Tax benefits on Housing Loan

05. February 2010 · Write a comment · Categories: General Tax · Tags: , ,

Loans are very important for all of us to realize some of our major dreams in time. We all look forward different kinds of benefits from loans we take. Of course it may be less interest rate, low processing fee, easy documentation, time taken to release the loan and finally, the very important thing we expect from a loan is Tax Benefit.

Tax benefits from loans are in different types and even it depends on the nature of loan taken. We take loan for personal use or to fund for our children’s education or construction of our house. We don’t get any tax benefit from the loan taken for our personal use. But of course we can claim tax exemption on the loan taken for education and house construction. As I have posted an article on Tax Benefits on Educational Loan, now I am giving you the complete details of tax benefits which can be availed on Home loan or the loan taken to construct a house.

Nowadays, it is very difficult to fund the entire amount for your house construction, because of skyrocketing real estate prices and construction costs. Therefore, we all take home loans from different banks at different rate of interest. It is again very difficult to repay the loan, but if you do your financial planning and tax planning properly, you can save a huge amount legally by considering the prevailing tax laws.

According to the income tax laws applicable, the interest paid on the capital borrowed for the acquisition or construction of house property is eligible for deduction up to the maximum limit of Rs 150000 per annum. You also get a 20% rebate on repayment of principal of the housing loan per annum. While this was earlier subject to a maximum of Rs 10,000, it is now Rs 1,00,000 and people can avail this benefit under section 80c of the income tax Act.

Points to be considered:
You should be residing in the home for which the loan is taken. If you are residing in a city but buying property in your home town to prepare for retirement, this will not be applicable. The property has to be acquired or constructed before April 1, 2003. The money should have been borrowed to construct or acquire property on or after April 1, 1999. If it was prior to this date, the deduction is only valid up to Rs 30,000.

You may find it more convenient and cheaper to finance the property out of your own resources. But do remember, you would be losing the tax shelter on account of the deduction available as well as the tax rebate. You can claim a rebate for housing loan only on producing the interest certificate from the lending institution. Taking a loan from a family member or a friend, who may get you a loan at cheaper rate of interest, or no interest at all, but will not qualify for such deductions. Only loans taken and interest paid thereon, to specified financial institutions which offer housing loans, qualify for deduction under the Income Tax Act, 1961.

If the loan is jointly taken by you and your spouse, you both are entitled to tax benefits. Since both will be claiming the deductions and rebate, you will have to approach the financial institution and ask for a certificate. This certificate will state how much of the loan is your responsibility and how much you are contributing towards the repayment. Your tax deduction and rebate can be calculated based on this amount.

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What You Should Know About Housing Tax Credit

03. February 2010 · Write a comment · Categories: General Tax · Tags: , , , ,

The Federal House Buyer Credit is now over at this point.  Currently, there are no further extensions being discussed by Congress.  Individuals should make sure that they submit the correct paperwork if they are claiming this credit when filing this year’s tax return in 2011. Some people (read below) can still qualify for this credit until September of 2011.

Out of the many articles I have written on this site regarding credit, the most popular one revolves around the one that talked about the big money that was being given away to homeowners.  Up to eight thousand dollars was being offered to home buyers at the time. This credit has been extended four times on favorable terms since the Bush term.  It has helped many families purchase homes.  There has been some cases of fraud, but this credit became one of the best stimulus payments that President Obama has put forth in order to remedy the financial and housing problems within in this country.

It is highly unlikely that credit will be extended to consumers despite the fact that prices of homes are becoming stable again.  It seems that the pleas of homeowners that missed the deadline are being ignored.  Some outfits such as certain state department employees and military members are still eligible for “Think You Pay Too Much for Your Mortgage”?  The Fifteen Hundred Dollar Energy Efficiency Credit is still available.  This credit will help consumers lower energy cost savings.  In turn, they will be able to save a significant amount of money over the long run.

Claiming home buyer credit has been another challenge for many.  The IRS has been pretty slow in processing credit due to the emergence of claims and other stimulus packages.  Many received their credit within two to three months.  Submitting the correct documentation after making the adjustment on the 2009 or filing your tax returns can shorten the time window.  Many are unaware that Form 5405 (an official IRS document) and a tax return are required to claim the credit.  A qualified tax specialist will be able to assist you if you do not fully understand the procedure.

