How to facilitate the filing of income tax returns

Aloke Gupta is unable to handle the paperwork when it is time to file his income tax returns. He ends up filing the return based on the Form 16 provided by his employer since salary is his primary source of income. It is easier to take care of the interest earned on deposits based on the TDS certificate, but the rest of his investments in shares and mutual funds are tough to manage for tax purposes. What should Gupta do?

If Gupta has too many transactions in equity and mutual funds, it may help to find a chartered accountant to maintain his accounts and file the tax returns. Equity transactions may create shortterm capital gains, which are taxable. Similarly, there may be capital losses that can be set off against some gains. Mutual fund transactions may also have short- and long-term capital gains that are taxable. Gupta may not be complying with tax laws if he does not account for and pay taxes that may be due on these transactions.
Many service providers and brokers provide periodic statements, which show tax liability with respect to equity, debt, mutual fund and derivative transactions. Gupta should subscribe to these services and use the statements after due verification by his CA to ensure that he is paying the right amount as tax. He should remember that the tax on these investment gains is not subject to TDS. Therefore, Gupta may have to fill up the required tax challans and pay the taxes as applicable. It might help to consolidate his transactions in investments with one or two advisory services.
Gupta also needs to ensure he does not have too many bank accounts that are used for making these investments. The non-payment of taxes may lead to fines and penalties if his returns come up for scrutiny. The cost of maintaining his accounts and books might turn out to be lower in comparison.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava

Source:The Economic Times 

Income tax returns: 9 tax saving options other than Section 80C

Before you calculate your tax liabilities, remember to analyze the various sections of tax deductions under the Income Tax Act as tax planning does not end with Section 80C. (Calculate your tax liability here)

80D:
Tax deduction under section 80D qualifies for mediclaim policies. The premium, which is paid for medical insurance policy for self and family members to protect them from sudden medical expenses, comes under this section. The maximum amount allowed for exemption annually for self, spouse and dependent parents/children is Rs. 15,000. In case of a senior citizen, the maximum amount extends up to Rs. 20,000. If you are paying the premium for your parents (whether dependent or not), you can claim an additional maximum deduction of Rs. 15,000.

80DD:
According to the Income Tax Act, if you are paying a premium to LIC or any other insurance company (approved by the Income Tax board) for the medical treatment of a dependent physically disabled person, you can avail exemption under the section 80DD. Here, the dependent should be none other than your spouse, children, parents or sibling. If the person is suffering from 40 per cent of any disability, a fixed sum of Rs. 50,000 can be claimed in a year. Similarly, if the disability is 80 per cent, the fixed sum goes up to Rs. 1,00,000 per year. For initiating the process of deduction you need to submit the medical certificate issued by a medical authority along with the return of income.

80DDB:
If you have incurred expenses for the medical treatment of self or your dependents, you can claim a deduction of up to Rs. 40,000 or the actual amount paid, whichever is less, under the section 80DDB. For a senior citizen, the maximum exempted amount is Rs. 60,000, or the amount actually paid for medical expenses. To claim a deduction under this section, you need to submit a medical certificate from a doctor working in a government hospital.

80E:
The interest paid on loan taken for pursuing higher education of self or any dependent is exempted from tax under section 80E. An education loan can be taken for wife, children and minors for whom you are the legal guardian. This deduction is applicable for a period of eight years or till the interest is paid, whichever is earlier. The deduction is only approved for higher studies, which means full-time graduate or postgraduate courses in engineering, management or applied sciences, pure sciences including mathematics or statistics. However, from 2011 onwards, the scope of this exemption has been extended to cover all fields of studies including vocational studies pursued after completing the senior secondary examination or equivalent. No exemption is applicable for part-time courses.

80G:
One often donates on philanthropic grounds to help the destitute. Such an amount can be donated to trusts, charitable institutions and approved educational institutions, and qualifies for deduction under Section 80G. The exemptions can be up to 50 per cent or 100 per cent of the donations made. Funds in which the donations are eligible for tax exemptions include the National Defence Fund, Prime Minister Drought Relief Fund, National Foundation for Communal Harmony, National Children's Fund, Prime Minister's National Relief Fund, etc.

80GG:
If a salaried or self-employed person staying in a rented house does not receive any kind of HRA, they can claim a deduction under this section. However, you cannot avail any such benefit if you, your spouse and/or your child owns any residential accommodation in India or abroad. You can claim the least of the following under Section 80GG: 25 per cent of the total income, or Rs. 2000 per month, or excess of rent paid over 10 per cent of total income.

80GGC:
Any monetary contribution to any political party or electoral trust is eligible for tax exemption. Thus, your contribution, as a matter of appreciation for their work, will serve both the purposes.

