TAX SCRIPTS
PRACTICAL ASPECTS ON TDS FROM PAYMENTS TO PARTNERS
Jigar M. Patel International Tax Attorney Withdrawals by Partners do not attract TDS and thus provide a strategic comfort for Tax Management Effective 1st April, 2025, partnership firms, including Limited Liability Partnerships (LLPs), are now required to comply with an important obligation in regard to tax deduction at source (TDS), as introduced by Finance (No.…
TAXATION OF GAINS FROM EQUITY & HYBRID FUNDS
Jigar M. Patel International Tax Attorney New Tax Regulations have paved way for a Smart Tax Friendly Category of Mutual Fund Schemes AM Readers will recall that in this column last week, we discussed various aspects in relation to taxation of gains arising on redemption of units of debt funds. Today, we shall review the…
TAXATION OF CAPITAL GAINS ON DEBT MUTUAL FUNDS
Jigar M. Patel International Tax Attorney Units of Debt Funds being taxed at normal rates, opens up interesting opportunities for tax planning Taxation of mutual funds in India depends on the type of fund (i.e., equity, debt, hybrid), holding period and how the returns are generated. They have become a popular investment avenue for many…
RENTAL INCOME – AN ATTRACTIVE TAX PROPOSITION
Jigar M. Patel International Tax Attorney Deductions for let-out properties, available even under the new tax regime, should merit attention for tax planning Income from house property for purposes of income-tax is based on the concept of ‘annual value’ of the property. The annual value of house property is the estimated rental value of the…
INVESTING IN A DIAMOND FOR ETERNITY – PPF
Jigar M. Patel International Tax Attorney With Investment Doors Open Lifelong and Tax-Exempt Returns, PPF is a Shining Star on the Horizon Unlimited Renewals Grant Eternity to PPF Although the initial maturity period of investment in Public Provident Fund (PPF) is 15 years from the opening of the account, an attractive feature of the account…
BE A TAX CHAMPION IN CRICKETING STYLE!
Jigar M. Patel International Tax Attorney AM TAX CLUES celebrates Century of its weekly columns today, offering practical tax tips in the absorbing jargon of cricket! Memorable Innings of Two Years Every Monday since April, 2023, it has been a privilege to interact with tax-savvy AM readers, whose keen interest and appreciation have been a…
MAJOR TAX SAVING FOR MINORS VIA TRUST
Jigar M. Patel International Tax Attorney Planning a Discretionary Trust for Minors can lawfully overcome Clubbing of Income and reap Useful Tax Saving Want to plan earning of income for minors, without getting trapped in the net of clubbing of income provisions under the Income-tax Act? Setting up of a Private Discretionary Trust can prove…
ALL YOU NEED TO KNOW ABOUT ADVANCE TAX
Jigar M. Patel International Tax Attorney Being Lax in discharging your Advance Tax Obligation can invite Penal Consequences! The Scheme of Pay as You Earn Advance tax is also referred to as being a scheme requiring taxpayers to pay as they earn. It requires every taxpayer to estimate his current income and the tax liability…
NRIs – BEWARE OF FAKE NEWS SCARE !
Jigar M. Patel International Tax Attorney No Tax or Legal Concerns for NRIs on Residency or Remittances under the New Income-tax Bill or Budget 2025 The eagerly anticipated Income Tax Bill 2025 has finally been introduced in the Parliament. Covering 536 sections, in 23 Chapters, with 16 Schedules, 57 Tables and 46 Formulae, the proposed…
NSS INVESTORS CALM AFTER SOOTHING TAX BALM
Jigar M. Patel International Tax Attorney Welcome Tax Exemption for NSS Withdrawals in case of Individual Investors, but TDS Relief sadly missing Highlights of the National Savings Scheme, 1987 The National Savings Scheme (NSS) was introduced in 1987 and remained effective until 1992. Popularly known as an EET (Exempt-Exempt-Tax) investment, Section 80CCA of the Income-tax…
SLIDING TAX RATES TRIGGER RISING REVENUES
Jigar M. Patel International Tax Attorney Past 15 years have witnessed over 10 times revenue growth, facilitating the slashing of average tax rates by half Income-tax is no longer as Taxing! In FY 2009-10, the basic personal income-tax exemption limit was just Rs. 1.5 lakhs and taxable income exceeding Rs. 5 lakhs attracted the maximum…
REBATE SCREAM, VILLAIN OF BUDGET DREAM?
Jigar M. Patel International Tax Attorney If debate on tax rebate does not abate, taxpayers’ dream can turn into an unwanted nightmare Budget’s Welcome Thrust on Trust and Ease of Doing Business Finance Minister Nirmala Sitharaman, earned wide acclaim for Budget 2025, her 8th consecutive and record presentation, for the tax bounties showered by her…
BUDGET 2025 – WHO GETS WHAT RELIEF AND HOW MUCH?
