Income Tax Act is concerned. Both have got the same meaning and relief.Non Resident Indian is defined in Section 115 C of Income Tax Act "e) non-resident Indian means an individual, being a citizen of India or a person of Indian origin who is not a resident.Explanation.A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was bor...
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How to Confirm If Your TDS was deposited by Deductor?
2007-03-29 05:22:00
Thanks to online initiative taken by the government, now anyone whose tax has been deducted at source can VIEW if the tax deducted is deposited with the government . Do you want to view? This facility is being provided by NSDL through which Tax information network initiative is being implemented. Following is the excerpts of the "how to " given on NSDL website . Follow these steps and , you will be able to view tax deduction made in your case.This is important because many a time , tax is deducted by the deductor , but not deposited to the government in time. this leads to dis allowance of tax credit and further lose of interest etc. So here are the excerpts:TIN facilitates a PAN holder to view its Annual Tax Statement (Form 26AS) online. Form 26AS contains details of tax deducted/collected on behalf of the taxpayer by deductors/collectorsadvance tax/self assessment tax/regular assessment tax, etc. deposited by the taxpayers (PAN holders) Steps for viewing Tax Credit1. Online Re...
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How Can A Non Resident Get PAN?
2007-03-27 05:37:00
Now that CBTD has allowed Non Resident to get a PAN , everyone who is Non resident should get PAN because for most of the financial transaction, PAN is mandatory in India.The circular issued by System wing of CBDT is given belowPAN Circular No. 4 Dated: 11.10.2006 “Following guidelines are issued to facilitate the allotment of PAN to citizens of India residing outside India, foreign citizens and other persons (like companies/trusts/firms) having no office of their own in India: I. Citizens of India residing outside India and foreign citizens Service providers shall accept applications from these categories of natural persons (individuals), without insisting on details of a representative assessee. Details of addresses and proofs required for identity and address in such cases will be as per Annexure "A " enclosed II. Other persons (like companies/trusts/firms) having no office of their own in India: Service providers shall accept applications...
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Personal Loan Utilised For Higher Eductaion Eligible For Deduction!
2007-03-26 04:48:00
I am working professional in software company. I am doing part-time MBA for which I have paid a fees of 80,000/- during current financial year of 2006-07.For that I took a personal loan & not education loan from ICICI bank. Will I get any tax benefit? komalfriends@rediffmail.comThere is nothing in Section 80E of the I T Act which states that you have to take educational loan from banks. Rather the word used in section is LOAN and used for the purpose of higher education. Section 80 E states"80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education.(2) The deduction specified in sub-section (1) shall be allowed in computing the total income...
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Seven Years Exemption From Wealth Tax to Non Residents or PIO!
2007-03-25 13:38:00
I will return to India for permanent settlement in June 2007.Am I exempted from wealth tax for the next seven years?Please explain the existing wealth tax rule for bank deposits. purackal@hotmail.comSection 5 of the Wealth Tax Act is regarding the exemption granted to certain types of case. Sub-section (v) of section 5 deals with the cases of Non resident or Person of Indian Origin returning India with the intention to settle permanently in India. The provision is clear and given as under"in the case of an assessee, being a person of Indian origin or a citizen of India (hereafter in this clause referred to as such person)] who was ordinarily residing in a foreign country and who, on leaving such country, has returned to India with the intention of permanently residing therein, moneys and the value of assets brought by him into India and the value of the assets acquired by him out of such moneys within one year immediately preceding the date of his return and at any time there after:...
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Can You Avoid Tax Collection At Source ?
2007-03-25 08:39:00
I m proprietor of a firm having turnover 2 crore.we are purchasing iron scrap on which we have to deposit 1.1% TCS on sale against Form 27C. We deposit Form 27 C on or before 7th of every month. I would like to ask that what is the last date to receive Form 27C from our clients. er.harkeenkaur@gmail.comThe last date for collecting the tax at source is the date on which you , as seller ,made entry in your books of accounts as due for any purchase or at the time of receipt of amount of purchase from any party , shall collect the tax.Section 206 C enjoins your responsibility in following words"206C.(1) Every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of a........."Therefore, if any declaration in form 27C is to be deposited to you by any purc...
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Should You File the Return IF TDS Certificate is Lost?
