The Tax Questions Blog

Posts Tagged ‘taxable’

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Question: Should I take a home loan or just pay the entire amount from my savings?

This is a India-specific question and requires a knowledge of the Indian Income-Tax rules (which I lack):
If I am buying an apartment for about 30 Lakhs, is it better for me (financially) to take a home loan for 25 lakhs or just pay the entire amount from my savings (assuming, I've that much)? My tax slab is 33.6%. I know Rs.1.5 lakhs in Interest is deductible from taxable income. But, will it offset the extra amount of money that I will end up paying during the entire loan term?
Basically, I'm looking for some help in how I should go about calculating whether I should opt for a loan or not. This is a question for people who know Indian Income-tax laws.

Answer: I have a very simple advice first:
Don't take a loan if you have liquid money to pay all that is required to buy anything. This comes with a fine print: if you can invest your money in an instrument that you are sure will return more interest then what you are going to pay for loan, go ahead and take loan.
One more thing: House loans are normally taken for 20 years tenure, and the IT sops may stop in any financial budget. So till the time IT benefits are there you may enjoy tax sops(supposing you take loan), but after that you wouldn't like pinches of paying EMI + no benefits.
Another thing: Home loan rates are never fixed....even thogh they call them as fixed and floating....and now as every one knows, interest rates are going north. So be careful.
My suggestion: assuming u have all the money. Take a loan for 5 years. Why: You can invest your money for 5 years, and get better or equal returns as u are giving away in home loan repayment. Plus IT act may not change completely in 5 years, and loan rates will also be preety much predictable.
Best luck..

Interest on Service Tax

Tilted: The Trials of Conrad Black, Second Edition $16.48 It was the trial that captivated observers on both sides of the Atlantic. Media titan Conrad Black, by turns respected and reviled for decades in Canada and around the world, faced off with U.S. prosecutors on charges of criminal fraud stemming from his activities with Hollinger International.As the only Canadian writer to attend the trials of Conrad Black, lawyer Steven Skurka delivers a thorough...

Tilted: The Trial of Conrad Black $18.16 It was Canada's trial of the century - held in an American court. Media titan Conrad Black, by turns respected and reviled for decades in Canada and around the world, faced off with U.S. prosecutors on charges of criminal fraud stemming from his activities with Hollinger Inc. The trial was "tilted" from the outset. Black attempted to tilt things in his favour by using his considerable wealth to mo...

Balancing Act $7.00 Kate, a forty-three-year-old single mother of three, is trying not to panic. As she hobbles down the street to the courthouse in her new high heels, she quickly realizes that law school has done nothing to prepare her for the real world of practicing l...

Picking Winning Lottery Numbers - Tips to Maximize Your Pick 3 Winnings

Question: Does Canada have an Estate Tax and, if so, what is it and where can I find more about it?

I am an Executor of an Estate of a person still living; however, I want to be prepared. I know that in the United States there is an estate tax. Is there an estate tax in Canada and what is it, how do I find out more about it. I need to know how it affects the handling of the estate, the persons receiving disposition of the estate's income, what is reported to Revenue Canada, and, is it taxable in the first place.

Thank you.

Answer: There is no estate tax as such. If the person owned any capital property, these properties are deemed sold at their fair market value on the date of death. This would include things like stocks, land, buildings, and units of a mutual fund, but not the person's principal residence. Also, if the person help any RRSP or RRIF, these plans are deemed to have collapsed on the date of death, and the entire value of these plans must be reported on the final return.

These amounts can be deferred if the person had a surviving spouse who was listed as the beneficiary of the capital property or RRSP, or listed as the beneficiary of these things in the will.

Beyond this, if the estate still holds assets after death that are still earning income (interest, dividends, capital gains, royalties), these things would be reported each year on a T3 Trust return.

Estate and Trust Administration For Dummies $8.97 Executing an estate or a trust fund is a big responsibility. Estate & Trust Administration For Dummies contains advice for handling estates and trusts of any size. It offers solid pointers on reading and interpreting a will and other documents, and helping heirs avoid paying too much (or too little). It also shows you how to take care of a loved one's estate in the event that a will or trust was ...

Estate and Trust Administration For Dummies (For Dummies (Business & Personal Finance)) $17.27 Your plain-English guide to administering an estate and/or trustAs more and more of the population reach senior ages—including baby boomers, many of whom do not have wills—an increasing number of people are being thrust into the role of executor, administrator, personal representative of an estate, or trustee of a trust after the death of a loved one. This updated edition of Estate & Trust Adm...

Estate Planning: A Plain English Guide to Wills and Trusts $7.99 Are you among the 50 percent of American adults who do not yet have a will? For many of us, busy day-to-day lives often result in putting the crucial process of estate planning precariously on the back burner. In fact, if you don’t have a clear, considered plan, government treasurers and probate attorneys may just have the ultimate say on your estate. Estate Planning: A Plain English Guide to Wi...

Free and Clear Equity Files Registration with S.E.C. for All Cash Real Estate Investment Trust (REIT)

Free and Clear Equity, Inc. today announced the recent filing of an S-11 registration statement with the Securities and Exchange Commission for an all cash Real Estate Investment Trust to invest in commercial real estate and mortgages backed by triple net lease commercial properties in the U.S.

(Life Insurance Proceeds Taxable) - Get A Life Insurance

Question: Is the federal poverty guideline determined by taxable income or by gross income?

Hi, I am asking the question above because my wife is in the process of immigrating to the US. I sent my tax return for last year to the consulate where she lives and they said that I don't meet the poverty guidelines because my taxable income in less than the rate for 2 in a household. I was dumbfounded to say the least because I always thought that income was determined by gross not taxable income. Someone please help me, a reference site would be helpful if anyone knows of one.

Thank

Answer: If that is exactly what they said, I'd be confused, too.

In this country the poverty guidelines are based on gross income, which for this purpose includes non-taxable income.

Deferring Income in an Uncertain Tax Environment

American Benefit Corporation’s Jim Herlihy has just released a new article explaining how income deferral is beneficial, even in an uncertain tax environment.

No Evidence Anyone Owes Taxes

Question: Are accelerated insurance benefits taxable?

I recently received an accelerated benefit due to cancer from a life insurance policy and wanted to know if it is taxed.

Answer: Insurance benefits should not be taxed. It is the benefit you are buying from the insurer based on the contract policy when the insurer sells you an insurance. It is seller insurer therefore who will be taxed the moment you buy or paid the contract policy. In business including insurance business, it is the seller that is being taxed not the buyer.

Mary Holm: Bank bashing proves too hasty

I have had a considerable sum of money on term deposit in Westpac. The term ended on a Saturday but none of the money reached my bank account until Tuesday. All my money, principal and interest, "disappeared" for three days.Where...

The role of life insurance in your estate and financial planning, Part 2 of 3