Jigar M. Patel International Tax Attorney Zero Tax on taxable income below Rs. 12 lakhs for all individual taxpayers is a Myth and is subject to Riders, taxpayers should be aware of! Tax Relief of Zero Tax can be enjoyed on account of tax Rebate u/s. 87A, which is applicable only in case of Resident…
TAX CONCESSIONS EXCLUSIVE TO NRIs
Jigar M. Patel International Tax Attorney Some exclusive tax exemptions and concessions given to NRIs or returning Indians Special Tax Provisions for NRIs Chapter XII-A of the Income-tax Act covering Sections 115C to 115I deals with special provisions for taxing certain incomes of Non-Resident Indians (NRIs). For the purpose, an NRI means an individual being…
RESIDENT, BUT STILL A NON-RESIDENT?
Jigar M. Patel International Tax Attorney ‘Non-Resident’ has different connotations under Tax Laws & FEMA and hence distinct implications Pravasi Bharati Divas was celebrated on 9th January. As per World Bank’s report of 2024, India was the Top Recipient of remittances received from its Diaspora, at a staggering USD 129 billion. The popular term Non-Resident…
TAX CONCESSIONS FOR CONTRIBUTION TO CHARITY
Jigar M. Patel International Tax Attorney Approved donations can reap useful tax savings to all taxpayers, whether resident or non-resident Donations to approved Funds & Institutions Section 80G of the Income-tax Act provides for deduction out of gross total income in respect of donations to approved Funds and Charitable Institutions. The benefit of this deduction…
AWAIT NEWS ON TAX REBATE FOR CAPITAL GAINS
Jigar M. Patel International Tax Attorney Procedural Changes cannot override Substantive Rights of Tax Payers holds Bombay High Court in Interim Order Controversy Surrounding Tax Rebate on Capital Gains Under the new tax regime, a resident individual taxpayer is entitled to a tax rebate of up to Rs.25,000 under Section 87A of the Income-tax Act,…
GIFTS FROM NON-RELATIVES WHEN TAX-FREE?
Jigar M. Patel International Tax Attorney Dispelling the myth that only gifts from relatives are tax-exempt, here are some smart tax saving clues! Provision for Taxing Gifts as Income Section 56(2) of the Income-tax Act provides that one or more gifts received by a person aggregating to more than Rs. 50,000 in a financial year…
INCOME TAX RELIEF FOR ARREARS OF SALARY
Jigar M. Patel International Tax Attorney Hardships caused due to higher incidence of tax can be avoided by availing of useful relief for taxation of arrears What are Arrears of Salary? In the context of salary, an arrear is value of money that should have been paid in the past as a salary and was missed…
HOW TDS CAN BE MADE LESS TEDIOUS?
Jigar M. Patel International Tax Attorney Practical Tips for Filing Form 15G and 15H to save your Tax Troubles in claiming Refunds What is Form 15G and Form 15H? Form 15G and Form 15H are self declaration forms prescribed by the Income Tax Department that taxpayers can submit to banks, financial institutions, companies or tenants…
GET SET FOR THE NEW REGIME OF PAN 2.0
Jigar M. Patel International Tax Attorney PAN acts as Financial Passport and is a sine-qua-non for series of transactions – missing PAN can cost you dear! Permanent Account Number (PAN) is the unique identification alphanumeric number assigned to taxpayers by the Income-tax Department. It provides a distinct identity for individuals and businesses, enabling tax authorities…
How Revision can be a Boon for Taxpayers?
Jigar M. Patel International Tax Attorney Taxpayers, otherwise deprived of adequate remedy, can opt for Revision before Income-tax Commissioner Section 264 of the Income-tax Act is an equitable or beneficial provision which can provide meaningful relief to a taxpayer in situations where he may otherwise be deprived of adequate remedy. Powers of Revision in the…
FACING TAX GROAN FOR ACCEPTING CASH LOAN
Jigar M. Patel International Tax Attorney When Acceptance or Repayment of Loans or Deposits in Cash can invite Serious Tax Trouble? The next time you accept any loan or deposit in cash, even from your friend or acquaintance, watch out that you do not walk into the tax trap of Sections 269SS and 269T of…
HOW HUF PARTITION CAN HELP SAVE GAINS TAX?
