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Nikhil Batra asked, Mr Prasanna. I am 32 yrs old. I have various policies LIC and ULIP and the total sum assured is 12 lakhs. Is it sufficient. What else can be done.
Prasanna Pandit answers, Adequacy of sum assured should be validated keeping your personal worth in picture. Your family may need certain amount on regular basis in case of your absence. Hence you could possibly work out the corpus amount taking a risk free rate of return say Post office FD that may yield 8%. Hence suppose your family needs Rs. 8 Lakhs per annum for their regular expense then you would need a corpus of Rs. 1 Crore. Please work out your requirement accordingly to define the correct estimate of your insurance requirements.
Arjun N asked, Hi, my employer quoted wrong PAN in his records and is given Form 16 last year with wrong PAN number. What should I do? Will the income tax dept take action against me?
Prasanna Pandit answers, Please write a letter to the ward officer relevant to your jurisdiction stating the mistake. Attach a copy of the PAN card with the letter and get an acknowledgment of this submission on your copy. This should take care of this mistake
Manikutti asked, Can i continue to stay in the rented house and claim the HRA while owning a house and availing the IT benefit on home loan by showing a modest rental income?
Prasanna Pandit answers,Yes you can but this modest rental income has to compare with the reasonable letting value in your area of residence
Mridul Roy asked, Sir,I am paying mediclaim Health insurance premium for my parent .Will i get tax benefit?
Prasanna Pandit answers, Yes you can get a deduction for this
Mangesh Mhatreasked, Sir,I am paying mediclaim Health insurance premium for my parent .Will i get tax benefit?
Prasanna Pandit answers, Yes you can get a deduction for this
Kalidas Mathur asked, How can we track how much money is credited into my PF account. Is there any web site where we can get this info.
Prasanna Pandit answers,You would get annual PF slips from the PF department through your employer. The PF department is in the process of putting up this feature wherein you can check the balance status online.
Nikhil Chainani asked, Hi, For tax investment what is better between ULIP & Tax saving ELSS.
Prasanna Pandit answers,I would go for ELSS MFs
Reema Chopra asked, i am staying in my own home and i had availed housing loan can i get HRA exemption from income
Prasanna Pandit answers, No you cannot avail the HRA deduction in this case
Annadurai Mughulam asked, Hi Sir, I stay in Chennai, my parents stay in Kolkata, every year i am sending 1.5laks to my parents for their living. Pls advise me is there any way by which i can claim some tax exemption on this amount?
Prasanna Pandit answers, No deduction for such expense can be claimed as these are personal expenses
Mriuntajay Shankar asked, Sir, Is PAN card migration essential? As i got shifted to different state and no where i file my income tax return?
Prasanna Pandit answers, Yes it is pertinent to change your PAN data with the tax authorities. An example as to how it may impact you is in case you have a refund, then your current ward officer may refuse to release the refund stating that there is no clarity on who has jurisdiction over your case
Manish Panda asked, What is a Diversified Equity Mutual fund? Why is it recommended for better returns? How is it different from other category of Mutual Funds?
Prasanna Pandit answers, Diversified Equity MF are such funds that have exposure to varied industries that may help in avoiding a steep fall in case any particular sector falls. This is unlike sector funds that has exposure to limited sectors such as say banking sector or power sector
MVerma asked, hi i'm planning to buy 2BHK. But current market price is too high so i planned to buy 1BHK and give it on rent and i will take 2BHK for me on rent. Doing this can i claim home loan and house rent. Please advice.
Prasanna Pandit answers, Yes you can claim both the home loan deduction & HRA deduction. The rent received should be reduced by the interest amount and 30% standard deduction to arrive at the net taxable income.
Kalyan Maditlu asked, Hi Sir, For financial year 2007-08 i declared my TAX returns and i should get nearly Rs:16K from the I.T dept but till date i didn't received even a single paisa and the bad news is that i lost the I.T return paper. So my question is when i will receive this money else to whom i need to contact on this issue?
Prasanna Pandit answers, You can check the status of your refund on www.tin-nsdl.com Approach your ward officer to enquire the status of the refund and if required issue an indemnity bond to the officer to get your refund. in case you have efiled your return then you can get a copy of the returned filed on the tax website
Hariprasad M asked, I have invested 1.5Lac in post office MIS in Jan this year and planning another 1.5Lac in march do you think it's wise to invest in PO Mis or is there any other alternative, my age is 32 and I can put this money for 5-6 Yrs.
Prasanna Pandit answers, I would advise equity investments such as MFs or direct equity. But these investments should be done in a disciplined manner and regularly. Such investments would work wonders in the long run compared to Post office investments
Shefali Sarma asked, Dear Mr. Prasanna! I have two home loans. One house is at my home town, that is very far from my work. another one is near to my work, which is under construction. Can I avail tax exemption on loan repayment on both? can i avail HRA ?
Prasanna Pandit answers, As the second home is under construction, you cannot claim any home loan deduction. You can however, claim the HRA deduction for your stay near your work. Also, once the second home is complete then you cannot claim HRA unless that house is let out. If not then one of your house would need to be deemed to be let out
Nikhil Rao asked, I have a LIC endowment policy for 2,50,000 sum assured. Yearly premium is about 12,000. I have been paying premium for last 6 years but I feel, I should discontinue... What do you suggest
Prasanna Pandit answers, In case you can wait for the premium paid to be returned on maturity then it may be advisable to stop the plan and go in immediately for a higher term cover. You can then invest the difference in equity related investments.
Usha T asked, Sir, my EPF+LIC is >1Lakh, There is no scope for tax savings. I do not own a house. Pl. tell me what else I can do to save tax? Pl. answer.
