Or is it bad to have a high basic salary component? Should you opt for a salary structure providing for higher allowances? How do you increase your take home salary?

How do you save tax on the interest and principal component of your home loan? Does making your spouse a co-applicant and a co-owner help both of you save tax? What if your spouse is not earning and does not contribute to the EMI payment?

Do you pay any fringe benefit tax if you take a loan from your company? Can you claim tax exemption on petrol expenses reimbursed by your employer?

In a chat with readers on June 4, Get Ahead tax expert Mahesh Padmanabhan answered these and many more queries related to tax claims on home loans, HRA benefits and capital gains tax on selling your property and tax on share trading?

For those of you who missed the chat, here is the transcript.

KKA asked, Hi Mahesh, i am willing to take a home loan with a joint account held in mine and my wife's name. She does not have any source of income. Is it possible to get any tax benefits? Thanks!

Mahesh Padmanabhan answers, You can definitely take the home loan in joint name and be co-owners in the house property but the deduction would be available to your wife only if she has taxable income and she contributes towards the repayment of the loan. Otherwise the benefit would be available only to you.

anne asked, Hi I am in 20% tax bracket,my husband in 30%,we are both expecting an increase in pay this year.We have taken a joint loan for 20 lacs for 10 years .. please can you tell me if we are both individually entitled to 150000 tax rebate on interest paid+ Rs 1 lac on principal amount each? Can we claim a total rebate of Rs.250000 x2 = Rs.500000 each.. or is it a combined benefit of total Rs.2.50 lac rabate only?

Mahesh Padmanabhan answers, Co-owners are eligible to claim the benefit of interest and principal deduction separately / individually in case both are co-applicants to the loan. Hence the condition that you need to satisfy is to be the joint owner and the co-applicant to the home loan.

james asked, How much FBT do i pay if i take Rs150,000 as loan from my company?

Mahesh Padmanabhan answers, Loan from company is not included under FBT but is taxed as perquisites. The interest rate as published by State Bank of India [Get Quote] (SBI) 1st of every year is considered to determine the value of perquisite. Hence in your case you would need to determine the rate of interest for the particular loan and deduct the interest recovered from your employer and thereafter in case there is a residual value, that would be treated as the perquisite chargeable to tax at your applicable slab rate.

Bhavani asked, My daughter's fees structure consists of Tuition fees, special fees, Exam fees, book fees and transportation fees. What can be claimed for tax rebate.

Mahesh Padmanabhan answers, Tution fees can be claimed as eligible tax deductible item under section 80C

Akhilesh asked, I join my first job in year 2006, my company has policy on LTA/LTC that 1st 2 year it is exempt and 2 yr it is taxable,in 2006 my does'nt allowed LTA, in 2007, it is exempt & now in 2008 & 2009 they are taxing LTA,how i can exempt my LTA this yr.

Mahesh Padmanabhan answers, LTA deduction is available once in 2 years or twice in a block of 4 years. Hence 2 journeys in the block of 4 years is allowed as exempt subject to submission of travel bills. The current block is from Jan 1, 2006 till Dec 31, 2009.

ranjit asked, can show sundry expenses in my tax returs i am working executive we get petrol allownce wether i can claim rebate on it

Mahesh Padmanabhan answers, the expense on petrol if it is specifically reimbursed by your employer and not paid as salary would qualify to be excluded for tax purposes. In your case however, you cannot specifically claim the same in your i-tax returns.

Kashi asked, Hi Mahesh, Does HRA come into account for Tax Rebate even when Conveyance is given.

Mahesh Padmanabhan answers, HRA is the allowance given to an employee to take care of rental expense. HRA exemption is eligible to an employee if she/he resides in a rented property and actually pays rent. Conveyance allowance on the other hand is for the purpose of meeting the commute cost to office and this is a fixed deduction upto Rs. 9600 per annum without submission of proof.

Bhavani asked, We have a joint housing loan (myself and my husband) and for the past 4 years I have been claiming the tax exemption and now my husband wants to claim it. Can we do it?

Mahesh Padmanabhan answers, As mentioned earlier in the chat, both spouses can individually claim the tax benefits on account of home loan provided they meet the basic conditions such as: The property is co-owned They are co-applicants to the home loan. Both are contributing towards the repayment of the loan.

nicks579\\\\ asked, MY salry is 5.33 lacs. If i invest 1 lakh(80C) what will be total tax that i need to pay this year. Which are the other means to save tax?

Mahesh Padmanabhan answers, Your tax would approximately be Rs. 43,000 with Rs. 1 Lakh investment. Other tax savings avenues are taking medical insurance, availing of home loan benefits etc.

dalbeer asked, hi i hav an confusion? My salary d'nt comes under the taxable slabs? so is it necessary to file the returm

Mahesh Padmanabhan answers, No in case your gross taxable income does not exceed the threshold exemption limit, you need not file the income tax return. However, we generally advise people to file returns as it becomes a useful document in building up a case for various loan applications, networth building up etc.

ricoh asked, Mahesh, I live in a different city owing to my Job and pay rent for my place of stay. I have dependant parents who also live in a rented house but in a different city. Can I claim HRA exemption for both the rents paid by me?

Mahesh Padmanabhan answers, You can claim the rent for your rented accomodation and not your parents rented premise.

anne asked, Sir.. do I understand correctly.. a total of Rs.150000 + Rs 1 lac= Rs.2.50 x2 = Rs.5 lac rebate can b claimed?

