What is the meaning of Taxation Regimes - EEE EET ETE TEE

There are different systems for tax exemption / deduction of investments, and for taxation of the income earned from it, like Exempt – Exempt – Exempt (EEE) or Exempt – Exempt -Taxed (EET).

What do these combinations mean? Which investment option follows which taxation regime? A fundamental understanding can help us select the right investment tool...Read on...

10 most common Mutual Fund Myths

Mutual Funds are just the right solution for investors ready to take reasonable risk and do not have time to analyse and dissect organisation data. Each one of us will probably touch Mutual Funds at some point of our financial investment cycle. Here are the 10 most common myths surrounding Mutual Funds that you must be aware of .. read on...

What is Securities Transaction Tax (STT)

Did you know that with every mutual fund or stock transaction, a TDS is being deducted by the government (by the name of Securities Transaction Tax or STT) and you may just be missing on asking for the refund. Let us understand more about STT.

Tax Saving under Sec 80EE for first time home buyers

First time individual home-buyers can get tax deduction on interest of home loan, under newly inserted section 80EE of the Income Tax Act, applicable for assessment year 2014-15. This is in addition to tax rebate on interest payment of home loan, under section 24.

HRA and Rent Benefit under Section 80 GG

In the last post, we studied about the tax implications of HRA under Section 10. But this section is applicable only if the individual qualifies for HRA as per the company policies. But what if your employer does not give you HRA or you are self employed? In that case, Section 10 is not applicable for you. You can still save taxes using Section 80GG of the IT Act.

House Rent Allowance (HRA) Entitlement under Section 10

In the absence of sufficient knowledge of key tax exemption opportunities like House rent allowance (HRA), we may end up losing out on valuable saving and investing opportunities. So, let us learn about HRA and how it helps us get tax exemption.

Tax Free Bonds in India

Tax free bonds have emerged as highly popular investment option among investors due to the taxation benefit that they offer. These bonds, generally issued by government backed entities, are exempt from taxation on the interest income received from such instruments under the Income Tax Act, 1961.

Smart Ways to Save Taxes and avoid Clubbing of Income

A penny saved is a dollar earned. This is how important saving a few extra rupees can be in your life. One of the prudent ways to save money is to be smart about avoiding taxes.

With the right professional guidance, you can legitimately avoid paying tax on the income earned on your investments. On popular demand, this post describes some smart ways to avoid taxes and hence increase your investible income.

Reduce your tax burden by owning a second house

Background
As your wealth goes up, you need to get innovative about the options that are available to multiply it further and faster. One of the lesser known options is to own a second home and get "unlimited" tax benefit on the interest portion of the home loan. Yes, theoretically, the tax benefit is unlimited since there is no cap to the interest amount eligible for tax benefit (the way you have a cap of rupees 1.5 Lacs on the interest part of the first home loan)

What are National Savings Certificate (NSC)

About National Savings Certificate (NSC)
National Savings Certificate (NSC) is a fixed income/debt long term investment option offered by the Indian Government through postal department.
National Savings Certificate, popularly known as NSC, is a time-tested tax saving instrument that combines adequate returns with high safety, in fact safety sometimes overshadows the returns potential. NSCs are an instrument for facilitating long-term savings. A large chunk of middle class families use NSCs for saving on their tax, getting double benefits. They not only save tax on their hard-earned income but also make an investment which are sure to give good and safe returns.

What is Rajiv Gandhi Equity Savings Scheme (RGESS)

What is RGESS?

Rajiv Gandhi Equity Savings Scheme (RGESS) is a new equity tax advantage savings scheme for equity investors in India. The scheme got it's approval on September 21, 2012. It is exclusively for the first time retail investors in securities market.

What is Equity Linked Savings Scheme (ELSS)

Background

Majority of us rush up to our auditors and financial planners during the month of March for tax planning in order to invest up to Rs. 1 lakh that qualifies for tax exemption under section 80C of the Income Tax Act. We end up in paying LIC premium, PPF, NSC, 5 year bank FDs and other traditional tax savings instrument. There is another exciting option available to all of us and that is Equity Linked Savings Scheme (ELSS).

Tax benefits for NGO donations under Sec 35AC and Sec 80GGA

As i am working on my goal of setting up my first NGO this year, there came the realization that i would also need some funds to run this NGO :). Well, do not worry, i will not bore you with my NGO details on this post. The purpose of this post is to help me collect funds :) just kidding..it is actually for you to know the tax benefits you can avail when you donate money to any NGO. There are different IT Act sections that apply if you are salaried class or if you are running a business.