2007-03-25 07:17:00
I have lost the original form 16 issued by my employer. In such a scenario what are the alternatives for filing tax return as I am unable to attach the Form 16 with my return. mainakdas@.......comYou should do two things1. File the Return without the said TDS by showing the income on which that TDS was done and claiming the TDS .Now the return shall not be taken as defective for the want of TDS certificate. Moreover, you can claim within two years for rectification of your total income . Section 139(9) of the I T Act effective from 1.4.2007 states "Provided that where the return is not accompanied by proof of the tax, if any, claimed to have been deducted 90a[or collected] at source, the return of income shall not be regarded as defective if(a) a certificate for tax deducted or collected was not furnished under section 203 or section 206C to the person furnishing his return of income;(b) such certificate is produced within a period of two years specified under sub-section (14) of s...
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When Is Exemption u/s 54F Not Allowable?
2007-03-25 06:46:00
I had purchased a plot in Greater Noida in 1997 from a developer. I paid full consideration and the possession was taken in Oct 2003. Got the same registered in my name in April 2005.I want to sell the plot and buy a big size apartment for my family . When can I sell the same and buy an apartment for me and get the benefit of LTCG. Is it now or after April 2008 ?I also own one apartment in joint name with my wife in NOIDA . Will it come in way of claiming section 54 benefit when I sell the plot to buy big size apartment.Please advise me on Tax issues involved and most appropriate course of action.rajesh.chopra@db.comIf you paid full consideration and taken possession in 2003 , even without registration, the land if sold after 2006 , shall be treated as Long Term Capital Gains. You need to read this .Since you will be selling Land , you can claim exemption u/s 54F under which if you have more than one house on the date of purchase of new home, then only you are not eligible for exem...
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What Is Disability as Per Income Tax Act?
2007-03-25 05:10:00
What is the definition for physical disability as per the income tax law? If a person does not have 100% vision for one of the eyes, does that treated as physical disablity? praseed_g@yahoo.comIt is important for a person to know the definition of physical disability on account of which certain deductions are allowed u/s 80DD , 80DDB and 80U of the I T Act which states:"disability shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), and includes autism, cerebral palsy and multiple disabilities referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);"Therefore , it is important to know what Section 2 of Persons with Disabilities (Equal opportunities, Protection of Rights &Full Participation) Act, 1995 is Definiti...
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Tuition Fee Not Allowed For Self Eductaion!
2007-03-25 03:58:00
I am a salaried employee. I have paid Rs.30,000/as fee at IIT Bombay for short term course. IIT issued receipt for the same. When I claimed this amount for exemption, accounts officer said that tuition fees paid for the children of the employee is exempted.'Is fee paid to IIT for self by a salaried employee is exempted ? clp@easy.comAccounts officer has rightly stated the provision.Section 80C(xvii) states as under "80C. (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub-section (2), as does not exceed one lakh rupees...................2(xvii) as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,(a) to any university, college, s...
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What Are TDS Rates For FY 2007-08?
2007-03-24 18:32:00
The rates are valid upto May 2008(Generally) and at present waits to get assent from Parliament.Tags: TDS
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Interest on Home Loan From Individual Is Allowable U/s 24 ,But Principal is
2007-03-24 05:53:00
The principle repaid and the interest paid for the purpose of a housing loan is given some benefits in the IT. I want to know whether these benefits are available only for the housing loan taken from banks/ financial institutions or for loan taken from any source like individuals/ banks as personal loan etc. rajeshgudipudi@yahoo.comGood question. The interest allowable u/s 24 of the I T Act is allowable even if the loan is borrowed from an Individual whereas deduction u/s 80C is allowable only in case of specified source of loan .Section 24 puts only condition that a certificate has to be issued by the Person from whom loan is borrowed .The excerpt from said section is :"Provided also that no deduction shall be made under the second proviso unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, o...
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Last Day of Filing Return IS Sunday,Will I get Carry Forwd OF Losses if Ret
2007-03-23 04:50:00
The last date for filing of Income Tax Return of Individual assessee was 31-07-2005 for A.Y. 2005-06. The return was filed on 01-08-2005 as there was Sunday on 31-07-2005. Whether carry forward losses of said A.Y. can be set off against current A.Y.nitinkumsgl@rediffmail.comThis is very common anxiety for all person who did not file Return till last date and last date happens to be a holiday. Fortunately , there is laws under General Clauses Act 1897 ,which clears the confusion. As per Section 10 of the said Act , if last day happens to be a day on which government office or court happens to be closed, next day on which the office opens is the last date. The said section is given below"10. Computation of time.- (1) Where, by any (Central Act) or regulation made after the commencement of this Act, any act or proceeding is directed to allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day ...
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Lost TDS Certificate? Apply For Fresh One!
