The recent guidelines issued by IRDA would now enable you to hold your insurance policies in electronic form. The benefits of doing so need not be explained- transparency, lower transaction costs, ease of operation – transactions like switching and other changes can now happen at a click of a button. Most importantly, it will do away with the job of carefully and painstakingly maintain and preserve a physical folder with all the original insurance policy documents, for years together.
The Swiss banks, for a long time, have been accused of aiding black money transactions and being a popular and safe place for people to park illicit funds and thus avoid paying taxes. This was mainly because of their strict guidelines on maintaining confidentiality. Not anymore. The Switzerland authorities have agreed to share data regarding the account holders’ funds held in their banks in an attempt to help countries tackle this problem of money laundering and tax evasion.
Section 60 of the Income tax rules covers clubbing of income – which specifies conditions under which if A invests for B, the income earned by B on the investment is taxable in the hands of A. Though this section aims to curb tax evasion, an in depth knowledge of the provisions of this section will help one know about the conditions under which the clubbing of income does not happen and how this can be used to bring down his or her tax liability.
Investments made in the name of children – Continue reading →
It is mid March, and just a fortnight left for the end of the financial year. Mr. A has not been able find time to invest the entire Rs 1 Lakh in section 80 C towards income tax rebate for the year. So, in a hurry to invest and save tax before the due date, he employs the services of Mr. B, an insurance agent who is readily available and more than willing to offer his services and sells him an insurance plan. After a couple of years, Mr. A realizes than the policy is not one of the best ones in the market, has high charges and has given returns below expectations. So he decides to wait till the minimum lock-in period gets over and then surrender it.
Today’s newspaper carries an article with details of a ruling in favour of a husband who paid rent to his wife with whom he was staying, and claimed HRA tax exemption. This had been earlier rejected by the IT authorities and prompted the claimant approach the Tax Appellate Tribunal.