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EPF Contributions Above Rs.2.5 Lakh: Why That "Taxable Account" Never Really Goes Away

If you're a high-saver relying partly on EPF/VPF to build a large, tax-free retirement corpus, there's a rule that quietly changes the math. The Rule, in Brief Since FY 2021-22, interest on an employee's own contribution to EPF/VPF is tax-free only up to Rs.2.5 lakh per financial year. Contribute more than that in a year, and the interest earned on the excess is taxable in your hands as "Income from Other Sources," with TDS deducted at source. This only applies to the employe

Aug 172 min read

Using Market Corrections to Clean Up Your Portfolio – The Tax Efficient Way

Falling markets not just offer attractive buying opportunities. They are actually one of the best times to identify and remove poor stocks or mutual funds from a portfolio and reinvest into better ones at attractive prices. But the key is to distinguish between temporary fall vs fundamentally bad investment. Most investors do the opposite – […]

Mar 272 min read

How DTAA can help NRIs avoid paying capital gains tax from mutual funds in India?

Recently, the Mumbai Income Tax Appellate Tribunal (ITAT) set a precedent by ruling that capital gains earned from mutual funds in India by NRIs will not be taxed in India. The ruling was given while assessing a case of Singapore based NRI who had earned short term capital gains by selling equity and debt mutual […]

Jun 18, 20252 min read

What are the different tax benefits available under the new tax regime?

The recent hike in income tax slabs under new tax regime has been the highlight of Union Budget 2025-26. Besides the direct income tax relief, there are a few exemptions and deductions which can be claimed by a tax payer under the new tax regime. These include: Salary: Let-out house property Income from other sources:

Feb 15, 20252 min read

Does 87A rebate apply to equity capital gains under the new tax regime?

If you are salaried, you do not pay tax up to Rs.12.75 lakh p.a. under the new tax regime as per tax reforms proposed by the Budget 2025-26. The new tax slabs, the standard deduction of Rs.75,000 retained and the 87A rebate hiked to Rs.60,000 make this all possible. Read here. But there are some […]

Feb 10, 20252 min read

How you pay nil income tax up to Rs.12 lakh and how much marginal relief do you get above this income?

The key highlight of the Union Budget 2025-26 is obviously the tax bonanza doled out by the finance minister for middle class tax payers. There will be no tax on income upto Rs.12 lakh under the new tax regime. This however does not mean that the basic exemption limit has been raised to Rs.12 lakh. […]

Feb 3, 20252 min read

What is an irregular PPF account & how new rules will affect from October 2024

New PPF guidelines will come into effect from October 1, 2024. The primary objective of the new rules is to target the accounts which have been opened in violation of the scheme guidelines. These are classified as irregular accounts which could be if an investor has: How will the new rules affect the irregular accounts: […]

Sep 10, 20242 min read

Key takeaways of the Budget 2024-25 on personal investing

Further the standard deduction has been increased from Rs.50,000 to Rs.75,000 under the new tax regime. The tax rebate under section 87A also remains i.e., individuals do not have to pay tax if the taxable income does not exceed Rs.7 lakh in a year. The revised tax slabs coupled with the increase in standard deduction […]

Jul 24, 20243 min read

Why PPF vs ELSS is a stupid comparison

If a cyclist and a motorist run a race, who do you think will win? The answer is a no brainer. One is a human powered mode of transport and the other is a machine. Although both are vehicles, is the comparison about who is the fastest, rational? Likewise, in investing, it is an unfortunate […]

Jul 2, 20243 min read

If you are Salaried, do not forget to do this by April end

The tax regime opted by an individual will decide how much tax will be deducted from his/her salary income. From financial year 2023-24, if you do not select any tax regime, the new tax regime will be the default option. This implies that your employer will deduct tax as per the slab rates of the […]

Apr 26, 20231 min read

Are debt funds still attractive for investors sans the indexation and LTCG benefit?

With a view to remove the tax disparity between debt mutual funds and other fixed income instruments like FDs, the government has finally approved the amendments in the Finance Bill 2023. Till now, debt mutual funds held for 3 years or more enjoyed the indexation benefit on purchase cost and long-term capital gain taxation at […]

Mar 26, 20233 min read

New vs Old Tax regime – how to choose post Budget?

Whether one should opt for the old or new tax regime depends upon the extent of tax benefits claimed in the form of deductions. Practically speaking, basic deductions like 80 C and 80D are inevitably claimed by majority under the old regime. Then many investors also invest in NPS to claim additional Rs.50,000 under subsection […]

Feb 12, 20232 min read

Know the tax impact on the gifts you receive

We receive various gifts in cash or kind from family, friends and relatives on different occasions. It is better to know the tax impact on the same. Section 56 of the Income Tax Act deals with the taxability on gifts and the gift is classified under the head ‘ Income from other sources’.

Nov 2, 20221 min read

Mistakes that make with people ELSS

Equity Linked Savings Scheme (ELSS) is one of the preferred options for investors to avail tax benefit under 80C. However, there are a few common mistakes which investors should avoid while investing in ELSS. 1. Do not invest in new ELSS every year: I have observed clients having at least 3-4 ELSS funds in their […]

Jul 10, 20222 min read

Tax planning is incidental to financial planning

In nearly a decade’s experience in the financial advisory profession, I can confidently tell one thing. The financial mistakes people make in investing in unsuitable products, in a bid to save taxes, costs them more over the long run than actual tax saved annually. While a tax payer should take benefit of the IT exemptions, […]

Jul 10, 20221 min read