[Spitfire]

Originally Posted by vnabhi

Regarding conveyance, there does seem to be something, as our HR has circulated that persons owning vehicles and driving to work will be exempted from income tax to the extent of 1800 or 2400 per month, depending on whether the vehicle is below 1600 cc or above it.

Thats correct. We had the same circular.

[ghodlur]

Irrespective of the engine capacity and what your company pays as conveyance, a max of 9600 can be exempt from Income tax in a financial year as per IT rules. If you co is paying you 2400 pm i.e 28800 pa then the tax on the difference of 19200 would most probably be borne by the company. Pls get this clarified by the HR. I am trying to find a link which clarifies the above. Expert BHPians can advise.

[pradkumar]

Is there a new IT notification to support this?

Originally Posted by vnabhi

Regarding conveyance, there does seem to be something, as our HR has circulated that persons owning vehicles and driving to work will be exempted from income tax to the extent of 1800 or 2400 per month, depending on whether the vehicle is below 1600 cc or above it.

My question is whether I've narrowly missed the bus for the higher slab of 2400, just becuase my vehilce is 1596 CC, and not 1600 cc. For that matter, there is no vehicle just equal to or just above that limit, the nearest are perhaps the Civic and the Altis that are around 1796 CC.
I wonder what the IT dept had in mind when they drew that line at 1600 CC.
Any clues?

Originally Posted by ghodlur

Irrespective of the engine capacity and what your company pays as conveyance, a max of 9600 can be exempt from Income tax in a financial year as per IT rules. If you co is paying you 2400 pm i.e 28800 pa then the tax on the difference of 19200 would most probably be borne by the company. Pls get this clarified by the HR. I am trying to find a link which clarifies the above. Expert BHPians can advise.

[ghodlur]

No new IT notification, its been there for the past decade or so and was expected to be reviewed this budget, but alas nothing happened. The transport allowance was supposed to be increased to atleast 2k pm based on the pre budget debates but it seems tax payers have to wait for another year for the FM to address to this issue.

[vnabhi]

Originally Posted by ghodlur

Irrespective of the engine capacity and what your company pays as conveyance, a max of 9600 can be exempt from Income tax in a financial year as per IT rules. If you co is paying you 2400 pm i.e 28800 pa then the tax on the difference of 19200 would most probably be borne by the company. Pls get this clarified by the HR. I am trying to find a link which clarifies the above. Expert BHPians can advise.

Well, that is what we were following till Dec, 2009. From Jan 1st, our company got merged with the parent company, and they've been exempting the amounts I have indicated for quite some time. I am now keeping all my fuel bills and making sure they are more than 2400 per month. Note, the entire amount of Rs 2400 (or 1800 for <1600 cc cars) is exempt from tax. Even chauffeur's expenses to the extent of Rs 900 per month are tax free.

Originally Posted by pradkumar

Is there a new IT notification to support this?

I was away from the country for 3 months, so I dont really know. I tried looking for it on the Govt's Income Tax site, but gave up in disgust, after painstakingly clicking on a dozen notifications.

[moralfibre]

Guys,

I bought an apartment that is still under construction but paid up the entire amount to the builder upfront for availing decent discounts on the purchase.

Now, the EMI from the bank has already begun. I am not in possession of the house. Would I be eligible to claim deductions for the interest paid on housing loan under section 24(1)(vi) and for housing loan principal repayment under section 80c? At the same time, I am currently residing in a rented accommodation, would I be able to claim deduction for HRA paid under section 10 (13A)?

Would appreciate any help in clarifying my doubt. Never want to be a defaulter.

[DCEite]

Originally Posted by moralfibre

Guys,

I bought an apartment that is still under construction but paid up the entire amount to the builder upfront for availing decent discounts on the purchase.

Now, the EMI from the bank has already begun. I am not in possession of the house. Would I be eligible to claim deductions for the interest paid on housing loan under section 24(1)(vi) and for housing loan principal repayment under section 80c? At the same time, I am currently residing in a rented accommodation, would I be able to claim deduction for HRA paid under section 10 (13A)?

Would appreciate any help in clarifying my doubt. Never want to be a defaulter.

Its not really recommended to make upfront full payment to the builder - even if he gives you discounts. A payment plan which is construction linked is always in the interest of the buyer, even though the buyer still pays the bank interest on the amount payed by the bank to the builder in terms of "Pre-EMI".

Having said that, i don't think you can claim any deductions right now, but as and when the construction is completed and you are given possession - you can claim interestd eduction for pre-construction period in 5 years equal installments from the year you get possession.

P.S. I too booked a flat recently, and the builder was pushing me to take the downpayment plan. But seeing the delays in recent times by even prominent builders - i decided to take the CLP. The money i save right now in terms of EMI - if i invest it in right avenues, the return over the loan repayment period (20 yrs) will be much more than what i would have otherwise saved as downpayment discounts.

[benbsb29]

Moralfibre, i dont think you can claim for the new apartment untill you have obtained a handover from the builder, IIRC. Not sure of the exact document you'll need to show, however the others can chip in.