Jigar M. Patel International Tax Attorney Partition of an HUF not being regarded as Transfer can offer useful capital gains tax shelter Section 47 of the Income-tax Act deals with provisions in regard to transactions not regarded as transfer. In view of the same, any gains arising from such transactions are not treated as capital…
MULTIPLY TAX SAVINGS VIA MULTIPLE TAX EXEMPTIONS
Jigar M. Patel International Tax Attorney Some Smart Thinking to Maximize your Gains Tax Saving through Investment in Residential Properties LTCG Exemption for Investment in Residential House Section 54 of the Income-tax Act grants exemption for long term capital gains (LTCG) arising from the transfer of a residential house. Similar exemption is prescribed under Section…
NOW HIGHER TAKE HOME FOR THE SALARIED
Jigar M. Patel International Tax Attorney How timely reporting to employer of TDS & TCS in Form 12BAA can ensure lower tax deduction from salary? Section 192(2B) of the Income-tax Act was introduced since 1998 to enable a salaried taxpayer to furnish to his employer particulars of income under any head other than salary and…
TREAD TIP-TOE WHEN DEALING IN CRYPTO
Jigar M. Patel International Tax Attorney Taxation of Virtual Digital Asset, brings within its net Cryptocurrencies, NFTs and other tokens Finance Act, 2022 introduced a specific tax regime for taxation of ‘Virtual Digital Asset’ (VDA), which includes cryptocurrencies, non-fungible tokens (NFTs) and various other digital assets. Definition of Virtual Digital Asset (VDA) Section 2(47A) of…
TAX BREAKS FOR AUTHORS
Jigar M. Patel International Tax Attorney Honorarium for Writings and Specified Royalty Income of Resident Authors entitled to special deductions As per the executive instructions of the Central Board of Direct Taxes (CBDT), certain adhoc deductions for expenses are available out of specified incomes, while computing the taxable income under the Income-tax Act. Deductions out…
DIKHAO VISHWAS SULJHAO TAX VIVAD
Jigar M. Patel International Tax Attorney Vivad Se Vishwas Scheme offers attractive terms for Settlement of Tax Disputes with Special Privileges The Central Board of Direct Taxes (CBDT) has recently notified the Vivad Se Vishwas Scheme (VSVS) 2024, an initiative that was announced in Budget 2024 to resolve pending appeals relating to income tax disputes.…
SCRUBBING THE CLUBBING PROVISIONS
Jigar M. Patel International Tax Attorney Gifts to Spouse and Son’s Wife attract Clubbing of Income, but can they be lawfully circumvented? Building Capital for Spouse and Son’s Wife Keeping in view the joint family system prevailing in India where the financial affairs of the family are generally managed and controlled by the male head…
PLAN TO HAVE YOUR CAKE & EAT IT TOO!
Jigar M. Patel International Tax Attorney Some Interesting Insights into Reaping Some Smart Benefits under Sections 54 & 54F Exemption for LTCG on Investment in New Residential House Section 54 of the Income-tax Act, grants exemption for long term capital gains (LTCG) arising from the transfer of a residential house, if such gains are invested…
NEW RULES FOR PPF & SSY EFFECTIVE OCTOBER 1, 2024
Jigar M. Patel International Tax Attorney Breach of Public Provident Fund & Sukanya Samruddhi Yojana Guidelines can lead to loss of Interest Under its recent notification dated August 21, 2024, the Department of Economic Affairs has made revisions and announced new guidelines aimed at regularisation of investments in Public Provident Fund (PPF) and Sukanya Samriddhi…
ALL ABOUT TAX CLEARANCE FOR FOREIGN TRAVEL
Jigar M. Patel International Tax Attorney No Mandatory Requirement of ITCC says CBDT, but also attaches Riders to Clarification! Provisions of Section 230 of Income-tax Act Section 230(1A) of the Income-tax Act originally introduced by the Finance Act, 2003 provides that taxpayers domiciled in India shall, under prescribed circumstances, be required to obtain an Income-Tax…
BE TAX PLANNING BOSS GET TAX SAVING FROM LOSS!
Jigar M. Patel International Tax Attorney Knowledge of Inter-head and Intra-head Set-Off of Losses can help you claim useful Tax Savings Sections 70 to 80 of the Income-tax Act lay down the provisions in relation to Set-Off (in the same year) and Carry-forward (to subsequent years) of Losses arising under any of the five heads…
HOW MIDDLE CLASS SALARIED HAVE BENEFITTED?
Jigar M. Patel International Tax Attorney The generally neglected salaried class has finally found some favour in past two budgets! Average Tax on TI of Rs. 16 lakhs dips from 14.14% to 9.59% A class of taxpayer that has been looked after reasonably well by the Finance Minister in her budgets over the past two…
UPROAR TRIGGERS RESTORE BUT BENEFITS NOT AS BEFORE?
Jigar M. Patel International Tax Attorney Finance Bill Amendment Grants Option for Indexation, but LTCG Tax Predicament not fully resolved? When the three decades plus benefit of indexation for long term capital gain tax computation was eliminated in a single stroke by Budget 2024, several taxpayers, likely to be adversely affected by its impact, aired…
ANALYSING POST BUDGET TAX PAIN AND GAIN
Jigar M. Patel International Tax Attorney Chit Chat with Readers on What LTCG Tax Benefits shall Stay and What will Vanish Away? Indexation goes Away but Grandfathering to Stay! Query: I am a senior citizen. I have been living in a residential house, which was purchased by my father in 1985 for Rs. 15 lakhs.…
FM MUST MITIGATE STCG TAX PAIN OF SMALL TAXPAYERS
Jigar M. Patel International Tax Attorney If not offered a Concessional Tax Rate, they may be lured to save Tax through Off-Market Share Transactions! After the intial sneeze on the budget day in reaction to the rise in capital gains tax, Indian capital market seems to have taken the tax pinch in the stride. “Look…
TIME FOR SOME SWEET TAX TUNES FROM FM!
Jigar M. Patel International Tax Attorney Raise Standard Deduction for Salaried & Revive Incentives for Housing, Healthcare & Education Taxpayers are anticipating some much needed tax breaks on July 23, 2024 from Finance Minister Nirmala Sitharaman, when she rises to present her seventh budget in a row (after 5 regular and 1 interim from 2019…
MATURITY SUMS OF ALL LIFE INSURANCE NOT TAX-FREE !
