Category Archives: Income Tax

Why March is the best month to invest for indexation benefit

We are in the month of March and the mutual fund market is flooded with new fund offers from almost all the leading asset management companies. Most of these are closed ended debt oriented plans with tenure of three years and above.

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How long does it take to get an income tax refund?



Three months have passed since the last late of filing individual tax returns, which was 31st of July. Many of us who applied for a tax refund have already got it, and some are still waiting, and a few may have to wait longer or may not get the refund at all. The general tendency is to blame the Income Tax Department – calling it a typical Indian public sector organization, inefficient, slow, lacking professionalism etc. While this may have been somewhat true in the past, it is not the case today, with the new online version of Income tax India introduced a few years ago.

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Budget 2014- from an investor’s perspective




The union budget 2014, one of the most awaited events since the Modi government came to power, was presented yesterday by the finance minister.

Here is what  it means/changes for you as a common investor and tax payer-

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Using indexation to earn a guaranteed tax free profit, yet book a loss



The captioned statement may sound too good to be true, and it is only fair if you think – “there must be a catch somewhere”. Honestly, there isn’t and this concept of indexation benefit, if properly understood and implemented, is one of the most powerful tax planning tools; and if timed correctly can not only be used to make your returns on debt and debt oriented investments tax free, but also enable you to book a long term capital loss which can be offset against any other long term capital gains.

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Clubbing of Income – Dos and Don’ts

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 →

Should HRA tax exemption be allowed on rent paid to spouse?

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.

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Managing your capital gains tax liability

The previous article details how one can apply indexation to eliminate/minimize the effect of inflation on your capital gains income. Apart from this, here are a few other ways of saving on your capital gains tax liability.

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