80U:
A resident of India suffering from any kind of specified disability is eligible to claim tax deduction under this section. In order to enjoy this opportunity, one should be suffering from not less than 40 per cent of the following diseases: blindness, low vision, mental illness, mental retardation, hearing impairment. The deduction provided is flat Rs. 50,000, irrespective of the expense incurred. If the disability is severe, the deduction can be up to Rs. 1 lakh. One needs to provide a copy of all the certificates issued by a medical authority in order to avail this benefit.

80CCG:
The Finance Act 2012 introduced a new Section 80CCG to offer 50 per cent tax break to new investors who invest up to Rs. 50,000 and whose GTI is less than or equal to Rs. 10 lakh. It has been introduced for budding investors entering the equity markets for the first time and is a once-in-a-lifetime benefit.

Hence, there are several sections apart from 80C that can help an individual benefit from tax exemptions. It is time to start looking beyond 80C for tax savings.

Disclaimer: All information in this article has been provided by BankBazaar.com and NDTV Profit is not responsible for the accuracy and completeness of the same.

Telangana: Near total bandh in coastal, southern AP

New Delhi: India is all set to get its 29th state – Telangana, which was endorsed by UPA allies and cleared by the powerful Congress Working Committee on Tuesday evening.

While the decision has been welcomed by pro-Telangana supporters, those opposed to the move have termed it suicidal.

New Delhi: India is all set to get its 29th state – Telangana, which was endorsed by UPA allies and cleared by the powerful Congress Working Committee on Tuesday evening.

While the decision has been welcomed by pro-Telangana supporters, those opposed to the move have termed it suicidal.

Here are the updates:

Shutdown has been effective in coastal and southern Andhra Pradesh; near total bandh observed.

West Bengal Chief Minister Mamata Banerjee condemns UPA government for endorsing statehood to Telangana, calls the decision "divisive politics". Mamata has also written to Prime Minister Manmohan Singh asking for the reasons behind the decision.

TDP chief N Chandrababu Naidu calls on the Centre to develop a city at par with Hyderabad as the capital of Andhra Pradesh following the formation of Telangana.

The decision to create Telangana "seems to have been impelled by the forthcoming Lok Sabha elections. It will give a fillip to demands for separate states in other places", says CPI(M).

Digvijay Singh says there is nothing wrong in having Hyderabad as joint capital for the two states of Telangana and Andhra Pradesh.

Six state ministers who are opposed to the creation of Telangana state have submitted resignations to the Andhra CM, say reports.

Reports said Andhra CM Kiran Kumar Reddy, who is from the Rayalaseema region and is a staunch supporter of the "united Andhra Pradesh" cause, told his ministers today that the decision on Telangana was "painful" for him as well. He however added that there was now a need to look at the road ahead and how to move ahead on the new states.

P Ramesh Babu, Congress MLA from Pendurthy Assembly constituency, resigns to protest the Congress decision to form a separate Telangana state.

Decision is in favour of Telangana because ultimately Hyderabad will be Telangana's capital, says Digvijay Singh. Decision is also in favour of Rayalaseema and Andhra so that both can progress and be self-reliant, he adds.

Until a new capital is formed for Andhra Pradesh, Hyderabad will be capital of both states, says Congress' Digvijay Singh.

BJP and Narendra Modi should welcome the decision (on Telangana) and not question the delay, intentions behind the decision etc, says Jagdambika Pal of the Congress.

Effigies of Congress president Sonia Gandhi burnt during anti-Telangana protests.

The shutdown has hit normal life in Visakhapatnam, Vijayanagaram, Eluru, Kakinada, Vijayawada, Guntur, Nellore, Ongole, Chittoor, Tirupati, Anantapur, Kadapa, Kurnool and other towns.

Hundreds of vehicles are on the Vijayawada-Hyderabad and the Chennai-Bhubaneswar highways.

Road transport has come to a standstill while shops, business establishments and educational institutions have remained closed in the two regions.

Protests have begun in coastal Andhra and Rayalaseema regions.

Hundreds of police and paramilitary personnel have been deployed in the two regions to maintain law and order.

Union Cabinet is set to meet on Wednesday to discuss Telangana - a separate state to be carved out of Andhra Pradesh. While the agenda of the special Cabinet meeting has not been disclosed, sources say it is most likely to take up and approve the creation of Telangana.

A day-long bandh has been called across coastal and southern Andhra Pradesh to protest the proposed creation of Telangana.

A 'hurt' Rayapati Sambasiva Rao, senior Congress leader and Lok Sabha member from Guntur, said he was resigning from the party as well as his Parliamentary seat in protest.