Prasanna Pandit answers, You can go in for medical insurance that could fetch you additional tax deduction
Azam Mohammed asked, HI PRASANNA, I'm having a ulip 0f 30000 each year and paid since 3 yrs but there is no return and it's in minus flow. Can i switch from growth to equity or shall I stay on or exit? Pls suggest.
Prasanna Pandit answers, You can exit the plan & go for separate equity investments
Neeta Garg asked, If I put2 lakhs in PPF/ELSS, I get Tax exemption for 1 Lakh and Whether the 8% interest will be taxed (for the Balance 1 lakh)at the time of withdrawal (or) that will be taxed (for the 1 lakh) when it is matured. Thanks in advance for your reply. Vijay.
Prasanna Pandit answers, PPF interest is tax free currently and hence the withdrawal of the same is not taxable
Rai Akshay asked, Hi, How to save tax on Child Education Fees? What is the difference between Child Edu. Allowance paid by Company and Child Education under 80C? Thank you.
Prasanna Pandit answers, Education allowance is an exempted income and it does not require proof of educational expense to be provided. on the other hand school tuition fees paid for your child's education is a deduction from your income and you need to provide the fee receipt to your employer to claim this deduction
Manohar Kadam asked, Hi If any one has new IT rules for the financial year 2010-11 and about the tax exemption on home loan please let me know
Prasanna Pandit answers, The tax break for home loan remains the same as in the earlier year. Up to Rs. 1.5 lakhs of deduction for self occupied residential property loan and Rs. 1 Lakh principal repayment
Dhruv Jhawar asked, Hi sir, i am planning to go for a Home loan please advice me whether to go for a home loan for saving tax is a better option or shall i opt for other alternatives to save tax
Prasanna Pandit answers, In case you are investing in a home from the perspective of getting a home then tax break is incidental. However, if getting tax break is the sole objective then you might have better liquid options than an illiquid residential property
A K Singh asked, what is elss?
Prasanna Pandit answers, ELSS is Equity Linked Savings Scheme that has exposure to the equity market. Investments in such Mutual Funds (MF) gets you tax deduction but has a lock in period of 3 years
Ashok Kandhari asked, Should i consider VPF for tax savings and retirement? My PPF and EPF contribution meets the quota of 1Lacs... i am in dilemma with VPF..whether to save a little there or not. My age is 26yrs and my EPF contribution is 3k per month. PPF 70k
Prasanna Pandit answers,In case you have met your section 80C investment limit then instead of focusing on similar investment better focus on equities / equity oriented mutual funds. Considering your age it would make lot of sense to go for equity investments
Siddarth Shah asked, When direct tax code does come into existence will tax saving have any meaning left ? If so please elaborate with some good illustrations. Thanks in advance
Prasanna Pandit answers, Yes tax savings will still have meaning as the current limit of Rs. 1 Lakh is proposed to be increased to Rs. 3 lakhs. The problem is that home loan deduction of Rs. 1.5 lakhs for interest is proposed to be withdrawn
Vedpathak Anuj Kumar asked, HDFC TAX SAVER OR ICICI TAX PLAN. WHICH IS THE BEST ELSS?
Prasanna Pandit answers, Of the two, i would go for HDFC Tax saver
Vidya Balsubramanium asked, Sir, i can save 2/4 thousand/pm. where should i go?
Prasanna Pandit answers, In case you are risk averse then go in for PPF investment that would give you risk free & tax free interest income. In case you can handle risk then go in for good ELSS MFs that would give you good returns in the long run
Madhuri Jadhav asked, I HAVE 20 LAKHS CASH WITH ME. WHICH THE BEST WAY TO INVEST WITH HIGH RETURNS
Prasanna Pandit answers, You can invest in liquid funds with a option of systematic transfer plan (STP) wherein every month a defined amount would be pushed to equity exposure MF. Else you can immediately go in for equities / equity MFs
Manoj Patel asked, If given option what to choose between salary and consultation fee for the CTC of Rs 70000?
Prasanna Pandit answers, For a CTC of Rs. 70000 per month probably fee model might be better as you can claim expense deductions related to rendering this service viz., conveyance, petrol, telephone, attire, books & periodicals etc. In case the gross fee goes beyond Rs. 10 Lakhs then Service Tax may be applicable and thereafter it might be better to be in Salary mode if you do not get separate ST reimbursement
Lalit Kanakate asked, Sir, Which type of mutual fund good for Long term Good Return?
Prasanna Pandit answers, Diversified Equity Mutual fund should be looked at in terms of long term horizon
Shikha Magadh asked, Hi Prasanna, Please suggest 3 best tax saving MF for a horizon of 3 yrs. Return must be decent.
Prasanna Pandit answers, Please note the answer to a similar query asked earlier
S K Sharma asked, Can you suggest me some tax saving schemes apart from ELSS, NSC, PPF, Tax Saving FDs, LIC?
Prasanna Pandit answers, Medical / health insurance, Principal repay of home loan, School tuition fees for your children, donations to specified institutions etc are other deduction components
Anubhav Jain asked, I have to invest 50,000 Rs lump sum for this particular year. Kindly tell me tax saving schemes which have 100% exposure to equities. I would like to diversify this amount into 3 mutual funds.
Prasanna Pandit answers, HDFC Tax Saver, SBI Magnum Tax Gain & Birla Sun life Tax relief are good funds
Chaturvedi Abhisekh asked, I have to invest 50,000 Rs lump sum for this particular year. Kindly tell me tax saving schemes which have 100% exposure to equities. I would like to diversify this amount into 3 mutual funds.
Prasanna Pandit answers, You can go in for ELSS MFs for equity exposure and tax deductions | 
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