Indian Income Tax Laws

It may come as a surprise to you, but it is true that there are a number of tax deduction benefits that we as taxpayers forget to claim. Here are some valuable tax deductions that you shouldn’t overlook.

Not all of us are familiar with various tax deduction concepts and the benefits we can avail from those. We tend to follow certain myths regarding tax deduction and we end up making the whole process of taxation too complex. Let’s understand some common tax myths.

Indian legal news brings you the latest updates about the new rule proposed by the Reserve Bank of India. The apex bank has said that banks shall fix their individual rates of interests for savings deposits. The RBI has also favored the deregulation of interest rates for agriculture sector, EXIM and savings account. Such deregulation is intended to encourage more financial inclusion.

On June 14, 2010, the Bombay High Court ruled that fashion designers are artists and hence eligible for income tax exemption, which came as a relief for many struggling designers in the Indian fashion industry. Indian law pertaining to tax exemption was not so liberal earlier. Ten years ago, when the ace Indian designer Tarun Tahiliani petitioned for I-T exemption under the category of artists, the income tax department rejected his claim as it did not recognize a fashion designer as an artist. A division bench headed by Justice J P Devadhar and Justice Dhananjay Chandrachud proclaimed that fashion designers should get tax privileges available the category of artists.

A Hindu Undivided Family (HUF) or a Joint Hindu Family is treated as a separate taxable entity under the provisions of sec. 2(31) of the Income Tax Act, 1961. This is in addition to an individual as a separate taxable entity. As per Indian laws, the same person can be assessed in two different capacities: as an individual and as a Karta or the leader of his HUF. The rates of income taxes for HUFs are the same as the ones applicable for individuals.

Are you aware of your legal rights in the event of an income tax raid? Well, this article will acquaint you with those rights.

As of May 2010, the Income Tax department in India has made it mandatory for all Indians to have a PAN card (Permanent Account Number), irrespective of their tax filing status. The PAN is a ten-digit alphanumeric number that is issued in the form of a card. It serves as a universal identification factor for tracking high value transactions and ensures that all financial transactions are in compliance with tax laws, and thus help prevent tax evasions.

Under Indian Laws, gift tax was payable by the donor up to 30^th September 1998, The Gift Tax Act, 1958 was repealed with effect from 1^st October 1998 and therefore, there is no gift tax on gifts made on or after that date. Indian law allows NRIs to gift anything to one's relatives as long as they have the capacity to buy those gifts and the gifts are genuine.

PAN or the Permanent Account Number refers to a ten digit number, which is issued by the Income Tax Department in India, in the form of a laminated card. A PAN card is mandatory for those who file income tax returns. This article will discuss  easy steps on how to apply for a PAN card in India and the importance of quoting it on return of income and all the documents pertaining to income tax.

It is also mandatory to mention the PAN in all credentials pertaining to any financial transactions, such as on purchase and sale of immovable property of value Rs.500,000 or above or motor vehicle excluding two wheelers, making cash deposit of Rs.50,000 or above in a bank.

Online trading can be defined as the performance of trading activities, such as buying or selling financial securities, currencies and commodities, on the Internet. The foremost requirement for successful online trading is to be patient and use the apt software.

Brokers are not directly involved in the Internet-based investment practice, with most online trading portals providing opportunities for trade with the biggest stock houses, such as NSE and BSE. The total turnover of the online trading industry has shown remarkable growth from a mere 3 percent in 2003-04 to 16 percent in 2006-07.