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

YEAR END TAX MANAGEMENT!

With 31st March around, just ensure that you are not missing out on securing any tax saving & filing of your tax return! 

As the fiscal year 2012-13 ends on 31st March, it’s time for all income-tax taxpayers to take a quick look whether they have fully availed of the opportunities for tax saving via saving of specified investments and allocations. 

 TAX SAVING THE 80C WAY!

            ‘Be happy and gay, saving tax the 80C way!’  This should be the ‘magic mantra’ of all taxpayers. “My liquidity constraints do not permit me to invest,” some may retort.  But let this not be your excuse.  Infact, you should be prepared to even beg or borrow or secure a loan or gift or even draw out of your exempt income or accumulation, to make up for your investment limit of Rs.1,00,000 and thus plan to lawfully avoid your tax sorrow.  This is so, because Section 80C of the Income-tax Act does not require you to invest out of your ‘income chargeable to tax’.  This point can be better appreciated by the illustration hereunder:

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DON’T LOSE YOUR TAX REFUND!

Tax refund must be claimed within the specified time limit, but there is a remedy for belated & additional claims! 

There may be situations where considering the amount of tax deducted at source from the income of the taxpayer or the advance-tax paid by the taxpayer on his estimated income, the taxpayer becomes entitled to claim refund of income-tax, if such tax deducted or paid exceeds the actual income tax liability for the relevant assessment year. A taxpayer may also become entitled to refund of income-tax as a result of any order passed in appeal, rectification or revision, when the assessed taxable income has been reduced and he had paid excess tax earlier.

             Section 237 of the Income-tax Act provides for granting of Refund of excess tax paid or deducted in the case of a taxpayer, where such tax exceeds the actual tax payable by him.

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NIGHTMARE FOR PROPERTY BUYERS!

FM thrusts onerous obligation of deducting TDS on all purchasers of immovable property over Rs.50 lakhs 

The taxing proposal, which came to be announced by Pranab Mukherjee in his Budget proposals in February, 2012, but soon came to be rolled back, when he realized its harsh implications, has quite astonishingly been sneaked in once again by P. Chidambaram in the Finance Bill, 2013.

 ILLOGICAL JUSTIFICATION

Attempting to justify the reintroduction, the FM tried to explain in his Budget speech, “Transactions in immovable properties are usually undervalued and underreported.  One-half of the transactions do not carry the PAN of the parties concerned.  With a view to improve the reporting of such transactions and the taxation of capital gains, I propose to apply TDS at the rate of one percent on the value of the transfer of immovable property where the consideration exceeds Rs.50 lakhs.  However, agricultural land will be exempt.”

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NO SWEET TAX TUNES FROM FM!

Tricky & Illusive Tax Reliefs Coupled With Mischievous Tax Provisions Disappoint Tax Payers!

           The FM announced the setting up of 839 new FM radio stations in 294 Indian cities in his Budget speech 2013. However, quite ironically, the FM’s Budget did not play any sweet music for taxpayers of India.

           P Chidambaram, the FM who in 1997, endeared himself to India’s taxpayers with his dream budget has only  flattered to deceive in 2013! Opening his budget speech, he quipped that, “I intend to keep my speech simple, straight forward and reasonably short.” However, only when one goes through the details of the 50 clauses, as contained in the Finance Bill, 2013, does one discover the number of tax googlies astutely thrown in by PC, almost in the style of his name sake, the great magician P C Sarkar!

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