[S_U_N]

A question about declaring income from other sources for the purpose of filing returns.

Some banks credit interest on 1st of April (which is part of next FY).

However that earning/ interest is for the FY 2014-15.

So, should that interest be added as 'income from other sources' for FY 2014-15 or for FY 2015-16?

[sdp1975]

Income can calculated as being accrued or on actual receipt. For example, for a fixed deposit that matures after 2 years, tax can be paid after 2 years when the actual interest is received ; or every year as the interest accrues ( but not actually received ). Any procedure can be followed so long as it's followed consistently every year and not changed from one year to another.

Most people follow the accrual method, so the interest would be part of income in FY 2014-15.

[DCEite]

Hi All,

Here is a query regarding VPF.

In my organization, the PF is managed by a trust (private) as against a government EPF office.

Now i want to increase my own VPF contribution by some amount for this financial year (other than the 12% already being deducted from salary).

My question was, is it safe to increase the VPF contribution to my PF account, considering that its managed by a trust, as is not at the hands of government?

Sorry if my question is a bit novice, but my knowledge level is limited.

[S_U_N]

Is there anyone who has opted for LIC's group superannuation scheme through his/her employer?
I am trying to figure out the tax liability if I withdraw the amount after I leave the current company (and say I do not find another employer who offers this component).
1. Since I will receive gratuity, I can only get 1/3rd the amount via the employer. This amount will be taxable for me. The balance 2/3rd, - I am not sure if I have to purchase annuity OR I can just withdraw it (tax free/ tax payable?)

Also, I am trying to figure out how much will be the monthly pension that I would be getting, from the balance 2/3rd amount in case I wait for retirement.

[hellmet]

Why am I unable to select "AY 2015-2016" when I try to "Submit Online ITR" on the Income Tax Returns website?

[vasanthjn]

Originally Posted by S_U_N

New scenario:

I invested Rs. 300000 in a liquid fund over a period of one year (but within the same FY).
During that period and after that, I kept on doing STP to international and domestic equity funds. In total, I took Rs. 200000 out from the liqud fund via STP.

Current market value for the liquid fund stands at Rs. 1,20,280
FundsIndia reports that realized gain is Rs. 9611 and unrealized gain is Rs. 10667.

In 2014, Govt. changed the rules and stated that for debt/ liquid funds, to qualify for LTCG, I have to stay invested for 3 years (instead of 1 year).

How much Income Tax do I have to pay (as part of captial gains)?

In International equity, (treated as debt in India), I have loss of -5873 (realized gain) and -1609 (unrealized gain).

If I try to set of the loss, how much do I have to pay as Income tax?

SUN,

1. If the realized gains in Liquid Fund has happened within 3 years from the date of Investment, then the entire realized gains are taxable at your marginal interest rate. For example, you have invested this amount in 2013 and as on date your realized gain is Rs. 9611, then Rs.9611 is fully taxable at your existing tax slab.

2. The realized gains you generated from Debt Funds cannot be set-off against the loss you have from Equity Funds, since these are two different asset classes altogether.

3. Assuming that you have two Debt Funds, one has a short term realized gain of Rs.1000 and another has a long term realized gain of Rs.1000. The profit and loss cannot be set-off in this scenario eventhough both are Debt Funds, the reson being one is a short term and another one is a long term gain/loss.

Hope I have clarified. let me know if you have require any further clarifications.

Vasanth

[S_U_N]

Aegon Religare sent me message that I need to pay Rs. 91 due to increased service tax rates.

My policy was due for renewal in July, but I renewed it on 31 May itself.

Similarly HDFC has not sent me any such demand.

Point of Taxation rules indicate that the rate also depends on the date of invoice. But in these cases, there is no invoice being received at all.

[ameyawaghmare]

I have a query here, would be glad if someone can help out in this:
For tax saving purposes in 80C, I am looking for avenues where I do not have to shell out any money going towards the government (LIC, PPF, Postal Savings etc.) but towards any private high risk, high return instruments. Additionally, I am looking for investment that help save tax and help to invest in equity or debt markets.

I can only think of tax saver-ELSS as of now. Any thing additional that can be tried out?

The Rajiv Gandhi Scheme on equity (can't get the exact name on that) is probably applicable only for investments in Maharatna companies for a fixed tenure, if I am not wrong. Any comments/clarifications/critique on this?

[ghodlur]

Originally Posted by ameyawaghmare

I can only think of tax saver-ELSS as of now. Any thing additional that can be tried out?

Infrastructure bonds can be another alternative although returns are not that high.

Rajiv Gandhi scheme is applicable only for a certain income group, I guess it is for 10L or less.

[hserus]

He says he doesnt want to spend a paisa on the Govt. Most infrastructure bonds are floated by various PSUs.

80C is a mere 1.5 lakh. If you are salaried your PF will go towards a substantial part of it though that is government anyway.

Your kids' school or college fees can be offset against 80C, so can repaying a home loan principal for example. You can put your kids in a non govt run school (so fancy private school not KV), take your bank loan from icici or deutschebank etc (foregoing some very transparent loan schemes from sbi because it is state run).

That way you make your 80C goal the not terribly wise way if you avoid govt instruments altogether.

Don't waste your money investing in tax saving ELSS type instruments. Figure out what you are already spending that is covered under your 80C 1.5 lakhs and then just invest in well chosen MFs / equities etc depending on your investment profile. Dont have 80C as a goal.

[S_U_N]

Originally Posted by ameyawaghmare

I have a query here, would be glad if someone can help out in this:
For tax saving purposes in 80C, I am looking for avenues where I do not have to shell out any money going towards the government (LIC, PPF, Postal Savings etc.) but towards any private high risk, high return instruments. Additionally, I am looking for investment that help save tax and help to invest in equity or debt markets.

I can only think of tax saver-ELSS as of now. Any thing additional that can be tried out?

If you are just starting out on your investment journey, then you need to split up your money into debt and equity in a certain ratio.
So, if you are 30 years old, then invest 70% of the money in equity and 30% in debt. most of the Government stuff like PPF comes under that 30%.
So, in any case you would not be investing more than 30% with the government.
Now, do you see any issues if in the worst case, you are unable to withdraw that 30%? I don't think so.

Formula is: Equity percentage = 100 - (current age). You need to revise it every few years.

[shankar.balan]

Quick query
What is the last date in this year for filing returns?

[Resfeber]

Last date for filing IT returns has been extended from 31 July to 31 August.

[ameyawaghmare]

Originally Posted by hserus

He says he doesnt want to spend a paisa on the Govt.

Don't waste your money investing in tax saving ELSS type instruments. Figure out what you are already spending that is covered under your 80C 1.5 lakhs and then just invest in well chosen MFs / equities etc depending on your investment profile. Don't have 80C as a goal.

Thanks for all the words!
Any specific reason in your opinion why tax saver ELSS would not make for a good investment? My life insurance (with a private player) and a few donations help to cover up part of 80C every year but I need to plan up something for the coming year so as to avoid having any tax payable.

All my investments are towards direct investment in shares/stocks and 80C has never been a goal.

Tax saving ELSS is the only avenue that I can think of, would like to know more of its pitfalls.

[ameyawaghmare]

Originally Posted by S_U_N

Formula is: Equity percentage = 100 - (current age). You need to revise it every few years.

Golden words for sure! That would mean 72/73% going towards equity for me. The formula you have invented indicates a very good moderate risk profile, well balanced out.