My wife earns Rs 5,000 per month. Can I take tax benefit against my wife's PPF account?
A: You can avail the tax benefit by contributing to your wife's PPF account.
I trade in shares. Can I invest some money from my son's NRI account without paying any taxes?
A: Money, be it for share trading, withdrawn from son's NRI account is not taxable. It will be treated as either a loan or gift.
Always accept a loan in the form of an account payee cheque only. But earnings from share trading would be treated as your income and not of your son. It would be taxed as per the income slab.
What is the process of capital formation for HUF?
A: It can be done either through gifts or a loan. A Hindu Undivided Family should not accept gifts from its members in order to avoid being subject to clubbing provisions, but any member can give loans to HUF.
If HUF gets gifts of over Rs 50,000 in cash, the amount above this limit would be subject to income tax. However, gifts received in the form of property and jewelry will not subjected to income tax.
Can a couple without children set up an HUF?
A: Yes. A married couple can form a separate tax unit as HUF.
RBI has increased the limit of overseas investment by individuals? How is its tax treatment done?
A: As per the new guidelines, individuals can invest up to $ 100, 000 per annum abroad in shares, mutual funds and property. Dividends from shares of the foreign companies will be subjected to income tax.
Income from foreign mutual funds will also be subject to income tax since they are not registered with the SEBI.
When you sell shares of a foreign company after one year, you wouldn't get the benefit of long-term capital gains.
I have purchased some raw material from a company. But the company doesn't have a bank account.
Can I give Rs 20,000 in installments on different dates in order to escape disallowance of expenditures?
A: If you have made cash payment of over Rs 20,000, 20 per cent of this
would be disallowed. As per the changed law applicable from this year, if you make the payment in cash, the entire amount will be disallowed. But if you are paying Rs 20,000 on different dates, the expenditure will not be disallowed.
I want to take education loan? How are the installments calculated? Will I get tax deduction against interest?
A: Different banks have different system for giving loans. Under 80E of the IT Act, interest amount will get you tax deduction.
How is tax calculated on shares purchased in futures and options?
A: Income will be treated as business income. The rate of tax depends on the size of the income. Total income is subject to tax as per tax slab -- 10 per cent for Rs 1.5 lakh, 20 per cent for Rs 1.5-2.5 lakh and 30 per cent if the income is above Rs 2.5 lakh.
What is TDS, and how is it calculated?
A: TDS is applicable on bank interest, lottery income, income from horse racing, money given to contractor and subcontractor, lottery commission, commission from brokerage any other business. You have to file its details in the return form.
I am a government employee. I have been paying an insurance premia of Rs 12,000 per annum. Will I get tax deduction?
A: You can take the benefit of tax deduction by informing your employer about it.
Can an employee of a public limited company do trading in F&O?
A: You have to see the company rules. But in my opinion, it is not appropriate to do business if you are a full time employee of a company.
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