According to the Income Tax Act, assessees are required to pay tax in advance in a previous year if their tax liability for the year is likely to be Rs 10,000 or more. Advance tax is payable on the total income of an assessee that is chargeable to tax in an assessment year.

Buy House in Parents name if they are in a lower Income tax bracket. Pay them rent if you live in their house- Do you live in your parents’ house? You can pay them rent to claim House Rent Allowance exemption. This is possible only if the property is registered in the name of your parent. The owner will be taxed for the rental income after a 30% deduction. So, if you pay your father a rent of Rs 3 lakh a year (Rs 25,000 a month), he will be taxed for only Rs 2.1 lakh.

We all know about the popularly know deductions like deduction u/s. 80C & 80D. But many times we use to forget to claim many other deductions which are available under the Income Tax Act, which can reduce our tax burden significantly. In this article we discussed 10 such lesser know deductions which taxpayers tend to forget to claim while filing there Income Tax Return.

We know that investment in residential property or Flats is one of the common investment avenue for individuals. Here we are trying to summarise the tax implication on sale of residential property and tax planning to save tax on the Capital Gain arising on the sale of such property.

What does, however, ‘salary’ include? Salary includes basic salary, bonus, wages, pension, fees, commission, gratuity, encashment of leave salary, advances and arrears, profits in lieu of salary, allowances and perquisites. An ‘allowance’ is a fixed sum of money given regularly for meeting requirements of an employee while a ‘perquisite’ is a benefit attached to an office.

Its a fact that Your own parents as well as your own in-laws can become legal tools of tax planning for you and your family. If you want to achieve this dictum then all you are need to do is just to give away a portion of your funds, either as a gift or a loan, to your parents as well as your parents in law so that in years to follow your income tax burden becomes lighter as the income on funds transferred by you to them which would bring in income would be taxed in their hands.

How is the exemption on HRA calculated? When can you claim exemption on HRA? Is your landlord an NRI? When can you enjoy the twin benefits of home loan and HRA? Rent-free accommodation vs HRA

Section 80C replaced the existing Section 88 with more or less the same investment mix available in Section 88. The new section 80C has become effective w.e.f. 1st April, 2006. Even the section 80CCC on pension scheme contributions was merged with the above 80C. However, this new section has allowed a major change in the method of providing the tax benefit. Section 80C of the Income Tax Act allows certain investments and expenditure to be tax-exempt.

Wallfort Shares & Stock Brokers, a Five Member Special Bench of the Tribunal (96 ITD 1 (Mum) (SB)) and the Bombay High Court (310 ITR 421 (Bom)) held that the ‘loss’ incurred by an assessee in ‘dividend-stripping’ transactions cannot be disallowed on the ground that it was ‘tax-planning‘. The department’s SLP against the said judgement has been dismissed by the Supreme Court today, 6th July 2010.

Tax Planning :- Tax planning as a concept had at a point of time suffered degradation and for a while seemed to be a euphemism for tax evasion. This was the fall-out of some observations in McDowell’s case, [154 ITR 148 (SC)] especially in the separate opinion of Justice Chinnappa Reddy. But the libel did not stay too long. Sabyasachi Mukherjee, Justice of the Supreme Court salvaged its respectability by observing tax avoidance by genuine transactions is not evil.