Jigar M. Patel International Tax Attorney Insurance Moneys Received on Death are Fully Tax Exempt – Know Conditions attached with Lifetime Receipts While the core underlying objective of life insurance is to secure financial security for the family of the insured, life insurance has also come to be relied upon as a popular tax saving…
APPRECIATING TAX WORTH OF YOUR INVESTMENT
Jigar M. Patel International Tax Attorney As a Prudent Investor, Keep in Sight the Effective Post-tax Return on Your Investment Evaluating Your Pre-Tax and After-Tax Returns The most common mistake an ordinary investor makes in the choice of his investment is in jumping for a higher rate of interest, without taking into consideration the effective…
HOW HARVESTING OF LOSSES CAN HELP SAVE TAXES?
Jigar M. Patel International Tax Attorney Your Equity Shares Delisted or Company in Liquidation? Don’t Lose Heart, Reap Tax Benefits! It’s never fun to lose money on an investment, but lawfully structuring and reporting a capital loss on your tax return can certainly be an effective consolation prize in several cases. Similarly, intelligent investors, who comprehend the rules of…
WEAVING TAX GAINS ON INHERITED ASSETS!
Jigar M. Patel International Tax Attorney Also addressing Practical Queries on Will of NRIs for Indian Properties & Probate for Estate Execution Probate to Will whether required in Gujarat? Query: My father passed away recently having appointed me as the Executor under his Will. All assets to be distributed under his Will, both movable and…
TAX EXEMPT PIN MONEY IS WIN MONEY FOR HOMEMAKERS
Jigar M. Patel International Tax Attorney PIN Money represents Skilful Savings by a Wife out of Allowances for Household or Personal Expenses Hundreds of thousands of households in our country are managed by versatile and skilful women who weave the bonding of their family in one unison. The common thread of efficient financial management runs…
OFF-BEAT DEDUCTIONS FOR HEALTH & EDUCATION
Jigar M. Patel International Tax Attorney Some Out of the Box Thinking triggered by three absorbing Tax Queries of AM Readers Deduction for Interest Paid on Two Higher Education Loans Query: In 2021, I took an education loan of Rs. 50 lakhs at 10% interest per annum for my son’s higher studies in the US…
PROFESSIONALS TOO CAN OPT FOR PRESUMPTIVE INCOME
Jigar M. Patel International Tax Attorney Professionals with Receipts upto Rs. 75 Lakhs and Income of 50% or more can opt for Privileges under the Scheme With a view to include small professionals and bring them on similar footing as small business enterprises, the presumptive taxation scheme for professionals was introduced in FY 2016-17 under…
TAXABILITY OF GAINS FROM LAND TRANSFERS & ACQUISITIONS
Jigar M. Patel International Tax Attorney Tax Concessions for Gains from Rural Agricultural Lands & Compensation for Urban Land Acquisitions Tests for determining whether an Agricultural Land is ‘rural’ Section 2(14) of the Income-tax Act, which defines ‘capital asset,’ excludes from within its purview an agricultural land situated in India at a place having a…
PRESUMPTIVE INCOME SCHEME – BOON FOR SMALL TAXPAYERS
Jigar M. Patel International Tax Attorney Enjoy Freedom from Accounts, Audit & Scrutiny, but Watch Out for the Consequences in case of Mischief! With a view to encourage small business proprietorships and firms to file their tax returns and pay taxes, without feeling the burden of maintenance of books of accounts and audit, the presumptive…
ATTRACTIVE PLATTER OF FOREX ENTITLEMENTS
Jigar M. Patel International Tax Attorney LRS provides a meaningful opportunity to resident individuals for spreading their wings for investment overseas With substantial liberalization of Current Account Transactions in Foreign Exchange (Forex) for resident individuals, the same can now be liberally acquired for a host of purposes, without seeking any prior approval of RBI. The…
SUKANYA SAMRIDDHI SE LAKSHMI KI VRIDDHI
Jigar M. Patel International Tax Attorney SSY & PPF too – Don’t Miss the Double Bonanza for Creating Tax-Free Capital for Your Daughters! Sukanya Samriddhi Yojana (SSY) is a small savings deposit scheme promoted by the Government for the welfare of a girl child. It was launched by Prime Minister Shri Narendra Modi on 22nd January,…
CLEARING ILLUSIONS ON COMPUTATION OF TAX REBATE
Jigar M. Patel International Tax Attorney Dispelling Two Common Myths in regard to Tax Liability on Long Term Capital Gains from Equity Under the new tax regime, a resident individual taxpayer is entitled to a tax rebate of up to Rs.25,000 under Section 87A of the Income-tax Act, if his taxable income does not exceed Rs.…
BOUQUET OF TAX EXEMPT RETIREMENT BENEFITS
Jigar M. Patel International Tax Attorney Enjoy liberal tax exemptions for Provident & Superannuation Fund payments and Leave Encashment Exemption for payments out of Provident Fund Sections 10(11) and 10(12) of the Income-tax Act grant total tax exemption, without any monetary ceiling, in respect of any payment made to an employee representing the credit balance…
PLANNING MAXIMUM TAX SHELTER FOR HOUSING!
Jigar M. Patel International Tax Attorney Readers’ Queries providing meaningful insights into Tax Saving for Property investment & Rental Income Planning Joint Investment for Maximum Benefit Query: My wife and I are working in a large private sector company and our annual taxable income is more than Rs.10,00,000 each. We want to take a house…
KNOW THIS AND BE BOLD TO HOLD GOLD!