Congress ministers and MPs from Andhra Pradesh are expected to meet state Chief Minister Kiran Kumar Reddy today.

Congress general secretary Digvijay Singh told a press conference last evening that the creation of Telangana will take around four to five months. "The entire process should take around four to five months," he said.

After the Cabinet approves Telangana, the CWC resolution will be sent to the Andhra Pradesh Assembly, which will have to approve it.

Next, the Central government would set up a group of ministers (GoM) which will go into the details of sharing the assets like water resources, boundary, finances and security related issues between Telangana and the rest of Andhra Pradesh.

The Law Ministry will then draft a bill for creation of Telangana state which will be sent to the Union Home Ministry.

The suggestions of the state Assembly will not be binding on the Home Ministry.

The bill, once approved by the Union Cabinet, will then be sent to President Pranab Mukherjee for his approval.

It will then be sent to Parliament to be passed by a simple majority in both the Houses. Once approved by Parliament, the bill will again be sent to the President for his assent. 

Indian IT cheers Telangana state formation

HYDERABAD: After over three years of uncertainty, the Information Technology industry here heaved a sigh of relief with the Congress party's announcement to carve out a separate Telangana state.

The announcement has cleared the air over the future of Hyderabad, a major IT destination in the country.

This fast growing metropolis will be the joint capital of Telangana and Andhra Pradesh for 10 years. Andhra Pradesh is expected to build its own capital within that period.

The IT industry welcomed the decision, saying it brought an end to uncertainty and brightened the prospects of the city attracting new investments.

The industry with software exports to the tune of Rs 40,000 crore was worried over frequent shutdowns and spells of violent protests for separate Telangana state. This had taken sheen off brand Hyderabad.

"I believe the decision has brought in a positive sentiment as the uncertainty surrounding the matter has finally been resolved," said V. Laxmikanth, managing director, Broadridge India.

"Hyderabad, known for its large pool of talented IT professionals and as a base for leading MNCs, is expected to reclaim its reputation of being the destination of choice for businesses across industries," he said.

BVR Mohan Reddy, chairman and managing director, Infotech Enterprises, said while he was not for or against the decision, he was anxiously looking forward for this decisive movement.

"The separation problem has been voiced for the last 50 years but in the last three years some of these agitations have been (hurdles) for progress of the state. The uncertainty has slowed down the growth. That is now past."

Suman Reddy, vice president and managing director, Pegasystems India, hoped the development will bring back stability in the business environment of the city.

"Growth and expansion from the perspective of IT MNCs investing in the state had been stalled/relatively slow due to this issue, which hopefully will resume after the decision is announced," he said.

Hyderabad, which emerged on the world IT map only in mid-1990s, is home to over 1,000 IT and ITeS companies including global majors like Microsoft, Google, Facebook, Dell, Oracle and Amazon.

The IT and ITes sector provides nearly five lakh jobs.

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Clarke Leads Australia to 303-3 Against England in Ashes Cricket

Captain Michael Clarke’s unbeaten century led Australia to 303-3 on the opening day of the third Ashes cricket Test against England.
Clarke reached 125, Australia’s first century of the series, at stumps at Old Trafford in Manchester and Steven Smith was 70 not out. The two will resume a 174-run partnership tomorrow.
“It’s always tough when the wicket plays like that,” England seam bowler Tim Bresnan, who took 1-51, told Sky Sports. “Ultimately, the Aussies played really well today.”
Chris Rogers added 84 runs as Australia looks to rebound from two losses to open the five-game series. England would win the Ashes for the third straight time with a victory.
Australia made three changes to its team as David Warner returned from suspension in place of Phil Hughes, off-spinner Nathan Lyon replaced Ashton Agar and left-arm seamer Mitchell Starc came in for injured James Pattinson.
Meanwhile, England captain Alastair Cook named an unchanged team after Kevin Pietersen was declared fit following his calf strain in the second Test.
Clarke elected to bat after winning the toss and his team reached 76 before Shane Watson was caught for 19 by Cook at first slip from Bresnan.
A controversial decision then left the visitors on 82-2 after umpire Tony Hill ruled Usman Khawaja was caught behind by Matt Prior off Graeme Swann. Australia called for video review, which appeared to show the ball missing the bat, but TV umpire Kumar Dharmasena upheld the original call.
Swann trapped Rogers leg-before-wicket after lunch for his second wicket. The Australian opener chatted with Clarke about a review before leaving the field.
Clarke, who has 17 fours, and Smith then took control to see out the day’s play. Smith escaped an lbw dismissal because England had used up its two reviews, as Hawk-Eye showed the ball from Stuart Broad would have hit the middle stump.

To contact the reporter on this story: Bob Bensch in London at bbensch@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.

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