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How to save tax smartly
February, 17th 2009

It's that time of the year again. Time to get ready with your investments and taxes.

Were you prudent with your investments last year? Did they help you save tax? Or did you end up paying more than you could afford?

What investment mistakes did you make last year? Are there ways to rectify them? What investment options should you go for this year?

What should you do to bring your tax liability to the minimum level?

Direct tax expert Vikas M Gandhi offered some valuable tips. Here is the transcript.

Vikas Gandhi says, Good Evening friends

pradeepkhanna asked, Any limit of Tax Benefit on Medi-Claim amount ?

Vikas Gandhi answers,  at 2009-02-12 16:05:38The limit to claim deduction of premium on medi-claim is Rs.15000/- for all Individuals who are not senior citizen & for Senior citizen it is Rs.20000/- .

Ramjee asked, An inherited property held by the members of the family together is sold and prorata share of sale value is being received.Please let me know whether there will be capital gains on sale of the property and hwo much? Whether the acquisition is to be taken as zero as it is inerited with no value paid.How to treat the sameas long term or shrot term capital gain,if so.

Vikas Gandhi answers, Since the property is jointly inherited each co-receiver will declare capital gain prorata. If from the date of the original owner owning the property till sale has exceeded 3 yrs then it will be long term capital gain else short term. The cost of the property will not be NIL but the same as that paid by the original owner & capital gain has to be accordilny calculated.


Vikas Gandhi answers, No the limit does not apply to rented house.

prakashsl asked, I am a salaried person having income from other sources like interest from FD. Can I offset my loss in futures against income from other sources as I have no business income

Vikas Gandhi answers, In my opinion since loss in futures is considered as business income/loss the same can be set off against other sources but not against salary income

VKumar asked, I have an income > 5 Lakh pa, Please clarify: is this correct, if I can avail tax rebate in Medical 15000, Mediclaim 15000, Pension Plan: 12K Housing Loan principal amount (50K) and interest amount (150K) and LIC & other savings 1 L All of those can be taken or not

Vikas Gandhi answers, Interest on Housing loan can be claimed at Rs.150000/- which seperate from other premiums & principal repayments etc put together upto 100000/-

ajoy asked, if i gift a property held by me and my mom jointly to my mom fully then what will be the treatment of it. shall the property be gifted as per the market value of at the actual cost price. Please advice and what will be the tax implication if the property is sold at a later date.

Vikas Gandhi answers, By Gifting your share of property to your Mom there is no income tax implication. However for transfering the same there will be stamp duty implicatiion. Later on selling the same she will be liable for the capital gain.

m_mahendi asked, how often i can claim my LTA . I claimed in dec 2006 , can i claim now

Vikas Gandhi answers, LTA can be claimed twice in four years

its asked, when you sale property. Within how much time you should buy a new one to avoid long term capital gains.

Vikas Gandhi answers, Your should buy another Residential property within 2 years from the transactiion date to save long term capital gain tax. In between if the financial year is ending then before your IT return filing date (generally for all 31st July) you should invest the amount in Capital gains account if you have not purchased the property by then. Utilise this money only to buy the property

Roopinder asked, Hi Vikas...I have not declared interest from NSC so far in tax return...can I still do it while filing next tax return...the certficaate has not matured as yet..any implication?? Thanks

Vikas Gandhi answers, In my opinion it is beneficial to declare NSC interest every year on accrual basis the tax implication gets spread out & upto the 5th year you can claim tax benefit of the yearly accrued interest U/s 80C as re-investment. However you can also show the total interest on Maturity and pay the tax, choice is yours

MANISH asked, I have contributed Rs 50100 to charity can I claim tax benefit on the same.If so then how much.

Vikas Gandhi answers, You can claim the deduction of contribution to charity provided they have issued you a *) G certificate. For most of such contributions the deduction will be reistricted to 10% of your gross total income less other deductions.

shubha asked, If I have two properties each giving me some rent, and I have loans outstanding on both of them, if I want to repay a loan, does it make a difference tax wise on which loan I repay ? I.e for an individual, is the tax calculated based on total income and total outstanding home loans, or, does it take into account loan outstanding and income per property ? Thanks

Vikas Gandhi answers, The tax is calculated on the basis of your income & the deductions you claim. It has no connection with your loan. You can decide your beneficial approach

rjps asked, the amount paid for school fee for children can be availed for eax exemption

Vikas Gandhi answers, Yes you can avail the school tution fess for tax benefit but for only two children. This amount is included in the 100000/-limit along with NSC, Life insurance premium etc.

sameerahmed asked, Hi Vikas, I quitted my job in November from one company and joined other company. Should I have to say what i have drawn salary and how much the taxes they have cut to the present company and make one form 16 or wait for the form 16 of the older company and form 16 of the present company and then file it?

Vikas Gandhi answers, If you declare your previos salary & tax deducted to the current employer he will deduct tax considering both salaries. By doing this you correct taxes will be calculated since the deduction declared to the old & new company will be common. However if you do not wish to declare then wait for both form 16, calculate the taxes on your own & then pay the differential tax if any & file your return.

rcv asked, Hi Vikas, I have a LIC policy which will mature next eyar and I will get some 7LKs approx, if I invest the entire money in my housing loan can I avoid paying tax for this

Vikas Gandhi answers, In my opinion most of the maturity amounts of a life insurance policy are exempt check with your agent the type of policy.

SBHAVIN50 asked, wrt your answer on gift to mother... if she sells the flat withing 1 year then will she get benefit of capital gains

Vikas Gandhi answers, To get long term capital gains benefit from the date of your purchase to the date of sale it should be more than 3 yrs

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