A video on 7 Income Tax saving tips you might not know

POSTED BY manish ON January 11, 2011 COMMENTS (489)

Haven’t you gotten bored of regular income tax saving tips? Are you looking for some tips which are different, kinda unique and not very well known?

If yes, then you’re reading the right article, mate! I will share some tips which would help you in area of income tax saving. Some of these tips will help you in this, current year and some, at some later point. But helpful at some level, they will be 🙂 . Below is a video on this topic where I explain those 7 tips.

In case you don’t want to watch the video , you can just skip it and move forward to read the tips in text . Let’s look at them. If you are reading this article on email, you can watch the video on Youtube here

7 income tax saving tips

1. Gift money to your major children and Save tax on Future Income

Imagine this, you have Rs 25 lacs. Logically you put this in a fixed deposit or invest in some other financial product through which you get an interest at 8%. You will get Rs 2  lacs as interest which will be added to your income and you pay tax on this income. Not good!

Now what? How do we save tax on these 2 lacs? As per income-tax laws you can gift any amount of money to your major children without attracting gift-tax and as their money will become theirs any income arising out of it would be treated as their income, not yours. In case their income is below the limits, there won’t be any tax.

However there can be times, where you might not feel too comfortable gifting away large amounts of money to your major children, in which case, there is another option of giving them loans. And guess what? you can make interest-free loans to your major children as per the law 🙂 .

Please note that doing exactly the same thing with your spouse is not possible. Any income you transfer to your spouse which generates any income will be treated as your income only. However, if you are going to be married in some months and you have some big amount of cash, you can gift her right away, as gift given to prospective wife would become hers lawfully! .

I hope you liked this first point on income tax saving tips

2. Claim stamp duty and registration fees in 80C

Many people dont know this, but the Stamp duty and the registration fees of the documents for the house can be claimed as deduction under section 80C in the year of purchase of the house. An important point to note here is that you should be in possession of the house if you want to claim these deductions.

So in case of under-construction properties, you lose out on claiming this deduction. As per the income tax

The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered.

Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property which is carried out after the issue of the completion certificate by competent authority, or after the occupation of the house by the assessee or after it has been let out.

Payments towards any expenditure in respect of which the deduction is allowable under the provisions of section 24 of the Income-tax Act will also not be included in payments towards the cost of purchase or construction of a house property.

3. Get deduction for rent even without HRA

Do you get HRA

All the salaries class people get HRA from their companies, and hence they claim deductions on that. However, what if you are self-employed professional or working for a company who does not provide you HRA benefit? Can you still claim HRA? Yes! But with some caveats.

Under Section 80GG, you can claim deduction of the rent paid even if you don’t get HRA. However not many people are aware of this deduction. If you are not being paid any HRA or don’t have any housing benefit from employer. You can claim least of following 3 things as HRA

a) Rent paid less 10% of total income

b) or Rs 2,000 a month;

c) or 25% of total income.

Note that your spouse or minor child should not own any house with the city limit if you want to claim this benefit , You will have to submit a form called 10-BA that you are paying rent and not receiving HRA.

Bonus tip : If you are staying with your parents, you can pay them rent. If they don’t have
 significant income, it would mean you  save  tax on rent paid and even your parents income does
 not cross the  tax  limits, which is a win-win situation.

4. Declare your losses in tax return to save tax in future

A lot of people do not show their losses in shares, mutual funds, gold ETFs, real-estate in their tax returns. This is a big mistake, as you lose an opportunity to save tax in future years. You can set-off your losses against profits in current year as well as in the future too.

For example : Assume you had sold your real-estate property and made a profit of 10 lacs after indexation. You will have to pay a tax of Rs 2 lacs @20%. However suppose in the same year you have also made a loss of Rs 4 lacs in stocks , you can set-off this loss with your 10 lacs profit and just pay tax on Rs 6 lacs , which comes at 1.2 lacs only. That’s a cool 80k in savings!

Also if you have only losses this year and no profits, you can show this loss in your tax returns and carry forward and set-off this loss against any future profits for next 8 yrs. For more details read this article.

5. Buy House with Parent or Siblings as joint-owners

Yes, if you thought only spouse can be co-owner in the real-estate property to claim the tax deductions, you don’t know the whole story.

You can have your spouse/parent/siblings as co-owner and all the co-owners can claims the tax deductions of 1 lacs for principal and 1.5 lacs for interest part . So if you take a housing loan with your siblings as co-owner of property and co-Borrower of loan, the loan amount interest and principle paid will be available for tax exemption in ratio of your loan amount.

So if you are still a bachelor or a single who wants to buy a house, consider asking your brother, sister or parents to become the co-owner so that both of you can get tax benefits and reduce your tax-outgo.

The only problem in this case is that loan-sanctioning companies are very stringent in giving loans to siblings, as their are higher chances of you parting your ways with them later in case of any family issues, however in case of spouse it happens lesser.

Bonus Tip : The co-owner who falls in the higher tax bracket should  hold a higher proportion
of home loan to make sure that the tax  benefits are maximised.

Income Tax saving tips

6. Use education loan to lower tax for your Children in Future

So what, if you have all the money to pay for your children’s education fees? It would be wise to opt for an education loan in name of your children’s name as you can claim the full interest paid on education loan under section 80E. Note that its only available if you are a parent or a legal guardian .

You can’t claim deduction for your spouse education loan 🙂

The other thing is that you can take education loan on your children name so that after some years when they pay off their loans, they can claim the deductions themselves. Apart from this, they’d be more responsible and this education loan payment from their pocket will make sure that they don’t spend to much money in wrong places and you can use your money today some where else!

7. Take unlimited deductions for your second home loan interest payment

This one is the last tax saving tips we will discuss here. If you have already bought first home where you are living right now and want to buy another house, the good news is that you can claim full interest paid for the EMIs of second house. As per tax laws, you can claim full deductions for the amount paid as interest on loan for second house.

For the first house you can claim up to 1.5 lacs in interest, however for your second house you can claim full amount of interest without any upper limit! . Read some tips on buying real-estate

Which of the above income tax saving tips were new for you ? Please comment .

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489 replies on this article “A video on 7 Income Tax saving tips you might not know”

  1. BHAGAT SINGH says:

    Dear sir your articles are very very useful thanks for that’

    i have a question
    my brother has a hotel in uttarakhand with air condition.
    we also provide food to customers.
    WHAT ARE THE TAXES WE MUST COLLECT?
    What is the VAT rate in uttarakhand on food and beverage ?

    1. Hi BHAGAT SINGH

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  2. Amit says:

    Hello Manish,

    I have two homes – A & B. A is given for Rent and B is currently under construction. I stay at a rented apartment for being convenient to my work location. I’ve taken loan for both the homes. While I claim the tax benefits for loan on ‘A’ along with the HRA benefits on the Rented apartment, can I claim the tax benefits for the 2nd home ‘B’. Please advise. Thanks.

    1. No, because you cant get the tax benefits unless you have possession !

  3. PRATIMA says:

    l want to invest 4.5lac in POMIS .pls reply me how much tax will be deducted from my interest

    1. This money which you will invest is out of POST TAX income. You cant save any tax just because you are investing in POMIS

  4. Joe says:

    Manish – i have a question. Assume the wife gets HRA and the husband does not get HRA (Self employed). If they live on rent, can the wife claim HRA exemption proportionate to the share of her rent payment And can the husband claim rent deduction under section 80GG for the share of his rent payment?

    Please advise.

    1. I am not very clear on that. Its more of a CA related topic.

  5. Rajeev says:

    Manish

    I bought fully constructed apartment in FY12-13 but did not claim stamp duty/registration fees due to ignorance of this provision. Am I allowed to this now FY-15-16/AY16-17?

    Regards
    Rajeev

    1. No, its only allowed in the year when you paid it !

  6. Biswajit says:

    Hi,
    I have taken home loan in Nov 2014 and paying EMI since Jan 2015. I registered the flat last month. I have not occupied it yet. I am currently living in a rented house. In the company prepared Form 16, the rent component is present. Can I also claim the home loan interest paid so far in this Fy 2015-16 tax returns?
    Biswajit

    1. Unless you dont have possession , you cant claim the interest part !

  7. Shashank says:

    Dear Manish
    Thanks for the info, especially the ‘Take unlimited deductions for your second home loan interest payment’ one.

    I live in Pune and have a house in my native (a village) which is owned by me and my parents live there. For this house, I pay around Rs. 200000/- interest on it’s home loan. In this case, is this amount eligible for deduction for tax from my income? I am in 30% tax bracket.
    Thanks,
    Shashank

    1. Yes, you can reduce this much from your income. Upto 2.5 lacs limit is there !

  8. Avinash Sardesai says:

    Manish, it is indeed very informative article. However regarding point 4 in your example, I suppose it has to be a short term capital loss on shares and not long term capital loss for setting off to be applicable. Correct me if I am wrong.
    Thanks.

    1. Yea I think you are correct

  9. RANA says:

    Hi
    I want to know whether I will get the entire amount of Super annuation fund on retirement.

    1. Avinash Sardesai says:

      No, you can’t withdraw the entire amount. Generally it is 1/3 (you can check with your employer or fund for exact condition), while rest needs to be used to purchase an annuity that will offer you a pension subsequently.

    2. No , some part will be for pension

  10. Umesh says:

    Hi Manish,
    My query is, currently I own a house (in my name) and have given it out for rent and the loan is also cleared. Hence since I fall under the higher tax bracket of 30%, if I transfer/gift deed this house to my wife, who is a home maker, and no other income earner, then for the rent earned, will the tax bracket be the minimal, as thehouse will be in her name. Pls provide your views.

    Thanking You

    Umesh

    1. Yes, thats correct. You can do that

  11. Arial says:

    Hi Manish,

    I am in 30% tax bucket. Can I give interest-free loan to my non-earning wife which she can then invest in FD (without Clubbing of income for me)? If yes, what documentation(s) and/or declaration(s) do I need for this loan? If it can not be interest-free, what is the MINIMUM interest rate I need to charge?

    1. Giving no-interest loan is same as just giving the money . Its just a trick . You cant food IT department like this. Its better to talk to a CA on this .

      1. Arial says:

        I see.Thanks, Manish.

  12. viveksingh says:

    i have a house on my name which i have given on rent. Can i collect the rent on by wife’s name to avoid adding the same in my taxable amount and save on income tax.

    1. That will not help , Even if you take on her name, its still going to be counted on your name because house is on your name only.

  13. KiranKumar says:

    I invest in agriculture but the land is on my father name? Can i claim losses ?

  14. AVNEET says:

    IF A WOMEN ONE WHO TAKES TUITIONS TO CHILDREN AT HOME WANT TO SHOW SOME INCOME ON HER PART AND STILL DO NOT WANT TO PAY THE TAX. HOW CAN SHE DO SO???

    1. If she is earning less than the taxable limit of 2.5 lacs a year, she anyways dont have to pay any tax

  15. RAMARAO says:

    Dear sir,
    Please do help me in my last income tax-calculation issue. I retired on 31 jan 2015,so It was shown in form 16 ( by my employer, AIRINDIA),that my tax on regular income is Rs2.5 lac and deducted. An additional tax on my retirement benefits is shown to Rs2.2lacs and deducted..which I could not avoid as it was deducted at source.Thus I paid Rs4.7lacs.
    In fact It is paining me that after all, it was my life long retirement benefit on which my income was calculated as additional income as if and deducted.
    I request you that can you show any loss of income in this current year submission or any other way of tax saving possibility.
    Regards KARRI RAMARAO, Ph:09493976988., karriramarao@rediffmail.com,

    1. Hi RAMARAO

      A CA is more qualified to answer you query, hence I suggest better get in touch one.

      We are not right people to talk on this

      Manish

  16. amol says:

    I have a joint house loan ( me & My wife).
    In first year of loan I gave 2 lac of principal & 3.5 lac as interest.
    Since it is a joint loan, we defined as 50 % each.
    Scenario here is that my house is in Bangalore Rural area and It is far from office, I am planning to take rented house near my office. And I may not get any rent income also from my house.
    My question here is :-
    1- Can I mention my house as Let out and define minimum rent income as above 3 K (Without any proof) & avail HRA ( Both Me & my wife) ?
    2- Is it possible only one person avails the benefit and defines interest more than 200000 ?

  17. NeerajGupta says:

    Hi I have a demat account on my wife names and she is a House wife. I made 2 lac loss this year in delivery add intraday trade. can I claim this loss against my income of this year?

  18. Jeevan says:

    Amazing article, Manish Ji!
    Please help me in solving below queries on point #1 and #5
    1. Gift money to your “major” children.
    What do you mean by major children? My daughter is 3 year old she has savings account in SBI. Can I transfer money in her account as gift?
    Example: My take home is Rs1,20,000. I transfer 60k in her account then only 60k will be taxable income, is it? If not please quote an example so that readers can understand it correct.
    2. Me and my brother bought a house. We took joint loan of 38 lakh. Flat is on both names.
    We have been paying equal EMIs i.e. 19k by me and 19k by my brother every month. But I hae always been in larger tax bracket. Is it possible that I can claim more benefit than him, because he has already deposited in PPF, kids fees, LIC etc so he taking home loan benefit is useless for him.
    Also , we are planning to buy another flat. That flat will again on both names, loan also will given to both? Can we exmpt 100% rebate. Example: Loan will be of 28lakh. I will 14k he will pay 14k. So we both will get benefit of 3.36 L(28*12) or we will get 50-50 benefit i.e. 1.68L(14*12).
    3. How point #5 and Section 26 are different/same?

    1. 1. Major = above 18 yrs
      2. Not possible

  19. ShrigopalMalani says:

    Your seven TAX saving tips are awesome….Hats off

    1. Glad to know that ShrigopalMalani ..

  20. VGS says:

    Hi Manish,
    W.r.t point 7 in your article : “Take unlimited deductions for your second home loan interest payment” Please clarify if its true that after we close the loan for second home loan. Thereafter every year we need to show income from 2nd home and this gets added to our taxable income?
    In my case I have 2 home loans. In one house my parents stay and in 2nd house I stay. I however claim tax benefit for both these loans as explained in point 7 of your article. But Now one of my loan is coming to closer and I have no much benefit. However my CA mentioned that I need to now start showing one of the house is earning notional rent.
    But in reality I am not earning any rent.

    Your views please.

    Thanks,
    VGS

    1. VGS

      your CA is correct. Notional rent means the “expected rent” . Its exactly for those who are not earning any rent, but they have to consider the notional rent and pay the tax on that

      1. VGS says:

        Thank You Manish.
        Is there a way to get out of this situation? Now this notional rent (which is prevailing rent in that area) adds to my taxable income.