Jigar M. Patel International Tax Attorney Presenting its 50th write-up today, Tax Clues covers useful tips on tax & investment aspects of Gold! One precious metal, the value of which has appreciated over time is gold. People buy gold for various reasons, may it be for auspicious occasions, for the love of wearing ornaments or…
BUY, BEG OR BORROW, TO AVOID TAX SORROW
Jigar M. Patel International Tax Attorney Deduction for initial investment and also accrued interest u/s. 80C, makes NSC an interesting investment option ‘Be happy and gay… saving tax the 80C way!’ This should be the ‘Magic Mantra’ of all taxpayers with taxable income above Rs.10 lakhs, who attract the tax bracket of 31.20%. No excuses…
PLANNING A ZERO TAX PAY PACKAGE OF Rs. 8.85 LAKHS
Jigar M. Patel International Tax Attorney As a Salaried Tax Payer aim to negotiate a Tax Friendly Pay Package with your Employer The Income-tax Act provides for a number of allowances and perquisites which have been notified as tax free. If a Salary Pay Package can be structured in a manner that the same can…
WHAT YOU NEED TO KNOW ABOUT ADVANCE TAX?
Jigar M. Patel International Tax Attorney With 15th March Round the Corner, taxpayers would be well advised to check their advance tax liability According to Section 208 of the Income-tax Act, every taxpayer, whose tax liability is Rs.10,000 or more after adjustment of tax deducted at source (TDS) and tax collected at source (TCS), is…
WAIVER OF OUTSTANDING TAX DEMANDS EXPLAINED BY CBDT
Jigar M. Patel International Tax Attorney CBDT Order lays down guidelines for remission to be undertaken suo-motu by CPC within 2 months In a first of its kind in the history of India’s Direct Taxes, the Finance Minister Smt. Nirmala Sitharaman in her Interim Budget 2024-25, made an announcement for waiver of tax demands meeting…
PPF CAN WEAVE MAGICAL RETURN OF UP TO 15%
Jigar M. Patel International Tax Attorney PPF can be your Life-time Companion with privileges of Perpetual Renewals & Stipulated Withdrawals Bulls or Bears may have their sway…but the evergreen PPF shall always stay! Safe and sound, growing compound at 7.10% tax exempt interest per annum and with the investment enjoying a straight deduction from taxable…
ENJOY CAPITAL GAIN WITHOUT TAX PAIN !
Jigar M. Patel International Tax Attorney When Short-Term Capital Gain in looks can still enjoy apparent Long-Term Gain Tax Benefits? Query: My father had invested in listed equity shares in 2015-16. He passed away in October, 2023 and I have received his entire share portfolio on inheritance. With the stock market now at its peak,…
HOW TO ENSURE NO TAX RIFT ON GIFT?
Jigar M. Patel International Tax Attorney Replies to Two Interesting Readers’ Queries that offer Meaningful Insights on Giving & Receiving Gifts Gifts in Kind beyond the specified list Query: I am a Doctor planning to procure an expensive instrument worth Rs.60 lakhs, which has also public health application. A cousin of mine in USA proposes…
Bury Your Worry for Belated Refund Claims!
Jigar M. Patel International Tax Attorney CBDT Offers a Six Year Window to Taxpayers to Claim Refunds Even Beyond Prescribed Time Limit! Situations commonly arise, where considering the amounts of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) or Advance Tax paid in the case of a taxpayer, he becomes entitled to…
SMART STRATEGIES TO BEAT INFLATION
Jigar M. Patel International Tax Attorney Look through money illusion due to inflation and focus on enhancing purchasing power of your rupee As someone once rightly remarked, “Inflation is when you pay fifty rupees for the twenty rupees haircut you used to get for ten rupees when you had hair.” When the value of the…
TAXABILITY OF PENSIONS & SOCIAL SECURITY
Jigar M. Patel International Tax Attorney Some useful tax tips for legal heirs of deceased employees and former NRIs, now Indian residents Leave Salary to Legal Heirs exempt Leave encashment received by an employee while in employment is fully taxable. In case of leave encashment received on retirement, by superannuation or otherwise, exemption is available, subject…
INVESTMENT, REPATRIATION & TAX TIPS FOR NRIs
Jigar M. Patel International Tax Attorney With Pravasi Bhartiya Divas & Vibrant Gujarat Summit Round the Corner, FAQs that will interest both NRIs & their Relatives As we celebrate the upcoming Pravasi Bhartiya Divas and the Vibrant Gujarat Festival, let’s answer some of the queries an NRI likely has, when investing into India. Q.1. What…
LIFE IN FORWARD GEAR WITH REVERSE MORTGAGE
Jigar M. Patel International Tax Attorney Under Reverse Mortgage, a Senior Citizen can borrow for his needs without any obligation to repay the Loan Shantibhai, a senior citizen aged 75, is living in his house at Ahmedabad, the present market value of which is Rs.50 lakhs. Since their children have neglected them, the couple are…
KNOW YOUR TAX LIABILITY ON GRATUITY
Jigar M. Patel International Tax Attorney Every Salaried Employee should know how much of this precious Retirement Benefit is Tax Exempt Income-tax Exemption for Gratuity 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…
TAX SUPPORT FOR THE DISABLED & AILING
Jigar M. Patel International Tax Attorney Taxman’s empathy for a taxpayer who is disabled or who is required to spend for the disabled The Income-tax Act provides for special deductions in computing the taxable income of a taxpayer who is disabled or who is required to incur expenditure for the medical treatment, training or rehabilitation…
INVESTMENT PLANNING – THREE GUIDING STARS
