Fire your tax related quieries and i would get it solved!!!

diosys · #31 30th July 2007, 03:08 PM

Quote:

Originally Posted by jraj

Excellent thread!!

Diosys,my parents held iob shares for last few years from its ipo rate of Rs24,and gifted it to me in Dec last year.At that time rate was Rs100.I sold them in Feb this year at 120(needed the cash!

)

1.Does this qualify as short term capital gains or long term gains?
2.If short term,is it from the time it came to my demat acct,or paying from ipo rate which was from many years ago.

Thanks in adv,
Jay Raj

Dear Jay....

1.) It being a long term or short term would depend upon the holding period of the previous owners....Since your parents have held it for a long time it would be a long term capital asset...This being the provision of Explanation 1(i) to Sec 2(42A) of the Itax act...

2.) As per Sec 49(1) of the Income Tax act the deemed cost of accusation under the scenario of a gift is the cost to the previous owner...Previous owned being the person who had actually paid for the asset...in your case your parents....

So enjoy....there is no tax liability since it is LTCG !!!

diosys · #32 31st July 2007, 08:37 AM

Just for everyone's notice.....Lucknow Bench of High Court has stayed the new ITR's and asked the department to accept the old Saral 2D also....I think this would apply only to the state of Uttar Pradesh....

hometypist · #33 31st July 2007, 08:43 AM

Good morning, thanks for answering my query, I have some more clarifications on the subject as follows:

1. You have mentioned conveyance upto 800 pm. Can you please give me a break up like you have given for conveyance that I will be be eligible not to pay any tax.

2. It is my salary that is being transferred to my wife's account, she is having demat account, whenever any household expenses are to be made she issues a bearer check in my name and I withdraw the cash for that month. Will this create any problem for me. She is not earning except from the stock which as of now is minuscle. So far starting from April, 2007 my salary has been transferred to her account and I have withdrawn in the above manner i.e. by way of bearer cheque.

Please guide me. Thanks,

Quote:

Originally Posted by diosys

Good morning...

I will answer one by one...

1.) At Rs. 1,80,000 (presuming it is of a non senior citizen male with no savings under Sec 80C) the total tax outgo would be Rs. 11,330.00

2.) There can be various methods to save tax by tweaking your salary...Ask for conveyance allowance of upto 800 p.m.. Entire would be taxfree....Ask for HRA if you live in a rented place, a portion of it would be tax free...Ask for tax free perquisties....there can be ten's of ways...

3.) Implications could be that person would be required to show the amount transferred to his account as an unsecured loan from the person giving it...Secondly please bear in mind that there is no cash transactions between such loan seeker and giver as it is debarred in IT Act and warrants a huge penalty....It would be advisable that you give an account payee cheque to the person whom you transfer and then if you want back then also take a account payee cheque only !!!

diosys · #34 31st July 2007, 09:52 AM

Hi Hometypist...

Please note that there can be tens of ways to minimize tax but there cannot be a way to nullify the tax outgo...nor would i suggest you doing the same...Please understand why....If suppose two years down the line you wish to avail any loan then nowadays bank prefer to give loans only to those people who have strong ITR's (which of course you would not be having as it would reflect low income), so in the long run it would hurt you badly...Secondly payment of tax increases your capital for future endeavorers...The best salary structure possible does not only depend upon the assessee it also depends upon the company to what level they wish to oblige to you...Now since FBT is payable by the employer they would also like to strike a balance between their tax out go and that of the employee, hence would not offer all the concessions that they used to offer earlier...

For your second point....There is no problem in you withdrawing from an account payee cheque as it would reflect your wife's name....But for the sake of utmost clarity i would like to suggest you that you open your own account and segregate the money of your spouse from it....It would be beneficial in the long term if your case is selected in scrutiny in the department....It would save alot of hassles for you in dealing with the department who are reluctant to hear anything sensible said to them !!!

dhyey · #35 31st July 2007, 11:00 AM

Quote:

Originally Posted by diosys

Dear Dweep....

It does not matter how you transfer....there would be no tax impact on you relatives as there is no SALE.....In income tax to pay capital gain there has to be sale....it is gifting hence there is no capital gain....that is clear from there angle...