        1. Truly speaking, there is no way out. Thats the rule and you have to follow it

          I think you should check this matter with a CA only, as they are qualified enough and know how you can get out of this 🙂

          Manish

          1. Abhay says:

            Buy one more property on loan and show it’s interest paid to bank as loss and this notional rent as income. In short always be the who is always paying interest component and always in loss. 🙂

  21. Nitin says:

    Hi Manish,
    Nice article.
    Do you mind if I I share your article on our page?

    1. Hi Nitin

      No , we wont allow copy pasting of the content. However you can just leave a link to this article.

      Manish

      1. Nitin says:

        Hi Manish,
        Thanks for quick response.
        Yup, I’ll use the link directly on our FB page.

        1. Glad to know that Nitin ..

  22. Kumar says:

    Hi Manish,

    I am a software engineer. My wife got a marriage gift on our marriage time nearly 15 lacs including from her father and all relatives at 3 years before. she gave that money to my father for our agriculture land clean up. now my father gave 5 lacs to my wife and she put a FD last year (jun-2014). and again my father gave 5 lacs on this year (apr-2015) again she put a FD. so now she has totally 10 lacs in FD in her name and both she submitted FORM15G. whatever my father gave all are his agriculture income and all he deposited as a money in her bank account. and my wife is a home maker and she does not have any other income. so I heard from my friends i need to have a proof to show all the money in her name otherwise it will be considered as my money and i have to pay tax for the FD interest. please let me know is it correct. if it is how to make the proof of the gift money. even i dont have any proof for the money given to my father. please advice.
    Thanks,
    Kumar K

    1. Yes thats true . But I think she got the money in her account and all investments are done by her name only. Then things should be fine !

  23. babu says:

    I need 15lakhs as home loan.i can pay only10000per month.i can repay 10lakhs after 2yrs.what shall i do?which is beneficial to me?homeloan short term or investing 5lakhs from it somewhere else and pay higher amount other than10000

    1. I think the bank will be able to share if its possible as per their terms and conditions !

  24. PRASATH says:

    I have purchased a home only in my wife name.but housing loan we are paying through my spouse savings account.can i declare the home loan in my tax declaration

    1. No , for claiming tax benefits, the house and loan has to be in your name .

  25. Jagannathan s says:

    If it is not available can i demolish the existing old building and construct a new one with the entire sale proceeds as the land with building is in my name

    1. Yes you can do that

  26. Jagannathan s says:

    Hi Manish
    Pl clarify- can i invest the proceeds out of sale of a land for any improvement in a house already in my name by constructing vertically or should be invested in a sepetate property to avail long term capital gains tax exemptions

    1. I m not sure on that

  27. Rominder Singh says:

    Hi Manish,
    I have a ULIP policy for 6 yrs now, and is reached its maturity. my query is:
    a) Can I redeem this total amount (about 14 lacs) without any tax implications. I ask because the new budget has put 2% tax on it, is it true?
    b)can I(if I want to avoid paying tax), gift this whole policy to my own sister?
    Thanking you and regards,
    Rominder

    1. Yes you can take out the money fully .

      The 2% thing is TDS thing, but not applicable in your case !

  28. Santanu Ghosh says:

    Hi,
    I am a salaried person and had bought an apartment on loan that will be completed by this year. I have been claiming tax benefit for the last few years for this loan. I have also bought, on March 2015, a 2nd apartment in resale (ie. not directly from the builder) before it is being registered by the first party. This 2nd apartment is bought jointly by my mother and myself (I am the 2nd name of the co-owner). The builder has endorsed our name on the possession letter sale agreement and other documents of the first party. I have also taken 20Lakh loan from my mother in buying the same, the rest of the amount being paid by me.
    My questions are:
    1) Can I get tax benefit on the interest for the loan taken from my mother?
    2) What kind of documentations will be required? Any link to sample documents is appreciated.
    3) Can I claim tax benefits on both the loans? Since second home loan can have unlimited deductions on interest how does this work out?
    4)My mother’s income in this year, considering her pension and the above interest paid by me, will be within 3 lakhs (Sr. citizen). Does she have to file return next year or later years?
    Thanks
    Santanu

    1. 1. No. you can claim only for the interest part of your loan

      2. Not applicable

      3. yes, you can do that. One loan you have to declare as self-occupied and the other one as the rented

      4. What matters is TAXABLE income, if that’s above the limit of 2.5 lacs, then she has to file the returns

      Manish

  29. Ayushi Jain says:

    Hi Manish,
    I and my spouse have a house in co-ownership and co-borrowing which we have rented . Since I am in low tax slab bracket currently complete rent is being transferred to my bank account.
    What will be tax implication for this – do my husband need to show 50% of the rent as his income or I can show the complete rent earned as my income?

    1. I think that should be ok . You can collect the rent on your name

      Manish

      1. Ayushi Jain says:

        Thanks Manish .

        Will it be same if someone is non -working , or in that case provisions of clubbing of income will get apply.

        1. Clubbing does not come into picture here because you are not getting income out of other investment . You can always tell that the rent is collected only for your part.

  30. Siddharth says:

    Hi Manish,

    First of all i must say jagoinvestor is a complete encyclopedia for financial planning. Hats off to you 🙂

    I want to know the following case:

    Say I am working in Bangalore and paying rent of Rs. 13000 per month. I am given HRA by company and I show the same for tax benefit. Now I get permanently transferred to Ahmedabad and now my company provides me accommodation their and hence my company is not giving me HRA…its not reflected in my payslip. However, my family still stays in Bangalore due to some personal reasons and I end up paying the same rent. Can I show the rent paid (Rs. 13000) in Bangalore for tax benefits although my company is not providing HRA? Or I can avail only Rs. 2000/month under 80GG for tax benefits?

    1. Only Rs 2000 ! .. If its not mentioned in the payslip, then you cant claim it ! ..

      Manish

  31. sunil says:

    Hi,

    Nice info. I am selling my plot abt 1.5 km from Lohegaon, which itself is undefined as Pune DP is yet to be approved and notified.

    In such a case how do you define this agricultural plot 4R in a layout.
    Are there any capital gains out of this transactions?

    Can I set gains off in a planned flat buy in same year

    1. Hi sunil

      The question asked by you is beyond our scope. Its suggested that you hire an expert on the issue and pay them for the advice.

      Manish

  32. Ramesh says:

    Hello Manish,

    I have taken the personal loan 10 lacks for my home construction from different banks and paying 15.5 % interest .
    I have already paid the EMI for 2 yrs. ( actually tender was 5 yrs )
    Now other bank guy is asking go for balance transfer you will get 13.5 % interest rate.

    is it helpful for me. i am not sure please clarify me .

    thanks regards
    Ramesh

    1. Hi Ramesh

      I think instead of keeping moving your loan from one place to another, focus on completing it fast. bit here and there wont matter !

      1. ramesh says:

        Thanks a lot…

        I was thinking the same…

        Thanks regards
        Ramesh

        1. Welcome .. Glad to know that ramesh ..

  33. Mahesh says:

    What would be the tax implications if I were to receive gift of Rs 1,50,000/- from my sister’s son. Will this gift be treated as gift from relative and will it be exempt or shall be taxed under the head “Income from other sources?”

    1. It will be gift and no tax is payable !

  34. Sateesh says:

    I work in Bangalore. I stay in rented house. I get HRA. I have property outside Bangalore which I bought taking home loan. I earn rent on that property. So far, while filing return I have taken benefit of HRA deduction and also took the housing loan interest benefit limited to 1.5L.

    In this financial year(14-15) my second property got completed and took possession in Bangalore and that is also bought with home loan. I am planning to actually
    shift to this house starting in next financial year.

    Now question is for this financial year return (14-15) can I consider my Bangalore property as “Deemed rented” and the property which I have outside as “Self Occupied Property”? I want to do this to maximize the tax benefits. Because home loan on this Bangalore property is very recent the interest component is very high where as the interest component in the property outside
    Bangalore is relatively very low.

    1. Yes Sateesh

      You can surely do that, and that’s called “tax planning” 🙂 . The way you structure it will help you save more tax . However I strongly suggest, consult a CA on this . He will take some fees, but be doubly sure on this .

      Manish

  35. vivek says:

    Hi,
    I have one query about rent. House is on my name. Can my wife take the house rent and show in her itr as an income and I will not.

    1. When house is not on wife name, how can she take the rent ?

  36. Akhilesh says:

    Dear Sir/Madam,

    I am going to Ghana for 9 to 12 months in the month of January 2015. My salary will be 3,000 US dollars when I will be at Ghana. The government organization will deposit my salary in my saving account in India when I will be in Ghana.

    Condition is this I am working at Ghana and staying in Ghana and I am receiving my salary in Indian saving account in India, the organization is Indian and I have only stay visa at Ghana not working visa.

    My question is this how much tax I have to pay in India. How much money will be deducted from my salary every month.

    1. You will have to pay it like any other person earning in India, you will come under 30% bracket !

  37. Hi Manish,
    I read your article on clubbing of income, I have certain doubts, request to clear.
    1)I got a property on my wife’s name ( Money was paid from my account). The rental income generated from property was coming to my wife account directly , was it supposed to be clubbed with my income?
    2) We sold the property with small profits after 2 & half year, who will pay the STCG (me or my wife).?
    3)The capital generated from selling the property will be invested in bank FD, will the interest will be clubbed with my income or it will become my wife income now as the property was on her name only and the amount was directly transferred to her account by buyer.

    What can i do to avoid clubbing in above situation?
    Thanks and rgds
    Sandesh

    1. 1. NO

      2. Your wife should be paying it !

  38. Pranav says:

    Hi,

    Very nice article. I have a couple of doubts related to education loan.

    1. I pay for my sister’s B.Tech education fees. Can I claim this by declaring her as a dependent ? My father retires from govt. service Feb’ 2015 and I will be the sole earning member of the family. Can I declare them as dependents as well ?

    2. I am pursuing CFA. Cna that be claimed under tution fees ?

    Thanks in advance.

    1. No Pranav

      You cant claim these for tax benefits !

  39. vikas reddy says:

    Hi,
    can you please guide me how to save tax for private ltd com

    1. You need a good CA for it . I just mailed you

  40. Sunil says:

    Hello,

    Myself and my father owns a home (Ground & 1st floor), selling it for 1 crore. I am planning to buy next home for 80 lakhs in my wife’s name, there would some other expenses of approx. 9-10 lakhs e.g. Registration charges and commission. Can I buy home in my wife’s name, I want to avoid income tax. Please help urgently.

    1. I dont think you will be able to save capital gains by buying a house in wife name

    2. Which tax are you avoiding ? When you sell it , you have to pay the tax on capital gains . To save it , you will have to buy it on your name or father .. not wife !

      1. Sunil says:

        Yes finally we did so. However could you please tell me Tax liability on Capital gain.

        Bought a house for Rs. 9.2 lacs in FY 1996-97
        Sold same house for Rs. 1.01 crores in FY 2014-15
        Bought another house for Rs. 87 lacs in FY 2014-15

        Best regards,
        Sunil Sharma

        1. Did you apply the formula I explained in the example . You need to search for the index value for 2014-2015 on net and do the calculation .

          Manish

  41. logmein says:

    Dear Manish,

    Wanted to ask you about my queer situation.

    I had an older home loan for a flat in Mumbai when I was working there. Lets call it Loan 1. Then a few years down the line I had to shift to Goa branch of the same company for work and hence was forced to stay on rent. Claimed HRA and loan 1 benefits both for a while.

    Now the twist is that I have finally bought a second home here in Goa. Lets call it loan 2. Now I mandatorily have to set one of my homes as Self Occupied and the other as Deemed Let out. In an ideal scenario the choice would have been straight forward by declaring home 2 (goa) as the self occupied one since it is in the same city of work and the other property as Let out.

    But my problem is that this new home loan (loan 2) is bigger and hence a larger chunk of interest/ principal benefits ensue here as compared to loan 1. Would it be possible for me to state I live on rent here in Goa since this new property (loan 2) is far off from place of work and thereby set THIS property (loan 2) as let out and file nominal rent and unlimited interest? the first home in that case should earn me max of 1.5L interest only and I am ok with that.

    Pls note I do not wish to claim HRA benefits in this scenario, only want to LET OUT the property in my city that happens to be out of a second home loan. Pls advise me if this would be possible.

    1. Yes, its your choice which property you want to consider as LET OUT 🙂 . So answer is YES . You can claim full interest deduction on the 2nd loan .

      1. logmein says:

        So first loan in Mumbai will give me 1L Principal/ 80C and upto 1.5L Interest/ 24(b). While the second loan in Goa will give me ZERO Principal/ 80C and UNLIMITED Interest/ 24(b). I wont be eligible to claim HRA though. Is the summary correct?

        I also wanted to know if you could help advise on the Goan/ Portuguese law which mandate every asset/ income/ taxation to be shared between husband and wife.

        My query is I want to understand if I am liable to be subject to it. Given that I am originally from Maharashtra staying in Goa since 6 yrs and married my wife who happens to be a Goan.

        1. No , I think you can either choose to claim 1.5 lacs interest on loan 1 , or unlimited on loan 2 , not both ! ..

          I am not aware about goan/portuguese law myself, You need to get in touch with some lawyer on this . Also its based on religion and not location based

          I dont think tax laws change for you based on any thing else., Its same for everyone ! Hindu or Muslim or Christian !

  42. Insurenceer says:

    Can you please update the info Year by year..
    Or at least put that this is applicable for year 2011/12/13…???

    I think HRA (Its now 3000 RS) and gifing point is now a days no more valid…

    1. All the points are still valid !

  43. Priya says:

    good morning sir,

    thank you soo much for your kind replay

    Priya

  44. Priya says:

    thank you very much for your kind reply Manish….
    Occupancy certificate means what? kind of the certification that, we did not occupy the house yet?
    yours faithfully,
    Priya 🙂

    1. Priya

      Occupancy Certificate is a Certificate document issued by Municipality to the Builder, which you need to obtain from the builder at the time of buying the house or later (after contruction)

  45. Priya says:

    Dear Manish sir,

    I need your valuable advice in my IT saving plan of AY 2013-14. I had taken home loan in the month of July 2013, but because of some emotional issues, could not shift to the new ready to occupy flat which i have purchased, still i am continuing with my rented home. And new house is not rented also. My taxable income is more than house loan interest that i can show, is there any provision to show both house loan interest and rent in income tax savings? if you could help me, its very greatful sir.

    yours faithfully,
    Priya 🙂

    1. Priya

      You can surely claim both . Just that you need to have occupancy certificate for your new home to claim tax benefit and HRA for the rented house

      Manish

  46. saumitra says:

    will any other gift, in terms of jewellery, etc , of the same amount help in tax saving if executed with proper gift deed.

    1. Save tax for whom ?

      1. saumitra says:

        As a tax-measure for myself

  47. saumitra says:

    I intend to transfer 80k to my wife , who is a housewife, as a gift for tax saving. Is it beneficial..

