BANK ON TERM DEPOSITS FOR AVAILING TAX SAVING
Investing in the ‘Tax Saving Deposit Scheme’ can be a great choice for NRIs & HUFs who cannot invest in PPF!
TAX FREE MEDICAL PERKS
Salaried employees enjoy special tax shelter for various reimbursements of medical expenditure for self & family!
Section 17(2) of the Income-tax Act provides for taxability of perquisites in the hands of a salaried employee. In this context, a salaried employee must plan to take the benefit of a number of medical facilities provided by an employer to the employee, which are not treated as taxable perquisites as per the Proviso to Section 17(2), which carves out exceptions to the general rule of taxing perquisites. (more…)
ZOOZOO WINS THE TAX BATTLE!
Supreme Court’s verdict in Rs.11,000 crore Vodafone case
A big shot in the arm for global investment in India!
One of the most sensational cases ever, in the history of Indian Income-tax, came to be decided by the Supreme Court on January, 20, 2012. The Vodafone ruling, involving a mammoth tax stake of around Rs.11,000 crores, which has been delivered in favour of the taxpayer and against the revenue assumes great significance, since it has also reinforced the faith of the global investor community in the Indian judicial system.
THE BIG TAX CONTROVERSY
The core controversy before the Apex Court was whether India could tax capital gains arising from sale of shares of overseas companies, merely because such companies had downstream subsidiaries in India. The tax authorities had contended that the sale of the share capital of a Cayman Islands company that ultimately held approximately 67 per cent in Hutchison Essar (now Vodafone Essar) gave rise to capital gains tax liability in India, and therefore, Vodafone was required to deduct tax on payments made to Hutchison for acquiring the shares. In response, Vodafone argued that the transaction was not taxable in India and that the Indian income-tax authorities did not have jurisdiction to proceed against them for any alleged failure to withhold tax. (more…)
CLUBBING PROVISIONS FOR MINOR’S INCOME!
Exemption for minor’s income fixed at Rs.1,500 in 1992
Has not been revised even after 20 years of the provision!
Until 1991-92, all income of a minor, other than that covered by the special clubbing provisions of Section 64 of the Income-tax Act was entitled to independent assessment in his own hands. Circumventing the said clubbing provisions not being difficult, a number of avenues for augmenting income and wealth assessable in the minor’s own hands were wide open. It was thus possible to avail of valuable tax savings through the independent tax assessments of minors.
Such independent income/wealth enjoyed by the minors became a source of envy for the Finance Minister, who while introducing the Finance Bill, 1992 struck a major blow on tax planning for minors by providing that all income/wealth of a minor would be liable to be clubbed with the income/wealth of his parent. Section 64(1A) thus provides that “in computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child.” (more…)
WELCOME RELIEF FOR HOUSING DEVELOPERS!
Gujarat HC confirms ITAT’s liberal interpretation on tax holiday for residential projects u/s. 80IB(10)
Housing developers having undertaken the business of developing and building residential housing projects, with a view to avail 100% deduction in respect of their profits as prescribed under Section 80IB(10) of the Income-tax Act, can truly heave a sigh of relief, with the Gujarat High Court finally resolving some burning controversies raised by the Revenue over the past few years.
Around 50 Tax Appeals filed by the Department have come to be recently disposed of under a consolidated order passed in the case of ‘Radhe Developers, Shakti Corporation & Others’ by the Bench comprising of Hon’ble Mr. Justice Akil Kureshi and Ms. Justice Sonia Gokani, who were called upon to decide two key contentions relating to eligibility for claim of deduction under Sec. 80IB(10). (more…)
PRACTICAL TIPS ON CLAIMING TAX REFUND
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. (more…)
FISCAL RESOLUTIONS FOR THE NEW YEAR!
YOUR ‘WILL’ CAN MAKE THE WAY!
The importance of executing a Will has yet not been appreciated to its fullest extent in the Indian society. It is, therefore, not surprising to come across several cases where in pursuance to the death of an individual, there are several family disputes and practical problems in the absence of the Will by the deceased. Don’t forget that the execution of a Will is very simple and at the same time non-execution of the same can create several difficulties. (more…)
PENSIONS & SOCIAL SECURITY FROM US & UK TAX EXEMPT!
Family Pension received by a Widow is entitled to Standard Deduction at 33.33%, subject to a maximum of Rs.30,000
Today’s write-up deals with some interesting issues relating to taxability of dues, family pension etc. received by legal heirs of a deceased employee, receipt of commuted pension by specified employees and Public Pensions/Social Security payments received from abroad by Indian Residents.
LEAVE SALARY TO LEGAL HEIRS EXEMPT!
Under Letter No.35/1/65-IT(B) dated 5-11-1965, the Central Board of Direct Taxes (CBDT) has clarified that the leave salary paid to the legal heirs of a deceased employee in respect of privilege leave standing to the credit of such employee at the time of his/her death is not taxable as salary. Similarly, under Circular No.309 dated 3-7-1981, the CBDT has also clarified that receipt of cash equivalent of leave salary, which the deceased Government employee would have got if he had gone on earned leave, by the family of the deceased employee, is not liable to income-tax. (more…)
TAX STIMULUS FOR MEDICAL INSURANCE
Section 80D allows deduction of Rs.15,000 for covering insurance for own family & additional Rs.15,000 for premium paid for parents
Medical Insurance is becoming increasingly popular in India with the increasing cost of medical treatment and hospitalization expenses. The benefit of having a medical insurance is that by making a small payment of insurance premium, the proposer can cover the cost of medical treatment and hospitalization of himself and his family members in case of need.
Section 80D of the Income-tax Act provides for deduction out of the gross total income of the taxpayer in respect of such medical insurance premium paid. The popular medical insurance policy offered by the General Insurance Corporation of India is the ‘Mediclaim Policy.’ Several private insurance companies recognized by the Insurance Regulatory & Development Authority (IRDA) also offer a variety of medical insurance products, the premium payment of which is eligible for deduction under Section 80D. (more…)
WEALTH-TAX SHELTER FOR RESIDENTIAL HOUSE!
One house or an open plot of land of upto 500 sq.mtr. is treated fully exempt from Wealth-tax irrespective of its value!
Under the present scheme for levy of Wealth-tax, all ‘productive assets’ are excluded from the definition of the term ‘assets liable to Wealth-tax.’ Accordingly, in respect of house property, the following have been treated as assets liable to Wealth-tax:
- Any building or land appurtenant thereto, whether used for residential or commercial purpose or for the purpose of maintaining a guest house.
- A Farm House situated within 25 kms. from the local municipal limits. (more…)