2007-03-22 04:40:00
My client has deducted TDS from payment. I have lost the same. How to find out how much tax my clients have deducted and deposited to income tax department. whether I can find out from my PAN. babhide@mail.comSince , your problem is that TDS certificate has been lost, you can apply for the fresh TDS certificate as per sub-rule 4 of Rule 31 of IT Rule "(4) Where in a case, the TDS certificate issued under this rule is lost, the person deducting tax at source may issue a duplicate certificate of deduction of tax at source on a plain paper giving necessary details as contained in or , as the case may be." Right now there is no facility for online checking of tax deducted by your client . However, in near future the facility is going . You can keep in regular of the touch with the NSDL which is implementing Tax Information Network for the government. Tags: TDS
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How to Change or Make Correction In Allotted PAN?
2007-03-21 16:46:00
Whether the old Pan Card is required to be surrendered in case of a women citizen if the PAN remains the same after marriage & only there is a name change.g_karandikar@times.com The PAN is Permanent Account Number. There is no need to change the number allotted to the woman, however if she has legally changed her name or want to change her name , it is best to surrender the PAN and apply a fresh one. If however , you want to change only address and legally name has not been changed even after marriage, I shall advise you to get the address change only. For all these , you can download form from here.Following are the FAQ given on NSDL site . When should I submit the application in the form "Request for New PAN Card or/and Chan g e s or Correction in PAN data"?Ans. You can submit the application in the form "Request for New PAN Card or/and Changes or Correction in PAN data" in the following cases: When you already have PAN but want a new PAN card, When you want to make some ch...
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How to Give Gift to An NRI Without Any Problem!
2007-03-21 04:24:00
My son is an NRI and working in the US. Can I give him a gift of Rs. 5 lakhs from my retirement benefits and deposit the same as a Fixed Deposit in bank in his name as a joint account with my name as second depositor.? What will be his or my tax liability on the interest earned? What form is to be filled by him (Form 15G?) to avoid tax deduction at source? pevenugopal@hotmail.comRelax! You can give any amount of gift to any body who is your relative ,not alone your son, without any implication of tax either on you or the relative whom you gift.In my opinion, you transfer the money to your son by account payee cheque to your son's bank and let him deposit the money . A father has all the freedom to transfer the money to his son under Indian law with no hindrance. However, the A.O may very well doubt your intention if he finds that the interests are being utilised by you but credited in your sons name or he thinks that you wnated to reduce the burden of interest in your hand and the...
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TDS on Gross Amount Including Service Tax!
2007-03-20 03:38:00
Whether TDS has to be deducted on the Gross amount of Bill, inclusive of service tax and sales tax if any, under section 194I (Lease rental Payments). Or it is applicable only on the Income Portion. manesh_jose@yahoo.comOurs is a Pvt. Ltd company. We make some payments towards taxi hire against the bills received from party and the party in his bill include 12.2% service tax. When make payment, we deduct TDS 2.244% on total billed amount. i.e we deduct TDS on Service Tax & Edu. Cess also.I would like to know whether we should deduct TDS on the amount excluding service Tax and Edu. Cess OR on the gross billed amount.sobhana@.....comI have a Invoice from a shipping line ( vendor in my case ) wherein service tax is included - while deducting TDS do I include the service tax amount or do I exclude the same ie the service tax amount ? sbanerjee@...ti.comFor a deduct or (TDS) who has to make some professional payments on which service tax is levied. Does he need to deduct the TDS on whole...
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Fellowship /Scholarship Is Exempt From Tax!
2007-03-19 18:02:00
I completed a training fellowship in Singapore in 2006-2007. The total duration of the fellowship from May2006 –November 2006 was 186 days. I had received a monthly stipend to take care of my stay and sustenance. I could save some amount which I deposited in my savings account in India after returning back. The total stipend received by me is not taxable according to Singapore tax laws. Will this amount deposited in my account attract income tax or is it exempt from income tax.?In case the stay in Singapore has not been uninterrupted (visit to India for 10 days in between to attend a conference) will the considerations change? drgajanan2002@yahoo.comSection 10 of the I T Act provides income which are exempt from income tax. Sub section 16 of section 10 is regarding scholarship received by a person. It states :'16) scholarships granted to meet the cost of education;"Accordingly , if you got fellowship for higher education , the amount received as Stipend is not taxable. In my vi...
