TAX SCRIPTS
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…