Many people think they cannot get tax benefit when they buy home appliances, but this is not true. India is a huge country and it is energy starved. So to promote people to save energy Govt gives tax benefit on purchase of energy efficient home appliances. To get tax benefit on such thing you have to buy appliances that carry the government’s energy star rating Now When you require new appliances for your home, such as a hot water heater, be sure to look for appliances that carry the government’s energy star rating. Items purchased with the energy star rating are eligible for tax deductions. In addition, when you replace your old appliances with energy efficient ones, you’ll save money every month on your utility bills. So investment in this saves double money.
Showing posts with label tax saving. Show all posts
Showing posts with label tax saving. Show all posts
Saving Schemes: National savings certificate
National savings certificate
NSC is an assured return scheme and provides for tax rebates under section 88. Interest is payable at 8 per cent for a duration of six years, which is relatively lower compared to other small saving schemes. Here, investors are required to make a single deposit and the interest compounded is returned along with the principal amount on maturity.
However, NSC suffers on account of liquidity, as premature withdrawals can be done under specific circumstances only, such as death of the holder(s), forfeiture by the pledgee or under court's order. Like PPF, NSCs are not suitable for those who yearn for regular income and are basically for those looking at safe long-term investments.
NSC investors enjoy tax benefits under section 88. Interest is eligible for deduction under section 80L upto a maximum limit of Rs 12,000. Also, the accrued interest is automatically reinvested, and qualifies for benefit under section 88.
Thus, NSC is an ideal vehicle for those investors who are looking at tax benefits on a longer-term basis and are not too bothered about liquidity.
NSC is an assured return scheme and provides for tax rebates under section 88. Interest is payable at 8 per cent for a duration of six years, which is relatively lower compared to other small saving schemes. Here, investors are required to make a single deposit and the interest compounded is returned along with the principal amount on maturity.
However, NSC suffers on account of liquidity, as premature withdrawals can be done under specific circumstances only, such as death of the holder(s), forfeiture by the pledgee or under court's order. Like PPF, NSCs are not suitable for those who yearn for regular income and are basically for those looking at safe long-term investments.
NSC investors enjoy tax benefits under section 88. Interest is eligible for deduction under section 80L upto a maximum limit of Rs 12,000. Also, the accrued interest is automatically reinvested, and qualifies for benefit under section 88.
Thus, NSC is an ideal vehicle for those investors who are looking at tax benefits on a longer-term basis and are not too bothered about liquidity.
Save Income Tax : Refinancing
RefinancingRefinancing your home loan can be a great thing to save tax. Interest rates have been really low over the past few years, which has led to a lot of houses being refinanced. If you’ve refinanced, chances are that you’ve paid points to get a lower interest rate. Not only are these points deductible over the life of your new loan, but also, any unamortized points can be deducted in the year of the new loan.
Save Income Tax: Donations
India is a developing country and also people in India are religious. so many people do donations to temple trust or schools, colleges, hospitals. Now if you donate to some organization, you can get total value of the donated amount/items(non cash) is tax-deductible. Yes this is applicable to both cash and non cash donations. suppose you donate 5-10 computers in some school of your village or town then you can get tax deduction on it. Next time you donate something remember to take advatage of tax benefit. Of course, you would need to furnish written receipts for all the donated items/cash.
Save Income Tax: Tution Fees
Is your child's tution fees is tax deductible?
Yes, you can deduct the tuition fees from taxes which you pay for education of your child. This is a good way to save tax. Ok you are young and don’t have child yet? Well still you can save tax by taking some classes on subjects on which you have some interest from college yourself as that’s also is tax deductible. Remember, investment in education yield highest return in any period. And when you get tax benifit on that it becomes little more rewarding :)
Yes, you can deduct the tuition fees from taxes which you pay for education of your child. This is a good way to save tax. Ok you are young and don’t have child yet? Well still you can save tax by taking some classes on subjects on which you have some interest from college yourself as that’s also is tax deductible. Remember, investment in education yield highest return in any period. And when you get tax benifit on that it becomes little more rewarding :)
Tax laws for TDS on Fixed Deposit and way to defer tax until end of fiscal year.
Fixed deposit is one of the many alternatives and safe way to earn passive income. You can earn higher interest rate than regular saving account. Interest is also considered a source of income and so governed by tax laws of India.
When do the banks deduct TDS on a fixed deposit?
If the total interest earned on all your fixed deposits in a bank is greater than Rs. 10,000 in a financial year, you are liable for TDS and the banks will deduct the income tax at source. The tax liability for the purpose of TDS is determined at the branch level. Even if a fixed deposit is in the name of a minor it will attract TDS and in this case the credit for TDS can be claimed by a person managing the minor's income. Whenever the bank pays an interest on your fixed deposits, it checks it for TDS eligibility. If it qualifies, the TDS is deducted. TDS is also deducted on interest accrued (but not yet paid) at the end of the financial year viz. 31st March every year.
The rate at which TDS is deducted varies according to the category of account holders.
TDS rates for a fixed deposit held by resident individual and HUF
If the fixed deposit holder is a resident individual and HUF, for a payment of up to 10 lacs, TDS will be deducted at a rate of 10% in addition to it there is an education cess of 3% which takes the total deduction to 10.3%. For a fixed deposit of resident individual or HUF with payments equal to 10 lacs or more the TDS rate is 10%, in addition to it there is a surcharge of 10% and educational cess of 3% this takes the total deduction to 11.3%
How does change in FD portfolio affect on TDS?
Any change or enhancement in fixed deposit portfolio affects the TDS liability. If your changed portfolio earns a interest which falls under limit of income tax laws, you will be liable for TDS on your current FD portfolio. In case the interest on your current portfolio is not sufficient enough to cover the TDS, it will be deducted from the principal amount.
For any TDS deducted by the bank, it will issue a Form 16A which can be used to substantiate the facts, while filing the income tax returns.
Remember, that any exemptions claimed don't help you save tax, since in your final Income Tax Return you would end up paying the tax with possibly interest penalties.
What if I don't have my PAN registred with bank?
effective from 01/04/2010, Bank will deduct 20% of your interest on your FDs. so if you don't have PAN quckly apply for one and register it with bank so you can defer TDS until end of year.
So what you can do so Bank does not deduct TDS? Well divide your FDs in such a way that interest from FDs does not go more than Rs.10000. so distribute amount in 3-4 banks. But still you will have to show interest as part of income in when you file for income tax retun after end of fiscal year. so thsi way you can delay tax on interest from FD but can not exempt from it.
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