Jigar M. Patel International Tax Attorney Benchmarks of Security, Yield and Liquidity should influence an Investor in right decision making Investment Considerations The key to successful Investment Planning lies in making the right choice of investments that best suit the investor’s specific requirements. What are the important considerations which you as an investor must keep…
NRIs – FEEL AT HOME WITH YOUR PROPERTIES
Jigar M. Patel International Tax Attorney FAQs in relation to acquisition, transfer and repatriation by NRIs for immovable properties in India Q.1. Is a Non Resident Indian (NRI) eligible to invest in residential or commercial property in India? A.1. Under the general permission granted by the Reserve Bank of India (RBI), every NRI being a…
WIN-WIN STRATEGY FOR HRA EXEMPTION
Jigar M. Patel International Tax Attorney Replies to Interesting Queries on Exemption for House Rent Allowance (HRA) for Salaried Best of Both ~ HRA Exemption & Deduction of Interest Query: My Basic Salary amounts to Rs.7 lakhs per annum. I am having my self-owned house at my native place at Rajkot, which is lying vacant…
FAMILY SETTLEMENT CAN SAVE TAX & STAMP DUTY
Jigar M. Patel International Tax Attorney Judicial Pronouncements have held that a Family Settlement or Arrangement is not a ‘transfer’ under law Definition of Family Settlement ‘The Halsbury’s Laws of England’ has defined a Family Settlement or Family Arrangement as an agreement between the members of the same family intended to be generally or reasonably…
SIP THE TASTE OF HEALTHY RETURNS
Jigar M. Patel International Tax Attorney The golden secret of earning from saving is not how much you invest, but how long you invest The early bird gets the worm is not just a part of the jungle folklore. Even the ‘early’ investor gets a lion’s share of the investment booty due to the magic…
TAX HOLIDAY FOR YOUR FAMILY’S HOLIDAY TRAVEL
Jigar M. Patel International Tax Attorney Salaried Employees can plan to enjoy Leave Travel Concession (LTC) as a Tax-Free Perk One of the important tax-free perquisites available to salaried employees is ‘Leave Travel Concession’ (LTC) or ‘Leave Travel Assistance’ (LTA) which is treated as exempt under Section 10(5) of the Income-tax Act read with Rule…
TAX ABATEMENT FOR HOUSE RENT PAYMENT
Jigar M. Patel International Tax Attorney Section 80GG allows deduction in respect of house rent paid by an individual not in receipt of HRA Deduction for Salaried or Self-Employed not in receipt of HRA Salaried employees, who incur liability for payment of house rent and who receive House Rent Allowance (HRA) from their employer, can…
TAX INCENTIVES FOR HEALTH CARE
Jigar M. Patel International Tax Attorney Planning for medical insurance, health check-up and treatment can reap smart tax savings! Tax Deduction for Medical Insurance Premium With the increasing cost of medical treatment and hospitalization expenses, medical insurance has assumed prime importance. Section 80D of the Income-tax Act provides that an individual taxpayer can claim a…
SENIOR CITIZENS’ DREAM – SAVINGS SCHEME
Jigar M. Patel International Tax Attorney Sound Security and Decent Yield coupled with Tax Incentives make SCSS an Attractive Investment Eligibility for Investment in SCSS Senior Citizen Savings Scheme (SCSS) permits investment for all individuals who have attained the age of 60 years or above. Moreover, as a special case, individuals in the age group…
NO TAX ON SALE OF PERSONAL EFFECTS
Jigar M. Patel International Tax Attorney Even Silver Utensils for Household Use have been held as exempt from capital gains tax! Any profit or gain arising from the ‘transfer’ of a ‘capital asset’ is treated as taxable income in the nature of capital gains. Section 2(14) of the Income-tax Act defines “capital asset as property…
Your Liability to TCS on Remittances under LRS
Jigar M. Patel International Tax Attorney While TCS is attracted on Overseas Remittances, Payments via Credit Cards still outside LRS & TCS Net! Planning to make forex remittances for international travel, overseas investments, expenses for higher education or medical treatment? Effective October 1, 2023, you need to keep in mind the revised regulations and new…
TAX CONCESSIONS FOR RENTAL INCOME
Jigar M. Patel International Tax Attorney Property Investment is attractive both for Rental Income as also for Valuable Tax Savings! While computing the taxable income from a let-out house property (LOP), whether residential or commercial, the taxpayer can enjoy attractive tax deductions from the rental income. This includes interest payable on borrowed capital for acquiring…
ALLURING TAX BREAKS FOR EDUCATION
Jigar M. Patel International Tax Attorney Interest on Loan for Higher Education and Tuition Fees for Children can Help You Save Tax! Deduction under Section 80E of the I.T. Act Section 80E provides for deduction in respect of any amount paid by an individual (without any monetary ceiling) by way of interest on loan taken…
PRACTICAL CASE STUDIES FOR PLANNING GIFTS
Jigar M. Patel International Tax Attorney Some Important Tax Tips to Keep in Mind while Giving or Receiving Gifts! Basic Exemption where Gift exceeds Rs. 50,000? Case Study-1: Mr. R receives a gift of Rs. 80,000 from his friend. Section 56(2)(x) provides that in case of a gift of any sum of money exceeding Rs.…
IN-HOUSE SHARING OF INCOME FOR USEFUL TAX SAVING
Jigar M. Patel International Tax Attorney Remuneration or Gift to Spouse attract Clubbing of Income, but that can be lawfully overcome too! Clubbing of Remuneration to Spouse Section 64 provides that where salary, commission, fees or any other form of remuneration is received by the spouse of an individual from ‘a concern in which the…
RASH WITH CASH CAN SEVERELY BACKLASH!
