I have been told Minimum Alternate Tax (MAT) has been introduced for individuals. Do I have to pay 30 per cent income tax plus 18 per cent MAT?
The Minimum Alternate Tax or Alternate Minimum Tax (AMT) is not payable in addition to the taxes an individual normally pays. It is an alternate tax which attempts to ensure that an assessee, who benefits from certain exclusions and deductions under the I-T Act, pays at least a minimum amount of tax. In general, this could be relevant to individuals who are eligible for certain deductions in respect to profits and gains of certain eligible business by reason of which the tax paid by them could be very little. According to the budget proposals, such individuals will be required to pay an alternate minimum tax of 18.5 per cent if the tax otherwise payable by them is lesser than the AMT. AMT provisions will apply to an individual only if his adjusted total income (i.e taxable income before allowing the aforesaid deductions) is at least Rs 20 lakh.
I sold a piece of land on January 28, from which I got more than Rs 60 lakh. As there is a limit of Rs 50 lakh for one financial year, I have invested Rs 50 lakh in REC bonds in 2011-12. Can I invest the balance capital gains this year, that is, before June 28?
The law on this issue is not settled. While there has been a judgment in the Ahmedabad tribunal (in the case of Aspi Ginwala) favouring the assessee, the Jaipur tribunal in Shri Raj Kumar Jain & Sons (HUF) had taken a contrary view. The latter has held that exemption under Section 54EC, which is to be restricted to Rs 50 lakh, even if the balance amount were invested in specified bonds within the prescribed time limit falling in two different financial years. Hence, if you invest the balance amount before July 28, 2012, and claim the benefit of exemption for the full amount invested, there is a possibility the tax authorities may dispute this.
In 2010, I made capital gains by selling equity shares of Rs 2 lakh. But this year I made a loss of Rs 3 lakh. Can I set off the gains with the loss?
No, the Income-Tax Act does not permit set off of current year's loss with the income of earlier years. However, an assessee can carry forward the current year's capital loss to the subsequent eight years and set it off against capital gains in the future.
I made tax saving investments in the last minute in the last financial year. As a result, I could not show it to my employer for tax benefits and had to pay a lot of tax. Is there a way to still show the investments and get the taxed money back?
Yes, you can claim a deduction for the investments while filing returns and claim a refund of excess taxes your employer has deducted.
The writer is a tax partner at Deloitte, Haskins & Sells.
The views expressed are his own.