– A clear copy of the settlement showing the names and signatures of all parties should be in the statement.  Also, you may be required to provide documentation that shows sales figures, date of purchase (prior to April 30, 2010 to qualify for the credit), and property address. This is normally labeled as The Form HUD-1 Settlement Document.  A copy of the certificate of occupancy (from the city/county office) displaying the name of the owner, address of the property, and certificate’s date.

– Present Home Buyers eligible for the housing tax credit must prove that they resided in their old homes for five consecutive years during the eight year time period ending on the buy date of the new home. This can be accomplished by submitting property tax records, insurance documentation, or mortgage interest statements.

Hometextile Overseas Expansion Remains Cautious

03. February 2010 · Write a comment · Categories: General Tax · Tags: , , , ,

October 21, approved by the State Council, Ministry of Finance, the State Administration of Taxation issued a “on the improvement of export tax rebate rate of some of the goods notification” (hereinafter referred to as “Notice”), specifically from November 1, 2008 onwards, due to increase part of the labor-intensive and high-tech, high value-added commodities export tax rebate rate. The export tax rebate adjustment involves a total of 3486 products, accounting for all goods in the total number of customs duties of 25.8%.

Among them, the part related to textile industry textile export tax rebate rate to 14%. , “Notice” of the enactment can be said that the national macro-economic control measures to play a major good news. This indicates that the country started to intervene in the manufacturing export market, labor-intensive manufacturing to help enterprise security through the winter. However, from the current market reaction, in order to revitalize the market, increase export tax rebates this a “feel good” is not enough.

While this increase in export tax rebates on textile and fabric products are more favorable, increased to as much as 14%. However, large-scale overseas markets cloth Home Textiles still cautious. The face of cost pressures, textile and fabric company still can not say relax. Louis Museum of Warsaw fabric of life person in charge of Mr. Liu told reporters that the export market due to cloth facial contrast is relatively narrow, Europe and the United States still the main reason for the dollar by the cost and a greater impact on the rate of increase now while the rebate, but it was too large-scale investment very carefully.

Mr. Liu told reporters: “A lot of fabric and home textile manufacturers are turning to the domestic market development, because it is relatively easy to grasp the domestic market, long-term orders for Europe and the United States take as little as possible. And other furniture industry is different is that each of fabric and home textile businesses to develop an overseas market are very cautious. As the profit margin is not substantial reasons, has not heard of that business because of sales tax increases in the price cuts. ”

Tax Credit for Hybrid Car

01. February 2010 · Write a comment · Categories: General Tax · Tags: ,

These days, there is a rise in new fuel-efficient hybrid car products for sale. Due to this rise the government is compelled to apply taxes. Those who are planning on buying a hybrid car should not be at a loss though. The Internal Revenue Service has already legitimized a handful of hybrid car brands and models for a tax credit. This may be a pretty good offer for those planning on buying a hybrid car, and it could be one of the best incentives initiated so far.

What Tax Credit Is

If you purchased a hybrid car on or after January 1, 2006, your purchase may be eligible for a tax credit that can amount to 0 to ,400. The amounts vary depending on how the fuel economy goes. Conversely, the tax credit may only be temporary because it also relies on whether new hybrid cars and other cars are in demand. This suggests that tax credits could last just a short period of time whenever manufacturers arrive at a certain mark in their car sales. Apparently, hybrid car brands that aren’t as popular will not be greatly affected if the number of sales does not increase too quickly.

Models That Are Qualified

The IRS has produced a list of all hybrid cars that have the possibility of being qualified for a tax credit. This list is comprised of automobiles that are sold after January 1, 2006 as well as those payable in 2008. Relevant tax credit totals are listed in the following document:

2007 Chevrolet Silverado (2WD): 0.00 2007 Chevrolet Silverado (4WD): 0.00 2007 Ford Escape 4 WD Hybrid: ,950 2007 Ford Escape Front WD Hybrid: ,600 2007 GMC Sierra (2WD): 0.00 2007 GMC Sierra (4WD): 0.00 2007 Honda Accord Hybrid AT: ,300 2007 Honda Accord Hybrid Navi AT: ,300 2007 Honda Civic GX compressed natural gas vehicle: ,000 2007 Honda Civic Hybrid CVT: ,100 2007 Lexus GS 450h: ,550 2007 Lexus RX 400h 2WD and 4WD: ,200 2007 Mercury Mariner 4 WD Hybrid: ,950 2007 Nissan Altima Hybrid: ,350 2007 Saturn Aura Green Line: ,300 2007 Saturn Vue Green Line: 0 2007 Toyota Camry Hybrid: ,600 2007 Toyota Highlander Hybrid 2WD and 4WD: ,600 2007 Toyota Prius: ,150

New Cars Only

The government may offer a tax credit for hybrid cars, but limitations still apply. For instance, only hybrid cars that are new are qualified for a tax credit. When a buyer purchases a hybrid car, it must not be a used car. Furthermore, hybrid cars that have been purchased by the buyer cannot be sold again. You must buy a hybrid car only for personal or business use, and not for any other purpose.

