Hi, I am paying for education loan which i have taken in the USA, however, I am back in India. I am going to pay this loan for another 2 years.Can I avail tax benefits on the interest I am paying in repayment.
RE:Educcation Loan paying abroad
by Amitabh on Apr 25, 2007 03:33 PM Permalink
Interesting question.However,if you look at the text of Sec 80E,posted in reply to a previous question,you will see that the loan should be taken from an approved charitable institution or any financial institution.Financial institution means a banking company to which Banking Regulation act applies or any other institution which the Central Government notifies by putting in official gazette,including any bank or banking institution referred to in Sec 51 of the Banking Regulation act.In view of the above,I do not think that the benefit will be available.This is only an inference that I draw by reading Sec 80E.
RE:Educcation Loan paying abroad
by venugopal reddy on Apr 26, 2007 02:10 PM Permalink
Hai i am an indian resident will there be any tax on the gift amount recieved from my brother in law who stays in USA
RE:Educcation Loan paying abroad
by Amitabh on Apr 26, 2007 02:17 PM Permalink
Pl see the answer to a previous question.The term relative has been defined there.If the person from whom you receive the gift falls in that definition,there will be no tax on the gift.
Sir, I am working in gulf & have NRE account. Every month I will send money to my SBI NRE account. It is required to pay income tax? It is necessary to file income tax returns every year. Please advice me....
RE:Income tax file
by Amitabh on Apr 25, 2007 10:01 AM Permalink
Interest on NRE accounts for a non resident is exempt from tax.If you have only this income,you need not file any return.
I want to know about payments received by people working as freelancer from within India for people in other countries. Like working on web sites or software development. I am asking only about individuals and not firms or companies.
They receive payment in Indian Rupees from various countries through bank or various web sites. I want to know what tax they have to pay on the amount received and what expenses can be deducted from payment received.
I haven't found any expert advice on this till now. Any advice will be really appreciated.
RE:Freelance payment received from abroad
by Amitabh on Apr 25, 2007 07:13 AM Permalink
If such people work from within India,they are obviously residents of India and income received or accruing to them from anywhere in the world is taxable.So this income too is taxable in India.All the expenses that they incur wholly and exclusively for earning this income would be deductible like depreciation on equipment,other working expenses,etc.However,if tax is being deducted in other countries as well for this income,they can take credit of that tax as per the double taxation avoidance agreement,if any,exists between India and the other country or if no such agreement exists,as per the provisions of sec 91 of the Income Tax act 1961,which allows credit of tax paid in a foreign country by Indian residents for incomes earned abroad.
If I am in a 30% bracket in India, and in a 10% bracket in USA, and I file returns in India as a resident , and in USA as a non-resident, than the 20% which I saved on the interest income in USA will be additionally taxed in india or not ??
RE:Interest income received abroad
by Amitabh on Apr 25, 2007 07:17 AM Permalink
If you are an indian resident,you will have to pay tax on income earned anywhere in the world as per Indian rates.But you will get the credit of the tax you pay in the US on the income earned there as per the double taxation avoidance agreement between india and the US or as per the provisions of Sec 91 of income tax Act.
RE:Educational loan
by Amitabh on Apr 24, 2007 02:29 PM Permalink
This is how Sec 80E goes Deduction in respect of interest on loan taken for higher education.
80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education.
(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest referred to in sub-section (1) is paid by the assessee in full, whichever is earlier.
(3) For the purposes of this section,
(a) approved charitable institution means an institution specified in, or, as the case may be, an institution established for charitable purposes and notified by the Central Government under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) financial institution means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette34, specify in this behalf;
(c) higher education means full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics;
(d) initial assessment year means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan.] So it is clear that only interest is deductible,and that too,without any limit as to the amount.
RE:Educational loan
by Amitabh on Apr 24, 2007 02:40 PM Permalink
However,provision has been made in this year's budget that even if the loan is taken for the benefit of spouse or children of the individual and the individual pays interest on the loan,the benefit of deduction would be available to him.This was not allowed earlier.
RE:Hiii, Education loan..
by Amitabh on Apr 24, 2007 01:52 PM Permalink
Deduction for interest payment of education loan under Sec 80E has got nothing to do with deduction for investments under Sec 80C.For education loan,you will get the deduction only for interest repayment,whatever the amount,if you satisfy the conditions given in Sec 80E.The deduction under Sec 80C for investments,repayment of hoam loan principal,etc will not be affected by it.
RE:Hiii, Education loan..
by Amitabh on Apr 24, 2007 01:52 PM Permalink
Deduction for interest payment of education loan under Sec 80E has got nothing to do with deduction for investments under Sec 80C.For education loan,you will get the deduction only for interest repayment,whatever the amount,if you satisfy the conditions given in Sec 80E.The deduction under Sec 80C for investments,repayment of hoam loan principal,etc will not be affected by it.
RE:Loans that are exempted from TAX
by Amitabh on Apr 24, 2007 01:19 PM Permalink
For home loan EMIs,principal part is deductible within the overall limit of rs 1 lac under Sec 80C and interest is deductible while calculating income from house property.However,principal deduction is available only when house is transferred in your name.For pre construction period interest,it will be deductible in 5 instalmants begening with the year when the property is transferred in your name.Education loan interest is also deductible under Sec 80E subject to the conditions specified therein.There is no limit as to the amount but principal repayment for hoam loan is not deductible.
RE:Loans that are exempted from TAX
by Amitabh on Apr 24, 2007 01:20 PM Permalink
I am sorry.I meant to say that principal repayment for education loan is not deductible.
RE:how to calcuate income tax
by Amitabh on Apr 24, 2007 12:55 PM Permalink
First calculate income under the following heads taking into account the exemptions available under each head 1.Salary 2.House property 3.Profits and Gains of business and profession 4.Capital Gains 5.Other sources.The total income from all the five sources taken together is your gross total income.From here take into account deductions available for investments made,donations made,etc.These deductions are available under Sec 80C to Sec 80U.The gross income less deductions give your net taxable income.Now you can calculate your tax as per the prevailing rates.However,it would be better if you ask specific question pertaining to your taxation issues rather than such general questions.
RE:RE:how to calcuate income tax
by Amitabh on Apr 24, 2007 01:14 PM Permalink
Once the net taxable income is calculated,tax can be calculated as follows.For incomes upto Rs 1,00,000 nil tax.For incomes more than Rs 1 lac but upto rs 1.50 lacs,10 % of the amount by which income exceeds Rs 1 lac.For incomes greater than Rs 1.5 lac but upto rs 2.50 lacs,Rs 5000 plus 20 % of the amount by which income exceeds Rs 1.5 lacs.For incomes greater than Rs 2.50 lacs,Rs 25000 plus 30 % of the amount by which income exceeds rs 2.50 lacs.However,from FY 2007-08,initial exemption limit has gone up to Rs 1,10,000
