Tax Filler Script

The Indian tax filing has become even more tedious now. Going forward, starting from assessment year 2020-21 (financial year 2019-2020) one needs to report each and every equity redemption that results in long term capital gain in Schedule 112A. It used to be optional last year. Instead of reporting every transaction you could just report the aggregate value. But it is not optional anymore. This increases the burden on the tax payer especially if you have made a lot of small transactions. This change applies only to equity transactions that have incurred long term capital gains. So the debt transactions … Continue reading “Tax Filler Script”

How And Who Should Pay Advance Tax

I just payed my second installment of advanced tax, so I thought I will write down the procedure. It will be like a reference for me in the future and might help some one as well. It is actually a pretty simple process that does not really warrant a post, but here we go anyway. Who should pay advance tax? If the computed payable tax for a year exceeds Rs. 10,000, then you are liable to pay advance tax. For most salaried individuals the payable tax probably will not exceed this amount because your employer pays tax (TDS) on your … Continue reading “How And Who Should Pay Advance Tax”

Taxation of Franklin Segregated Funds Payout

There is a lot of confusion about how the payout from Franklin Segregated funds (Vodafone Idea papers) will be taxed. After reading a lot about the taxation for the past 3 days, I think I finally have a good idea. If you received a payout from Franklin, you will find all the details on how to calculate your tax. I can tell you upfront that we are at a tax disadvantage. Moreover, you might have to pay advance tax depending on how much you received. In the rest of the post I will be using Franklin Ultra Short-term Bond fund … Continue reading “Taxation of Franklin Segregated Funds Payout”

Consolidating Your Portfolio

I am sure everyone of you at some point have wondered why you have so many funds in your portfolio. I am one of them too. If you have wanted to consolidate your funds into fewer funds in fewer categories, this post should help you get there. There could be many reasons for your bloated portfolio. May be some funds performed better at some point but not anymore and so you stopped investing in it and started another one. Or perhaps you created multiple folios in the same fund by mistake because you did not select a folio number. May … Continue reading “Consolidating Your Portfolio”

Income Tax Reporting

While the name “income tax reporting” seems to suggest that you only need to report income, it is not really the case. It has been expanded to report investments that you already have, whether they gave you any income or not during the assessment year. After reading a comment on one of my blog posts I became aware of the fact that some people might be misinformed about what is supposed to be reported. Since I am not a tax adviser, I cannot tell what everyone should report, but I will go over what I have been reporting over the … Continue reading “Income Tax Reporting”

Tax Audit

I was recently audited by the Income Tax Department and thought that the whole faceless scrutiny process was interesting. So here is something about it. It seems like I was one of those people who got randomly selected for Limited Scrutiny (Computer Aided Scrutiny Selection). It was the government’s way of testing out the e-Proceedings facility. Here is the email I received from the Income Tax Department. Dear Taxpayer, Thank you for filing your return of income for Assessment Year 2018-19 vide Ack. no. XXX on XXX. While acknowledging the care and diligence you may have taken in preparing the … Continue reading “Tax Audit”

Budget 2020 and How It Affects Me

I am sure you already know everything you need to know about the budget by now. There are hundreds of articles covering every aspect in details. Now the question really is — how much does it affect you? Since everybody’s situation is different, their incomes and tax deductions are different, there isn’t much advice that I can give. This is one of those times when I throw the clichéd answer “it depends”. So instead, I thought I will pen down how it affects me. But first, lets rewind and understand what happened in the budget. It seems to me that … Continue reading “Budget 2020 and How It Affects Me”

Tax Deductions

As I am doing taxes for the recently concluded financial year, I am realizing how much of tax saving one would be forgoing once you retire :). Without income there is no more section 80C deductions, no more savings from interest paid towards home loan via section 24, no exemptions for HRA under section 80GG. These things only hit you once you retire. Of course I went into retirement knowing that, so nothing to worry, but you don’t realize these until you do your taxes. During your earning phase, every paycheck is a reminder for saving taxes and claiming as … Continue reading “Tax Deductions”

Am I Financially Ready To Retire?

Here is an alternative take on whether you are financially ready to retire. In this post, I want to help you determine if you are ready to quit with nothing but a simple calculator and just one formula. You don’t need to predict expenses, inflation, rate of return etc, and as such, this method is not as comprehensive as the How Soon Can I Retire calculator. So take it with a pinch of salt and use it more as an indicator of whether you are ready to retire or not. Also note that this is only to check if you … Continue reading “Am I Financially Ready To Retire?”

Financial Support for Your Parents

You are currently working and deriving a salary. It is easy to support your parents with the salary. But how about when you retire? Hopefully, you have included supporting your parents as part of your expenses when calculating how much do you need to retire. Alternatively, they have enough corpus or other income that will let them support themselves and live independently. In my case, it was a mix of both and I thought I should explain how I am handling it. May be it will help you get some clarity on how you want to go about it. We … Continue reading “Financial Support for Your Parents”