Mahesh Padmanabhan answers, That is right it is Rs. 2.5 lakhs individually subject to the actual payment made on this account.

rudra asked, hi Mahesh, I just want your advise regarding tax-friendly salary structure. having a high basic salary is good or bad...if one's basic is very high then decreasing it by putting some chunck under allowances in order to increase the take home salary. can this be a good option provided the 80C investment limit is already exhausted and the high PF investment is not getting utilised?

Mahesh Padmanabhan answers, Having a high basic means that your retirals could be very high, standing you in good stead in your retired years. However, the flip side is that the entire basic salary is taxable. You can structure your salary based on the FBT components thus reducing your overall tax outgo. You can speak with your Company payroll team to see if they have any scope for structuring your salary on these lines.

Kiran asked, Hi Mahesh, I am taking a home loan along with my brother. I understand that both can claim tax benefits. Our bank representative says that cheques from one of us would do. I want to confirm from you, whether both can claim tax benefits even by giving cheques by either of us?

Mahesh Padmanabhan answers, Generally to facilitate smooth repayment, banks insist on one bank account. You could have a joint account and contribute to that account for repayment of the loan. Else if it is a single account, then the other brother has to transfer his share of contribution to the account from where the repayment happens.

parag asked, Sir, I have an existing flat which is purchased on loan and the term is going to get over in 2011 Dec. What if I purchase another flat today on loan, can i get Tax benefit from the second housing loan (Assuming both the houses are on loan and I am the borrower)?

Mahesh Padmanabhan answers, If you are planning to buy an under construction house then definitely you would not be eligible to the home loan benefits else, you would get the deduction on account of interest. However, you would need to note here that one of your house (based on your choice) would be deemed to be let out (if it is not actually let out) and the deemed value would be taxable. You would in this case be eligible to a standard deduction of 30% of the net annual rental value in addition to the total interest deduction.

piyal asked, Dear Mahesh, I get an HRA of 50000. Iam planning to buy a house after taking a loan of 80 lakhs. Will I continue to get HRA? will it still be taxable as I will be paying an EMI much more than that? Please answer. This is very important for me.

Mahesh Padmanabhan answers, In case you reside in your own house then definitely you would not be eligible to HRA exemption. However, in case your own house is in another city and you stay in a rented premises due to employment then you would be separately eligible to HRA exemption as well as home loan deductions.

Sundar asked, Sir, How much can we seek exemption through donation? Sundar

Mahesh Padmanabhan answers, You have to ensure that the charitable institution or the fund to which you are contributing is registered with the IT department and they have the approval for providing deduction. This is generally available with the fund / institution and provided to the donor as a copy. When you make the donation ensure that you get the original receipt for the amount and the copy of this approval and keep it in your records.

mandar asked, I have flat since 1990 in Chembur. The society has redeveloped. Redevelopment finished this month. In redevelopment I got 367Sq Feet carpet (free of cost) area of 1BHK. I took a additional area of 165 Sq. feet and now it become 2BHK. I paid 4.30 lacs on additional area. Which I paid to the builder in 4 installments. Total area now is 532 carpet. Now I want to sell this flat. My question is that will it come under short term or long term capital gain tax.? I will be getting 22lacs (aggrement value) on selling this flat. Out of this 10 lacs I am investing in property which will be jointly purchased by me and my son. Kindly tell me on balance 12lacs will there be any tax implications?

Mahesh Padmanabhan answers, Would need further details to comment upon the same, please write in as a separate email to us to provide you with an answer. support@relaxwithtax.com.

passion asked, When do you say business income in Share Trading? If a salaried person doing day trading, what is that it is considered?

Mahesh Padmanabhan answers, Generally share trading is treated as business income unless your trading activity reflects holding with a long term objective of gaining capital appreciation and dividend. Day trading is generally treated as speculative transaction as there is no delivery taken.

Jinish asked, Hi, I have received my PF amount from my previous exployer last year. Its around 1 lakh. I am earning around 10 lakhs as taxable income from my present job. Do i need to pay tax for this PF amount?

Mahesh Padmanabhan answers, PF withdrawal is exempt from tax if you have rendered continuos service of 5 years (with a single or multiple employers). If this is not the case then the interest component on employee contribution is treated as Income from other sources" and taxed and the employer's contribution and interest thereon is treated as salary income and taxed.

sdsf asked, Can U clarify 1.0 Lakh Amount transfered from My friend in Australia to My Account is taxable

Mahesh Padmanabhan answers, Is this amount in the nature of gift or loan. In case this is a loan then there is no consequence of tax currently. If it is a gift then this amount would be subject to tax.

KATRINA asked, HI MAHESH I AM WILLING TO TAKE A HOME LOAN WITH A JOINT ACCOUNT HELD AND MY SISTER'S NAME. SHE DOES NOT HAVE ANY SOURCE OF INCOME. IS IT POSSIBLE TO GET ANY TAX BENEFITS? THANKS.

Mahesh Padmanabhan answers, I have answered a similar query earlier in this chat session. No tax benefits would be available to your sister as she is not contributing to the repayment of the loan.

Mahesh Padmanabhan says, Thank you friends for actively participating in this chat session. We would sign off now and return in the next session. Have a good day. - Team RelaxwithTax

Mahesh Padmanabhan is principal advisor -- direct taxes group, RelaxWithTax Consultants Pvt Ltd, a Mumbai-based personal taxation and finance solutions provider.