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ABHILASH GAVEL

Category : REVISION..,

Solved

December 25, 2018 1:21 am

I received intimation u/s 143(1) for AY 2018-19 and i found two problems
1. Department's Mistake- TDS as per 26AS is not considered in intimation(Tax credit Mismatch)
2. My Mistake- I forget to Include Interest on FDR received during the year clearly visible is 26AS at the time of filing return
now ...

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Amlan Dutta

Yes, you should revise the return and include the FD interest in it ( everything else stays as it is )...for department mistake , you could have considered submitting rectification request for tax credit mismatch but since the case in point also deals with revision of income , revision ( assuming th...

December 25, 2018

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SAIKAT DAS

Category : Return f..,

Solved

December 21, 2018 12:12 pm

Dear Amlan, I want to know about
1. how can i save income tax upto 7lacs /annum??

2.Below 4 lacs income ,Paying income tax or Create a new LIC policy ,which is better and why??

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Amlan Dutta

1.) If someone is earning 7 lakhs per annum ,then the tax liability is around 12500 + 40000 =52500 plus cess ....To save tax , he/she can invest in permissible deduction sections under 80 ...a very popular saving is investing under 80 C in PPF to the tune of 1.5 lakhs ...this alone shall make taxabl...

December 21, 2018

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Amlan Dutta

December 21, 2018

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Sunil Sahoo

Category : Clubbing..,

Solved

December 20, 2018 11:30 pm

How can clubbing be avoided in cases of gift to non working wife/spouse...can you guide further on this

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Amlan Dutta

Section 60 to 64 speak of clubbing of income
There are different ways where you can save on some of the taxes when incomes are clubbed.

a.) Interest on Interest:
In case you earn a lot of money while your Spouse has zero income, you can benefit from investments made in his/her name. The interest earned from the investment will be clubbed with your income and taxed accordingly. However, if your spouse re-invests the income and earns income from this investment, it will be taxed on him/her only as per respective tax brackets.

For instance, you have invested Rs.20 lakhs in equities in your spouse’s name and earn Rs.10 lakhs from that. The income from this investment will be clubbed with yours and taxed accordingly. However, if this Rs.10 lakhs is again invested by your spouse in equities and earns Rs.4 lakhs, the income this time will be taxed on him/her. So, assuming your wife doesn’t earn anything, this Rs.4 lakhs will put her in the 10% tax bracket with mandatory exemption up to Rs.2.5 lakhs. She will ultimately pay Rs.15,000 p.a. as income tax on the amount.

Now, if you had invested the Rs.20 lakhs in your name and reinvested the income of Rs.10 lakhs to make another Rs.4 lakhs, this amount will be taxed as per your tax bracket which is 30%. The amount of tax you pay is Rs.1.2 lakhs p.a. on this amount.

A point to note here is that if your spouse is in the 10% or 20% bracket, tax calculations will become complicated for you and you might not benefit from the investment also if your spouse is transferred to the 30% bracket with you if income from investments push her tax bracket. You should ideally approach this method only if your spouse or major child is not earning anything.

Loans to Spouse:
Another way is to give money as interest-free loans. This is lawful and provides you with tax exemptions on up to an extent on the loaned amount. Giving loans to dependents will benefit you more than giving gifts. A simple letter notifying the loan amount and signed by both parties is enough to save taxes in this case.

In cases where clubbing does happen , if the investment is in a exempt source i.e say investment is in a PF whose interest income is exempt , then clubbing wont effect since the clubbed income is exempt anyways

(Note for major son/daughter, clubbing doesn't happen...it only happens in the case of minor son , so if you are doing anything for a minor son , then ensure to invest in exempt sources in his name else the income shall get clubbed to higher income generating parent)

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December 20, 2018

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Amlan Dutta

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December 20, 2018

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Sunil Sahoo

Category : Clubbing..,

Solved

December 20, 2018 6:13 pm

I want to know two things regarding clubbing of income
1.) If grandfather decides to gift any money to his niece/nephew, will there be any clubbing of income
2.) If father gives money to his son/daughter will there be any clubbing of income

Can you please mention the cases wherein there shall be cl...

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Amlan Dutta

Good question , for these we will refer section 56(2) which defines list of relatives and section 60 to 64, which deals with clubbing of income in certain combinations of gift given to relatives

In your particular cases, both relationship ( niece and parent ) fall in the realm of relative ...not...

December 20, 2018

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Amlan Dutta

December 20, 2018

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