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Q: Can a person get tax exemption on medical insurance ?

Ans:  Under Section 80 D of the Income Tax Act, 1961, a person can get a tax exemption for an amount up to Rs. 25,000 for the medical insurance of self, spouse, and children. If parents are included, the amount for the tax exemption will be Rs 50000 in the case of medical insurance. In the case of medical expenses, a person can claim a tax exemption of an amount up to Rs 50,000. The medical expenditure amount decided for part A, i.e. self, spouse, and child, is Rs 30,000 and the amount of medical expenditure which is decided for part B, i.e. parents, is Rs 30,000, but if both part A and part B are included,  the limit of total amount will be Rs 50,000. A person can get the benefit of tax exemption for maximum number of two children. 
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Q: State the limit of Rs 50 thousand under Section 80 CCD of Income Tax Act, 1961 ?

 Ans: In section 80 CCD of income tax act, 1961, the limit is of Rs 50 thousand. In National Pension scheme , a person can get the tax exemption in the limit of Rs 50 thousand in a year under section 80CCD of income tax act, 1961.
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Q: What is tax exemption under section 80 C of Income tax act, 1961 ?

Ans:  According to section 80C of the income tax act, 1961, a person can get the benefit of a tax exemption on the amount of Rs 1.5 lakhs. The facility can be availed of under the following conditions:  1. LIC: In a life insurance policy, a person will get a tax exemption of Rs 1.5 lakhs if he pays the premium of Rs 1.5 lakhs on an LIC policy. 2. PPF(Public Providend Fund) : In PPF also, a person can get the deduction of Rs 1.5 lakhs in a year. 3. Mutual Fund ELSS(Equity Linked Savings Scheme): In the equity linked savings scheme of mutual fund, the person can get the tax exemption on the amount of Rs 1.5 lakhs but in this scheme,  the amount gets locked for the period of 3 years. 4. Fixed Deposit: In fixed deposit, a person can get the tax exemption if the amount of fixed deposit is more than 5 years. 5. Home Loan Principal Amount: A person can the benefit of tax exemption on the principal amount of home loan. 6. Tuition fees:  The person will get the...
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Q: What is cost inflation index ?

Ans: Cost Inflation Index or CII is a tool used in the calculation of an estimated yearly increase in an asset's price as a result of inflation. The Central Government fixes this index and publishes it in its official gazette for measuring inflation. 
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Q: How would the tax be collected in LTCG and STCG ?

 Ans:  When any property is sold, the income tax is levied on the property on the basis of short term capital gain or long term capital gain.  If the property is sold within 2 years of purchase of property,  the gain will be short term capital gain and when the property is sold after 2 years of purchase of property,  the gain will be long term capital gain. The long term capital gain tax is fixed i.e 20 percent and the indexation benefit will be achieved on long term capital gain tax. In short term capital gain tax , the tax will be levied according to slab rate whether it is 20 percent slab rate or 30 percent slab rate and indexation benefit is not given on short term capital gain tax.  How the tax is Calculated in long term capital gain tax?  Suppose the purchase price of flat was Rs 5 lakhs and after indexation with inflation rate, the calculated price is Rs 8 lakhs and a person sells that flat in Rs 11 lakhs. Then, the capital gain will...
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Q: What is the difference between LTCG and CII ?

Ans:  LTCG is long term capital gain tax. So, LTCG is a tax which is levied on asset of long term. CII is used to adjust the capital asset's cost price against the inflation with the help of cost inflation index number and is referred to indexation. CII is used for capital assets like real estate, gold, debt mutual funds or debentures. The benefit of CII is not in shares. Gain of asset = Selling price-Purchase price Real gain of asset= Selling Price - Inflation Adjusted Purchase Price The increase in the inflation rate will lead to increase in the prices of capital assets and eventually result in lesser capital gain as well as taxes. Cost inflation index= 75 percent of the average rise in the consumer price index(urban) for the immediately preceding year. CPI index is used to calculate the current price of specific goods and services and the next year price of goods and services. The difference between these two is consumer price index. Inflation Adjusted Purchase Price=...
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Q: What are the types of capital gain ?

 Ans: The capital gain means that the profit which is earned from the sale of an asset. The capital gain is the difference of actual price at which the asset was acquired and the price at which the asset was sold or transferred. The capital gain can be either long term or short term and it depends upon the period of holding .The tax in long term is more as compared to the tax in short term. The rate of tax on long term ranges from 0 percent to maximum 20 percent.
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