ot a question related to the filing of your returns? Or tax-saving avenues?

Relax With Tax will answer such queries.  

When filing my returns, must I show dividends from mutual funds?

I know dividends are tax-free. Am I obliged to declare them, irrespective of the tax-free status?

- Sanjay

Yes. While filing your returns, you need to show the dividends received from mutual funds.

It is shown under the head, Amount Claimed As Exempt, which is not included for computing taxes.

I work at a 5-star hotel. I have just got a pay hike, and arrears for the current financial year.

If I invest around Rs 45,000 this month, can I ask for tax refund of the tax applicable to me, including the tax deducted from my salary till now?

- Leena

Based on the broad parameters you have provided, you seem to be eligible to avail the tax rebate, provided you make the investments this year itself.

How much should you invest such that you have zero tax liability? That will be decided on your total income, other deductions available, etc.

Speak to a consultant with detailed facts and figures to ascertain the amount you need to invest.

Can I get the Leave Travel Allowance benefits every year? If not, what kind of restrictions will I have?

- Vivek Singaram

Leave Travel Allowance is exempt from tax when you submit travel bills for one journey in a year.

This exemption is available once in two calendar years or twice in a block of four calendar years.

In other words, you could claim LTA exemption two times in four calendar years.

If you fail to claim exemptions in the first block of four years, you can carry forward a maximum of one exemption to the next block and avail three exemptions in the next block of four years.

The current block of four years is 2002 to 2005 (January 1, 2002 to December 31, 2005).

I was employed in a different company till January 2005. I have paid income tax in my earlier company.

My income in the current company will not exceed Rs 1 lakh (Rs 100,000) for the rest of the two months in the current financial year. Hence, my current company will not deduct any income tax.

Please let me know how to adjust my income tax for the total income in the financial year 2004-2005.

- Nilootpal Sarma

You can make a declaration to your current employer in Form 12B (under IT Act), incorporating details of your previous employer.

If you have the Form 16 or the tax estimation signed by the previous employer, you could submit the same to your current employer so that your current employer can consider the total salary income.

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Note: Questions may be edited for brevity. Due to the tremendous response, all queries will not be answered.

Illustration: Dominic Xavier