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Get Dedcution for Investment in Pension Fund ,But Pay Tax When You Get Surr
2007-03-19 17:11:00
The limit for claiming tax benefits u/s 80C is Rs 1,00,000/- . I have certain points about this section which needs clarification : 1) Section 80CCC is now part of the overall section 80C. However, is the sub limit under 80CCC still restricted to Rs 10000 ?2) Further, are HUFs allowed tax benefit u/s 80CCC ? If so, to what extent ??please clarify at the earliest. amitluharuka@gmail.comTill Asst Year 2006-07, the deduction u/s 80CCC was allowed upto Rs 1,00,000 . This was in addition to deduction u/s 80C which was off course not allowed on the same amount which was claimed u/s 80CCC. However, from Asst Yr 2007-08, the deduction is restricted to Rs 10,000. Thus if , you save for deduction u/s 80C and 80CC , maximum allowable u/s 80 C shall be Rs 90,000 only.No, deduction u/s 80CCC is allowed only to Individuals .Please also remember, the deduction u/s 80C is short lived , because when you get back the surrender value or pensions same is taxable in the year of receipt. For ready ref...
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Windows Licence Fee Is Subject TO TDS !
2007-03-18 13:35:00
We have purchased windows 2003 license,i.e only documents,costing around 4Lakhs,and CDS worth 10,000.,and there is no installation,or service provided by them,my question is do we have to deduct TDS for this ? I am in a dilemma please reply and thank you in advance..... : vijai.isr@gmail.comYou have given little facts .However , with some presumption I am replying. In my opinion, the Section 194J is applicable after the amendment from 13/7/2006 by which Royalty has been included within the provision of section 194J . The amended section states as under: "194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of(a) fees for professional services, or(b) fees for technical services, 46a[or](c) royalty, or(d) any sum referred to in clause (va) of section 28,]shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any...
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Deduction u/s 80D Not Allowable For Mediclaim on Parents of Wife
2007-03-17 12:52:00
I am taking one mediclaim policy in name of my Wife ( who is not filing) and her parents. Can I avail the tax benefit for this mediclaim?pradeepk@sgtus.comThe mediclaim deduction is allowable u/s 80D. Sub section 2 of Section 80D states the person on whom mediclaim policy allowable for deduction under I T Act.The excerpt of the relevant provision is as under:"(2) The sum referred to in sub-section (1) shall be the following, namely : (a) where the assessee is an individual, any sum paid to effect or to keep in force an insurance on the health of the assessee or on the health of the wife or husband, dependent parents or dependent children of the assessee;"In my opinion, law makers used the words assessee and then wife or husband and dependent parents, mean that only assessee's parents who may be either husband or wife , is allowable for mediclaim. As such, you may not get deduction for the amount spent on "parents of wife" Tags: Deduction, Income Tax
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Fastest Tax Computation For FY 2006-07 & FY 2007-08
2007-03-17 06:49:00
Presenting fastest Comp utation of tax liability in Fy 2006-07 and FY 2007-08 for Individuals.The input is to be given in Total income field after reducing deduction u/s 80C and other deductions.Capital Gains have been excluded from the computation keeping simplicity in mind and that computation of capital gains is easier . I will be publishing different types of computation of tax including Form 2D which will automatically compute tax in excel format.Please give feedback and any error you find.Tags: Tax Calculators
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How to Compute Turnover In Case Of Future & Options Trades?
2007-03-12 05:21:00
I am a working professional and apart from my salary I have some income in Future s and option transactions and shares. I need to know few this.Since Futures and options transactions are under business income. Can we set of gains and losses against income from salary?How is turnover in Futures and options transactions calculated?? If notional value is considered, even 5-10 transactions will exceed 40L turnover and we need go through tedious Tax audit process. What are documents that needs to be submitted while filing returns of income. Apart from Form 16, will a statement of account for futures and options transactions would be enough? santoshk.sahu@gmail.comAnswer to your first question is Negative. The loss from "Capital Gains " and "Business & professions" can not be set off with income from Salary.The meaning of turnover for in case of transactions in Futures and Options of shares is not defined under the I T Act.In case of derivative trading-Futures and Option- the difference ...
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Budget's Tax Proposals Made Simple!
2007-03-11 13:59:00
The budget , every year , is much hyped event and more so because the newspaper reading class are the one who keeps an eye on all the proposals made by Hon'ble F.M .Rest of the country just ignores even though all are effected by the changes made through budget proposals same way. The Finance Act 2007 proposes following changes which will bring cheers to some and agony to some. Here are the proposals from income tax angle:Tax Rates:Increase the limit by Rs 10,000. So exemptions for different classes are Tax free upto Rs 1,45,000 for Women Tax Free upto Rs 1,95,000 for Senior Citizen Tax free s 1,10,000 upto for rest of Individuals and HUF .Education Cess increased from 2% to 3%.Surcharge 10% if income exceeds Rs 10,00,000. SalaryExplanation inserted to diffuse the impact of the judicial ruling by which there must be a positive finding that there indeed was concession in rent granted to an employee. Now , such concession is being taxed by making the computatio...
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