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

[magnet]

Dear,

The whole point that these companies are asking the public for FD and paying such huge Interest means that the banks are not comfortable to lend to them because of their poor credentials and performance....

Yes, the income which is earned from these (interest) would be added agian to your taxable income...but that would not have any impact on the overall tax outgo since the TDS would be allowed as tax paid.

Poor performance.....Hmm i thought banks charges higher loan interest(ard 21-28%) thats why they asking public for the money here they paying at 12% that too not monthly but quarterly......Mom invested in tata motors company fd hope she gets the principal back in future.....

Btw didnt got the point it wont affect tax outgo?
Just take an e.g

Suppose i m from 30% tax bracket and say the overall interest before TDS say is 7k....now after TDS that interest goes to ard 6k....incomes without this fd interest is 5lakh 50k now it becomes 5 lakh 56k(with company fd interest).....the 30% apply on 56k na ? or becoz of tds on 50k above 5L
(forget about the 80c e.g for e.g sake)

Becoz if it applies on 56k..than again 16k will go as tax....1k again deducted from fd.......so net return again comes low right

 

[diosys]

Poor performance.....Hmm i thought banks charges higher loan interest(ard 21-28%) thats why they asking public for the money here they paying at 12% that too not monthly but quarterly......Mom invested in tata motors company fd hope she gets the principal back in future.....

Btw didnt got the point it wont affect tax outgo?
Just take an e.g

Suppose i m from 30% tax bracket and say the overall interest before TDS say is 7k....now after TDS that interest goes to ard 6k....incomes without this fd interest is 5lakh 50k now it becomes 5 lakh 56k(with company fd interest).....the 30% apply on 56k na ? or becoz of tds on 50k above 5L
(forget about the 80c e.g for e.g sake)

Becoz if it applies on 56k..than again 16k will go as tax....1k again deducted from fd.......so net return again comes low right

by less tax outgo i meant that overall tax payament and not your taxable income...You taxable income would in any case incerase once this is added but suppose the tax payable is Rs. 50000 and TDS is rs. 5000 then net you would need to pay 45000 so TDS or no TDS it does matter...

As for the banks thing....Actually banks generally keep the spread of 3-5% on the peak FD rate as their lending rate...so if these days the peak FD rate is 7-8% then the peak bank lending rate would be about 10-13%...

 

[hangman]

Hi diosys,

I was looking to select a ELSS tax planning mutual fund, i found 2 funds with difference in the Tax Section Applicable to them

Fund 1 (canara tax saver)
Tax Section Applicable
Section 88 (2) (XIII B)
Section 54EA
Section 54EB
Section 54EC
Section 54ED
Section 10(33)
Section 112(1)
Section 94(7)

Fund 2 (fidelity)
Tax Section Applicable
Section 112(1)
Section 94(7)
Section 64(1A)
Section 115(R)

I read what these sections means using the below link
http://new.valueresearchonline.com/funds/taxdesc.asp#12
But still i need guidance on which of these would be a better choice in terms of tax perspective.

Also, is Long term capital gains tax applicable to ELSS funds currently, any info you have on this?

 

[magnet]

Hi diosys,

I was looking to select a ELSS tax planning mutual fund, i found 2 funds with difference in the Tax Section Applicable to them

Fund 1 (canara tax saver)
Tax Section Applicable
Section 88 (2) (XIII B)
Section 54EA
Section 54EB
Section 54EC
Section 54ED
Section 10(33)
Section 112(1)
Section 94(7)

Fund 2 (fidelity)
Tax Section Applicable
Section 112(1)
Section 94(7)
Section 64(1A)
Section 115(R)

I read what these sections means using the below link
http://new.valueresearchonline.com/funds/taxdesc.asp#12
But still i need guidance on which of these would be a better choice in terms of tax perspective.

Also, is Long term capital gains tax applicable to ELSS funds currently, any info you have on this?

I guess the section u mentioned looks to b taken from site on which its posted way before 2005...After 2005 all came under 1 head..and now finally under 80c i guess....hope i m correct

 

[diosys]

I guess the section u mentioned looks to b taken from site on which its posted way before 2005...After 2005 all came under 1 head..and now finally under 80c i guess....hope i m correct

As correctly mentioned these are old provisions.

I have personally invested in both....

 

[hangman]

Thanks Guys :clap:

 

[asko]

Hi Diosys, this is little paranoid question about future. I was going through the new direct tax code 2009 draft and came across this.

Maintenance of accounts
83. (1) Every person shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Code.
(3) The person referred to in sub-section (1) shall be the following:-
(b) any other person carrying on business, if,-
(i) his income from the business exceeds two lakh rupees;
(ii) his total turnover or gross receipts, as the case may be, in the business
exceeds ten lakh rupees in any one of the three financial years immediately
preceding the relevant financial year; or
(iii) in a case where the business is newly set up in any financial year, his
income from the business is likely to exceed two lakh rupees or his total
turnover or gross receipts, as the case may be, in the business is likely to
exceed ten lakh rupees, during such financial year.


Am I reading this correct that if my stock trades generate income of more than 2 lakhs or 10 lakhs (5lakh buy + 5 lakh sell) turnover then I need to maintain all books of accounts.

I know you always advise to keep books of accounts for even the smallest investor. But there is steep learning curve for me to begin that. Previously I was confident that since i m don't do intraday trading or F&O, my turnover may not reach the 40 lakh mark which means i need my books to get audited.

 

[diosys]

Hi Diosys, this is little paranoid question about future. I was going through the new direct tax code 2009 draft and came across this.

Maintenance of accounts
83. (1) Every person shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Code.
(3) The person referred to in sub-section (1) shall be the following:-
(b) any other person carrying on business, if,-
(i) his income from the business exceeds two lakh rupees;
(ii) his total turnover or gross receipts, as the case may be, in the business
exceeds ten lakh rupees in any one of the three financial years immediately
preceding the relevant financial year; or
(iii) in a case where the business is newly set up in any financial year, his
income from the business is likely to exceed two lakh rupees or his total
turnover or gross receipts, as the case may be, in the business is likely to
exceed ten lakh rupees, during such financial year.


Am I reading this correct that if my stock trades generate income of more than 2 lakhs or 10 lakhs (5lakh buy + 5 lakh sell) turnover then I need to maintain all books of accounts.

I know you always advise to keep books of accounts for even the smallest investor. But there is steep learning curve for me to begin that. Previously I was confident that since i m don't do intraday trading or F&O, my turnover may not reach the 40 lakh mark which means i need my books to get audited.

Dear,

Even in the present taxation scenario this case is there !!!

infact in the present tax code it is even lower at 1.20 LACS of income !

Auditing and books keeping is separate....

 

[magnet]

What actually happen in auditing?

Also minimum how much expense happens in it(i heard around 20k+)...From last financial year i have started maintaining books for my business.....and this year the total turnover might be around 30lakh plus.....but our profit margins is less ard 7% ..next year we might have to go for same

Also do u think in this budget there might be increase in the value as heard it might be raised to a crore..

 

[diosys]

What actually happen in auditing?

Also minimum how much expense happens in it(i heard around 20k+)...From last financial year i have started maintaining books for my business.....and this year the total turnover might be around 30lakh plus.....but our profit margins is less ard 7% ..next year we might have to go for same

Also do u think in this budget there might be increase in the value as heard it might be raised to a crore..

Auditing a team of articles supervised by a CA visit to check the books of accounts maintained by you...

As per the fees it depends on the CA, the city you reside in, the health of your books etc....

For the Budget thing your guess is as good as mine...Though i think in the DTC they had also not changed the limit to 1cr and could be possible that they not change it here also...