    1. You cant save tax while giving . Just that she will not pay tax on that !

  48. santanu says:

    Hi Manish,

    I have a question here. My flat is in another city and it is in the name of me and my wife. Now in the current city we are staying in a rented house.
    So, Can I rent out my own flat and add that as my wife’s income, as she is not working.
    And at the same time I will claim HRA and Home loan benefit together, as the Home loan is in my name.

    Is it possible?

    Thanks for your support and guide all the time.

  49. sudhin says:

    Hi,
    For the last year my main source of income was from bank fd’s, also my minor daughter got a gift from my father by cheque into her saving a/c, I transferred this amount to my account and put in bank fd’s in MY NAME. Now was this the right thing to do? Secondly some interest has to be paid to my minor daughter how do I make the entry? can this be reduced from the total bank interest I received? and as she is a minor this paid interest is again added to my income? As the 26AS details are easily available, and if I pay her interest from the bank interest received by me will this not create a doubt in the mind of the ITO as my income will get reduced in my hands and once again is added back to my total income? Say next year I return the entire capital to my minor daughter thereby my fd’s get reduced to that extent will this create a problem for me as my minor daughter has given me a loan which is quite big?
    Alternatively can I receive this loan from her as an interest free loan and take the interest earned by me into my account is this a safer option, in the previous year the interest was treated as a business interest payable by me to her and as this year there was no business income what do you suggest? Thanks in advance.

    1. Sudhin

      Truely speaking your case is not normal one and only a good CA will be able to suggest you the restructuring. It would be worthwhile to pay him few thousands on this and get it rectified and also get what you should do from where onwards.

      1. Rajesh says:

        Hi Manish

        Is Interest on loan taken to pursue CFA course can be claimed as deduction?

        1. If its an EDUCATION LOAN , then yes !

  50. ANKIT MEHTA says:

    HIII…
    SUPPOSE MY MOTHER GETS 20 LACS TAX FREE DIVIDEND FROM SOME UNLISTED COMPANY…NOW HER PAST FD AND RENT INCOME IS ALREADY AROUND 150000 PER YEAR…..NOW IF THIS 20 LACS again i go for further fd then she will have to pay tax in 10 % slab…
    now my questions are as follows
    1) if i take int free loan of this 20 lac amount from her and invest in fd & earn via fd then is it allowed? i am a major child so it will be taxed in my hands ?
    2)what difference it will make if instead of int free loan i take gift of this amount and invest in fd?
    3)can my mother give int free loan or gift to sons huf file for above purpose instead of individual file? will it make any difference in taxability point of view
    4)in future if i want to repay all this gift amount or loan amount then whats the better way gift or loan……

    1. Just ask her to gift it to you , and then when you invest the income will be yours personally .

      1. ankit mehta says:

        what if i show it as free loan from her??
        and can i take gift or loan in huf file??

        please reply in detail

  51. Nirmal Singh says:

    I am paying one lakh insurance premium. And also paying 30000 as Home loan EMI. Also paying 14000 rent monthly. paying two children’s school fee. How much rebate can I claim ?

    1. You can get upto 1 lac in 80C and upto 1.5 lacs in home loan interest under sec 24D

  52. Mohd Amir says:

    Hi Maneesh,
    If i gift 20k per month to my younger brother can i use this for tax saving purpose and How?

  53. Ravi says:

    Thanks for such nice tips and a wealth of clarification. My Qs are: I have purchased a site in BLR in 2003. I am planning to sell it in 2013 -this year. There is no construction on this site. When I sell it, I am aware of Long term capital gains tax to be paid at 20% after indexation. There has been a few expenses to maintain the site by periodically getting it cleaned from weeds, security, and association maintenance (since it’s a gated community) etc…Is it possible to deduct these expenses from the total CGT? 2) Can we deduct interest on the loan availed against this property in calculating CGT – if yes, how much? 3. Can we deduct commissions from the purchase and sale of property in our CGT? I wish to clarify that since we have a primary home, we have not availed any tax deductions on the interest payments or any maintenance of this PLOT since the time we purchased. Thank you very much.

    1. I dont think that is possible ,you have to consider base cost and sell price

  54. Rahul says:

    Hi Manish,

    Need your kind suggestions for my queries.
    I have paid 6000 approx tax for FY 2012-13.I show the rent slips of 84k of the whole year for tax rebate in January at company premises. But as the HRA was of small amount than rent….HRA become the part of tax rebate .
    I bought a ready to move flat in January for which I got loan of 19 lacs having dad as co-applicant.I paid two premiums of 19k for Feb and March 2013.I have some questions below:
    1)Can I have tax rebate for the year 2012-13?
    2)Should I apply for the tax rebate?
    3)If yes how much aprox amount will I get after refund and when?
    3)I think it will be done through ITR?
    4)If yes then What proof do I need to add with ITR.I myself have filled the ITR online for 2012-2013 but missed to send the docs to the specified address.
    5)I have come to know about exemption on stamp duty through your article.Do I need to send the property registration xerox docs to IT dept.

    Regards,
    Rahul

    1. Rahul

      The question is more suitable for our forum – http://www.jagoinvestor.com/forum/

  55. Manish says:

    Sir,
    For a pensioner , when should the interest from FD be added in income. every year or on maturity.

  56. Manish says:

    One more query sir,
    I am residing with my parents in the house owned by my mother for which I am paying her rent to get exemption from HRA. Will this rent be added in income of my father also or only for mother .
    thanking you in anticipation
    with regards

    1. It will be mothers income !

  57. Manish says:

    Hi Manish sir,
    My father is pensioner. His total pension is 3.5 lac. what can be done to save tax or how much to pay? Is the interest from saving account also taxable.

    1. Upto 10k per year is tax free from saving bank account. Your father can invest in 80C products for save tax upto 1 lac

  58. preeti says:

    hello manish sir,
    i want to know that in my family, me , my mum and mybrother r living , my father has expired recently and nobody is working in our family. whatever we haveeared by my father, nd i want to know that will it come under tax payment .
    if yes then tell me what is the procedure under which we can save tax or pay least.
    plz reply as soon as possible
    thank u sir

    1. Hi Preeti

      There are few things which might be earning some interest , that interest would now be your income , I mean if its in your mother name now, then it will be her income , so now its like a normal scenario .. if that interest is less than 2 lac, you dont have to pay any tax ..

      1. preeti says:

        sir thx 4 ur ur reply , but 1 want to know 1 more thing , as we hav 2o lacs , and its all my name of my mother , then or weshould devide thta amount in 3 parts

        1. Actually if its only 20 lacs, then the interest must be below 2 lacs , in which case there will be no tax , but a TDS , which means banks cut the tax and pay to govt , but you dont have to pay at the end, so there will be headache of claiming the tax paid back.

          Ask your mother to fill up form 15G with bank … check this article – https://www.jagoinvestor.com/2011/06/avoid-tds-form15h-form15g.html

          1. Vishwanath says:

            Appreciate your prompt replies in preeti’s case.
            Just another good human being trying to help!
            How did world become sooo insane then!
            Ahhh…never mind
            Have a great day n God bless

  59. Amit says:

    Hi Manish,

    Thanks for sharing nice tips!

    My question is – Can I save tax by gifting money to my mother? She doesn’t have any income & neither files her return. She is 62.
    As per my understanding, there is no tax for Sr. Sitizen upto 2.4 lac. Hence, if I will pay 2 lac. to my mother & even file her return with zero tax, does it benefit me? Means, does these 2 lac. will come out of my Net Taxable income? And Can I file a refund of ~ 70k in my return (I’m in 30% slab)?
    I have heard about this provision somewhere but not sure how does this work? Pl. clarify! If this is possible than pl. also confirm that is there any particular procedure (tax saving bonds / medical grounds etc.) to gift money to mother or just bank transfer will do?

    thanks in advance!

    BR/Amit

    1. No Amit

      This will not work this way .. you can gift her Rs 2 lacs, but you cant deduct the money out of your taxable income .. All this gifting is from your “after-tax” income only , just that she will not have to pay tax on the amount she gets . thats the only benefit !

  60. Dipak says:

    Hi Manish,

    I want to know the procedure of tax saving by gifting money to spouse

    Hi Manish,

    My wife is house wife how can I save money by gifting her?

    please let me know procedure like,
    1) How much amount can I gift to her.
    2) How can I show that I have gifted money to spouse? proof required?
    3) During IT declaration where I have to put (claim) this amount? in which section?
    4) For this is her IT return submission is required?

    1. Dipak

      Note that you cant save tax on the money immediately by gifting to anyone . Only the recipient can save paying tax on the amount if its a relative . For wife and minor child , you cant gift assuming that even future income can be tax free in their hands !

  61. uday mishra says:

    sir ,
    thnx fr sharing these information ..

    sir iam living in london , i have two rented houses in delhi …. can u please advice how can i save tax on them .. should i tranfer it to a company or what … please give me few tips so that tax burden is reduced i would be greatful to u ./….

    1. Uday

      If the house are in your name and the rent is coming on your name, then its going to be your income in India, after exhausting the 80C limits, I think there is very small scope left for reducing the tax liability ?

  62. Prabha says:

    I want to know that what should I do to save my Income Tax.
    my annual salary is coming in the range of – 3 to 5 lacs .

    1. Have you exhausted your 80C ?

  63. Raghu says:

    Hi,
    Is the last tax saving tip applicable only to 2nd housing loan or all subsequent housing loans?

  64. navneet says:

    Dear Manish,
    I took Education Loan of 198k (2nd yr + 3rd yr + 4th yr) for B-Tech. I passed out in 2011. Now I pay interest of approx. Rs. 3000 per month and principal amount is still above 1.5L. My salary fall in between 2L to 5L per anum. So please let me know Can I save any tax from this situation ?

    1. Interest on education loan is tax exempted, so you can claim the tax deduction on that amount !

      1. navneet chauhan says:

        Thanks for quick reply!
        Plz explore how and how much can I save ?

        1. Its tax exemption , You dont need to include the interest part in your taxable salary !

  65. pramod sharma says:

    Mr. maneesh,

    Many thanks for your information on how to save tax. I have to pay tax on 3.46 lacs. I have purchase 2nd house, in current year i have give around 1.35 lac as principle n interest amount. I have paid around 1.50 lacs of stamp duty. I have got possession also. Can i add stamp duty n registration charges amount to get benefit of income tax. Pl inform.
    Best regards,

    P O Sharma

    1. Yes you can .. but only under 80C ! 🙂

  66. Yuvaraj says:

    Hi Manish,
    Your contribution is valuable for us.
    I have gone through the most of the communications from the thread below.

    I fall into 30% income bracket after utilizing all basic tax saving schemes.
    My query is around Gift.
    My parents are farmer and have no taxaable income.
    1. I want to gift them some Jwellary by purchasing it from the shop. Now will it help me in any way to claim tax benefit.
    2. Suppose instead of Jwellary, if i gave them cash or cheque of the amount say 1 lakh. Will it help me to claim tax benefit.

    I know the gift I am going to make them, there will not be an another income from it. Like it will not be deposited to FD or else.

    Regards,
    Yuvaraj.

    1. Yuvaraj

      NO , its not going to help you in anyway .. You cant claim tax deduction on that amount

      1. Yuvaraj says:

        Thanks for the quick input Manish, Little disappointed to know the fact but It helped me to clarify the doubt. I’ll not regreat that I never asked on the possibility.

        1. Understand the simple rule .. You can never get any exemption like this just by giving away the money to your parents . The only benefit is that now , if they use this money for investments , the interest they earn will be their income, which might be a non-taxable income because of lower limits of your parents, but if it was with you then it might be taxable .

  67. Dear Mr.Manish,

    My father is a retired person with no pension and mother is a house wife, both are living together separately.

    After my marriage, I’m living separately, but, taking care of my parents nicely by all means. I am almost spending 1.75 to 2.00 lakhs per annum to my parents and as such, I am unable to make savings against the annual income of Rs.6.00 lakhs and paying income-tax.

    Could you kindly look into this matter and assist me with your valuable suggestions as to how I can save income-tax, since I’m supporting my parents financially.

    Appreciate your valuable feedback.

    Regards

    Bhanu Prakash

    1. You cant save on anything on what you get in hand ..

  68. sasmita says:

    Dear Manish,
    Thanks for ur valuable suggestions…
    But i have some doubt, my father is retired teacher,he is getting pension of only 15,000.and if i transferred some money to him,then can i claim for that amount and wat d procedure

    1. NO you cant claim for that !

  69. Sanjay Kumar says:

    Dear Manish,

    Thank you so much for sharing the tips. Can you please help me in clarifying the below query:
    My father is a farmer. I transfer him a sum of 20000/- per month. He doesn’t have PAN card & all. Can I get the tax benefit on the entire amount transferred to my father during the year. What will be the procedure for that. Also, would my father also need to submit the income details for that. What are the income tax rules for Farmers. Please help me in getting this clarity as I am about to loose a good amount of money due to not investing; can’t invest as a good amount of my income is transferred to my father.

    1. Sanjay

      There is no provision like this , where you can get any deduction on the amount sent. You need to worry if your father have to pay tax on it or not . Which he is not !

  70. Pradeep says:

    Hi Manish,

    Thanks for the valuable information’s on Tax savings. Could you please guide me how to show the money given to Parents as gift. I am about to Pay 14,000 as Income Tax in this year. Please help a little bit.

    Thanks and Regards,
    Pradeep

    1. All you need to do is one a paper put the words and sign it . Thats all

  71. Naveen says:

    Hi Manish
    personal loan can submit for tax savings

  72. Kumar says:

    Hi Manish,
    Thanks for sharing your knowledge.
    I am planning to contribute Rs. 1-2 lakh for my sister’s daughter marriage.
    Can i claim tax rebate on that?
    My sister’s daughter is in a govt. job for past one year.

  73. Vishnu says:

    “Claim stamp duty and registration fees in 80C” – Is it applicable even If i’m going to buy a plot (in Bangalore), not House? What is the procedure?

    1. Yes, it should be applicable !

      1. Sethu says:

        Manish – Are you sure? I dont think so!

        AFAIK from your forum you stressed somewhere its just for Flats/Houses.Please confirm.

        1. Yea you are correct , It cant be done on plot , my answer was wrong above

          1. Sethu says:

            Thanks Manish for Confirmation!

  74. Vinay says:

    Hi Manish,

    Please mention something about HUF also, through which we can also save lot of taxes..

    Also under new pan card form 49, to create an HUF pan card an affidavit is required stating name of father, karta & co-parcerner.. if you have the format of the same please provide…
    I m looking for that affidavit format…

  75. Vinay says:

    I have gone through your whole article as well as your tax saving tips, in tips 7 u have mentioned that u can claim interest 2 any upper limit on second home only… i would like to know very it is written so…. As far as i am aware of if the home is self occupied than the limit is 1.5 lac & if it is let out then to any upper limit.

