The following information is for educational purposes only and please consult your financial adviser or financial planner for further details.
These were some of the questions that I wanted answers and I am glad that I found them.
1. Can I pay to rent to my father if he owns a house? Is it legal? Continue reading
I am writing articles regarding taxes. I don’t preach others that it is bad to pay taxes or advice them not to pay taxes. I believe that Taxes have to be paid by the citizens for the welfare of the nation.
The only thing I want to emphasize is that, why does government gives tax break? It should serve some purpose right? I am certain that most of the rules does make sense even today which was formed way back before my birth. 🙂 Continue reading
This time of the year, most of my friends prefer to go and get Insurance policy just because they have to buy one so that they can save tax. I get calls from various Insurance agents to take up policies from January to March time frame and the prominent reason they give me to buy the policy is “Tax Benefit”. I am not very keen on taking a policy just because I get a tax break. I know that it does not work that way.
I don’t mind taking a insurance cover for the purpose of insurance rather than “Tax Benefit”. But the fact is that most of us prefer to take the policy thinking it will reduce our tax bracket. I have done that in the past. I have taken a policy and I do pay a yearly premium. I did not know much about tax at that time and for tax benefit I did take a policy only to learn that it does not make sense. Continue reading
The maximum amount of House Rent Allowances (H.R.A.) permitted to be enjoyed by an employee tax-free is up to 50% of the salary in the metros namely Delhi, Kolkata, Mumbai and Chennai and 40% in other cities.
If you notice carefully, there is a clause of “up to” and not flat. This was quite interesting to me when I figured that out. Why not keep it flat? The following is the reason. The government wants some amount of money to be paid by the employee from his pocket which does comes back to exchequer. According to 2A section of the Income Tax Act, the employee has to bear a minimum of 10% of the salary as Rent so that he can get the full benefit of 50% or 40% depending on where he is located. Continue reading
As per new rule 3(9) (vi) “Salary” includes the pay, allowances, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called from one or more employers, as the case may be, but does not include the following, namely: Continue reading
Engineer's Finance 