HOW TO CALCULATE THE ANNUAL VALUE OF YOUR HOUSE PROPERTY

HOW TO CALCULATE THE ANNUAL VALUE OF YOUR HOUSE PROPERTY

GROSS ANNUAL VALUE                           XXXX

LESS: MUNICIPAL TAXES PAID                 XXXX

ANNUAL VALUE (NET)                             XXXX

LESS: DEDUCTION U/S 24

       1. STANDARD DEDUCTION                XXXX      

       2. INTEREST ON BORROWED

          CAPITAL                                   XXXX

INCOME UNDER HEAD HOUSE PROPERTY      XXXX

FOR THE PURPOSE OF CALCULATING STANDARD DEDUCTION UNDER SECTION 24, THIS DEDUCTION IS ALLOWED AT THE RATE 30 PERCENT FOR EXPENSES INCURRED IN RELATION TO PROPERTY SUCH AS REPAIR, COLLECTION, INSURANCE PREMIUM PAID FOR PROPERTY ETC. THIS DEDUCTION CAN BE CLAIM BY ASSESSEE IRRESPECTIVE OF AMOUNT ACTUALLY SPEND.

FOR THE PURPOSE OF CALCULATING INTEREST ON BORROWED CAPITAL, IF ANY LOAN IS TAKEN BY ASSESSEE FOR PURCHASE, CONSTRUCTION, REPAIR, RENEWAL OR RECONSTRUCTION OF BUILDING, THE DEDUCTION IS ALLOWED ON ACCURAL BASIS, EVEN IF NOT ACTUALLY PAID AND IF ANY INTEREST IS PAID PRIOR TO COMPLETION OF CONSTRUCTION OR PURCHASE OF HOUSE THEN ANY INTEREST IS PAID, THE DEDUCTION OF INTEREST SO PAID IS ALLOWED DEDUCTION IN 5 EQUAL INSTALMENT STARTING FROM THE YEAR OF PURCHASE OR COMPLETION OF INTEREST. THE MAXIMUM DEDUCTION CAN CLAIM ASSESSEE IS Rs 30,000 OR Rs 1,50,000 IN ANY FINANCIAL YEAR, FOR THE PURPOSE OF CLAIMING DEDUCTION OF Rs 1,50,000 THE HOUSE IS CONSTRUCTED ON OR AFTER 1^ST APRIL, 1999 AND CONSTRUCTION COMPLETED WITHIN 3 YEARS.

TAX TIP

THE ASSESSEE CAN PURCHASE HOUSE PROPERTY IN CO-OWNERSHIP AND THE HOUSE PROPERTY IS SELF-OCCUPIED THEN ASSESSEE SHALL BE ENTITLED TO THE DEDUCTION OF Rs 30,000/1,50,000

THINKING TO INVEST YOUR MONEY IN FIXED RETURN INVESTMENT

THINKING TO INVEST YOUR MONEY IN FIXED RETURN INVESTMENT

IF YOU ARE THINKING TO INVEST YOUR MONEY AND YOU ARE CONSERVATIVE IN APPROACH WHEN IT COMES TO INVESTMENT, THEN YOU CAN INVEST IN THE SAVING BONDS LIKE HDFC 8% SAVING BONDS

IN THIS INVESTMENT, INVESTOR HAS AN OPTION TO CHOOSE CUMULATIVE OR NON CUMULATIVE BOND OPTION. THESE BONDS ARE ISSUED IN THE DOMINATION OF Rs 1000 AND THERE IS NO UPPER LIMIT OF INVESTMENT.

THE TENURE OF INVESTMENT IS 6 YEARS FORM THE DATE OF ISSUE. NO INTEREST IS ACCRUE AFTER THE MATURITY OF THE BONDS. THE INVESTOR WILL EARN 8 % OF INTEREST ON PER ANNUM BASIS AND THE END OF 6 YEAR, THE INVESTOR WILL EARN Rs 1601 OF EVERY Rs 1000 INVESTED BY HIM.

TAX IMPLICATION

THE INTEREST INCOME FROM THE BONDS IS TAXABLE IN THE HANDS OF INVESTOR. TDS IS DEDUCTED AT THE TIME OF CREDIT OF INTEREST.