Jigar M. Patel International Tax Attorney Keep Away from Specified Cash Transactions or Encounter Severe Penal Consequences! With a view to curb cash transactions and thereby check generation and circulation of black money, Section 269ST came to be introduced providing that subject to specified exceptions, no person shall receive an amount of Rs. 2 lakhs…
HOW TO ENSURE NO DEDUCTION OF TAX AT SOURCE?
Jigar M. Patel International Tax Attorney Some Useful Tips for Senior Citizens, Small AOPs and Trusts for enjoying exemption from TDS on Interest Section 194A of the Income-tax Act provides for tax deduction at source (TDS) at 10% out of interest payments exceeding Rs. 5,000 in a financial year. The threshold limit for TDS in…
PERK UP YOUR EMPLOYEES WITH SOME TAX-FREE PERKS!
Jigar M. Patel International Tax Attorney What Tax-Friendly Perks can an Employer offer to make his Employee’s Pay Packet Sweet? While the option for availing concessional tax rates under the New Tax Regime has substantially curtailed the scope of enjoying tax-free allowances such as HRA, LTC and the like by salaried employees, there are a…
ACHIEVING MAJOR TAX SAVINGS FOR MINOR’S INCOME
Jigar M. Patel International Tax Attorney Some Smart Planning Tips to lawfully avoid Clubbing Provisions in respect of Minor’s Income A major stumbling block in capital formation for the minors are the clubbing provisions under Section 64(1A) of the Income-tax Act, which provide that in computing the total income of an individual, there shall be…
EXEMPTION VIA INVESTMENT IN RESIDENTIAL HOUSE!
Jigar M. Patel International Tax Attorney Plan to Enjoy Capital Gain without any Tax Pain on Sale of Your Residential House! Under Section 54 of the Income-tax Act, a taxpayer being an individual or HUF can avail exemption in respect of capital gains arising on transfer of a residential house held for a period of…
ARTIFICIAL INTELLIGENCE & DATA ANALYTICS FUTURE OF NON-INTRUSIVE TAX COLLECTION!
As India Commemorates 164th Income Tax Day Some Musings from Tax Guru Mukesh Patel ‘Income-Tax Day’ has its origin on 24th July, 1860, when Income-tax was first introduced in India by Sir James Wilson with a view to meet losses sustained by the British Government on account of the mutiny of 1857. Evolution of Income-tax…
MISSING YOUR ITR DEADLINE CAN PROVE COSTLY!
Jigar M. Patel International Tax Attorney Four Good Reasons why you need to File your IT Return due on July 31 well within time! With just a week away from the deadline of 31st July for filing Income Tax Returns (ITRs) for Assessment Year 2023-24, taxpayers need to be sensitized of the consequences of belated…
IMAGINATIVE PLANNING – LIFELINE FOR TAX SAVING
Jigar M. Patel International Tax Attorney Average Tax Rate of 10.40% on Family Income of Rs. 45 lakhs – Myth or Reality? The Indian taxpayer is indeed fortunate to be in an enviable tax system today. It is difficult to believe that some 50 years ago, he was required to live with a system of…
TAX FRIENDLY STATUS – EMPLOYEE OR CONSULTANT
Jigar M. Patel International Tax Attorney How & When Professional Retainership can prove to be a much Smarter Tax Option over Salary? Singh is offered a professional consultancy assignment by a company with an annual package of Rs. 18 lakhs, with a choice to either join the company as an employee or offer his services…
DISPELLING MYTHS ON FILING YOUR TAX RETURN!
Jigar M. Patel International Tax Attorney Get set to file your Income-tax Return in specified cases, even though you may have no tax to pay Section 139 of the Income-tax Act provides that an Individual or a Hindu Undivided Family are required to file their Income-tax Return (ITR), if their Gross Total Income (GTI), prior…
DESIGNING YOUR WILL TO REAP TAX SAVINGS!
