Amazing video on tax laws has been uploaded on youtube for the benefit all tax payers of India. The video talks of most common and simple mistakes by Indian tax payers which cost them huge amount of tax. The video lists ten such simple mistakes under Income Tax Act, 1961 which can be easily avoided if proper attention is given by people. The author of the the video says that most of the mistake occur either because elf unawareness of law or casual approach by tax payers in India. The author claims that he has prepared the list out of his long experience of dealing with tax worries of people related to salary taxation, capital gains, income from house property, corporate taxation,transfer pricing, late filing of return and various other issues.
Watch the video to understand the benefit of knowing it.
The details about the mistakes to avoid to save tax is given for ready reference:
Detailed Provisions of Law on Each Mistake are related to house property income,long term capital gains exemption under section 54 & section 54 of the Income Tax Act,taking and repaying cash loan exceeding Rs 20,000,not filing tax return within due dates, selling the house within 3 years after claiming exemption on long term capital gains,discontinuing the insurance policy when one has claimed deduction,non disclosure of PAN to the tax deduct or, receiving loan from private limited company in which one has shareholding, etc,
The Video suggest that if one has taken home loan for self occupied house , then it must be seen the said house is completed within 3 years. Otherwise the maximum interest deduction u/s 24 shall be restricted to mere 30,000. So one should strive to see that the builder gives the possession certificate showing that the said flat or house was completed within three years.
If one has claimed exemption on long term capital gains under section 54 or 54F of the Income Tax Act under which exemption is allowed when the new residential house is bought by investing the gains, one must keep in mind that the said new should not be sold within 3 years from the date of buying the house. If one does not adhere to his rule, the capital gains exemption which was allowed earlier , will be added as income in the year in which the said property was transferred.
One other very simple rule , but often not given attention is the receipt of loan in cash in excess of Rs 20,000 or repayment of loan in excess of Rs 20,000. Under Income Tax Act, both kinds of transaction is prohibited . If one breaks these rule, the penalty u/s 271 D and section 271 E are 100 % of the amount of loan taken or repaid.
Then, as far as loan from private or closely held companies are concerned, the shareholders of such closely held company should refrain from taking loan if the shareholding in the said company is 20% or more. Section 2(22)_(e) of the Income Tax Act provides that in that case the loan amount shall be treated as income commonly known as deemed dividend.
Timely filing of return has its own benefit. But the author in the video suggest that one of the most common mistake by tax payer is not to file the tax return within due dates. This simple mistake of filing late return creates problem of many tax payer, like they can not revise the return if they found any mistake or in many cases penal interest shall be charged or even carry forward of business or capital loss shall be disallowed.
The tax video suggests that If anyone have claimed deduction u/s 80C for buying life insurance or Unit Linked Insurance Plan (ULIP) or other insurance products, they must be aware that section 80C provides condition of not letting their insurance plan lapse for non payment of premium. Here is the relevant provisions u/s 80C(5).
This is a must watch video for every Indian tax payer so that he/she can save tax .
Visit http://taxworry.com for more information.
Name: Sanjay Kumar