    To make it more clear, if suppose i m having 1 home on which i have taken loan & now paying interest which is more then 1.5 lac, but i can avail only upto 1.5 lac since i m residing there, but………………… now if i let out this property and move myself to rented house, than i can claim interest to any upper limit since now the property is let out, as well i can claim HRA since i am staying in a rented property… which can also be done just by paper working also…

    In this whole story i have not purchased any second home…

    think…
    & let me know if i am wrong….

    1. Vinay

      I myself have a doubt on this rule , Never saw anything written on this , can you give some source which can prove you right ?

  76. Purna says:

    Hi Manish,

    I have a doubt regarding capital loss. Say if i have only short term capital loss (Flat purchased @ 50,00000 and sold @ 40,00000). Is it possible for me to claim this 10,00000 at TDS with my employer or do i need to show only at the time time tax return.

    Thanks and Regards,
    Purna

    1. You can only mention it in return and carry it for next 8 yrs,it can be only adjusted with capital gains !

  77. Ajay says:

    I am planning to buy a home in partnership with my friend in Bangalore. So both of us would be co-owners in the ratio 50:50
    We would be the co-borrowers of the loan as well in the same ratio.

    a.) From what I read, both of us would be able to claim tax benefits – maximum of 1 lakh on principal and 1.5 lakhs on the interest component. Is this correct?
    b.) We are planning to rent out the new property. Since I stay in a rented house in bangalore, can I continue to claim HRA?
    c.) Will the rent obtained automatically go into the taxable income category or any deductions can be shown due to the housing loan re-payment?

    1. Ajay

      a) That is incorrect, You both will not be able to claim the tax deductions seperately , its allowed only when its Spouse , Sibling or parent . As far as I understand , along with friend you will only get a total deducation of 1.5 lacs only .

      b) Yes

      c) Yes , but you will be allowed a standard dedcution of 30%

      1. Ajay says:

        Thanks Manish!

  78. sachin says:

    I am living in Government flat. My pay is 6 lack per annual. I have taken a loan(1,50,000), ppf(10,000),Medical Policy(15,000),Infrastructure Bond(20,000)
    and several other which can compete to 6 lack.

    It means I don’t have to pay any Tax
    Is it right ?
    And upto which limit i can save tax ?

    1. What is your taxable income after doing all these investments ?

  79. Singla says:

    Hi Manish,

    Wonderful article!!!

    I have one query:
    Can i give my mother some money, which she will be investing in FD? The income on the that amount will not be my liability, right? Is there any limit on the amount that i can transfer to my mother?

    Thanks,
    Singla

    1. You can do that , no limit 🙂 . Just make sure there is a gift Deed !

  80. Ruhi says:

    Sir,

    If I am paying a rent of 56000 annually , how much tax can i save.?
    Can I save tax on a Reccuring or RD Account?

    1. You cant save tax on RD . Also how much will you save on rent will depend on your HRA , how much HRA you get ?

  81. Divakara A B says:

    I am an Income Tax Payee with highest tax slab.
    I propose to invest (buy from secondary market) in Non Convertible Debenture with coupon rate 12.25% (Annual Payout) with CRISIL AA & ICRA AA maturing on 14-Sep-2016. Face value : Rs. 1,000.00 Market value :Rs. 963.00 and reported YTM yield of 13.50% . Next payout date is 14th sep 2012. Unlike Bank FDs there is an element of Risk and I am aware of it.
    I would like to know the tax implications on the income to be received and on the maturity value during 2016, if I invest Rs.1,00,000 today.

    1. I think debentures are just taxable like anything else, the income will be added to your income .

  82. Arun says:

    Hi,
    Thanks for this informative page….
    I have taken gold loan and educational from bank for my wife pg education. I am claimg tax exemption on educational loan.
    Can I claim tax exemption of the interest paid from gold loan also. I have cost estimate from the college, which shows education loan i got is not sufficient.

    Thanks
    arun

    1. No you cant claim tax deduction on the gold loan interest!

  83. Divakara A B says:

    I have some Fixed Deposits in a Bank and as I am a Income Tax Payee, TDS on the Bank Interest is deducted at Source and also the interest is added to the total income for calculating the IT.
    I propose to take some loan against the Bank Deposit (LTD) from the Bank for few months and I want to know whether the interest on the loan paid to the Bank is adjustable with the Interest on Deposit received, while calculating the IT?

    1. No it is not adjustable !

  84. gautami says:

    hi,

    i have some amount of money like 2 lack .
    how can i invest for that i doesnt want to give any tds or tax
    i thought about fd but there is tds and tax

    can u tell me what is the option

    1. Which product is it ?

  85. Arun says:

    Hi,

    I took loan for a house in my home town, where my parents are residing. My father’s income does not come under tax bracket.
    Can I get tax exemption upto 1.5L interest? Do I have to show any notional income on that house?

    thanks
    Arun

    1. Yes you can take the benefit upto 1.5 lacs , you dont need to show any income , show it as self acquired !

  86. VIBINDAS says:

    yes in above tips hra is new to me.thanks for u r valuable tips.i have one query.my total income = 402588 i have 100000 in 80c.no housing loan.in this case in my form16 no refund .one of my friend with same status filed his return by some firm and in his itrv he is getting around 5000 rs as refund.they reduced his total income around 50000.in which section they reduced this?

    1. You can get this info from your friend or that company only

  87. shiv says:

    hi Manish,
    no doubt all ur tips are precious for us & i am very thankful to u for this.I need one more advice as I am salaried & falls in 30% tax bracket.I have a flat on loan on which I am showing exemption both intrest & principal but I moved to another city to a rental flat.So can I show this rent also? I am getting HRA.If I pay rent for my parents can I get exemption?

    1. Yes you can show HRA and take tax benefit

  88. uma says:

    hi.. can u tell me wat are all the reimbursement that can be useful for tax benefit.. like petrol bills.. medical bills.. internet/telephone …!!

    1. Medical Bills upto Rs 15,000

  89. Ankur says:

    Slightly different from topic question.

    I left my previous company in Sep2011 and joined new company in oct2012.

    1. I encashed my leave in Aug2011 for 58000 rupees. I thought leave encashment is non taxable. Now I got to know that the leave encashment during service is taxable but relief can be claimed under section 89. Now I am not able to figure out how much relief can I get and what is the procedure to avail that benefit.

    2. While leaving my previous company, I paid 2.1lac against notice pay+service bond+training bond. Can I reduce this (or any partial) amount from my total salary to avail tax benefit?

    Please help.

    1. This question is suitable for our forum discussion , please ask it here : http://www.jagoinvestor.com/forum

  90. kaushal says:

    Dear Manish
    very educative & informative . fantastic work pl keep it up .

  91. Uday says:

    Hi Manish,

    Let me applaud your informative article about little known Tax saving ideas. As for tip no. 7 I have been reading up a lot about this one, however i still am not clear about my own situation. Please let me elaborate.

    I live in a Company leased Accommodation in Mumbai. Amount Deducted from my salary is 20000 p.m. However, rent paid by company is added to my Form 16 as Perk(hence i pay 30% tax on that). I have the option of entering into individual contract with Landlord and claim HRA.

    I solely own a house in Ahmedabad which is clear of any loan. My In-laws are living in this house right now.

    I’m buying another house in Ahmedabad thru a joint loan (50Lac /11% /180 months) with my wife. The second house will eventually be occupied by my In-Laws. Thus making my first house un-occupied.

    Now in this case, how can i maximize my Income Tax Savings.

    1) should i opt for HRA instead of CLA.
    2) Do i have to have a Loan running on my First House before i can claim unlimited interest deduction for my second home?
    3) And suppose i start a Loan for house repairs and renovation on my first house, what is the maximum Interest deduction allowed for both of us.

    BTW for me and my wife 80C limit is always exhausted by PF deduction, LIC premiums and Tution fees.

    Hoping to get clarity finally!!!

    Thanks in Advance..

    1. This question needs some discussion and conversations , I suggest starting a thread in our forum : http://www.jagoinvestor.com/forum/ . I assure you will get answers fully 🙂

  92. niladri sen says:

    Hi!

    i am planninag to sell my house, can i save on LTCG tax by declaring the profitable amount as a gift to my daughter?

    1. No , you cant do that .. you can only save it by investing in another property or investing in REC or NHAI bonds

  93. Abhishek Shrivastava says:

    hello manish,
    i live in a flat provided by my company(PSU), which is in company’ own colony.
    there is a rule that company will not pay HRA if any flat for eligible person is vacant. so i opt to choose company flat. it is not furnished neither they pay electricity bill for the same.
    there is no official lease agreement between me and my company for the same.
    now company’ finance people are saying that the amount equal to HRA (which is not even paid to me) is taxable since you are living in company flat.
    I do not understand tax much. i know that HRA is exempted upto a certain limit.
    Kindly educate me on the same.
    thanking you in anticipation

    1. See , HRA is given only when company does not provide you accomodation because the HRA is the compensation for not providing accomodation, now when they have provided you accomodation , then you will not get HRA per se , so that part of income automatically becomes your income and hence taxable

      1. Abhishek Shrivastava says:

        thanx…
        and should i enter in a leagel lease document with my company or not?

        1. If they do allow it then you should get into it for sure

  94. Rakesh says:

    Thank you very much, got to know a lot about saving IT. Very Good ARTICLE…..

  95. Raghav says:

    Sir,

    Staying in a house bought in 2007 with a loan of 8.00 Lac and availing TDS on this one. Booked a flat in flat in May 2010. Regestration was done in Dec 2010 (Registration charges were 87K for land and construction deed). 16.00 Lac Loan sanctioned in Feb 2011. Costruction completed in Jan and the possession of the flat in Feb 2012.

    Paid intrest 80K and principle 37K on first house during Apr-11 to Mar-12
    Paid intrest 130K and principle 58K on Second house during Apr-11 to Mar-12.

    Already got Loss on property benefit -TDS on first house which is self occupied. I paid some 30K Tax inspite of this. No regrets.

    But, Now having the figures of intrest and principle amount paid on Second house, how to proceed to get the benefit on intrest paid on second house while filing returns?

    Please suggest.
    Thanks for keeping the thread alive.

    Raghav

    1. Raghav

      All you need to do is deduct the interest amount paid from your overall income and pay tax only on that

      1. Raghav says:

        Thank you sir. Which ITR form applies to me?

  96. saurabh says:

    hi Manish,
    Thanks for the tips. These tips are very useful.
    I have a doubt in first tip i.e saving tax by giving gifts.

    My gross income: 3.75 lakhs
    P.F=45000

    PPF=15000

    LIC=20000

    Medical Policy=15000

    Relief fund=20000

    Education Loan= 30000(only interest . however the total EMI was around 1 lakh).

    Hence total investment= 145000

    My net taxable income=50000(375000-180000-145000).

    Plz tell me if I gift Rs 30000 thousand to my mother who otherwise does not have any other source of income then how much will be my and her net taxable income ?(She has a fixed deposit in her name and these 30000 will be deposited in that F.D).

    Thanks and Regards,
    Saurabh

    1. You still have to pay the income tax on that money , but your mother will not have to pay

  97. sunny balwani says:

    Hi Manish,
    Thanks again for this wonderful article. I was not knowing these tips. I have two queres as mentioned below:

    1.There is one plot on my mother’s name, if she tranfers that plot on my name. Then i buy a flat through home loan, so will this flat can be considered as my second home & can i claim more than 1.5 L interest p.a. on this flat as second home? what will be money(approx) my mother has to spend for this plot transfer?

    2. My grandmother has given one plot to my father as a will before her death, but my father has not transfered that plot(current value 17L) on his name, now if he transfers this plot on his name, wht amount money (in form registration, stamp duty etc) approx he has to spend, and after this if he sell this plot then what will be tax implications. currently he is retired and not earning any income. He will be senior citizen after 3 yrs.

    Regards,
    Sunny Balwani

  98. MANOJ K SHARMA says:

    if i have car loan emi 9000/- per month than tax saving benifit on car loan

  99. vandana says:

    Thank You for giving ur valuable time for replying !!! thanks……a lott!!! me too ws thinking the same… but wantsss to confirm frm you…Thanks a lottt

  100. Vandana says:

    Hi Manish,

    Your all articles… are outstanding always !! even when i’m vry busy & searching on urgent basis searching some information, I always found ur site, And I can’t control myself to read your full articles !! Good Job !!

    I have 1 query Pl try to give some inform.

    One of my client having a property in his mother’s name now he wants to sold it.. & wann take a new one property.. but becoz of loan approval.. he will going to purchase new property in HIS & Brother’s Name.. SO I wann to ask u that Is that old property will be taxed under capital gain ??? His Mother’s will need to pay a tax or not?? IS THERE ANY OTHER WAY?? pl suggest me MANISH.. !! Awaiting for ur reply!!!!!!!!!!!!!!!!!!!1

    1. Vandana

      Obviously her mother will have to pay the tax , The better way to handle this situaiton would be that mother transfers the properties on the name of her children !

  101. Viral Patel says:

    Hi Manish,

    Very good info.

    I have one query regarding point # 7 .

    I am having one home loan for my new home i took. In current financial year only i have taken one add on loan against the same home. In this case will this another loan be considered under the no upper limit for interest on second home loan purview?

    Please clarify asap.

    Thanks
    Viral

    1. No , if its for the same house, how can that be claimed for another house . I dont think it will work

  102. Jitendra Yadav says:

    If i receive a FD ineterst of Rs. 20000/- and transfer this money to my mother as a gift ,she is dependent on me .Then can i save tax on this amount.

    1. JItendra

      No , you cant save tax on this money like this, once its income , then its income, the question you should have asked is , that will your mother have to pay any tax on this amount if she gets it from you as gift, then the answer is NO

      Manish

  103. Anand says:

    Hi,

    We have a plot in the name of my father. I want to construct a house and since the plot is not in my name, I cannot save on income tax when availing a homeloan. CA suggested to include my name as the co-owner of the land, but that’s a lengthy procedure as the plot was allocated by the development authorities under scheme.
    Is there any other option available which can help me avail tax benefits, say power of attorney(maybe there are variations in POA but I am not aware of it). Will it help if my family makes some kind of will transferring the plot in my name.

    Suggestions would be greatly appreciated.

    Regards,
    Anand

    1. Anand

      Just by making a WILL does not mean anything , its something for future, for this moment the plot has to be on your name. I am not sure if there is any solution for this, why dont you start a thread on our forum to get better answers : http://www.jagoinvestor.com/forum

      Manish

      1. Anand says:

        Thanks a lot Manish.
        Let me start a new thread and it would be wonderful if I can get a solution

        Regards,
        Anand

  104. rafi says:

    i have sold an ancestral agricultural land.to save capital gains can i construct a house on a plot owned by my wife.