The thing about acquiring the tax credit for hybrid car goods is that your income tax liability will be lessened. Furthermore, any surplus cannot be passed on to the succeeding year. What all this information means is that, the government is practically encouraging the purchase of automobiles that are more energy-saving and environmentally friendly by giving buyers the benefit of saving money on gas. Additionally, the government is allowing buyers of hybrid cars to save through tax breaks.

VAT rebate policy on renewable resources, notification of a number of issues – renewable resources – the plastics industry

01. February 2010 · Write a comment · Categories: General Tax · Tags: , , , , , , , ,

Tax 2009 119 Provinces, autonomous regions, municipalities, separately listed cities (bureaus), state tax, the Finance Bureau of Xinjiang Production and Construction Corps, the Ministry of Finance in all provinces, autonomous regions, municipalities, separately listed cities Financial Ombudsman Office:

Based around the reflection is on the “Ministry of Finance State Administration of Taxation on VAT policy on renewable resources, notification” (Cai Shui [2008] 157) of the policy issues as follows:

One fiscal [2008] Article 157 (1) of the “through Financial Agency settlement “refers to the taxpayer Sell Renewable resources, according to Bank of China “on the issuance of <Payment and Settlement> Notice” (silver [1997] 393) provides the instruments, credit cards and exchange, collection incurred, commission receivables and other monetary payments and settlement fund settlement.

Taxpayer sells renewable resources accounts receivable, should the taxpayer in accordance with the seniors [1997] No. 393 document provisions be included after the liquidation of funds through financial institutions, clearing sales of renewable resources.

Taxpayer sells renewable resources in accordance with the seniors [1997] 393 document provides the advance payment made should be included in the sales after achieving settlement through financial institutions, sales of renewable resources.

Netting between taxpayer money should not be included in calculation of financial institutions through the sales of renewable resources.

Taxpayers through financial institutions balance sheet total sales of renewable resources, renewable resources, the proportion of sales is not less than 80% of the requirements, time limits should apply for taxpayer rebates (monthly, quarterly, etc.) for approval.

Second, fiscal [2008] 157 document referred to the specific scope of renewable resources, operations in accordance with the tax authorities before the end of 2008 for exemption from value-added tax policy, the specific scope of the implementation of renewable resources, but must meet the fiscal [2008] Document No. 157, Article VI, in which processing is limited to cleaning, sorting, crushing, cutting, dismantling, packing and other renewable resources, changes in density, humidity, length, thickness, hardness and other physical properties of simple processing.

Three fiscal [2008] Article 157 of document (a) provides that in accordance with the “Renewable Resource Recovery Management Regulations” (Ministry of Commerce Order No. 8 of 2007) and Article VII, Article VIII shall be filed with the relevant departments , shall record the month from 1 to enjoy tax rebate policy.

4, provided the taxpayer refund of October 1, 2009 after the acquisition of certificates issued by renewable resources, tax deduction certificates or sales invoices, invoice management in addition to meeting existing regulations, it should also indicate the purchase or sale specific types of renewable resources (from scrap metal, scrap Electronic Products, discarded electrical and mechanical equipment and parts, waste paper raw material, waste light Chemical industry Raw materials, Waste plastic , Waste glass, and other renewable resources, choosing complete Class 8), shall not enjoy tax rebates.

5, the financial institutions responsible for the trial and tax authorities should strengthen ties in a timely manner and on the taxpayer’s tax rebates, etc. to communicate. The financial institutions responsible for the trial to the tax authorities should regularly inform the examination and approval of applications for tax refund the taxpayer and approved the list of the amount of tax authorities in the daily tax collection, and tax inspection, tax assessment, audit and other taxpayers in the process of discovery anomalies timely information to the responsible fiscal authority of first instance.

Inform the competent authorities for the unusual tax circumstances of taxpayers, financial institutions should be responsible for preliminary examination of the situation in a timely manner for review and final report of the financial institutions, financial institutions should be suspended at all levels of the taxpayer’s tax refund process, and together with the taxation authorities to further identify the situation.

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