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Old 30th December 2014, 06:24   #496
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Default Re: Income Tax savings, Investments and Insurance

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Originally Posted by faustus77 View Post
From AY 2013-14, within the existing limit a deduction of upto Rs. 5,000 for preventive health check-up is available.

Thanks a lot once again Regards
Even your link says within the existing limit. Nowhere does it say additional.

So no, the 5k can't be claimed if you already maxed out existing 80d limits by buying health insurance.
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Old 30th December 2014, 12:21   #497
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Default Re: Is Reliance Easy Retirement Solution worthy as they showcase?

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Originally Posted by zenren View Post
Is this applicable for salaried folks who get their income tax deducted at source? Under which header should this be mentioned as an exemption?
Hi Zenren, As far as I understand, the fund you transfer to your parents as gifts are not taxable in their hands. If they invest it in an FD, the interest is taxable in their hands and not yours. The interest earned is not exempted. However, they may not have to pay tax as the income will be well within their exempted limits. For senior citizens, the first 3 Lac in their income is exempted from tax. For regular individuals, it is 2.5 Lacs.

For example, if you have 10 Lacs to invest in an FD the interest received (9.25%) would be approximately 92,500/-

If you invest in your name, and you are in 30% tax bracket, you will have to pay 27,750/- as income tax on interest.

If you transfer the 10 Lac to your parents who are senior citizens, the interest income of 92,500 will be within their exempted limits (3 Lacs) and they need not pay any tax on it.

Also, please note the the below from hserus. If one invest in their Mom's name and Mom is a dependent on Father and not you, there won't be a problem. If not, the below point is significant.

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Gifts in the hands of close blood relatives such as spouse and parents are tax free in their hands. However if they have zero income and are your dependent then their income may be clubbed with yours for tax purposes so be careful of that
Thanks hserus for pointing out a significant factor.

Last edited by D C : 30th December 2014 at 12:32. Reason: Multi-quoting
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Old 30th December 2014, 12:40   #498
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Default Re: Is Reliance Easy Retirement Solution worthy as they showcase?

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Hi Zenren, As far as I understand, the fund you transfer to your parents as gifts are not taxable in their hands.
I understand that we can give the amount to our parents and it wouldn't be taxable in their hands. However, for salaried professionals, the tax is deducted by the employer before the income reaches us. In such a case, it would not be possible to save tax unless there is a clause in the income tax act to avail exemption/refund on the same. Salaried employees cannot set off their expenditure against the income to make it tax exempt outside of the regular provisions available.

In case we are paying the tax ourselves after we get the entire income, your suggestion might be possible. However, such an option is not possible for salaried employees.

EDIT: I got your point now. I was looking at another possibility of saving the tax on the principal as well, in case of family business. In case of family businesses, every adult in the family can be considered as an employee and the total earnings can be split among them to ensure it reaches the taxable limit only after everyone exhausts their limits, even if most of them would be just sitting at home.

Last edited by zenren : 30th December 2014 at 12:45.
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Old 30th December 2014, 15:19   #499
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Default Re: Is Reliance Easy Retirement Solution worthy as they showcase?

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Originally Posted by D C View Post
Hi Zenren, As far as I understand, the fund you transfer to your parents as gifts are not taxable in their hands. If they invest it in an FD, the interest is taxable in their hands and not yours. The interest earned is not exempted. However, they may not have to pay tax as the income will be well within their exempted limits. For senior citizens, the first 3 Lac in their income is exempted from tax. For regular individuals, it is 2.5 Lacs.

For example, if you have 10 Lacs to invest in an FD the interest received (9.25%) would be approximately 92,500/-

If you invest in your name, and you are in 30% tax bracket, you will have to pay 27,750/- as income tax on interest.

If you transfer the 10 Lac to your parents who are senior citizens, the interest income of 92,500 will be within their exempted limits (3 Lacs) and they need not pay any tax on it.

Also, please note the the below from hserus. If one invest in their Mom's name and Mom is a dependent on Father and not you, there won't be a problem. If not, the below point is significant.



Thanks hserus for pointing out a significant factor.
Hi,
Just to clarify, for gifting cash to parents, do one has to execute a gift deed and accordingly pay the stamp duty of 2% (in Maharashtra) on the value? Or can it be done by drawing cheque on parent(s) names and getting a receipt from them with Revenue stamp that they have accepted the money as gift?
Thanks in advance.
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Old 30th December 2014, 15:55   #500
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Default Re: Is Reliance Easy Retirement Solution worthy as they showcase?