ELIGIBILITY

ANY INDIVIDUAL, NOT BEING THE NON RESIDENT INDIAN, AN HINDU UNDIVIDED FAMILY, A CHARITABLE INSTITUTION

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OWN A HOUSE PROPERTY- KNOW YOUR TAX IMPLICATION

OWN A HOUSE PROPERTY- KNOW YOUR TAX IMPLICATION

HE YOU ARE THE OWNER OF HOUSE PROPERTY, THEN ITS ANNUAL VALUE IS TAXABLE UNDER THE HEAD HOUSE PROPERTY.

ACCORDING TO SECTION 22 OF INCOME TAX ACT, 1961, THE ANNUAL VALUE OF BUILDING OR HOUSE PROPERTY AND THE LAND APPURTENANT (i.e. ACCOMPANYING) THERETO IS TAXABLE UNDER THIS HEAD

EXPLANATION OF ABOVE RULE

1. EVEN IF LETTING OUT IS THE BUSINESS OF ASSESSEE STILL ITS RENTAL INCOME IS TAXABLE UNDER THIS HEAD.
2. IF BUILDING IS LET OUT TO CARRY ON THE BUSINESS MORE EFFICIENTLY, THEN IT SHALL BE TAXABLE UNDER HEAD PROFIT & GAINS OF BUSINESS OR PROFESSION
3. IN CASE OF COMPOSITE RENT, IF IT IN INSEPARABLE.
4. IF BUILDING IS OCCUPIED BY ASSESSEE FOR HIS OWN PROFESSION OR BUSINESS THEN NOTHING SHALL BE TAXABLE.
5. INCOME UNDER THIS HEAD IS TAXABLE ONLY IF ASSESSEE IS THE OWNER OF THE BUILDING

PLANNING TO INVEST YOUR MONEY!!!!!

PLANNING TO INVEST YOUR MONEY!!!!

HAVE YOU JUST SELL ANY OF YOUR ASSET LIKE HOUSE PROPERTY, GOLD JEWELLERY etc. ????

HAVE YOU EARNED ANY PROFIT FROM THE SALE OF ABOVE ASSET????

HAVE WORRIED ABOUT THE TAX IMPLICATIONS???

WANT TO SAVE TAX WHICH IS GET ATTRACTED BY THE ABOVE TRANSACTION??

THE ABOVE PROBLEM IS RESOLVED BY SECTION 54EC OF INCOME TAX ACT, 1961.

ACCORDING TO THIS SECTION IF ANY ASSET IS TRANSFERRED AND THAT ASSET IS USED FOR MORE THAN 36 MONTHS OR 12 MONTHS (IN CASE OF SHARES) AS THE CASE MAY BE, IF ANY CAPITAL GAIN IS EARNED AND IF THAT CAPITAL GAIN IS INVESTED IN PURCHASE OF BONDS ISSUED BY OF NATIONAL HIGHWAY AUTHORITY OF INDIA OR RURAL ELECTRIFICATION CORPORATION LTD. WHICH IS REDEEMABLE AFTER 3 YEARS, IF ANY OR WHOLE OF THE CAPITAL IS INVESTED FOR THE PURCHASE OF ABOVE SPECIFIED BONDS THEN WHOLE OR THE AMOUNT INVESTED WILL NE EXEMPT FROM TAX i.e. IT IS NOT TAXABLE IN THE HANDS OF ASSESSEE

EARNED AGRICULTURE INCOME- NO NEED TO PAY ANY TAX

EARNED AGRICULTURE INCOME- NO NEED TO PAY ANY TAX

AGRICULTURE IS THE PRIMARY SECTOR OF INDIA, IN ORDER TO ENCOURAGE THIS SECTOR THE GOVERNMENT HAS GIVEN INCENTIVE TO THE ASSESSEE WHO DERIVED INCOME FROM THE AGRICULTURAL ACTIVITIES IN INDIA.

BUT FIRSTLY IT IS IMPORTANT TO KNOW WHAT INCLUDES IN THE AGRICULTURE ACTIVITIES:-

1. ANY RENT EARNED FROM THE LAND SITUATED IN INDIA AND THAT LAND USED FOR AGRICULTURAL PURPOSES i.e. FOR FARMING etc.
2. ANY INCOME DERIVED FROM SUCH LAND BY AGRICULTURE OR THE SALE OF THE PRODUCE RAISED OR RECEIVED AS RENT IN KIND.
3. ANY INCOME DERIVED FROM THE SAPLING OR SEEDLINGS (A YOUNG PLANT RAISED FROM A SEED) GROWN IN  NURSERY SHALL BE DEEMED TO BE AGRICULTURE INCOME.
4. ANY INCOME DERIVED FROM ANY BUILDING OCCUPIED BY CULTIVATOR ( i.e. BY FARMER) AND THAT BUILDING MUST BE IMMEDIATE VICINITY i.e. NEARBY, THE LAND USED FOR AGRICULTURE AND THAT BUILDING WHICH IS SO PROVIDED TO FARMER IS USED BY HIM AS DWELLING HOUSE OR AS A STORE HOUSE.

