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The financial year is drawing to a close, and if you are still scurrying about to save on taxes, here is the harsh truth: you have made a classic financial mistake. Tax planning needs to be incidental to financial planning and you need to adopt a proactive approach to both. For now, let’s look at your options. Today, we shall focus on health insurance which qualifies for tax deduction under section 80D. Under section 80D, the premiums paid towards a health insurance policy for self or family can be claimed as a deduction of up to Rs.25,000. If you also pay premiums for your parents who are not senior citizens—less than 60 years of age—then you can claim an additional deduction of Rs.25,000. So the total deduction that you can claim is Rs.50,000, which translates into a tax saving of Rs.15,450. For senior citizens, the deduction limit is Rs.30,000. But if you are buying a health insurance policy for your parents who are senior citizens then you can claim a deduction up to Rs.55,

The groups have been asked to give suggestions on procedural simplifications and possible rate structure With the goods and services tax (GST) set to be rolled out from July 1, the government has set up 10 working groups to address the concerns of industry. The groups cover banking, telecom, exports, information technology, transport, textiles, MSMEs, gems and jewellery and services received and provided by the government. The groups have been asked to give suggestions on procedural simplifications and possible rate structure. The deadline of submitting reports by the groups is April 10. Some of the issues that would be tackled by the groups include how to handle services provided between establishments of the same entity without invoice or payment in certain sectors with high volumes of transactions when operations are spread across the country. The other matter is compliance challenges for small and medium sector in an automated environment, with end-to-end matching of invo

The finance ministry on Friday held a meeting with bankers to discuss ways to use excess liquidity in the system. There was consultation on introduction of standing deposit facility (SDF). While some bankers agreed to it, others sought more time to assess the scheme, sources said. The SDF is a tool used for sucking out surplus liquidity without the need for a collateral in exchange. The demonetisation announced by prime minister Narendra Modi on November 8 has led to a huge surge in deposits, with scrapped notes of Rs 500 and 1,000 being parked with banks. According to various informal estimates, about Rs 14 lakh crore has come back into the banking system. High cash deposits have raised concerns about price rise at a time when the RBI is seeking to check inflation by changing its policy stance to neutral from accommodative. Wholesale inflation soared to a 39-month high of 6.55 per cent in February and retail inflation inched up to 3.65 per cent due to higher food and fue

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation. As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead wi

Nifty PSU Bank Index rises 3.3% on hopes of imminent solution to NPAs following FM's remark Public sector banks were the toast of Dalal Street in an otherwise listless trade on Friday as finance minister Arun Jait ley's remarks on an imminent so lution to the growing asset quality problems enthused traders. Trad ers rushed to cover short posi tions in these stocks and the Nifty PSU Bank Index rose 3.3%. Gains in PSU banks and even se lect private banks, which form around 30% of the benchmark Nifty weightage, propelled the main Nifty index back above the 9100 mark. The Nifty closed a 9108, up 21.70 points, or 0.2%, and the Sensex ended 89.24 points, or 0.3%, higher at 29421.40 points. Money managers said the mo mentum can lead to more gains in the PSB sector in the next few days but added that sustainability over the time would depend on the steps the government announces. “For PSU banks to outperform market we need permanent solution for non-performing assets, administr

The government has done away with the 1 per cent tax on cash payments of over Rs 2 lakh for purchase of any goods or service after it banned cash dealings above that limit from April 1. Finance Minister Arun Jaitley, in his Budget for 2016-17, had provided for the seller to collect tax at the rate of 1 per cent from the purchaser on sale in cash of any goods or offering any services exceeding Rs 2 lakh. Tax collection at source (TCS) limit for cash purchase of bullion was kept at Rs 2 lakh, but for jewellery, it was fixed at Rs 5 lakh.However, in the Budget 2017-18, presented last month, he brought in a new provision banning cash transaction above Rs 3 lakh. This cap was lowered to Rs 2 lakh through an amendment. To reconcile the two provisions, the tax at source on goods and services, including jewellery, has now been removed through an amendment to the Finance Bill, 2017. The amendment, along with other changes, were approved by the Lok Sabha Wednesday. The amendment scrapped sub-se

Aadhaar is on course to evolving into a comprehensive identification number for financial transactions, with the government deciding to introduce Aadhaar-enabled know-your customer regime across financial sector. The government is holding consultations with all regulators including the Reserve Bank of India in this regard, officials said on Thursday, a day after Aadhaar was made mandatory for filing income tax returns and applying for permanent account number or PAN. “Aadhaar e-KYC provides an instant, electronic and non-repudiable proof, besides updated contact details, which helps in further streamlining the process of service industry ,“ said a senior finance ministry official, who did not wish to be identified. The government has through an amendment in the Finance Bill made Aadhaar, the 12-digit number issued by the Unique Identification Authority of In dia, mandatory for filing income tax returns and applying for PAN. “Those individuals who already have Aadhaar, will need to pro