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TAX PLANNING FOR GIFTS TO WIFE!

Remember that income from accumulated income is outside the purview of Section 64!       In the context of the clubbing provisions under Section 64 of the Income-tax Act and Section 4 of the Wealth-tax act, it is important to note that the income liable for clubbing is such income arising from the amount of the gifted asset and the wealth liable for clubbing is such wealth representing the amount of the gifted...

SCRUBBING THE CLUBBING PROVISIONS

Gifts to Son’s Wife on the occasion of Marriage can help save smart tax for a lifetime!       The abolition of Gift-tax since 1st October, 1998 has also thrown open several opportunities for planning to reduce a taxpayer’s income-tax and wealth-tax liabilities. Moreover even under the provisions of Section 56(2) as effective from 1st September, 2004 (and further amended w.e.f. 1st April, 2006 and 1st October,...

TAX IMPLICATIONS OF REMUNERATION TO WIFE

Clubbing of income is not attracted where remuneration is paid to spouse possessing professional or technical qualifications!         Keeping in view the family system prevailing in India where the financial affairs of the family are generally managed and controlled by the male head of the family, it is common to come across situations where the husband plans deriving income in the hands of his wife, thus aiming to...

HEALING TAX PAIN OF CAPITAL GAIN!

Deeming fiction u/s. 50 for taxing short term capital gains cannot deny benefit of exemption or set off of loss!       Section 50 of the Income-tax Act prescribes a special provision for computation of capital gains arising on the transfer of depreciable assets. As per the same, where the consideration received or accruing on the transfer of such an asset exceeds the written down value of the block of assets to...

TAX CONCESSIONS FOR DONATIONS!

Contributions & Donations to approved Charities & Research Institutions qualify for deductions from 50% to 175% ! Section 80G of the Income-tax Act provides for deduction out of gross total income in respect of donations to approved Funds and Charitable Institutions. The benefit of this deduction and consequential tax saving is available to any taxpayer viz. individual, HUF, company, firm, etc., whether...

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