    1. Rafi

      No , if the plot is not on your name, you cant save tax on that. Also after selling agricultural plot the money can be saved only when you invest the money in agricultural property

      Manish

      1. rafi says:

        Can you claim exemption u/s 54 or 54F for constructing house on land owned by wife?
        May 15, 2010 By taxworry
        Capital gains exemption can be claimed u/s 54 or 54F if the sales consideration is invested in buying the house or constructing the house . It does not matter if the land on which construction is done is owned by spouse. This is what karnataka High court said in the deicision in case of CIT and Anr. vs P.R. Seshadri [228 CTR 334 ]
        The facts of the case
        The assessee during the relevant accounting period was holding 90% shares in a company and transferred the entire shareholding in favour of another company. The assessee during the year had received Rs.25,00,000/- as advance payment towards the transfer of the said shares, and had invested the proceeds in the construction of a residential house on a piece of land that was owned by the assessee’s wife.
        A.O. assessed the Capital gain on transfer of share . Assessee appealed to the CIT (A) and made the alternative argument of deduction under section 54F on the construction of the house on a piece of land which was owned by his wife gument was not accepted by the CIT(A).
        On appeal to the tribunal by the assessee, the tribunal held in favour of the assessee and in doing so held that the assessee had contributed to the construction of the house out of his funds generated by the sale of shares and irrespective of the fact that the land belonged to the wife of the benefit under section 54F.
        Decision of High court
        23. The first question relating to the benefit of s. 54F being availed by the assessee in our opinion has to be answered against the Revenue and in favour of the assessee for the reason that though the land may be in the ownership of assessee’s spouse, nevertheless the Tribunal has recorded a categorical finding that construction work was in progress during 21st April, 1995 till 31st Aug., 1996 and the wife of the assessee could have included the value of construction for mortgage purposes and this alone does not mean that construction was carried out by the wife of the assessee out of her own funds so as to deny the assessee the benefit of deduction under s. 54F of the Act.
        24. If that is to be accepted as finding of fact then we find no impediment in the assessee’s claim for relief under s. 54F, as the assessee had claimed relief to the extent of Rs. 20,96,008 as his contribution towards the cost of construction of the building and this amount we find that will fall within the cost of the building. Accordingly questions (i) and (ii) are answered in the affirmative and against the Revenue.
        what is your opinion on this?
        please reply

        1. Rafi

          In that case I would have to say better meet a lawyer . Because as per tax laws which i know to claim the tax deductions , the house should be in your name, so i assumed that even the plot has to be on your name .

          Manish

          1. rafi says:

            thanks for your repy…be in touch..

  105. Swati says:

    I have a question on Gift tax- what category of relatives does the clubbing of income rule apply to?
    For example, I gift money to my parents / grandparents. They then invest that money in FDs. Now, will I be liable to pay tax on the interest earned on those FDs deposited in their name?

    (I know that if a lady invests in FDs, where the money is gifted to her by her husband, then the interest earned on those FDs is taxable in the hands of her husband.)

    1. Swati

      In your case, if you gift the money to your parents/grandfather, then it will then officially become their asset and then all the income arising out of it will be taxed in their hands 🙂 . So this is a good strategy. go ahead.

      1. Swati says:

        Thanks Manish! Any idea what the gift tax clause / section pertaining to this is?

  106. vijay singhania says:

    mother gifts jewelry to her major sons acqired by her in 1975 would like to know tax liabilities under capital gains in the hand of the donar.

    1. No tax on the gift recieved, but when you sell them , there would be tax payable

  107. Sriram says:

    Hi,
    If I buy a 3rd flat will i be allowed to have the 1.5 lac deduction on my taxable salary?

    I am staying in one of them and my parents are staying in the other. Hence I don’t get any income from both of them.

    Regards
    Sriram

  108. anil says:

    i have a HUF a/c .I know about the PPP investment of huf.

  109. pooja says:

    Thanks for the good article. I know that the capital gain tax from sale of property can also be saved by investuiing the amount in a residential property. I wish to know is it ok if i invest in my child’s name. i mean if i buy aproperty in my child’s name but with my own funds will it be considered for saving capital gain tax.

    1. No , it will not be .. it has to be in your own name only

  110. Soumya says:

    Hi Manish,

    I worked for a company for 3 months (did not avail HRA) and then freelanced for the remainder of the financial year. Can I submit form 10 BA and claim and tax relief?

    Thank you,

    Soumya

    1. Soumya

      Better ask it on our forum to get right responses : https://www.jagoinvestor.com/forum

  111. sunil says:

    i am a salaried person 30% slab
    i listen that if you gift money to your father it will be reduced from income is it true or can we save the tax by gift the money to parents
    any other tip to save tax as salaried
    your tip about second house is awesome thank you

    1. Sunil

      No , your cant save tax on the amount by just gifting it to your father, the only advantage is that if you gift some money to your father, the future income arising out of that money will be treated as your father income , not yours .

      Manish

  112. Ramakrishna says:

    I started trading in sharemarkets from April’1 2010. I made so many transactions that I lost count of what is the exact profit/loss i got. Is there a way where by I can calcualte net gain/loss i amde over a particular period of time or i have to calculate manually ?:(

    Thanks,
    RK

    1. Ramkrishna

      I think websites like moneycontrol etc have mechanisms where you can just add details of transactions and it will give you the capital gains

      Manish

  113. Ramakrishna says:

    Hi,
    Thanks for the use ful info. I have a question. I took loan from my friend and it is credited to my account online. Should I declare this as income? this is purely an informal loan.Is this income taxable?

    Regards,
    Ramakrishna

    1. Ramkrishna

      I think you should make a small contract kind of thing which acts like a legal document for your loan from friend . that way you dont have to pay tax on that

      Manish

  114. Thanx Manish ….
    you gives a different idea about saving taxes …….this is unique one ..
    i really like it …..awesome…….

  115. Samarjit Baruah says:

    Hi Manish,

    Thanks a lot for sharing these great tips, need your urgent help on point 7 –

    I am currently working in Assam and staying in a rented house. I have a housing loan against a flat in Gurgaon. Possession certificate of the same would be issued in the 1st week of March’12. This is my first proprty.

    => Interest paid on the property in 11~12 : 1.98 Lacs
    => Interest paid upto FY 10~11 : 2.8 Lacs, 1/5th of this Pre-EMI interest – 56,000/-

    Plz guide how I can claim the entire amount of 2.55 Lacs (i.e 1.98 + .56 lacs)
    Plz suggest whether I need to declare any income rent, as the possession is taken in March and it won’t be rented out in FY 12. If yes, plz suggest what should be the nominal value, and whether 30% deduction to be shown in the calculation.

    Thanks again for all your valuable inputs 🙂

    Samarjit Baruah

    1. Samarjit

      You need to show that you paid the interest before possession and now you can declare 1/5th of it , so you can get it . But the total interest is limited to 1.5 lacs only .. so you can never claim more than 1.5 lacs in a year . But in your case your yearly interest is anyways going beyond the limit, so this benefit is of no use to you.

      If your interest was say 90k yearly , then you could have took that 56k and claimed the total of 1.46 in a year .

      Manish

  116. binu says:

    dear friend,
    is there anyway i can save on tax for the housing loan i am paying on behalf of my father.the house is in my dads name..i am helping with the emi…thanks

    1. Binu

      No , unless the house is also on your name , you cant claim any deduction

      Manish

  117. Ankush says:

    Thanks a ton for sharing this informative stuff!

  118. Pramod says:

    Hi Manish, i m in Govt Job i added my father in my medical card and take medical reimbursement for his treatment about Rs 35,000 Is this amount taxable? and i also want rebate in HRA rent paid to my father. Can i take benefit of HRA. Also i booked a plot i m paying loan interrest for that . Can i take rebate on that interest too, i havn’t got possession for that
    thanks & regards,
    Pramod

    1. Pramod

      The amount recieved wont be taxed , and you can take HRA benefit also , but if possesson is not there then interest part can be claimed like that

  119. Jay says:

    Hi Manish,
    I work in private sector and want to save my TAX, i have utilized saving under 80C and also had claimed HRA… now i want to further save my TAX,

    My Mother is a housewife and my father is in govt service….
    If i give 2 Lakhs rs to my mother
    1) is this mean, my net taxable income would be reduced by 2 lakhs ??
    2) will there be any effect on my fathers’ TAX, coz im gifting to my mother ?
    3) Is there any extra form/certificate that i would have to fill along with my ITR to show this gift?
    i know too many questions, please guide 🙂

    thanks & regards,
    Jay

    1. Jay

      You cant save further tax now .. if you gift 2 lacs to your mother , the only advantage is that your mother will not have to pay tax on that 2 lacs and the income arised out of that money will be your mother income , but note that your mother will be the owner of that money than .. she can do whatever she wants with it

  120. saket says:

    I am a Central Govt. employee falling under new pension scheme (CPF). Please guide me that is there any notification of I.Tax for declaring the investment made under Contributory provident fund as not eligible for deduction under 80C. Previously I got deductions for investment made under CPF under 80C. Is the investment made under CPF is still eligible for deduction under 80C? Please clarify (for F.Y.2011-12).

    1. Saket

      Yes , they are still under 80C

  121. jayesh says:

    as per the last tip, please advise under which section, the interest payment is exempted from income for loan for purchase of second house?

    can the second house be purchased in joint names?

    1. Jayesh

      Its 24b section . Note that you can invest in second house in joint name , thats ok

      Manish

  122. suresh says:

    Hi

    I have bought a house in 2006 through homeloan in my home town and i am claiming tax benefits on the same

    Since i am staying in some other city i am also claiming HRA benefits

    I am planning to buy one more house through home loan in my home town.Need clarity on the following

    a) Can i continue to claim HRA benefits
    b) I will claim only interest benefits from both loans and i will not claim any benifit on principle amount since i have already exhausted 80C through PF & PPF
    c) Can i claim tax benefit for standard deduction for both houses and show rent from one house

    1. SUresh

      1. Yes
      2. Yes , thats fine
      3. Not both , one house will be deemed to be self-occupied and you cant show rent on that one .. you can show rental income on only one of them

      Manish

  123. VIVEK says:

    hi manish,
    i m a regular reader of ur articles.
    as return filing time is up ahead , hats off to you for yet another nice article at the right time.
    well i have sm queries.

    1. i hv bought a house for 35 lacs, for which i took 26 lacs of loan frm HDFC, can i get exemption of 1 lac capital and 1.5 lac interest paid that means a total of 2.5 lacs.
    2. if suppose i buy a second house can i realy get full interest exemption .
    3 if my wife and i become the co-owner of the house can v both get exemption of unlimited interest seperately.
    4. if my wife was a co-owner of my first house (which is not the case as i m the only owner of my first house) cud v hv both enjoyed the exemption of 1 lac for capital and 1.5 lac interest paid separately.
    5. one more thing about filing of return: as per now i m filing a return thru a CA who is taking 12 %of refund money as he brings the cheque. one benefit of this thing that he surely brings the chaeque in abut 5-6 months, can it be safe to go for ECS option for refund. what if the money is not refunded or delayed because i can run to get money back as i remain very busy.

    1. Vivek

      1. Yes, definately 🙂 .. just make sure you have possession certificate .

      2. Yes

      3. Yes, but it must be second house for both of you, means if the first house is only on your name, then the secound house will be first house for your wife , in that case she will have that limit

      4. Yes, if she was co-owner of the first house and was paying the EMI also in same proportion , then the limits are seperate for both of you , means 2.5 lacs each = 5 lacs total

      5. In that case your CA should be ok .. but if you file the refunds online , its known that refunds come back in 2-3 months only .. if the refund amount is not big , then CA is ok , but if it runs in very high amount, you might be loosing too much money just because of convinience factor

      Manish

  124. Amit says:

    Thanks……………really good tips………..

  125. sankaran says:

    To save tax in my hand I gift 15 lakhs to my daughter. My daughter in turn gifts the amount to her mother who is my wife not having any income. Now my wife puts the money in fixed deposit and earns interest. Whether clubbing provision still applies in my income? Please clarify.

    1. NO , in this case there will be no clubbing provisions

      Manish

  126. subha kandhari says:

    my mother gifted me 10,00000 as my marriage gift in 2010. now she want to make a gift deed. so can u plz tell me how much gift tax she has to pay or any suggestion to save maximum tax? plz reply its urgent…

    1. Subha

      As this is gift on marriage from mother , there is no tax to be paid on that ..

      Manish

  127. SUBHADIP ROY says:

    I do not agree with point 4. Loss in share market is loss from speculation (speculation loss). And that can not be offset with gain from property. Loss in speculative business can only be offset against gain in speculation business.

    1. Subhadip

      Why dont you agree ? Loss in shares before 12 months is a STGL and STGL can be set against any LTCG , so its allowed

      Manish

  128. Katoch says:

    Hi Manish – You are doing a wonderful service ! My query….
    Property A–> registered in my name and my wifes name. All loans are cleared. On rent. Rent taken in two parts 50% in my ac, 50% in my wifes ac.

    Property B –> Wife co-borrower for 2nd home loan. I pay the EMIs. Property on rent. All rent goes in my wifes ac. Total income of wife less than 5 lakh per yr. Does not file IT.
    Questions
    1. Can I show Property B as self occupied ? (I think out of 2 properties one can be)
    2. Can I alone claim 1 lakh principle u/s 80(c), and unrestricted interest payment u/s 23(i) [or is it u/s 24 ?] with a certificate that my wife is not claiming benefits in IT or do I have to ask my wife to file IT returns and claim 1 lakh each in principal and 50% each of interest paid (she does not pay EMI) ?
    Thanks
    Katoch

  129. Katoch says:

    I could not see an answer to Ramans question, as I have similar query. His question was…..
    raman August 19, 2011 at 1:15 pm
    Dear Manish.Great article.
    I have two properties A&B. Both on Joint name with my wife and both on rent.Property B home loan is being paid by me and I am enjoying tax rebate. Peoperty A no loan is pending. Wife also files return…hardly taxable bracket.I am showing rent from property B in my income.Rent from Property A comes into her bank account
    Question: For the purpose of filing my income tax return and showing rental income. Do I have to show income as 50% each(into my wife and my account) or I can chose to show it as 10% and 90% or any other ratio(1% and 99%)? Why do I ask? I would like to show the higher rental into wife’s income (propertyA) because she wud hardly make it to tax bracket. rental from Property A goes to her account and for Property B comes to my account
    Regards
    raman

  130. N. RAMAKRISHNA RAO says:

    Sir, I have retired from service on superanuation. I am getting pension+bank interest= 4,00,000/- per year. After paying income tax on my income i want to tranfer rs. 1,00,000/- per year to my wife who is not having any income. She will pay the income tax as per existing rules. it is correct or not. please clarify

    Thanking you,
    Sd/-
    (N. RAMAKRISHNA RAO )

    1. Yea .. that should be fine ..

      Manish

  131. mahendra chouhan says:

    I would like to make one clarification from you that in the calcualtion of short term gain calculation from sale of house property,cost incurred on traveling for buying flat in another city than place of work or recidence to be considered in cost of acquition ?

