Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

TAX SAVING, THE HEALTHY WAY!

Take care of your family’s health insurance & check-up needs & avail useful tax saving deductions u/s. 80D!

Section 80D of the Income-tax Act provides that a taxpayer can claim a deduction up to Rs.15,000 per year in respect of health insurance premium paid by him or any contribution made to the Central Government Health Scheme (CGHS), by any mode other than cash, out of his income chargeable to tax. It needs to be noted that payment of premium, by any mode other than cash viz. cheque, draft or credit card, is one of the important conditions prescribed under Section 80D. 

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TAX FREE SAYONARA!

Receive a bouquet of tax benefits when you say good bye

to your employer on retirement or termination of service!

Under the provisions of Section 10(10) of the Income-tax Act, gratuity received by an employee from his employer, on retirement, or becoming incapacitated before retirement, or expiring, or whose services are terminated, is exempt as under: (more…)

RELIEVING PAIN ON CAPITAL GAIN!

Bombay & Delhi High Courts hold that taxpayers can enjoy indexation even on assets received via gift or inheritance

    If your grandfather had acquired a plot of land for Rs.10,00,000 in late 1981, which you received by way of inheritance on his death in 2012 and you are planning to sell the same in early 2013 for a consideration of Rs.85,00,000, what would be the income-tax you would be required to pay on your capital gains? Difficult to believe, but ‘zero tax’ is the correct answer.

GAIN COMPUTATION OF GIFTED & INHERITED ASSETS

Section 49(1) of the Income-tax Act provides that where the capital asset has been acquired by the taxpayer in any of the modes such as on partition of a Hindu Undivided Family or under gift or will or by succession or inheritance, etc., the cost to the previous owner shall be deemed to be cost of acquisition of the taxpayer.

Similarly, Section 2(42A) provides that where a capital asset is acquired by way of gift or inheritance as mentioned in Section 49(1), period of holding of the previous owner shall also be included in the period of holding of the taxpayer. (more…)

NO PENALTY FOR BONAFIDE ERROR!

A reputed firm of Chartered Accountants making a silly mistake need not be penalized for concealment holds SC!

Can a taxpayer be penalized for a bonafide or inadvertent error in declaring his income? Would it make any difference if such default was committed by a leading firm of Chartered Accountants?

Dealing with this interesting issue, the Supreme Court has, in its very recent pronouncement in the case of ‘Price Waterhouse Coopers vs. Commissioner of Income-tax (25 taxmann.com 400)’ held that, “the caliber and expertise of the taxpayer has little or nothing to do with the inadvertent error. That the taxpayer should have been careful cannot be doubted, but the absence of due care, in a case such as the present, does not mean that the taxpayer is guilty of either furnishing inaccurate particulars or attempting to conceal its income.” (more…)

YOUR WILL GOES A LONG WAY!

Keep a joint holder or make a nomination and direct a clear bequest under your Will in respect of all your properties!

Today, we shall discuss some interesting readers’ queries with reference to the execution of a Will and passing over of property to legal heirs.

OVERCOMING PROBLEMS FOR PROPERTY IN SINGLE NAME

Query: Many times an immovable property is purchased only in single name, since that person alone has invested the funds in acquisition of the property. Where such investment has been made in the single name of the head of the household, what should be done to facilitate the smooth passing over of the property to his wife or his son or daughter?

Reply: Wherever practicable, the registration of an immovable property should be executed in joint names to facilitate smooth passing over in future. It is, however, not necessary that the second name holder should contribute any funds for having his or her name entered jointly. In such a case, the first name holder, who invests in the acquisition of the property, remains its real owner. (more…)

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