WHERE SHOULD WE INVEST OUR SAVINGS?

FOLLOWING ARE THE AREAS OF INVESTMENTS WHERE ONE CAN INVEST HIS SAVING ACCORDING TO HIS PORTFOLIO.

1. GOLD
2. SILVER
3. COMMODITIES
4. REAL ESTATE
5. SECURITIES i.e. SHARES, DEBENTURES etc
6. TIME DEPOSITS
7. INSURANCE
8. PUBLLC PROVIDENT FUND
9. NSE

10. MUTUAL FUNDS

THESE ARE JUST THE FEW AREAS OF INVESTMENTS WHICH ARE LISTED ABOVE BUT THERE ARE MANY MORE AREAS WHERE ONE CAN INVEST HIS MONEY.

WHERE SHOULD WE INVEST OUR SAVINGS?

THE ANSWER DESCRIBES THE SIGNIFICANCE OF PORTFOLIO. THE ONE SHOULD ALWAYS ADVICE THAT HE SHOULD NOT INVEST HIS ENTIRE SAVINGS IN PARTICULAR ONE AREA, RATHER HE SHOULD DIVERSIFY HIS SAVINGS IN SUCH A MANNER THAT HIS SAVINGS GET MAXIMUM BENEFITS IN THE FORM OF HEALTHY RETURNS. EVEN IF HE SUFFERS LOSS FROM ONE AREA, THAT LOSS WILL GET COMPENSATED BY THE OTHER AREAS.

GET ASSURANCE FOR YOUR RETIREMENT

PENSION PLANS – ASSURE MONEY WHEN YOU RETIRE

PENSION PLAN SHOULD BE CONSIDERED IN EVERY PORTFOLIO BY EVERY PERSON.

EVERY PERSON PLANS WHAT WILL THE EARNING SOURCE WHEN HE WILL RETIRE FROM HIS JOB. WHEN THE PERSON IS OF GOVERNMENT EMPLOYEE HE CAN RELAX AS HE WILL GET MONEY SOME AT REGULAR INTERVALS IN THE FORM OF PENSION, BUT IF YOU ARE AN NON-GOVERNMENT EMPLOYEE THEN YOU SHOULD PLAN YOUR RETIREMENT INCOME IN ADVANCE.

THERE ARE MANY LIFE INSURANCE COMPANIES WHO GIVE YOU VARIOUS PENSION SCHEME , YOU CAN ALSO PLAN IN ADVANCE WHAT AMOUNT YOU REQUIRE AT THE TIME OF RETIREMENT AT THE REGULAR INTERVALS BY WHICH THE COMPANIES WILL CALCULATE THE AMOUNT TO BE PAID AT THE REGULAR INTERVALS AND AT THE CERTAIN AGE THE PERSON WILL BE ENTITLED TO GET REGULAR PENSION IN HIS REST OF LIFE.

FIXED DEPOSITS (FD's) IS VERY FAMOUS TAX SAVING INSTRUMENTS

FIXED DEPOSITS (FD’s) OR TIME DEPOSIT ARE ALSO YOUR TAX SAVING INSTRUMENTS.

FIXED DEPOSITS CAN BE MADE WITH ANY NATIONALIZED BANKS WHICH ARE KNOWN AS ONE OF THE SAVE INVESTMENTS.
FIXED DEPOSIT CARRY CERTAIN ADVANTAGES WHICH MAKES IT VERY POPULAR. FD's CAN BE MADE FOR BOTH SHORT TERM AS WELL AS LONG TERM WHICH MEET THE REQUIREMENT OF ALL THE TYPE OF INVESTORS, BUT FD's ARE VERY FAMOUS AMONG THE SMALL INVESTORS AND WHO WANT TO TAKE LESS RISK WITH THEIR INVESTMENTS.ONE CAN TAKE LOAN FROM ANY FINANCIAL INSTITUTION AGAINST HIS FIXED DEPOSIT, BY THIS HE CAN MEET HIS SHORT TERM OBLIGATIONS.

WHY TAX PLANNING?

Why we need tax planning this question is often comes to the minds of many people. But firstly, we need to understand what is tax planning?