    1. Mahendra

      NO the travel cost will not be included ..

  132. Jasbir says:

    Hi,

    I have a house loan and staying in another city.
    So i can claim HRA as well as other benefit of House Loan(interest + principal).
    House loan is name of me and my father but we have not declared the ratio.

    1. Jasbir says:

      House loan is taken for a home that is in native.

    2. Yes Jasbir

      You can claim the tax benefit .. you need to have house and loan on your name , in some ratio atleast .. mostly its 50:50 ..

      Manish

  133. Ashutosh Gangrade says:

    Hi Manish !
    My company is giving me 54000/- yearly as HRA .Can this amount be used to save Income Tax.Actually currently I am have invested Rs. 30000/- .I want to reach to the limit of Rs. 100000/- , If HRA can be used then I will have to invest only Rs.16000/- other than that Rs. 30000/-.

    1. Ashutosh

      NO HRA does not help in direct tax saving .. only benefit of HRA is that its tax free and you dont have to pay tax on that .. but your Salary comes only after HRA is cut

      Manish

  134. Padmakumar G says:

    Thanks Manish, but as she is not employed anywhere and doesn’t have any source of income, its me who is claiming the 100% home loan benefit limited to 1.5 lacs in interest and 1 lac in principle. Now as the rent of that house is going in her account, I want to know how I would be declaring that amount. Do I need to show the rent is my ‘Income from House Property’ apart from claiming full home loan benefit ? Please advise.

    1. Padmakumar

      there can be a good chance thats it has to be clubbed with your income . I would suggest started a thread on our forum on this to get a clear idea : https://www.jagoinvestor.com/forum/

      1. Padmakumar G says:

        Thanks Manish, the rent is going to her account as she has no other earnings and the total rent amount is well below her taxable income. So you mean to say, if I am claiming 100% home loan benefit, I need to declare the rental income as my source of income ? I will start a thread on the forum too. Thanks

        1. JUst start the thread and we can do detailed discussion there .. you will surely get your answers there .. alos you need a login for that .. try to create one first and if you cant , be mail me to open it for you

          Manish

          1. Padmakumar G says:

            Hi Manish,

            In the forum its not allowing me to register, saying my email already exists…I have provided my email here only for the first time. If yes, can u provide me the password ?

            1. Padmakumar

              Just sent your password

              Manish

  135. Padmakumar G says:

    Happy New Year Manish…

    I have my house in Pune with my wife as co-owner given on rent from May2011 onwards. My wife is a home maker and the rent is going in her account. We are living on a rental accommodation in Bangalore. I am paying the EMI for the house at Pune claiming 100% benefit. How do I show the Pune rent in my declaration ? Do I need to declare as my source of income, even if the amount is going to my wife’s account ? How do I need to declare Let out Property ? Please advise.

    1. Padmakumar

      I am wondering how you are claiming the full benefit if your wife has not taken the home loan on her name ? Because if she is co owner and also a co borrower , then the rent will be deemed to be her income

      Manish

      1. PadmakumarG says:

        Thanks for the quick response Manish. In the loan agreement we are co-owners also per the registration documents for the house of Pune given on rent since May 2011. I am the only one claiming the Home Loan benefits (EMI) as my wife is not employed, as stated earlier. Do you mean to say, I cannot claim the home loan benefits (Interest + Principal), as the rental income is going in her name only.

        1. Padmakumar

          No , I am not saying that … as per the rules .. you can claim tax deducations only in the ratio of what you own and have co-borrowed , so I am assuming you guys are 50:50 in ownership and borrowing .. so now you can claim only that 50% part of yours upto the limit to 1.5 lacs in interest and 1 lac in principle .

          Manish

          1. Padmakumar G says:

            Thanks Manish, but as she is not employed anywhere and doesn’t have any source of income, its me who is claiming the 100% home loan benefit limited to 1.5 lacs in interest and 1 lac in principle. Now as the rent of that house is going in her account, I want to know how I would be declaring that amount. Do I need to show the rent is my ‘Income from House Property’ apart from claiming full home loan benefit ? Please advise

  136. joel dsouza says:

    hi manish,
    good tips simply explained,i am 46yrs not working due to health,i have 2 rooms enjoined into 1,mothers name is added.now given the same on rent as one unit and staying in smaller house 20kms away.this has been done for some income purpose.what is the way out because rent and broker exhaust more than 50%.
    thanks
    joel

    1. Joel

      I am not sure of your question . what do you mean by “way out” ?

      Manish

      1. joel dsouza says:

        hi manish,
        way out means,how will my rent paid be treated

        1. Joel

          the rent is paid by whom ? If you are paying the rent, then you can claim some HRA , thats the tax deduction you can do .. refer to the article

          Manish

          1. joel dsouza says:

            dear manish, hi again,
            i am unable to work due to health for a long time,i have an enjoined house in my and my mothers name,which is given on rent and a smaller house is taken on rent for us to reside.this is done to earn some income,now question is can rent paid be claimed as deduction .also any advice other than this will be appreciated
            loads of thanks
            joel

            1. I beleive I replied you last time on this same question

            2. joel dsouza says:

              hi manish,
              can i claim hra if i am not having a job.

            3. No , then you cant .. you can claim it even if HRA is not part of your salary

              Manish

  137. Durga Prasad S says:

    Hi Manish,

    I think my question is already answered above.

    I understood as per your previous answers, I can not claim

    Thanks,
    Durga

  138. Durga Prasad S says:

    Hi Manish,

    Thanks for useful information in the site.

    I need one clarification regarding claiming house registration fee under 80C. I bought a new house and registered on my wife name.She is house wife.

    Can I claim house registration fee for my tax savings under 80c?

    Thanks,
    Durga

  139. D says:

    Hi Manish,

    Great job on the website!

    I have one query for you: I am living with my mother and the flat we live in is jointly in my name and her name.

    I would like to pay her rent, but since the house is party in my name, do i need to get it transferred fully to my mother’s name and then pay rent?

    Also, any other guidelines so i can increase my mother’s income?

    Thanks very much!

  140. Sachin Shinde says:

    Thanks a lot these are most important tips given by u, will help everybody.

    Once again thanks a lot.

  141. raja says:

    Is HRA exemption come under 100000 savings or not??

    1. Raja

      HRA exemption is over and above 1 lac exemption 🙂

      Manish

  142. Divakara A B says:

    Thanks for the excellent tips.
    You had suggested that, if the amount is gifted to children who are majors are kept in the bank as FD, the interest earned on the FD will be treated as their income and will not be clubbed with mine. Please clarify whether such gift can be made to married daughter. Is there any ceiling on the gift per person per year? Is there any procedure to gift money or just issuing the cheque will be traeted as gift.

    1. Divakara

      There is no limit for making a gift to certain relations , gifting to your daughter is 100% tax free in your daughters hand for any amount . You will have to produce a GIFT DEED . But note that with this , the money will become hers and not yours , legally its her money after that and the income coming from it will be her income .

      Manish

      1. Divakara A B says:

        Manish,

        Thanks & Regards,

        Divakara A B

  143. sriram says:

    Firstly thank you for very good article.
    Secondly I have a question is there any way to get tax saving for investment on the remodelling of the existing house.

    1. Sriram

      Yes . you can get 80C benefit on the interest paid on the loan taken for renovation of existing house .

      Manish

  144. sumit says:

    my mother is selling her house and wants to give that money to me and my mother
    what is the way out?
    she will have to pay capital gain on profit or not??

    1. Sumit

      Yea .. she will have to pay the tax if she does not want to buy a new house . If she invests in some other real estate , then she does not have to pay

      Manish

  145. Mehul Dalwadi says:

    Dear Friend,

    Thank You very much for putting this data on net, till to date i don’t know this idea.

    THANK YOU VERY MUCH.

    Reard,

    Mehul Dalwadi

  146. amit says:

    Hi thanks for the post,
    there is another way to save your tax. Gift your money to me and I’ll run away, this way you can Show your loss under section 420 G, and save tax,. Another benefit will be you’ll get my blessings

  147. Abhishek Manu says:

    Hi Manish, I have been reading this forum, need one suggestion. I have recently bought a house on my wife’s name, and loan is also on my wife’s name. I am just a co-aaplicant in the loan, but, full EMI is being paid by me. My company says I cannot claim any tax benifits as loan or home is not on your name. I am paying heavy taxes and would like to reduce it, please suggest if any criteria exists through which I can save tax through this component.

    Thanks

    1. Abhishek

      For tax deduction facility , you should also have house on your name in same ratio in which you are paying the EMI , only then you will be able to claim the tax else not , there is no workaround here ,its plain INCOME TAX RULES

      Manish

  148. Joe stephen says:

    Thanks for the Tips on Tax saving.

    If I give a gift of 4 lakhs to my wife whose income is less than 1 lakh (she files nil return every yr), Do I GAIN in reducing my annual income by 4 lakhs (I am in the 30% tax bracket) thereby saving 30% of 4 lakhs as tax, which otherwise would have added to my tax for the current financial yr ?

    1. Stock Guru says:

      I don’t think you will be able to gain that benefit. As all your income will get clubbed to your wife income unless yr wife is having job or business which is own by her only. But you can take that advantage by giving to parents.

    2. Joe

      No , you cant do that .. you can gift the 4 lacs to wife , but you need to pay tax on that , also any income earned on that 4 lac will also become your personal income and not your wife’s

      manish

  149. Rustom says:

    Hi Manish,
    I have read the blog and I must say Good Job Manish…!!
    well I thought of asking you a suggestion myself .
    can you advice me on some ways apart from home loan to save my tax.
    I’m a defence officer and pay Rs 6900/- pm tax and it gets deducted at source.
    so which tax form, I should fill and how should I save this hard earned money?
    Thanking You in Anticipation.

    1. Rustom

      Truely speaking apart from home loan , sec 80C,D,E,F,G etc are the top most ways of saving the tax, if you have exhausted them , than there are hardly any other ways .. meet a CA , he can make a customized solution

      Manish

  150. Sanghvi says:

    The article above is very insightful and nice. However I would like to know, if my mom can take a loan from her FD and inturn give that loan to me interest free and also whether my mom can claim deduction on the interest paid on the loan against the FD (Fd interest less interst paid on the loan agst FD)?

    1. Sanghvi

      NO , both the things are not possible ,she can either give a loan to you on interest , or the better thing is that she gifts that money to you

      Manish

  151. abhijit majumdar says:

    Ihave one question regarding long term capital gain.i have earned Rs1100000/after indexisation as long term capital gain from sale of a plot ,now Iam going to purchase a flat for 2300000/out of that my own contribution Rs 3 lakh and 20lakh from home loan and have a plan to invest Rs eight lakh on that flat in coming two years.do I have to pay any long term capital gains tax on Rs 8 lakh(1100000/-300000/) or I shall be exemted from paying long term capital gains tax since I shall invest Rs 800000/ in coming two Fin.years, still I have not filed my return nor I have deposited any amt in capital gains deposit scheme in any bank, give some advice

  152. prema sankaran says:

    Dear Manish,
    I read about giving interest-free loans to children to save tax. I would like to know how to go about this from you. Could you give me some details? I would like to give Rs 2 lacs to my daughter who is now an adult.

    1. Prema

      If your child is major (above 18) .. you can give hte money to her as loan and charge hte interest . It will be income for you ..

  153. ClickInsurance.co.in says:

    These are wonderful tax savings tips. As they say, awareness about the tax savings options is the first step in capitalizing on the benefits that are provided by the governement for claiming tax deductions. The benefits under section 80C for claiming tax exemption for investing in mutual funds, provident fund and insurance products should also be given a serious thought by everyone.

    1. Thanks for your comment

      Manish

  154. Ram says:

    Manish,

    Nice article. Just wanted to check on point no 7 that you have mentioned in the article.

    As i understand the tax law states that there is no limit on the interest deduction for loan on properties which are not self occupied. This essentially means that if one is staying on rent in parents/landlords house and buys a home(would be thr first home) then one can enjoy the benefit of the unlimited interest deduction. It need not necessarily be the second home.

    As rightly said by you rent on this property (actual or notional) would have to be declared as income by the person enjoying the benefit.

    Lemme know your thoughts.

    Cheers
    Ram.

    1. Ram

      yes , ,thats correct

      Manish

  155. Deepa says:

    Dear Manish,

    I am a regular reader of your blog and I find them very useful.
    I have a doubt regarding the interest paid on education loan and tax deduction. I am paying interest on my education loan. My last year’s statement from bank showed that the interest I paid as Rs9910 and I already filed my IT returns and the processing is over. But recently, I got my net banking activated, and the account statement shows that the interest paid in the previous financial year was in fact Rs 24,000. Is there any way I can avail the tax deduction on the same now? or is it possible for me to show it in this year’s returns?
    Regards
    Deepa

    1. Deepa

      Then how did you calculate it to be 9910 ? Why was it not 24000 ? You can avail it !

      Manish

  156. raman says:

    Dear Manish.Great article.
    I have two properties A&B. Both on Joint name with my wife and both on rent.Property B home loan is being paid by me and I am enjoying tax rebate. Peoperty A no loan is pending. Wife also files return…hardly taxable bracket.I am showing rent from property B in my income.Rent from Property A comes into her bank account
    Question: For the purpose of filing my income tax return and showing rental income. Do I have to show income as 50% each(into my wife and my account) or I can chose to show it as 10% and 90% or any other ratio(1% and 99%)? Why do I ask? I would like to show the higher rental into wife’s income (propertyA) because she wud hardly make it to tax bracket. rental from Property A goes to her account and for Property B comes to my account
    Regards
    raman

  157. raman says:

    Dear Manish.Great article.
    I have two properties A&B. Both on Joint name with my wife and both on rent.Property B home loan is being paid by me and I am enjoying tax rebate. Peoperty A no loan is pending. Wife also files return…hardly taxable bracket.I am showing rent from property B in my income.Rent from Property A comes into her bank account
    Question: For the purpose of filing my income tax return and showing rental income. Do I have to show income as 50% each(into my wife and my account) or I can chose to show it as 10% and 90% or any other ratio(1% and 99%)? Why do I ask? I would like to show the higher rental into wife’s income (propertyA) because she wud hardly make it to tax bracket. rental from Property A goes to her account and for Property B comes to my account
    Regards
    raman

  158. mahendra chouhan says:

    I have purchased a flat in name of my wife last year when she was not earning now she is in job .I have sold this flat in july, so STCG liability will rise on me o or on my wife?