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Hi,
Just to clarify, for gifting cash to parents, do one has to execute a gift deed and accordingly pay the stamp duty of 2% (in Maharashtra) on the value? Or can it be done by drawing cheque on parent(s) names and getting a receipt from them with Revenue stamp that they have accepted the money as gift?
Thanks in advance.
AFAIK, there is no need to execute deeds for gifting cash to parents. If Gift deeds are executed when one transfer the ownership of a property (or the like) to another with out a consideration in return.

Here is an extract from an Internet Source for reference

Quote:
When it is required to be stamped OR get registered?
Gift made by way of cash or cheque does not mandatory requires to be executed through a gift deed. Writing a plain typed note on a paper will generally suffice. It is not required to be stamped and registration is also not needed. You may simply mention the names of persons, their relation and that the gift is being given out of love and affection.
Gift made by way of movable property is required to be made in stamp paper and stamped by the notary or court, and registration of gift deed is not required in this case. For the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor. Gift of immovable property which is not registered is not valid as per law and cannot pass any title to the receiver.
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Old 31st December 2014, 08:54   #501
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Default Re: Is Reliance Easy Retirement Solution worthy as they showcase?

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Originally Posted by D C View Post
A Reliance executive tried to sell me the below investment.

Easy Retirement Solution (ERS) from Reliance:
1. Pay 1 Lac every year for 10 years
Golden rules - never mix insurance and investment. Never mix insurance and pension plans.

Stick to EPF / PPF for retirals.

Never believe marketers, "bancassurance" people etc who have a conflict of interest in that they earn commission from selling you plans, and so focus on maximizing their commission rather than your investment.

Use a good for-fee advisor - not investment advice from neighborhood uncleji / friends and family type insurance agents.

For such marketing people, give a counter offer. Tell the fellow to pay you 1 lakh x 10 years = 10 lakhs upfront, and you'll pay him as per the advertised benefits table. Watch him run away, real fast.
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Old 31st December 2014, 12:49   #502
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Default Re: Is Reliance Easy Retirement Solution worthy as they showcase?

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Originally Posted by hserus View Post
Golden rules - never mix insurance and investment. Never mix insurance and pension plans.

Stick to EPF / PPF for retirals.

Never believe marketers, "bancassurance" people etc who have a conflict of interest in that they earn commission from selling you plans, and so focus on maximizing their commission rather than your investment.

Use a good for-fee advisor - not investment advice from neighborhood uncleji / friends and family type insurance agents.

For such marketing people, give a counter offer. Tell the fellow to pay you 1 lakh x 10 years = 10 lakhs upfront, and you'll pay him as per the advertised benefits table. Watch him run away, real fast.
That's what exactly they do. I loved the counter offer
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Old 1st January 2015, 15:18   #503
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Hi. I need to spend around 75k inr in present year for medical treatment of myself. I have no insurance. How much of the expenses can I claim a deduction? Is it eligible deduction? What documents are required?

Its for cataract surgery, if it is relevant.
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Old 1st January 2015, 15:46   #504
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Default Re: Income Tax savings, Investments and Insurance

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Hi. I need to spend around 75k inr in present year for medical treatment of myself. I have no insurance. How much of the expenses can I claim a deduction? Is it eligible deduction? What documents are required?

Its for cataract surgery, if it is relevant.
Your son or daughter on whom you're dependent can pay for surgery and claim deduction u/s 80DD. Edit they can claim to the full allowable extent even if expense incurred is less than the allowed limit. That is if you are over 80% blind without surgery as certified by a govt surgeon then the full one lakh can be claimed even if only 75k is spent on surgery. http://www.simpletaxindia.net/2013/0...full-even.html

(a) Any expenditure for Medical, Nursing & Rehabilitation incurred on dependant suffering from permanent disability including blindness, mental retardation, autism, cerebral palsy or multiple disabilities

(b) Deposits under LIC, UTI’s Scheme & other IRDA approved insurers for the benefit of physically handicapped dependant
Rs.50,000 (Rs.1,00,000 if the disability is severe exceeding 80%)
- See more at: http://www.simpletaxindia.net/2013/0...cal.html#.dpuf

If God forbid it is one of some serious diseases such as cancer and kidney failure requiring dialysis, a separate section 80DDB covers deduction of money spent on treatment

Last edited by hserus : 1st January 2015 at 15:52.
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Old 21st January 2015, 14:40   #505
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Default Re: Income Tax savings, Investments and Insurance

New procedure made for enchasing matured NSC certificates

Apologies for not posting it earlier. Had my hands full. Herein found the time to pen the things for encashing matured NSC certificates at GPO, Bangalore.
I have been investing in NSC for quite sometime as a means of savings for retirement. Till few years back, around 3 years back, when I had encashed my matured NSC, it was a two step process.