Tax planning is a technique which primarily aims at adopting an arrangement so as to bring least incidents of taxes.

It aims at without violating the legal provisions of income tax act, 1961, full advantage is taken of all exemptions, deduction, rebates & relief to reduce tax liability.

PAN- A UNIQUE IDENTIFICATION NUMBER FOR ASSESSEE's

PERMANENT ACCOUNT NUMBER (PAN)

PAN  GIVE A UNIQUE IDENTIFICATION TO THE TAX PAYER.

EVERY ASSESSEE SHOULD APPLY FOR PAN.

THE PAN NUMBER IN THE FOLLOWING CASES IS NECESSARY:

1. IF THE TOTAL INCOME OF ASSESSEE EXCEEDS THE MAXIMUM LIMIT WHICH IS NOT CHARGEABLE TO TAX ( for financial year 2011-2012 the limit for women assessee is Rs 1,90,000, for senior citizen is Rs 2,40,000 and assessee other than above if individual is Rs 1,80,000)
2. IF TOTAL SALES OR GROSS RECEIPT EXCEEDS Rs 5,00,000 IN ANY PREVIOUS YEAR
3. IF RETURN IS FILED UNDER SECTION 139(4A) (i.e for charitable trust)
4. HOWEVER, THE ASSESSEE IF NOT FALL UNDER ABOVE STILL MAY APPLY FOR PAN

BUYING GOLD IS SAVE AND HEALTHY INVESTMENT

BUYING GOLD IS SAVE AND HEALTHY INVESTMENT

IF YOU ARE LOOKING FOR A SAFE AND THINKING OF GOOD RETURN THEN INVESTING IN GOLD IS ONE THE BEST INVESTMENT.

INVESTMENT IN GOLD IS CAN BE MADE BOTH FOR LONG TERM & FOR SHORT TERM AND ITS VALUE INCREASED FROM AROUND Rs 9000 TO 10,000 IN LAST DECADE TO AROUND Rs 22000 DURING THESE DAYS

AS ONE CAN ANALISE THE GROWTH IN THE VALUE OF GOLD. ONE CAN INVEST IN GOLD IN THE FORM OF FOLLOWING :

1. GOLD COINS ISSUED BY VARIOUS BANKS
2. GOLD JEWELLERY
3. WORLD GOLD COUNCIL COINS: THESE COINS PROVIDED BY JEWELLERS WHO ARE THE PART OF WGC AT A PREMIUM OF 1% TO 2%
4. BULLION BARS
5. GOLD EXCHANGE TRADED FUNDS

IN THE SHORT TERM, GOLD IS VERY STRONG INVESTMENT AS COMPARED TO THE INVESTMENT IN SHARES etc. WHICH IS HIGHLY VOLATILE IN NATURE.

ATLEAST 5% OF OVERALL INVESTMENT PORTFOLIO CAN BE CONSIDERED FOR GOLD INVESTMENT. JEWELLARY IS NOT AN INVESTMENT AS IT IS ONLY AS EXPENSE IN NATURE WHICH IS FOR PLEASURE AND IT SYMBOLISING WEALTH.

YOUR MEDICAL INSURANCE CAN ALSO SAVE YOUR TAX

YOUR MEDICAL INSURANCE CAN ALSO SAVE YOUR TAX

THE PERSON WHO IS PAYING MEDICAL INSURANCE PREMIUM OR ANY CONTRIBUTION MADE TO CENTRAL GOVERNMENT HEALTH SCHEME ( AS PER AMENDMENT FOR ASSESSMENT YEAR 2011-2012) OF HIMSELF, SPOUSE, PARENTS WHETHER DEPENDENT OR NOT, AND DEPENDENT CHILDREN IS ALLOWED DEDUCTION UNDER SECTION 80D OF INCOME TAX ACT, 1961.

THE QUANTUM OF DEDUCTION

MAXIMUM DEDUCTION CAN BE CLAIM BY ASSESSEE IS OF Rs 15,000 + Rs 15,000/ Rs 20,000(IF PARENTS ARE SENIOR CITIZEN) FOR INSURANCE OF PARENTS

YOU CAN SAVE THE MAXIMUM TAX OF Rs 10,500 (assuming that assessee have more than Rs 5,00,000 of earning)

BUT THE CONDITION OF CLAIMING THIS DEDUCTION IS THAT THE PAYMENT OF PREMIUM MUST BE MADE BY ANY MODE OTHER THAN CASH.

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