Following are some of the common misconceptions regarding taxes; i will share detailed info on each point in further articles.
- I need a CA to file my returns as filing taxes is a complex process!
With technology becoming so advance gone are the days when you have to fill up the form manually and running from pillar to post to get the IT dept. “Stamp”. Now you can easily file your returns Online and that too free of cost through IT dept’s website (www.incometaxindiaefiling.gov.in),
- Maximum deduction for the interest which I pay on my home loan is only up to Rs. 1,50,000 p.a.!
This is correct but only for the house which is “Self Occupied” but if you take a home loan on a second house, the entire interest paid on the loan can be claimed as a deduction from your income on house property. It would be a good move for investment planning as you can take a home loan on a second house, rent out the house and claim interest paid on the loan as a deduction from the rental income and reduce your borrowing costs considerably.
- I don’t have to file my Returns as my employer has already deducted “TDS”.
Even if your employer has paid taxes on your behalf, it will not exempt you from filing your returns because if your total income is more than basic exemption limit then you have to file your returns.
- Benefit for reimbursement of Medical bills submitted to employer & Mediclaim (Health Insurance Premium) is same!
Medical reimbursement by your employer for an amount up to Rs.15,000 p.a. is different from the amount of premium you or your employer pays towards mediclaim policies & deduction for the same is available under Section 80D. Both these exemptions are covered under different sections of the Income Tax Act and you can enjoy benefits for both.
- I can avail benefits of section 80C only by making certain investments!
Apart from investing in saving options as listed u/s 80C you can also claim deductions for certain expenses; the school or university tuition fees you pay for your children, repayment of principal on home loan and stamp duty & registration charges on buying a house.
- I don’t have to pay taxes on interest received on my FDs till it is matured!
Tax on interest income from on FDs is calculated on an accrual basis & it does not imply that you are not liable to pay tax annually on the interest which is credited to your fixed deposit account every year, even though you do not have access to that interest income.