Income Tax is one of the most complex subjects in India. Most of the taxpayers struggle on this front. Through the posts on this blog, i always share my learnings, means and ways to save Income Tax in a legitimate way. The objective is to decode and explain the complex income tax rules in a simplified manner. In this post, i will share how a taxpayer can adjust LTCG against the basic exemption limit. Thus tax savings for the taxpayer. Some of the points shared in this post are already discussed in earlier posts. I hate being repetitive but some of the readers might not be able to comprehend. ... Read More
Provident Funds – Types, Tax Benefits and Most Common Queries
Provident Funds is one of the most loosely defined terms used by the taxpayer. At the macro level, except PPF, rest all types of provident funds are perceived as one and the same only. There are no efforts to educate the readers regarding the same. The tax treatment of different types of provident funds is different. For an investor/employee, the understanding of the types of provident funds is critical and important. Last week, one of my readers posted a query on withdrawal of provident fund. He worked in an organization from 1993 till 2013 as a blue-collar employee. He had to leave the ... Read More
Leave Encashment – How it is taxed in the hands of the Employee
In layman terms, Leave Encashment means to avail salary in lieu of accumulated leaves. In any organization, Leave Encashment is one of the major incentives for employees not to avail leaves :). I was one such employee who believed in the accumulation of leaves. In all my previous organizations, i accumulated at least 80% to 90% of the total leave eligibility. Normally the Leave Encashment policy of the organization allows you to encash the leave at basic salary. If your salary structure is tax friendly i.e. fully loaded with perquisites and allowances. In such cases, basic salary is less than ... Read More
Advance Ruling – NRI or Resident Indian can Avoid Tax Issues
Advance Ruling is one of the "Brahamastra" to avoid any future taxation issues. Not many NRI's or Resident Indian's are aware of the same. Advance Ruling is more popular among the corporates, in the case of disputes between 2 parties or high-value transactions. Alternatively, it can help to plan income tax liability in advance and avoid any future shocks on tax liability. In layman terms, if a resident Indian has any doubt or issue related to taxation in respect of a transaction with NRI that is already undertaken or proposed i.e. Scenario A. Alternatively, if the transaction is proposed or ... Read More
Income Tax – 51 Important Points
Last date of Income Tax Return filing is approaching. All taxpayers have a lot of doubts and queries related to income tax. Though each query is different and unique but there are some common points which are useful for all taxpayers. Over last 10 years, the return filing process has simplified. Once it was unthinkable to file the return on your own. I used to pay Rs 4,000 for return filing in Mumbai. TRP was 1st major reform and max fees of a TRP was capped. Online tax filing turned the table upside down and completely simplified the entire process. In case, you have income only from salary, ... Read More
How To Destroy Your Wealth?
Wealth is an abundance of valuable Assets, Possessions or Money. To become rich, you have to build a wealth at a rate higher than the rate of depletion. The risk reward of building a wealth is equally balanced. Higher the probability of wealth creation more is the risk of losing it. As an investor, you have to adopt the method to build a wealth in which risk reward is more favorable for investors. For example, currently any investment in Real Estate is not favorable to build a Wealth. Investors who bought property in 2013 or 2014 are in loss. The loss will increase manifold if we consider the ... Read More