Jigar M. Patel International Tax Attorney Strategic Drafting of Your Will can help Your Family achieve Smart Tax Planning Benefits Interest-free loans to family members from your own funds can go a long way to lawfully reduce your tax burden! If you have advanced an interest-free loan from your own funds or from borrowed funds…
KEEP IT WITHIN THE FAMILY AS YOU SAVE TAX
Jigar M. Patel International Tax Attorney Valuable Insights for Tax Deduction for Housing Loan Interest coupled with Smart Savings within the Family! Two interesting queries raised by AM readers on tax deduction for housing loan interest have been covered today. Readers can keep on sending their queries which will be duly addressed in this Column.…
REAPING SMART GAINS FROM CAPITAL LOSSES
Jigar M. Patel International Tax Attorney Even in the Gloom of Capital Market, make a Boom out of Capital Losses through Smart Tax Strategies! The provisions relating to set off and carry forward of capital losses under the Income-tax Act provide as under: Long Term Capital Loss (LTCL) can be set off only against Long…
ENJOYING TAX FREE STIPENDS AND SCHOLARSHIPS
Jigar M. Patel International Tax Attorney Judicial Pronouncements have been Liberal in Granting Tax Shelter for Cost of Education! Under Section 10(16) of the Income-tax Act, any scholarship granted to a person to meet the cost of education is exempt from tax. The term ‘scholarship’ has come to be interpreted liberally in several judicial pronouncements…
KHUL JA SIM SIM – OPEN NEW TAX SAVING DOOR!
Jigar M. Patel International Tax Attorney Amendment Closing Door on Double Tax Deduction for Housing Interest, Offers Key for New Tax Saving! Today’s write up in Tax Clues has been inspired by Alexander Graham Bell’s celebrated quote, “when one door closes, another opens, but we so often look upon the closed door, that we do…
CREATE AMAZING TAX-FREE CAPITAL FOR CHILDREN!
Jigar M. Patel International Tax Attorney PPF Magic can help build a Kitty of Rs. 1.10 Crores for Your 2 Children in 18 Years Bulls or Bears may have their sway… but the evergreen PPF is there to stay. While the Public Provident Fund (PPF) continues to rank as a star investment, popular with all…
CELEBRATE WITH REBATE YOUR TAX SAVING MATE!
Jigar M. Patel International Tax Attorney Income Tax Rebate can help you plan Zero Tax even for an Income Range of Rs. 7 lakhs to Rs. 10 lakhs The provisions of Rebate u/s. 87A of the Income-tax Act, introduced with a view to grant relief to small individual taxpayers, resident in India, became popular since…
INHERIT TODAY, SELL TOMORROW, WITHOUT ANY TAX SORROW!
Jigar M. Patel International Tax Attorney Courts Grant Unique Capital Gains Tax Shelter For Assets Acquired Via Gift, Inheritance or Will In April 2023, Mr. Amdavadi received under the Will of his grandfather a plot of land. His grandfather had acquired the said land for Rs. 60 lakhs in FY 2001-02. Mr. Amdavadi plans to…
SOVEREIGN GOLD BOND – 24 CARAT TAX SAVING
Jigar M. Patel International Tax Attorney SGB scores high over Physical Gold & Gold ETFs in terms of its glittering tax benefits! Investing in Gold – Ideal Hedge against Inflation! Return on investment in Gold has overshadowed many asset classes in the recent past. It has also served as an excellent hedge against inflation making…
WANT TO GIFT YOUR FRIEND BUT FREE FROM TAX TRAP?
Jigar M. Patel International Tax Attorney Motor Cars, Electronics, Furniture, Air Tickets and the like out of purview of Taxable Gifts, offer a Smart Avenue for Tax Planning! The scope of taxable income under the Income-tax Act is wide enough to include any sum received as gifts from one or more persons aggregating to more…
NA BULL… NA BEAR… BANO MARKET KE SHER!
Amidst the turbulent ups and downs of the stock market, it is only the prudent share investor who can steadily hold the fort, relying on his informed study, judicious analysis, diversified investment strategy and mature decision making. Playing with Bulls & Bears All investors see ‘Big Money’ lying in the stock market and, therefore, investment…
SEVEN SMART STRATEGIES TO BEAT INFLATION
As an investor you must look through money illusion due to inflation and focus on preserving and enhancing the all-important purchasing power of your rupee. You must also account for the impact of income tax which eats away your actual earnings. Conserving Purchasing Power of Your Rupee As someone once rightly remarked, “Inflation is when…
NO TAX HURDLE FOR INTEREST-FREE LOANS!
How Strategic Tax Planning via Interest-Free Loans to Spouse or HUF can be lawfully safeguarded? Interest-free loans to family members from your own funds can go a long way to lawfully reduce your tax burden! If you have advanced an interest-free loan from your own funds or from borrowed funds on which you are under…
FIVE GOLDEN INVESTMENT QUOTES
‘Panchamrut’ for Prosperity Five Golden Investment Quotes Managing your money requires more skill than making it. Savings will not make you rich, only smart investments will. Plan your play and play your plan. Let it not be a ship without a rudder, floating where the tide takes it. An investor’s worst enemy is not the…
INVESTMENT PLANNING – THE GUIDING STARS
Key Investment Considerations Security – Yield – Liquidity The key to successful Investment Planning lies in making the right choice of investments that best suit the investor’s specific requirements. Security, Yield and Liquidity are the three Guiding Stars which should influence any investor in making his decision. Investment Considerations The key to successful Investment Planning…