    1. Mahendra

      For you only . Its clubbing of INcome

      Manish

      1. mahendra chouhan says:

        but now she is earning and paid tax in this assesment year, and what is the meaning of “clubbing of income”. kindly elaborate the same.

  159. kasi says:

    Me and my mom have joint home loan and joint owners of the home.We both stay together.
    I have paid my home loan that i have taken for the house. I still Now can i pay rent to my mom and claim HRA. My mom has no income , i can file income tax return for her for this rental income.
    is this allowed ???

    1. Kasi

      I dont think so , as you are staying in your own house , how come you will pay rent for the same to someone .

      Manish

  160. Anand says:

    Dear Manish,

    My father has a plot of land which is registered in his name,as an individual.
    I am planning to construct a house on this plot. What options are available for me to save tax.
    Is there a provision where I buy the plot from him and then take loan both for buying the plot and construction of house. Will my father be charged with tax for the amount which I transfer to him for land.
    I am looking at an option where we both enjoy benefit and save maximum tax.

    Regards,
    Anand

    1. Anand

      The best answer can come from CA only . But as far as i understand , you can directly build the house on the plot with loan taken by you and your father in 50% : 50% or what ever ratio works foryou

      Manish

  161. Mahesh Chatterjee says:

    Hello Sir,

    My name is mahesh chatterjee,i just want to know that is there any tax deduction we gift our parent with some goods like electronic items?I want to give Laptop to my parents will it come under Tax deduction?And thanks for your all the tips.

    1. Mahesh

      No , You cant get any tax benefit by “giving” the gift , its always the other side which benefits by getting the gift and the benefit is only upto “not being taxed” .

      Manish

  162. bilandar says:

    Dear Sir,

    I am nri. My mother is housewife in India and a senior citizen. She has income about 1 lac per annum from the bank interest.

    In current financial year I will come under tax bracket from income from bank interest. Just to avoid tax on my income, I wish to give 5 lacs as a loan to my mother and she will invest on her own and earn and then return back principal amount after 3 years.

    Can you please tell me, how to prepare documents for doing this in simple way and later I can use this to get tax relief for me.

    1. bilandar says:

      any reply for this query ?

    2. How will this save tax for you ?

      1. bilandar says:

        That way I will be depositing amount in my mother’s name and so interest income will be earned by my mother and not by me. (She is currently no falling within the tax bracket where as I fall within tax bracket) Anyway, this will ensure dual pupose. One way I can help my mother to earn some income and two I can save the tax on my personal account.

        So now question is, if I want to give a rs. 5 lacs as a interest free loan instead of direct cash to mother (which she can utilise in fixed deposit on her name), how can I do it simple way?

        1. BIlander

          The best thing her is to gift the cash to your mother . that will not complicate thigns and the income earned will be hers

          Manish

  163. bilandar says:

    I am NRI. I come below the income tax bracket. This is the first time I have already filed ITR just for getting refund on TDS on bank interest. However, I have not declared income from renting the house to my sister. In fact, she stays in my house in India but I don’t collect any rent from her. But, she is working and has declared rent paid to me to get her tax relief.

    Will it be problem for me in this situation?

    1. bilandar says:

      any reply for this qurry ?

      1. bilandar says:

        Dear Manish,

        Can you pl advice me on the above matter ?

        bilandar

  164. asif adeni says:

    Dear Sir
    am now retired. my daughter has given Rs 5 lakhs by cheque to buy a car.

    in other words she has gifted me Rs 5 lakhs. how do I show in my IT.. return..?

    Kindly let me know –thanks.

    Regards

    Asif Adeni

  165. vishal says:

    Hi Manish,

    With the Direct Tax Code coming from 1st April 2012, the Tax Saving Mutual Funds will no longer have Tax benefits.

    What is your suggestion should someone start an SIP for this year? as SIP has to be of longer term without the Tax benefit other schems could be more attractive from 2012 compared to an existing SIP in Tax saving, or what is the other option.

    I am thinking of SIP in HDFC Tax Saver but then what should I do from 2012?

    Thanks

    1. Vishal

      From Apr 2012 , there wont be any more option of investing in Tax product ,but for poeple who have already invested in those ELSS , there money will be locked up for 3 yrs and they will be able to take money out only after 3 yrs of payment . so you can start the SIP atleast till 2012 !

      Manish

  166. Ajay says:

    Hi,
    Regarding point 3.
    I stay with my parents & my parents are retired & basically don’t draw any kind of Income. What should I do to claim HRA?? Any documents to be in place?

  167. Zaki says:

    I am living at my mother home and paying rent to her. Is this rent amount may deduct from tax?

  168. Nitin Gupta says:

    Suppose i am planning to buy a house for my parents.
    Is it correct that to get max benifit i shud buy the house in a city other than where my office is, so that i can get tax rebate on HRA(rent paid) as well as tax rebate on home loan interest.

    1. Nitin

      No there is nothing like that , you can get both in the same city

  169. Mann says:

    I have a “big” house loan running. Because of other financial obligations, I could not get my house registered, i.e. I did not go for registration and stamp duty stuff.
    Its been three years and I still hold only the Power of Attorney. Can you tell me if getting the registration done is really important? I am living in that house and have been paying house tax for every year.
    Thanks for your time and sharing so insightful information.. This site is now “bookmarked”….!!

    1. Mann

      Registration is required as per law , tomm when you go to sell the house wont it be required that property was registered already ?

  170. ASHOK YADAV says:

    THE SUGGESTIONS GIVEN BY YOUR COLUMN ARE REALLY VERY IMPORTANT TO THE PUBLIC AT LARGE . PEOPLE DOES NOT HAVING THE KNOWLEDGE OF TAX LAWS ARE PAYING TAX ON NTHE INCOME WHICH CAN BE CLAIMED FOR REBATE BUT NOT DOING SO BECAUSE LACK OF KNOWLEDGE. THANKS FOR SUGGESTIONS.
    ASHOK YADAV
    9897439750

  171. Amit says:

    Manish and Other Punters…

    Off Late i see some banks are offering 10.5% returns for senior citizen.
    My father is senior citizen. He gets pension and ends up paying little tax.
    Mother earns little, she does file tax returns with zero tax.

    If My father and Mother jointly deposit money, will they get 10.5 % returns as my Father is senior citizen and Bank does not deduct TDS as my mother’s income is less than the minimum Taxable limit?

    Probably i am asking too much 🙂

    1. Amit

      Thats a bit tricky questions , I am not sure of the answers , I am sure the community at our forum would know about it . ask it there : https://www.jagoinvestor.com/forum/

  172. Abhisek says:

    Hey Manish,
    Great post giving a lot of Insights.
    Just a couple of questions…

    1) I am karta of our Family’s HUF. I had extra funds in my account which i parked in the HUF Account as Loan so as to get Interest in HUF Account. Please let me know under whose file will it be taxable.

    2) My mother (getting remuneration as director in pvt. ltd.) is planning to buy a House. In case she makes part of the payment from her account and part of it from our HUF Account, in whose file will the Rent Income be taxable? Or will it be proportionately taxable? Also, what if we make the payment from the HUF account and get the House registry in her name? Also, who will get the benefits of 80C for Stamp duty in the various cases mentioned? (No Loans taken)

    Abhisek

    1. Abhishek

      My knowledge in HUF is not that great , can you kindly ask it on Forum , there are many people who would have good idea on this : https://www.jagoinvestor.com/forum/

      Manish

  173. Rinks says:

    My mother is housewife and hence she is not having any tax liabilities. I am in 30% tax slab. I have some surplus with me to invest for 1-1.5 yrs (Preferring FDs) and want to avoid taxes on return. I have thought of following
    – I will give money as loan (or Gift) to my mom (whose income won’t get included in my income) and she will invest money for time period and after 1.5 years she will return me back my money.

    is it a true method to avoid paying tax on returns?

    1. Yes

      Look good to me

      Manish

      1. Rinks says:

        Thanks for the same !!! But will it have any TAX complications in future?

  174. Judy says:

    Wow Manish, I am going to add you on my soul search list.
    I have found great wealth in the above article.
    Hope to use them in future as age age catches up.
    TQ.

    1. Judy

      Glad you liked it 🙂 . Which city are you in ?

      Manish

      1. Judy says:

        Presently Tirupati.

  175. abhishek manocha says:

    the last point isnt in the favour of rich? for first house you get only 1.5 as upper limit, for the second you can claim any…. wow democrarcy!

    1. Abhishek

      Haha , thats a way to look at it .. I am not sure why that rule is there .. buts its there

      Manish

  176. Amit says:

    Thanks Manish….. sounds like a plan….

    Do you have any idea how much would it cost to transfer the flat? Do we have to re register the flat? Cant we Gift it, instead of Transfering?

    1. Amit

      I have no idea on the procedures details , you can Gift it ..

      Better hire a good CA , its better to pay him fees than to loose more than that by trying to do things on your own .

      Manish

      1. Amit says:

        Thanks Manish,

        i will update the thread incase i get more info

        1. Sandeep Jain says:

          Hi Amit,

          So what’s your final status. Actually I’m also about to get possession of my flat but due to lack of awareness 5 years back I booked it in my name. I was also thinking if I can simply register it in my Mother’s name. and then start paying rent to her. OR I can sell it to her, OR gift it to her.

  177. Amit says:

    Manish and Other Finance GURU’s…

    We are planning to buy a flat. Me and My wife together would be applying for Loan. Our plan is to finish the loan in 4 to 5 years ( Just to make sure we dont end up paying huge interest to bank).

    After 5 years, we wont be able to claim HRA and we might end up paying good amount of Tax.

    Is there any way of buying/transfering this flat in my parents name and pay rent to them. They can show it as thier income while filing returns.

    Any other Ideas are welcome….

    1. Amit

      you can definately pay off the loan in 4-5 yrs , but did you do comparision between taking loan for 5 yr and 10 yrs ? In which case are you getting benefitted , as you also have to consider taxation . Considering you take it for 10 yrs , the interest part will be good enough as in that case you and your wife can claim total of 5 lacs (2.5 lacs each , 1 lac for 80C and 1.5 for interest) .

      You can always sell it off to your parents, and the house will become theirs … Assuming they will not have any other income, they will not have to pay any tax on it .. Looks as a good strategy to me .. Just make sure you transfer the house to him and not SELL to him , as it would mean paying the taxes on the profit again !

      Manish

  178. Sharad says:

    Manish,

    Query no 2 is if I’m getting a rental income from the house I’m staying in (from 1 floor). Would it be added to my income? If yes, what could be the best way to not get it counted. Is it possible to rent out to my mother/spouse and they in turn rent it out to the tenants. As none of them have any source of incomes. Would it be possible to show some kind of notional rent I receive from mother/spouse and they show the total rent and file return on this income.

    Thanks
    Sharad

    1. Sharad

      I dont think your mother or father or whoever is dependent on you can pay you rent ,as they are “dependent” . It can happen vice-versa ! .

      Manish

      1. Sharad says:

        Manish,
        My father is not dependent on me and hence so my mother. My father is a pensioner.

  179. Sharad says:

    Hi Manish,

    Thanks for the information you have shared here. I own a house and I want to buy a flat in my wife’s name. She is a housewife.
    What is the best way which would not add the rental income (on possession) to my income. I don’t plan to take a loan as the flat should be in wife’s name.
    a). Should I make the payments and sign a loan paper with my wife.
    b) Gift her the money and she pays off.

    Thanks
    Sharad

    1. Sharad

      You can give her interest free or nominal interest loan and she can buy the flat through that money . That should not make the rent yours

      Manish

      1. Sharad says:

        Thanks Manish.

  180. rajeev says:

    Manish,
    Day by day I have started considering your blog as on stop shop for all financial needs.
    I try to keep myself aware with most of the stuff but pleasantly surprised with point 7, about which I had not clue at all.

    Thank you very much your 7 might give a little push to real estate market 🙂

    1. Rajeev

      Thanks , Just make sure that every point is their to assist in decision and not influence your decisions . So just because their is unlimited deductions does not mean you go and buy real estate :)_

      Manish

  181. Srikanth Achanta says:

    One question, i paid 7000rs to change my Home loan interest rate from 11% to 9% in this financial year. It was a limited period offer from ICICI bank.

    can i claim this amount for tax rebate?

    1. Srikanth

      No , that does not come anywhere in tax scene

      Manish

  182. raju says:

    Hi Manish,
    Is the money generated from the gifted money to spouse is taxable?
    If he/she is not earning member?I read somewhere, gift money to relatives is not taxed…

    Pls suggest on this.

    Regards,
    Raju

    1. Raju

      Yes , the money you gift to your spouse or minor children if invested anywhere , the income arising out of it will be added to your salary .

      Note that the gifts to Major children and Parents is non-taxable . Also the gift given by specific relatives does not attract tax . Here relatives mean

      * Spouse of the individual;
      * Brother or sister of the individual;
      * Brother or sister of the spouse of the individual;
      * Brother or sister of either of the parents of the individual;
      * Any lineal ascendant or descendant of an individual;
      * Any lineal ascendant/descendant of spouse of the individual

      Manish

      1. raju says:

        If I gift to my wife,
        the gains of the invested gift (money) are taxable from her name or my name?

        Pls clarify this.

        raju

        1. Raju

          It would be yours !

          Manish

  183. Gift money to your major children and Save tax on Future Income says:

    Dear Manish,
    As Always very informative article! Great Job.

    1. Kindly clarify on tip no.1 i.e. Gift money to your major children and Save tax on Future Income. Provide source
    2. Can parents gift money to their married children? Money that Parents got from their children as Rent (or Rent paid by children to Parents), after adjusting/paying income tax by Parents.

    1. 1) The tip comes from Subhash Lakhotia in his book “How to save tax through tax planning” (he comes on a tv show TAXGURU)

      2) Yes they can , parents can also get money from children and the income arising out of that money will be parents income !

      Manish

  184. Shrikant Ligade says:

    Thanks Manish

  185. UKN says:

    Had a question on the same lines as Jaibeer. If a father owns a property and son has constructed the house using the home loan (remember here the property is in the name of father). Will the son be able to claim the deduction on income tax since he pays the EMI ?

    If this is not possible is there a simpler way to get tax benifit ?

    1. UKN

      The tax benefit will go to the person who takes the loan on his name , thats all ! . So if son has taken the loan on his name and paying the EMI , then he can use tax benefits

      Manish

      1. UKN says:

        Thanks very much Manish. Again nice article. And really helps.

  186. Jaibeer says:

    Q: Cost of property: Rs 22lac, Mr A contributed 6 Lac and his son took the loan for rest of the required amount. two questions:
    1) how can Mr A include himself as co-owner? Does he need to persuade his builder for the same?
    2) Loan has been taken by his son, so can Mr A enjoy the deductions u/s 24 and u/s 80?

