Posts Tagged ‘income.tax’
Income Tax 2009 Deductions
July 8th, 2010
Question: Computing Capital Gain Tax?
I purchased a flat in June 2004 for INR 15.75 lakhs and sold this for INR 35 lakhs in July 2009.
(1). How do calculate capital tax. (2). Can I claim deductions for interest paid on housing loans for last 5 years, which we did not claim earlier because no assesment was filed by us – both did not have PAN card then and both are NRI + payment for loan installment was thru NRE a/c. (3). This was a Joint purchase with my wife so, can we both claim income tax deduction eligibilty – we both do not have any income in India. (4). Can I show increase on cost on purchase by adding the cost of transfer and repairs etc. (5) How do I calcaluate inflation factor (6) Is there any way I can avoid taxation thru some way for eg. reinvesting some where or under some income tax section.
Reply and help on this would be most appreciated.
Answer: 1. Cost inflation index for 2004 2005 was 480. For 2009-2010, it has not yet been published. Let this be x.
2. Your indexed cost of the property will be 15,75,000 multiplied by x and divided by 480. The resultant figure will be your cost now for tax purposes.
3. 35 lakhs minus indexed cost (as per 2) will be the Long Term Capital Gain. Your tax will be 20.60% of this amount.
4. As you are a non resident in India living abroad, that country has the right to tax capital gains. (Depends on the DTAA between that country and India.) However, Indian Capital Gains Tax is payable.
5. Any improved done to the property that enhanced its value can be added to the cost and benefit of indexation taken.
6. Interest paid on loans availed can be added to the cost of the flat and indexed again.
7. If you do all this, you will find that the gain has come down substantially. Pay 20.60% tax on this and forget it.
8. You will (usually) get benefit of reduction of your overseas income tax for the tax paid in India. However, if you live in a country where no incometax is levied, then, there will be no benefit.
9. You and your wife can claim tax benefits declaring your ratio of holding interest in this property. That is legal and permissible.
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Tax Deduction Ira Contribution
March 14th, 2010
Question: Why is there a deadline to contribute to a Roth IRA for 2005 of 04/17/06 if a Roth IRA is not tax deferred>
Traditional IRAs are tax deferred so you can deduct any contributions on your tax return. Roth IRAs are not tax deferred so no deduction is permitted.
Answer: There are annual contribution limits for IRAs(Roth or Traditional), so you can actually contribute more during the same calendar year if you have not reached your 2005 limit.
The limit is $4000 for those under 50.
If you made a $2000 contribution in 2005, you could still contribute another $2000 before April 17th and still have your full 2006 limit to contribute $4000 during the year.
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Standard Deduction Income Tax
March 8th, 2010
Question: Turbo Tax Worthwhile for Standard Deduction?
Would it be worth it to buy Turbo Tax if I just claim the standard deduction? Also, my dauther had a baby in Jan 07. She turned 18 in Feb 07. They both lived with us until July 2007. Can I claim them both? (She has no income so will not be filing any tax return).
Answer: Yes to turbo tax and yes your daughter and her baby are both your depend ants for 07. Happy holidays !
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Posted in Standard Deductions |
Tags: 2008_tax_changes, income.tax, interest_loan, irs_help, itemizing_deductions, standard deduction, standard deduction income tax, standard deduction income tax 2009, standard deduction income tax 2009 in india, standard deduction income tax 2009 india, standard deduction income tax india, standard deduction income taxes, tax |
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Sales Tax Deduction Federal Income Tax
March 5th, 2010
Question: How much of federal tax return should I get if I have 21k in deductions and only made 29k?
How much of a return should I get if I have 21k in deductions and only 29k in income? Yeah I’m in sales and had a bad year with my bills from 80k a year 
Deductions are as follows:
Mortgage Interest: $7700
Property Taxes: $2000
PMI: $700
Mileage: $5000
Donations: $1000
Medical: $3000
Student Loan Interest: $1100
I’m curious how much of a federal return I will get?
I have 0 dependents and am a single 26 yo male living in Ohio.
Answer: Go to Hr Block tax estimator
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