Author: CA Tarannum Khatri

Save tax on sell of house property by sec 54

 Long term capital gain is taxed at 20%.The rate is high and as a taxpayer or professional, you should be aware of saving long term capital gain by using sec 54. Here I have tried to explain main points of section 54 through questions and answers. Who can claim deduction u/s 54? Only individual and HUF can take benefit of section 54.. For which transaction exemption u/s  54 is allowed? Section 54 can help to save the tax when any residential house is transferred and the asset should be long term asset. It means that you have owned the residential house for more than 3 years from the date of transfer. Which asset should be purchased? You have to purchase another residential house within 1 year before the date of transfer or within 2 years after the transfer. The deduction is also available if you construct the residential house within 3 years from the date of transfer.Cost of plot can be included as cost of new residential house. How much exemption is allowed? Exemption is allowed up to the least of following: cost of the new residential house capital gain. What if you purchase or construct two new residential houses? The exemption is available to only one unit. But you can choose for which house you are seeking exemption. Obviously, you will choose the house which has more cost....

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Top 5 Ways of income tax saving

Each tax payer searches way to save his tax and get more net income. In practice, I have meet two kinds of people – one who doesn’t want to spend 1 Rs. on tax and another who asks me to calculate tax payable higher as possible. Here I am talking about first kind of person. So here I will suggest you 5 top ways of tax saving. Way No. 1:  Claim your expenditure of business:  Many taxpayers do not know what to claim in return as expense. If the expenditure is related to business and revenue nature, you can definitely claim it. Maintain all the bills of expenditure in one separate file. You can claim salary of employee, interest paid on loan, rent of office, petrol expenditure, travelling expenditure, mobile bill , bad debt and most important depreciation. Yes , you can claim depreciation on asset as expenditure. It will be varied between 5% to 100%. so don’t forget to claim it. Way no. 2:  Investment in insurance:  Investment in life insurance and medical insurance will not only give you insurance cover and bonus but it is smart way of saving tax. Suppose you have invest Rs. 1,00,000 in LIC policy and your income is Rs. 6,00,000. so you have to pay 20% tax on Rs. 1,00,000 (Rs. 6,00,000-Rs. 5,00,000)  but as you invest in LIC .your income will...

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Income tax rates for A.Y. 2014 -15

Income tax return filling due date is near and you may be searching for income tax slab.Here I have given chart for income tax rates for A.Y. 2014-15 and F.Y. 2013-14  Tax rates for other than senior citizen for a.y. 2014-15 For individuals other than senior citizen (60 years or more age) and super senior citizen (80 years or more age)assessee   Income Tax Slabs Up to Rs 2,00,000 Nil Rs. 2,00,000 to Rs.5,00,000 10% plus rebate-10% of income up to 2000 Rs. 5,00,000 to 10,00,000 20% More than Rs. 10,00,000 30%   Surcharge -10% when income exceeds Rs. 1 crore Education and higher education cess-3% on tax and surcharge   Tax rates for senior citizen (60 years or more age) for a.y. 2014-15:   Income Tax Slabs Up to Rs 2,50,000 Nil Rs. 2,50,000 to Rs.5,00,000 10% Rs. 5,00,000 to 10,00,000 20% More than Rs. 10,00,000 30%   Surcharge -10% when income exceeds 1 crore Education and higher education cess-3% on tax and surcharge   Income tax rates for super senior citizen (80 years or more age) for a.y. 2014-15:   Income Tax Slabs Up  to Rs.5,00,000 Nil Rs. 5,00,000 to 10,00,000 20% More than Rs. 10,00,000 30%   Surcharge -10% when income exceeds 1 crore Education and higher education cess-3% on tax and surcharge.  ...

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How to calculate tax on agricultural income?

Agricultural income can give you tax advantage but you should know correct method for calculating tax.Learn how to calculate income tax liability when you have agricultural income. Step 1: Compute non agricultural income as if it was your only income. Step 2: Aggregate non agricultural income and agricultural income and compute tax on it. Step 3: Compute tax on agricultural income after adding basic exemption limit to it. Step 4: Step 2- Step 3 is tax payable Step 5: Add surcharge and education cess. This exemption is not available to company or firm. Don’t you think this is great benefit given to small tax payer. So follow the rule and save the tax.  know more about income tax by subscribing to Tax masala’s news...

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Income Tax Return due dates

In taxation field, dates are very important. you are late for one day and you have to pay interest , penalty etc. But don’t worry. Here I have given information about due date of Income tax return filling, belated return, revised return and defective return.It will help tax payers, students and professionals.Let’s take a look. Due date for filling income tax return (139(1)) Assessee Due date Company assessee 30th September Where accounts of the assessee are required to be audited under any law 30th September Where assessee is working partner in a firm whose accounts are audited under any law 30th September In any other case 31st July Benefits of filling return within due date: 1)      No interest chargeable for 234A, 234B and 234C. 2)      No penalty 3)      All losses can be carried forward to next year. Income tax return can be filed belated u/s 139(4) within one year from the end of the assessment year. Disadvantages of filling belated return: 1)      The assessee will be liable for penal interest under section 234A. 2)      A penalty of Rs. 5000 may be imposed u/s 271F. 3)      Few losses cannot be carried forward. Revised Return under section 139(5): Assessee can correct omission or wrong statement by filling revised return. The revised return is substitution of original return and once revised return is filed, assessment will be started according to the revised...

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