As of AY 2005-06 i.e. for income earned during 2004-2005 if you have invested Rs. 30,000 in eligible equity shares of companies forming part of BSE-500 index the assessee is entitled for rebate as per the tax bracket upto a maximum of 20% over and above the limit of Rs. 60,000+ 10,000 prescribed under various sections. However, you have to hold the equity for a period of 12 months.
Under the new tax laws, soon to be passed , rebates are scrapped and deductions from income is allowed upto Rs. 1,00,000. Also sub cap between various savings instruments has been removed. Effectively you can invest one lakh rupees in an instrument of your choice.
I would like to be clarified if one can invest in eligible euity shares and hole it for a year and become eligible to claim deductions subject to the conditions stipulated previously.
If so this would give maximum deduction at the rate of 30 percent in the highest bracket and also entitle one to claim exemption from Capital gains tax of 10 %, if any. Thus one would be saving cool Rs. 30000+ 10 % Capital Gains Tax. Sounds too good to be true.
Somebody can please clarify on this aspect.
thanks
Under the new tax laws, soon to be passed , rebates are scrapped and deductions from income is allowed upto Rs. 1,00,000. Also sub cap between various savings instruments has been removed. Effectively you can invest one lakh rupees in an instrument of your choice.
I would like to be clarified if one can invest in eligible euity shares and hole it for a year and become eligible to claim deductions subject to the conditions stipulated previously.
If so this would give maximum deduction at the rate of 30 percent in the highest bracket and also entitle one to claim exemption from Capital gains tax of 10 %, if any. Thus one would be saving cool Rs. 30000+ 10 % Capital Gains Tax. Sounds too good to be true.
Somebody can please clarify on this aspect.
thanks