One, apply to the Post master at GPO with a handwritten letter requesting for encashment of matured NSC certificates with copies of NSC's attached. Receive an acknowledgement of the same, wherein the personnel at GPO would tell you to come in a day or two to receive the cheque. Two, visit the GPO again with an original ID proof and then get your cheque which I used to deposit in the bank.

Last month, there was a twist in the story.

On the day to submit my application for encashment, left home to GPO early, to meet the personnel first thing in the morning. Have known that GPO starts at 10 AM. Being an early bird, was able to reach GPO before the said time. When I enter GPO, it was vow, it has become swanky [ probably my old age shows up here ]. All counters numbered from 1 to 10 [ or is it 12 ? not sure ]. Counters numbers 1 to 7 are for savings schemes; and 8 to 12 was for speed posts, regd posts, etc. There is a token system which will be called out based on your requirement, whether it is for savings or for general post office requests.

Picked up a token from the token machine and the wait starts. Modi does seem to have an impact on the timelines in govt offices. Noticed that 60% of the employees were already in by 10 AM. Slowly the savings personnel arrive one by one. Announcement for Token numbers against counter numbers started being announced, and we do have 3 display boards to check whom to approach based on your token number. 10:30AM by token gets called out. Having noticed few people already visiting the savings counters, was sure to be called out. Approach the counter to see the employees dressed in red postal overalls [ nice touch ].

Me: Good Morning, Maam

Employee : Good Morning Sir, How can I help you

Me: Maam, want to encash my matured NSC certificates [ Forwarding the application with photocopies of NSC certificates and ID/address proof ]
Employee: [After patiently reading the letter and refering all the photocopies] Sir, Do you have any savings account with Post office ?

Me: No, Maam, I don't

Employee: I cannot process your request for encashment Sir.

Me: [ I was blind for a sec. Was thinking if I picked up wrong NSC or any mistake in the letter ]. Ca Can you explain me please why ?

Employee : Sir, the process for encashment has changed. You need to have a post office savings account first. Then the matured NSC can be encashed and the funds transferred to your PO savings account, and you can withdraw from the savings account. Today, yours is the third case I have to tell the procedure on it.

Me: [ Grey cells started working, opening PO savings account, what documents i need to have, photos I am not sure if they are in my wallet ]. Maam, Can you tell me what type of S/B PO account I need to open and how much it costs, along with the documents required

Employee: [ Seeing my predictment ] No worries Sir, You can either open a simple PO S/B A/C with only INR 50 without cheque book facility, or with INR 500 with cheque book facility. It will take approximately 45 mins for me to open the account for you, if youhave time. And yes, I do require your photo and address proof. After S/B account is opened, I can encash your NSC certificates and transfer it to S/B from where you can withdraw anytime

Me: [ INR 50 vs INR 500. I am sure I dont have 500 with me. After taking a bus pass and for some money for smoke, was sure I have INR 50 with me, hence thought of going for a plain vanilla PO S/B account ] Can you kindly give me the form for the same ? And can the opening of S/B account and encashment of NSC be done today itself ?

Employee : Sure sir, Can be done. I will help you with it

Me : [ What a relief, can save a day if everything is done in few hours ] Please give me the form, will get you filled up with the necessary data and the KYC information

Employee hands over the form and then starts my hunting. A/c opening form is on similar lines any bank account opening form. Now I already had a photocopy of address proof with me. Started hunting for photos. Where the hell I have seen my grey photo last night ! Remember it. Dig the grave. Started filling the form and the grey cells are active for photo location. Atlast tubelight blew its fuse. They were in my DL, which I always carry with me. Phew, what a relief. Thanked god for all his help. After having filled up the data, and with the proofs and photo, approached the same employee [ Mind you, no need to take the token in here ]. She accepted the form and asked me to wait for 30 to 45 mins. During this wait time, have noticied few people taking the forms to open S/B ac and leaving to get the necessary documentation. To kill 45 mins in a govt office was tiresome. Luckily, snooker game on my mobile came handy. Spent time killing the game, and won 2 frames surpringly !

Within 45 mins, postal employee calls out to me and requested for original NSC certificates [ which I had carried ], told me to counter sign it on the back, with date and amount cleary speficied. Having done that, handed over to the post office employee. Was told to wait for some more time so that the NSC be closed and funds transferred to the S/B account. Also had to fill a form for funds transfer to my S/B account.

Within 10 mins, have been called again to fill the withdrawl form to take the funds from S/B account. After submitting the same, cash was handed over the counter to me.