[vrprabhu]

Originally Posted by ghodlur

1. Damn sure that income above 10L does not attract any surcharge.

2. AFAIK the max exemption for conveyance is still 9600 pa i.e 800pm. Its a pity that the FM had not addressed this major issue in this years budget. Guess he thinks that transportation is still cheap in India

1. Right. Surcharge for "taxable income" which exceeds Rs. 10.00 lakh is removed from AY 2010-11 (FY 2009-10).

2. Yes, you are right. Conveyance which is paid as an "allowance" viz. part of your "salary" or "pay" is tax free to the extent of Rs. 800.00 per month.

People are confusing this with "perks" i.e. things which company reimburses you... details given below in reply to other queries

Originally Posted by ghodlur

Irrespective of the engine capacity and what your company pays as conveyance, a max of 9600 can be exempt from Income tax in a financial year as per IT rules. If you co is paying you 2400 pm i.e 28800 pa then the tax on the difference of 19200 would most probably be borne by the company.

Originally Posted by vnabhi

Note, the entire amount of Rs 2400 (or 1800 for <1600 cc cars) is exempt from tax. Even chauffeur's expenses to the extent of Rs 900 per month are tax free.

The tax part which both of you are talking about is the "perks" part. If your company reimburses you for the expenditure which you have incurred on account of transportation, including the salary paid to chauffeur, there is a cieling on the amount reimbursed every month - as stated above. Whatever is received by over and above this cieling is charged as "perks" i.e. the difference amount is added to your salary for the year. Upto last year the company / employer was bearing it in the form "Fringe Benefit Tax". From the current year i.e. 2009-10 it is moved to the employees

Originally Posted by moralfibre

I bought an apartment that is still under construction but paid up the entire amount to the builder upfront for availing decent discounts on the purchase.

Now, the EMI from the bank has already begun. I am not in possession of the house. Would I be eligible to claim deductions for the interest paid on housing loan under section 24(1)(vi) and for housing loan principal repayment under section 80c? At the same time, I am currently residing in a rented accommodation, would I be able to claim deduction for HRA paid under section 10 (13A)?

Want to have your cake and eat it too, eh?

As per IT rules, unless the house for which you have taken a loan is "complete" before the end of the FY. Which means that your house should be complete before 31st March 2011 and you should have taken possession of it (normally municipal corporation issue what is called a "completion certificate" for this purpose), if you have to be eligible for deduction for HL interest.

HRA will be extempt to the extent allowed - viz. (a) 40/50% of your salary depending on the city where you stay; (b) actual HRA received; (c) amount paid by you in excess of the HRA received or 10% of your salary. Least of 'a', 'b', 'c' is exempt.

It doesn't matter if you own a house and have let it out - as long as you include the rent received in your income. Don't want to be a defaulter, do we ?

[moralfibre]

Originally Posted by DCEite

Having said that, i don't think you can claim any deductions right now, but as and when the construction is completed and you are given possession - you can claim interestd eduction for pre-construction period in 5 years equal installments from the year you get possession.

Originally Posted by benbsb29

Moralfibre, i dont think you can claim for the new apartment untill you have obtained a handover from the builder, IIRC. Not sure of the exact document you'll need to show, however the others can chip in.

Thanks DCEite and Benny.

Originally Posted by vrprabhu

Want to have your cake and eat it too, eh?

As per IT rules, unless the house for which you have taken a loan is "complete" before the end of the FY. Which means that your house should be complete before 31st March 2011 and you should have taken possession of it (normally municipal corporation issue what is called a "completion certificate" for this purpose), if you have to be eligible for deduction for HL interest.

HRA will be extempt to the extent allowed - viz. (a) 40/50% of your salary depending on the city where you stay; (b) actual HRA received; (c) amount paid by you in excess of the HRA received or 10% of your salary. Least of 'a', 'b', 'c' is exempt.

It doesn't matter if you own a house and have let it out - as long as you include the rent received in your income. Don't want to be a defaulter, do we ?

Thanks a bunch vrprabhu. I figured out what I can do now.

[quadra]

Is there any software wherein we can manage mutual funds online. I know that you can buy a paid subscription from any known brokerage firm - is there something which is less expensive available ?

Or

How do you guys mange / track your MF's ?? all at one place ??

Edit: I am looking for something with automatic updates unlike moneycontrol.com which is manual.

[hrishig]

Every major MF has online investing option. That's the best place where you can see the actual amounts/ value of your investment .

[neoonwheels]

I use moneycontrol to manage the portfolio. MF's own website is the best option.

[lambuhere1]

OT : Infrastructure Bonds

As per the current income tax laws, we can invest upto 20K INR in infrastructure bonds. Does anyone have any idea about which institutions are currently issuing the said bonds for purchase currently ? I am planning to invest in the same to save some tax.

Any pointers in the right direction is highly appreicated

[quadra]

Originally Posted by hrishig

Every major MF has online investing option. That's the best place where you can see the actual amounts/ value of your investment .

Correct but there should be some place to manage all your investments. Have heard about kotak securities and they seem to handle lot of fund house

Originally Posted by neoonwheels

I use moneycontrol to manage the portfolio. MF's own website is the best option.

Correct but for MF's you need to manually add the number of units every month.