    1. Jaibeer

      The 80C and 24 section is applicable only on the EMI payment and in the ratio of the loan amount . So is A pays 6 lacs initially and B takes the loan of 18 lacs , then A is out of scene as all the loan is taken by B only . So only B is entitled for deductions

      Manish

      1. Jaibeer says:

        Thats what I call a bullet reply. Thanks!

        1. Jaibeer

          I am online most of the time 🙂

          manish

  187. Amit says:

    Hi Manish,

    A very informative post indeed!!!!!!
    I have got one query :- Is the interest earn on PPF in a particular FY is also comes under saving u/s 80C???? Say one has got 5 lakhs in his PPF account till 31st March 10 then the interest earn@ 8% i.e. 40K in FY 10-11 will also be come under savings??????

    Amit

    1. Amit

      No , it does not come under 80C . I think you are askig if you have to pay any tax on that money or not ? So the answer is NO . you can get all this interest money at the time of maturity and at that time it will be tax exempt

      Manish

  188. Amit Gulati says:

    Hi Manish

    As always another brilliant article with perfect timing as people have started submitting investment proofs for tax saving. Someone told me that if I spend some money towards medical expenses of my dependant parents that also qualifies for tax saving u/s80c. Do you have any idea about this?

    Thanks
    Amit

    1. Amit

      There is no provision under sec 80C for this . But you can claim 15k for reimbursment . So if you have any medical expenses like medicines , doctor bills etc up to 15k , thats deductible , you get this in your package per year , but if you show the bills, you dont pay tax on this much amount ,so if you are in 20% bracket , you save 3k in tax

      Manish

      1. Amit Gulati says:

        Thanks Manish

        I just got further info on this.

        Section 80DDB makes this allowance. A deduction to the extent of Rs. 40,000 (60,000 if senior citizen) or the amount actually paid, whichever is less, is available for expenditure actually incurred by you on yourself or on any dependent relative for medical treatment of a specified disease or ailment.
        The diseases have been specified by the Income Tax Act.
        You will need to furnish a certificate in form 10 (I) from any Registered Doctor working (but not necessarily regularly employed) in a government hospital.

        If you have health insurance which has reimbursed part of the treatment expense, then the remaining expense can be considered as a deduction under this section.

        Please note: this is applicable only for the treatment of certain diseases.

        Thus, Section 80DDB allows for a deduction of up to Rs. 40,000 (or Rs. 60,000 in case of senior citizens) for medical treatment expense incurred.

        1. Amit

          Ok , yea this is a seperate one .. I thought you are asking about the medical bills and those expenses !

          Manish

  189. Neeraj says:

    Hi Manish,

    Nice article, though a query on #7, There are some limitations on 2nd house like it should be atleast 50 km away from your work place, can you clarify that?

    1. Neeraj

      I have not heard anything like that for the purpose of tax claims !

      Manish

  190. Monali says:

    Can the Joint Loan Holders(Husband & wife) claim the Registration Fees & Stamp duty in any ratio like (40:60) for tax exemption if both are working ?

    1. Monali

      Definately , if you pay 40% of EMI , you can claim 40% of the charges paid 🙂

      Manish

  191. Raj says:

    You can even open a Trust for your kids under HUF and get treated as a separate entity under tax laws. Correct me if thats not the case.

    1. raj

      Yes you are correct , you can open a trust and incase there is any income upto 50k , there is no tax on that , above that there will be taxes

      Manish

  192. Ashish says:

    Hi Manish, Thanks for an informative article. Some questions
    #1: Can we gift money to parents? My child is minor 🙂
    #5: I have a house in joint ownership with my mother, but we haven’t declared any %age. I pay the loan completely and take the full exemption. I hope this is valid as per IT rules. Are there any guideline on showing rental income as well.

  193. Anonymous says:

    Thanks Manish for a great article once again
    for #1, can we gift money to parents. My child is minor 🙂
    for #5, how do you declare the % of ownership. Currently I have house on my and my mother’s name. We haven’t declared any %age allocation. Loan is paid completely by me and I am taking full deductions. I hope this is a valid as per IT Laws. Also how the rental income on the house should be divided.

  194. Rakesh says:

    Manish,

    Once again excellent post. I was not aware of –
    2 Claim stamp duty and registration fees in 80C
    5 Buy House with Parent or Siblings as joint-owners
    7. Take unlimited deductions for your second home loan interest payment

    Rakesh

  195. Krish says:

    Very informative article.. The apna loan article is very eloborative about point # 7 but focussed which should be declared as self occupied or rental home. It is not clear whether it makes sense for anyone to opt for second home buy.

    If someone is in 30% tax bracket, your rental income is equivalent to interest paid, it is no great deal to buy the second home. However if someone bought second home with 50 lacs amount on loan and getting meagre rental income say 10,000 pm, it would turn out as very attractive.

    1. Krish

      Second house will make sense incase you have cleared the first house and on second house you are getting good rent too 🙂

      Manish

  196. Pratik says:

    Hi,
    Manish ,
    Tax decuction on interest paid /stamp duty is only available for housing loans or we can claim if we purchase a commmercial plot or shop/office on loan .

    thanks
    Pratik

    1. Pratik

      No , it would be available only on residential flat or a plot on which you build house

      Manish

  197. Vikas says:

    Hi,

    Need a clarification if someone can help.

    We have bought a house that we are paying for through our savings. The house is in the name of my wife. Can I extend a loan to her on interest for paying for this property?

    The idea is that she can claim deduction on the interest (up to Rs 1.5 lacs) from her income. I will have to pay tax on the interest but then as of now I am paying 10% tax and she pays 30%. It is still a saving for us.

    1. Vikas

      It would be a wise decision to transfer the major part of house in her name as she is in higher tax slab . something like 75:25 in her and your name . She should be able to bring down the tax outgo a lot

      Manish

      1. Vikas says:

        It is 100% in her name.

        Can I give a loan to my wife?

        Can she claim tax deduction on the interest she pays me? (I am aware it will get added to my income and that is OK).

        1. Vikas

          No , she can claim the tax deducation only if its provided by a recognised financial institution and only for some courses

          Manish

          1. Vikas says:

            courses?

            1. Vikas

              Sorry , i got confused with “education loan” when you said ” loan ” . anyways its not allowed what you want

              Manish

            2. dr kishan says:

              dear manish,
              great article as usual. one point to differ. i think its not necessary that the loan be taken only from recognised institutions. loan can be taken from anybody and the person can claim tax deduction for that while calculating income tax.
              section 24 incometax:
              thus only requirement is making documents regarding interest payable and paid

              i think that this applies when the loan is taken from spouse also. further clarifications will require the help of CAs
              please correct me if i am wrong

              dr kishan

            3. Dr Kishan

              err. . guess what . you are partially right . One can take loan from friends and relatives and then claim the interest part under sec 24 b , but NOT Principal part under 80C .. thanks for the correction . Any more info you have on this ?

              Manish

            4. banudas says:

              There is no need for interest to be for a financial institution. Interest can be paid to anybody. Only 80C deduction s not allowed

  198. Jason says:

    Oye! It’s Manish Chauhan!

    In the flesh! Nice video 🙂 Nice work 🙂

    1. Jason 🙂 . You got to see me first time ? You didnt saw my pic earliar ?

      Mzanish

      1. Jason says:

        Didn’t know what you sounded like 🙂

  199. Daya says:

    Fantastic article Manish! it was truly helpful. I appreciate your hard work and efforts. Such articles will be really helpful for people like us who are the new entrants to the Income Tax and Investment procedures..!! Thanks once again!

    1. Daya

      Incase you are new , you should first learn the basic options of tax savings, these options are little unknown and not so common one 🙂

      Manish

      1. vns says:

        how to make black money white?

        1. vns

          I am not sure on that . Try asking at our forum : jagoinvestor.com/forum

  200. bharat shah says:

    frankly , no tip is not unknown to me. however, it refreshes your knowledge and also thought provoking, particularly bonus tip. in my case, my son is not getting hra, and we live together in my house. i am not having any income.so your bonus tip for hra is beneficial.keep up writing such articles! most tips are less known or thought off!

    1. Bharat

      Yes , you can ask him to pay you rent of Rs 2000 per month (max he can get in HRA as exemtion) . He will save some money in tax and you will not pay any tax on it as your limit will be lower 🙂

      Manish

      1. coder says:

        @Manish, first a big thank you for the information about sec 80gg.
        secondly pl let me know if i pay rent for 5 months of the current FY & then my company provides me accomodation, how much max deduction i can avail:
        1 ) 2000 x 5 =10000 or 2000 x 12 =24000
        2) total rent paid less 10 % of the net income (deducting all deductions except 80gg form total income)?

        thanks in advance

        1. Coder

          It will be always the total rent paid in the year .. you dont have to see if it was paid in 12 months of 2 months .. just see what was total paid in year

          Manish

          1. coder says:

            thanks for so quick reply.

            i have read somewhere (in some IT rules book) that the deduction is least of the following 3

            “Quantum of deduction
            The amount of deduction is calculated as under
            1- excess of rent paid over 10% of modified total income; or
            2- 25% of modified total income; or
            3- Rs. 2000 p.m
            Whichever is less is allowed as a deduction from the gross total income”

            so i was & am confused and asked this (2000 x 5 =10000 or 2000 x 12 =24000 ?)
            thank you in advance

  201. M Anand Kumar says:

    Hi Manish,

    Is this point (2. Claim stamp duty and registration fees in 80C) applicable on plot purchases too?

    1. Anand

      Not if you are buying the stand alone plot . Incase you are going to build house on that , only then

      Manish

      1. Navraj says:

        Hi Manish, I have purchased a plot and plan to contruct a house in the near future. what documentation would be required to prove that the plot is for construction purposes and hence get the tax rebate on the stamp duties?

  202. Mitr Singh says:

    Manish,

    if capital gain(LTCG) from property is 12,50,000 & We use 6,50,000 (Including redistary) in second property in that case the taxable amount is (12,50,000-6,50,000=6,00,000) so tax 20% of it is 1,20,000. Now how can i reduce the tax without purchanse of any debanture or anything. How can i reduce the tax…

    Thanks
    Mitr Singh

    1. Mitr

      I assume that this capital gains is considered indexed cost price of the house , In that case you can not save paying tax on this 6 lacs without investing it .

      If you want , then you will have to invest that money in REC or NHAI bonds only . else you have to pay the tax

      Manish

  203. Karthik says:

    Thanks for the post.

    “7. Take unlimited deductions for your second home loan interest payment” is new to me…..

    I just spoke with my finance team and they too seem unaware of this… Would you please quote the tax law which states this?

    I am living in my second house (taken on loan) and not in the first house (loan which I have completed – in another city). Is this applicable too?

    Thank you so much.

      1. Rajesh says:

        Hi Manish,

        I am regular follower of your website and liked most of the articles.
        Now with regard to you tip 7. i think you should make it clear that if we want to get the benefit of tax claim for the unrestricted interest paid on second home loan then the pre-condition is it should be rented / or self declare it as an rented house (with nominal rent amount should be shown as income from the property)

        Rajesh

        1. Rajesh

          Whatever the case , you will get unlimited interest payment exemption . Incase you have not rented it out , it would be deemed to have been let out and you will pay tax on the rent which you would have got incase you had given it on rent

          Second house = unlimited exemption for the interest payment

          Manish

          1. Anunay says:

            Hi manish, the unlimited interest deductions on your second home loan? This may be correct techinically but practically this is not the case. The second home will not be self occupied and even if you have not rented it out, that rental value will be deemed income added to your taxable income in which you can deduct the interest paid. The interest component in EMI repayment will never be greater than the notional rent practically and hence you will not be able to claim any deduction.

            Correct me if I am wrong

            1. Anunay

              Not always .. Its not always the case they you have to add the whole rent as your income , first you deduct any municipal taxes from it and then deduct another 30% from it as “Standard deduction” , so that will be your income .

              Now take interest part . Lets say you buy a 2BHK for 20 yr tenure for 50 lacs @11% .

              You interest alone can run around 3-4 lacs in first year . And how much rent you can get for that 2 bhk ? 12-13k and after deducting things from it , it might turn out to be 1 lacs per year only . So your interst part will be very high compared to the rent atleast in first half of tenure !

              Manish

          2. Shiva says:

            What is the 2nd house is under construction? Can i still avail interest exemption which i am currently paying the HFC?

            1. Shiva

              Yes .. you can …

          3. ketul says:

            is there any limit for purchasing gold in physical form in income tax rule because i want to know how much gold in physical can you keep with you according to income tax rule, 50 gm or 100 gm or none

            1. There is no such rule . you can buy 1 ton also if you have the money .

              Manish

            2. Rajanna K V says:

              Hi Manish,
              As per you there is no income tax rule & one can keep any quantity of gold with him. Ok, But, what about when we want to sell. I mean is there any Tax we need to pay at the time of selling? Is there any mandatory rule to show IT authorities while selling the gold?

              Rgds,

              RKV

            3. You obviously have to pay tax on the profit made on selling gold . You dont have to show the proof of SELLING, but its always a good idea to keep it .

              Manish

            4. Rajanna K V says:

              Thank you very much Mr.Manish for your quick reply.

      2. Karthik says:

        Thanks, Manish. When I go through these, I get a feeling that I should have 2 loans running. Is that so? In my case, one of my loans is paid off and only one loan is currently on. Please let me know.

    1. banudas says:

      The question is not about the first house or the second house. The question is whether the house is let out or self occupied. All the relevant provisions are in section 24 and 25 of the Income Tax act. You can claim the deduction of full interest if the house in Let out.

      1. Venugopal says:

        Exactly!! This concept of second home is just the interpretation of the tax. Many people can claim this benefit and save a lot by letting their first home on rent also. If i understand it correctly, its not for under construction property. But you can still claim this benefit for under construction period after getting possession from builder in next five years equally divided.

  204. Prasad says:

    Nice tips. A few of these were totally new to me. What I would like to know is, is there any option or way to claim tax deductions for spouse’s loan? I will be probably taking a loan of about 12 lakhs in a few months time for my wife’s post graduation. What would be the better way to save tax on this loan?

    P.S: Some Ctrl +C. Ctrl +V error on this page. The last few paragraphs are repeated. 🙂

    1. Prasad

      No you cant get any deduction on spouse loan . Its her loan , she can get deduction .

      Thanks for point the error . I corrected it

      Manish

  205. Congrats Manish for the video! The tips are of course great as usual…

    1. Raag

      Thanks , Starting exploring Windows now a days . Will come up with more and more videos and other stuff soon . lets catch up in Pune some time next month when I shift my base there 🙂

      Manish

      1. Shifting base to Pune? Awesome man! Welcome 🙂

        And good luck for the videos…

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