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Balwant Jain

CA & CS ,

Things to be completed before 31st March

 

Questions Answered

Q

guest: Hi Sir, my current CTC is 2,70,320. Do have to pay nay tax for this CTC? am i eligible to pay nay tax?

Balwant Jain: It is difficult to say what tax you will have to pay based on your CTC. Generally the taxable income is lower than the CTC amount so based on your CTC of Rs. 270320/- you will not have to pay any tax in all probability. Even if your gross CTC is considered fully taxable salary and further presuming you do not have any other income you will not have to pay any tax as you will be eligible for tax rebate upto tax liability of Rs. 2500/- under Section 87A.
Q

guest: Which form i should use as i am having short term and long term gains shares and having gross income Rs. 1175000/- and i am sr citizen and pensioner for Assesment yr 2018-19 -B K SHARMA

Balwant Jain: The forms for assessment year 2018-2019 have not been yet notified and are expected to be notified during first week of April, 2018. If there is no change in the form which were applicable for last year, then you can file your income tax return in ITR 2 as you have short term and long term gains but use the new forms as notified.
Q

harish1132: Dear sir I wanted to invest 6000 per month for 1 year 2018-2019 in ELSS Fund . should I do SIP of 3000 each in Reliance Tax Saver ELSS Fund,aditya birla tax relief 96.please suggest some elss fund

Balwant Jain: Aditya Tax relief 96 is good. In stead of Reliance tax saver, I would recommend you to invest in Axis Long term equity fund for tax saving. During the year keep a watch on performance of these two funds. If the performance deteriorates, shift your future SIPs to better performing fund.
Q

guest: Which form i should use as i am having short term and long term gains shares and having gross income Rs. 1175000/- and i am sr citizen and pensioner for Assesment yr 2018-19

Balwant Jain: Already answered.
Q

guest: Capital gains from sale of house to be invested in 54EC or mutual funds. I have very good risk appetite and do not need money in near future.

Balwant Jain: For claiming long term tax benefit from sale of a house can either be invested in buying or constructing a house within time prescribed under Section 54 or the capital gains can be invested in capital gains bonds of specified companies including National Highway authority of India, Rural electrification Corporation within 6 months under Section 54 EC. The maximum amount which can be invested in a year and for a year is restricted to Rs. 50 lakhs. There is no provision for claiming the exemption by investing in mutual funds.
Q

guest: Investments in ETF any tax benefits??

Balwant Jain: There are no tax benefits for making investments in ETF. The capita gains may be taxable at different rates dependnig on whether the ETF are equity based of gold ETF.
Q

guest: Hi sir Recently amendment has been in LTCG tax. Is LTCG is applicable if I sell long term gain earned from sale of shares within 31st March 2018. Please help

Balwant Jain: Do not worry. There is not capital gains tax for sale of equity shares or redemption or equity oriented till 31st March 2018. Even for sale affected after this date, the profits accrued till 31st January 2018 are protected.
Q

guest: My father gifted me shares worth Rs 10 lakhs in the year 2016. The cost price for me was 0 and I have not paid LTCG until now. After Budget 2018 and grandfathering clause, will i be expected to pay tax on this gift?

Balwant Jain: There was no tax liability when the shares were gifted to you by your father as gifts from relatives are exempt under Section 56(2). Even for these shares the capital gains tax will be on the difference between the sale prices and NAV or market price on 31stJanuary 2018. So though there is not liability to pay tax at the time of receiving the gifts but you may have to pay the capital gains tax as and when you sell these shares.
Q

guest: Ours is a partnership firm of 3 family members. We have industrial units owned by the firm. We are closing down the business. If we rent out our property, what will be our tax liability? How much each partner can retain out of rent? We are expecting rent of around 16 Lacs in 2 companies owning one unit each

Balwant Jain: The rental income in most probability will become taxable under the head Income from House Property and not under the head profits and gains of business of profession. The firm will be able to claim a deduction of 30% on gross rental and the balance will be taxable in the hands of the firm. The exact amount which the partners can take can be determined on the basis of the aggregate tax liability of the firm.
Q

suku_ajish: if a person does trading and gains 50,000. the person doesnot have any other income. should that person have to pay any short term capital gain tax. also how we can claim 5K medical preventive bills

Balwant Jain: No. If you do not have any other income even short term gains will become taxable beyond 2.50 lakhs. This facility is available only for Indian tax resident and not to non resident.
Q

malanihd: Kindly clarify: More than one year purchased shares on 31Jan 18 : A) Cost 100 Price on Jan31-130 CP 125 1)If sold now on 125 No LTCG Tax - 2)If sold in next fin yrs at 140 then LTCG tax on Rs.10 @ 10% and If sold at Rs.125 no LTCG tax B) Bonus Shares recd in 2017 Cost zero-After one year when sold will full sale amt be taxed at 10% as LTCG tax.Thanks and Regs

Balwant Jain: There is no capital gains if sold before 31st March 2018. If sold in the next year the LTCG will be only the difference between market price on 31st January 2018 and the sale price. Even for the bonus shares the market price of 31st January will be taken as cost. The tax of 10% will be after initial exemption of 1 lakhs.
Q

guest: can I claim the benefit of gratuity of Rs 20 lacs as tax free amount and since when

Balwant Jain: The law amending the ceiling to 20 lakhs for gratuity has been passed by the Lok Sabha on 22nd March so in my opinion any gratuity received after that date will qualify for exemption of 20 lakhs.
Q

malanihd: Sir, Kindly advise if Grand fathering clause is applicable to NRIs also in respect to Long Term Cap Gains earned upto Jan 31,18- Thanks and Regds

Balwant Jain: Yes. Tex grandfathering clause is applicable to all the tax payers whether Indian resident or nonresidents.
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