When you sell then the cost of the original purchaser becomes your cost....

I need a clarification as to what can be done to get shares transferred into one of two joint holders of shares in physical form. Like I hold shares in joint names with my sister, some shares with my brother and now sister is married and brother stays separately. Some shares are with first holder as sister who is married and does not have any objection to the transfer to my name. What would be tax implications and whether transferring physical shares into my name, would it require stamp duty to be paid?
thnx

yoogi · #36 31st July 2007, 11:07 AM

I am a self employed professional. I have made investments in Mutual Funds, ELSS and 100% equity diversified. Where in investments (or assets) of the tax return form that I need to specify this investment,

There is a column for

Govt securities quoted
Govet & other securitues unquoted.

then there is a column for

Equities...
Debts...
debentures..

Both funds are equity funds qualifying them from a long term tax exemption, so where Do I declare them so that there will be no problem in getting exemption from Long term tax.

yoogi · #37 31st July 2007, 11:29 AM

dear hometypist,

Since you are very particular about tax reduction (or evasion), let me give you some from my own experience.

1.8 lack is definitely not a serious amount to hide from tax. Up to 3 lac try to show maxium salary to IT dept.

First 1 lac is exempted, if you invest in a ELSS, you get another 1 lack rs exemption, and for the next 1 lack, you would be paying a paltry 15,000 rs. (thats only 5% Tax. Be happy to pay that)

But if you earn 6 lac rs in 2010. Now, you would be paying about 15K + 90K = 105K per year in taxes after almost all exemptions. That is almost 17.5% of your income.

The more you earn, the higher % you pay. So when your salary is low, try to be cash rich yourself. Try to show all investments in your name. When your salary increases, that is the time you should try to move cash from yours to your wife so that you can reduce your tax burden.

yoogi · #38 31st July 2007, 12:36 PM

ydpm, let us make it clear. You know the risks involved in trading, or day trading right. Also you know how to manage your money etc.. right.

Also make sure that you borrow from someone who is not going to suffer greatly if you loose all the money. Otherwise he will make you suffer for his & your loss.

From my little experience with tax laws,

1. If you take a loan of more than 20K, then get it as a account payee cheque only.

2. If you borrow it within family (ex father..) and his taxable income is lower than your's, then do pay him some intrest for the loan. So the total tax you two pay will be lesser.
The intrest you pay becomes your expense so you pay less tax.

3. Day trading is a business income, so you keep account of all expenses you make while day trading.. Office rent, computer internet bill, tea, coffee, office boy, electric bill...
Even if you do it in your house you effectively spend these and you can deduct these expenses from income.

If you foresee yourself earning more money in future, do show all expenses and even a show loss in the initial years, file tax return form, so that when you actually earns your payable tax will be less.

diosys · #39 31st July 2007, 02:51 PM

Quote:

Originally Posted by yoogi

I am a self employed professional. I have made investments in Mutual Funds, ELSS and 100% equity diversified. Where in investments (or assets) of the tax return form that I need to specify this investment,

There is a column for

Govt securities quoted
Govet & other securitues unquoted.

then there is a column for

Equities...
Debts...
debentures..

Both funds are equity funds qualifying them from a long term tax exemption, so where Do I declare them so that there will be no problem in getting exemption from Long term tax.

It would go in other securities unquoted....

diosys · #40 31st July 2007, 02:53 PM

Quote:

Originally Posted by yoogi

dear hometypist,

Since you are very particular about tax reduction (or evasion), let me give you some from my own experience.

1.8 lack is definitely not a serious amount to hide from tax. Up to 3 lac try to show maxium salary to IT dept.

First 1 lac is exempted, if you invest in a ELSS, you get another 1 lack rs exemption, and for the next 1 lack, you would be paying a paltry 15,000 rs. (thats only 5% Tax. Be happy to pay that)

But if you earn 6 lac rs in 2010. Now, you would be paying about 15K + 90K = 105K per year in taxes after almost all exemptions. That is almost 17.5% of your income.

The more you earn, the higher % you pay. So when your salary is low, try to be cash rich yourself. Try to show all investments in your name. When your salary increases, that is the time you should try to move cash from yours to your wife so that you can reduce your tax burden.

Well said !!!

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