Health Insurance Tax Exemptions under Section 80D

After Life Insurance, Health Insurance is probably one of the most critical risk mitigation actions that you would under take. While life insurance would cover the risk related to your life and some optional top ups like critical illnesses or accident cover, health insurance is more related to covering risks wrt the expense you may have to incur on account of hospitalization for small, medium or critical illnesses.

Those of you who are in regular full time jobs with reputed organizations might be ignorant of various health insurance nuances and its income tax related implications, for the simple reason that your employer would have you and your family insured for health.

Life Insurance Policy Tax Exemptions - Section 10(D)

This month, one of my old life insurance policies with LIC, which my dad had subscribed for me when i was young, got matured and i received the final amount with bonus in my bank account. While it always feels exciting to receive such amounts in your bank account, it was important for me to understand the tax implications for the same as well.

There is a general perception amongst the taxpayers that all premiums paid for Life Insurance is eligible for deduction under Section 80C subject to overall limit of Rs.1.50 Lacs. Further, it is also a misconception that all sums received from the insurance company against your life insurance policy is exempted under section 10(10D).

Income from House Property Part-3 (Sec 22 and 24 IT Act)

In this series of posts, we have been covering the tax awareness on Income from House property (Sec-22 and Sec-24 of IT Act). We have covered 2 parts till now and we are covering the 3rd and ultimate part today.

Part-1 : Sec-22 : Basis of Charge (House Property)

Part-2 : Sec-24 : Income from Let House Property

Part-3 : Sec-24 : Income from Self Occupied Property (current post)

In the last two posts, we essentially studied the following:
Part-1 : Sec -22 of Income Tax Act which talks about what is considered a house property and what kind of taxes are applicable on the same.
Part-2 : We studied Sec-24 of IT Act. Once you have a taxable house property which is worthy of generating income for you, we must understand the applicability of Sec-24 for a rented out property.

The applicability of Sec-24 is covered under two sections (and hence Part-2 and Part-3 of this series of posts)

So, lets read on the Computation of Income from a self-occupied Property.

Income from House Property Part-2 (Sec 22 and 24 IT Act)

In the last post(Income from House Property Part-I (Sec 22 and 24 IT Act)), we studied essentially about Sec -22 of Income Tax Act which talks about what is considered a house property and what kind of taxes are applicable on the same.

Today, in Part-2 of this series of posts on "Income from House Property", we would study Sec-24 of IT Act. Once you have a taxable house property which is worthy of generating income for you, we must understand the applicability of Sec-24.

The applicability of Sec-24 is covered under two sections (and hence Part-2 and Part-3 of this series of posts)

This series of posts:

Part-1 : Sec-22 : Basis of Charge (House Property)

Part-2 : Sec-24 : Income from Let House Property (current post)

Part-3 : Sec-24 : Income from Self Occupied Property (next post)

So, lets read on the Computation of Income from Let House Property

Income from House Property Part-I (Sec 22 and 24 IT Act)

As your wealth grows, so is your tax liability. Hence, understanding of tax laws can play a critical role in paying the correct taxes. Income Tax laws can be sometimes very complex but if we understand the intent behind the specific law, it becomes all the more easier to interpret, understand and follow these laws.

"Income from House Property" is one of the most often misunderstood laws in Indian Income Tax Laws. Very often, we confuse it with the rental income, loan interest and many other such misconstrued notions. We are going to deal with this specific section of the IT act under a series of posts starting today.

Today, we deal with Part-I which is understanding the fundamental meaning of this Income Tax law under Section 22 of the IT Act, which deals with understanding the meaning of "Income from House Property".

5 Year Tax Saving Fixed Deposit (FD) under Section 80C

We studied in detail about Bank Fixed Deposits (Bank FDs) and the tax implications arising out of the interest earned through Fixed Deposits in a few of our earlier posts:

1. Ladder your Fixed Deposits

2. Know more about Company Fixed Deposits

3. Are you paying TAX on your FD interest

There is one very interesting aspect of Fixed Deposits which is worth mentioning as a separate post. So, i thought i would share that with all of you.

As per the Section 80C of the Income Tax Laws of India, we can do investments of up to Rs. 1.5 Lacs (Rs. 150,000 only) which would help us save taxes on an equal proportion of our salary. While there are various commonly known options to invest and save taxes under Section 80C, one of the option which is not very commonly known for Section 80C investments is 5 year Fixed Deposits.

Know more about LTA or LTC Claims

Most of us do take out time for at least one vacation in a year with our family. While this is good, so many times we just fail to take the tax benefits provided to us by the government. There can be various reasons for not availing tax benefits like these. Either we are afraid of the paper work, or we are too busy otherwise, or we do not realize the importance of saving taxes or it may be just that we are not fully aware of the rules pertaining to Leave Travel Concession (LTC)/Leave Travel Assistance (LTA)