Me: Thank you very much for all your help, Maam, You have been greatly helpful

Employee : It's my job sir. You have been patient. And you had documents with you, So it was an easy effort. From next time, you can encash your NSC in any post office which has core banking facility with this S/B a/c. And if you want to convert this simple account to the one with cheque book facility, make a request when you have time by depositing a min of INR 500. Hope this helps.

Me: Thank you so much, Will do the same shortly.

After having spent all the time, and having got cash on hand, was happy for the efforts taken. It saved me atleast a day to come again to GPO.

A few points which might work for you who wants to encash NSC [ Not sure if its applicable everywhere, though ]

1. One needs to open PO S/B a/c, with a min of INR 50 / 500. INR 500 for cheque facility

2. Take your matured NSC certificates along with an original ID proof and address proof.

3. Request Post office employees to encash the NSC and transfer the funds to S/B account.

4. When funds are transferred, withdraw it as per your convenience.

Hope this helps everyone who wants to encash NSC at PO.
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Old 29th January 2015, 14:34   #506
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My son is suffering from Cerebral Palsy and last year I had got his disability certificate done from a civil hospital and had claimed a deduction under section 80DD.

My company has rejected my claim this year stating that the certificate is for last financial year. In the certificate it is mentioned that his disability is permanent and non-progressive. Do I need to get a fresh certificate every year even though it clearly states that his condition is permanent? Please advise.
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Old 29th January 2015, 15:13   #507
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My company has rejected my claim this year stating that the certificate is for last financial year. In the certificate it is mentioned that his disability is permanent and non-progressive. Do I need to get a fresh certificate every year even though it clearly states that his condition is permanent? Please advise.
Sorry to hear about your son. My view is that if they have asked for it, you should do it. Not a totally unreasonable request, as it could otherwise be subject to misuse. e.g. someone could use an old certificate for claiming tax benefit even if the subject has passed away since the certificate was issued. Some permanent disabilities (such as blindness) may also be cured with a transplant or surgery. What you are saying about the condition being permanent is logically true, but it is also possible to see the company's point of view on this thing.
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Old 29th January 2015, 15:15   #508
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Default Re: Income Tax savings, Investments and Insurance

Sorry to hear about your son's condition. You are definitely entitled to 80DD. Your company HR / finance is being needlessly obstructive and/or ignorant of what cerebral palsy is.

All you have to do is to claim the 80DD amount in your tax return, and make sure that all payments are by cheque or credit card, rather than cash, so your PAN is linked to the payments.

You will then be able to claim a refund based on the TDS your employer has deducted. As all tax returns these days tend to be e-filed, you will get your money back in a few months (mostly dec / jan if you file your return around July).

Quote:
Originally Posted by gr8guzzler View Post
My son is suffering from Cerebral Palsy and last year I had got his disability certificate done from a civil hospital and had claimed a deduction under section 80DD.

My company has rejected my claim this year stating that the certificate is for last financial year. In the certificate it is mentioned that his disability is permanent and non-progressive. Do I need to get a fresh certificate every year even though it clearly states that his condition is permanent? Please advise.

Last edited by hserus : 29th January 2015 at 15:16.
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Old 29th January 2015, 16:43   #509
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Default Re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by gr8guzzler View Post
My son is suffering from Cerebral Palsy and last year I had got his disability certificate done from a civil hospital and had claimed a deduction under section 80DD.

My company has rejected my claim this year stating that the certificate is for last financial year. In the certificate it is mentioned that his disability is permanent and non-progressive. Do I need to get a fresh certificate every year even though it clearly states that his condition is permanent? Please advise.
I am not really knowledgeable about taxation, so I am not sure how much this will help. My wife has been claiming deduction under section 80DD for her permanently disabled sibling for many years now. Maximum eligibility is Rs. 1,00,000 for severe (80% or more) disability and only self certification of expenses is required.

In her case, what she has done is that she has obtained a disability certificate from the Government of Karnataka as well as an identity card (or rather a book) that certifies the severity of the problem as well as whether the disability is permanent or temporary. From my recollection, this was done at Bowring Hospital which I have been told is the only place to get it in Bangalore. A certificate from the state or central government medical board is an absolute must for claiming deductions under section 80DD. Earlier the patient's doctor could certify the disability, but this was stopped many years ago.

Since the disability is permanent, no recertification is required and she has been using the same documents for the past 5 years or so.

PS: On reading your post once again, I am not entirely sure whether you already have a certificate from the Maharashtra State Medical Board. If so, then as far as I know your employer should accept the certificate if it states that the disability is permanent.

Last edited by nowwhat? : 29th January 2015 at 16:47.
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Old 29th January 2015, 19:04   #510
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I think the company accountant is just blindly following a policy that says "only this year's documents will be considered". Forget it, use what you have to file your return appropriately and claim a refund.
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