Skip to main content

Income TAX misconceptions

There are millions of questions on one's mind related to income tax -who should pay them, what are the exemptions, what are the rules?

Given below are a few well known myths and their solutions
 
1 Tax has been deducted at source, I don't have to worry. Just because taxes have been paid does not mean filing tax return is not required. You still need to put the tax deduction amount shown on the Form 16 on your tax return form 2 Filing tax returns is a complex process.

Contrary to popular belief, filing tax return is quite simple. You can fill and submit the returns online, print a receipt, sign it and drop it off at the income tax office within fifteen days 3 Home loan interest I pay is deductible from my income from house property. This is true if you have home loan for a single house. If you have loan on a second house, interest paid on loan can be claimed as a deduction from your income 4 I receive tax exemption on the rent I pay for my home. If actual rent paid is lower than 10 per cent of your basic salary you receive no exemption. Also, you cannot claim any exemption under this section if you live in your own home 5 Section 80C benefits are available only on making investment. You can claim a deduction for the tuition fees you pay for your children (maximum of two) as long as they are enrolled in a full time programme at any institute in India 6 If I avail medical reimbursement, I can't claim relief on health insurance premium.

Tax free medical reimbursement by your employer for your family's medical expenditure is separate from the deduction available under Section 80D 7 The only interest payment I can claim is the interest paid on home loans. There is a section in the Income Tax Act called 80E that allows deduction on interest paid on loans taken for higher education for self, spouse and children 8 Interest I earn on my savings account balance is exempt from income tax.

Interest income from any source is subject to income tax. If you do not want tax to be deducted you can spread your deposits across multiple bank branches 9 I have to pay taxes on interest received from my fixed deposits only on maturity.

Your tax liability on interest income from your fixed deposit is calculated on an accrual basis. You need to pay tax on the interest credited to your FD account 10 I received cash as a gift from a friend, so don't have to pay tax. If you receive a cash gift, which exceeds Rs 50,000 in one financial year, you are liable to pay I-T. The good news is cash gifts during marriage are totally free from tax Source: iTrust Financial Advisors



Popular posts from this blog

L&T Income Opportunities Fund dividend

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 L&T Income Opportunities Fund declares L&T Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( R /unit) L&T Gilt Investment-DQ 0.3 L&T Gilt Investment Direct-DQ 0.3 L&T Income Opportunities Ret-DQ 0.31 L&T MIP-Wealth Builder-DQ 0.3 L&T MIP-Wealth Builder Direct-DQ 0.3 L&T MIP-DQ 0.3 L&T MIP Direct-DQ 0.3 L&T Short Term Opp-DQ 0.26 L&T Short Term Opp Di...

Mutual Fund Exit Load Changes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now