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A Tax Deduction Checklist for Investment Expenses

Every serious investor knows that it costs money to make money. Fortunately, tax law allows you to deduct certain expenses that are associated with investments that produce taxable income. You generally can deduct investment expenses as miscellaneous itemized deductions, to the extent that your total miscellaneous itemized deductions exceed 2 percent of your adjusted gross income (AGI). To qualify as an investment expense, the expenses you pay must be related to (1) producing or collecting income or (2) managing, conserving, or maintaining property held for producing income. Expenses attributable to rental property are deductible from gross income and not subject to the 2 percent floor. Here are some of the more common investment expenses that may be deductible on Schedule A, subject to the 2 percent limit. Accounting Fees If you pay someone to keep track of your taxable investments, you may write off the fees you pay that individual. Trustees Administrative Fees Individual Retirement Account (IRA) trustee fees that you pay to maintain your IRA are a deductible investment expense, but only if you pay them by separate check. Fees that are automatically deducted from your account are not deductible. Travel and Transportation Costs You may claim a deduction for travel costs you incur to look after investments, or to seek professional advice from an accountant, attorney, stockbroker or trustee, so long as you do not invest solely in tax-exempt investment vehicles. (If you own investment property in a resort area, keep detailed records to show that the trip was necessary for checking your investment property and was not a vacation.) Bear in mind that you may not deduct travel expenses associated with a trip to attend an investment or financial planning seminar, convention or meeting, nor may you deduct the cost of the seminar or convention itself. Legal Costs Legal expenses related to investment activities are usually deductible as long as the lawyers advice is related to the determination of your tax liability, tax planning, or keeping track of taxable investments. Safe Deposit Box Rental Fee

You may deduct the cost of renting a safe deposit box, if you use the box to store stocks, bonds, or investment-related documents that generate taxable income. Subscriptions to Investment Publications and Services You may claim a deduction for subscriptions to investment-related publications or services. You may not, however, write off in one year the cost of a multiple-year subscription. Subscriptions must be deducted one year at a time. Investment Management or Investment Planners Fees If you pay someone to manage your investments, you may deduct any amounts you pay for his or her services. You may also deduct custodial or service fees charged by a dividend reinvestment plan. Telephone and Postage Expenses The cost of investment-related telephone charges, including the cost

Tax exemption in India


This site provides comprehensive information on India Tax Exemption. The site also focuses on the several tax exemptions offered in India. India has a well developed three-tier federal tax structure. According to Chapter III of the Income Tax Act, 1961 there is a provision of exemptions in income tax. India tax exemptions are specified incomes on which a person can get exemptions. It means that at the time of calculating annual income, this type of income will not come under the purview of tax. Some of these exempted incomes are as follows:
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Agriculture Income. Share of partner in total income of a firm which is assessed separately. Interest on securities and bonds including premium on redemption of bonds by Non Residents. Interests on amounts in Non-resident (External) account in any bank in India being maintained as per FERA, 1973. Interest on specified central Government's savings certificates which were subscribed to in convertible foreign exchange remitted from a country outside India as per FERA by an individual citizen. Income of individuals engaged in research work in India under duly approved research schemes and remuneration received from foreign government for training in a government office or undertaking as employee. Gratuity not exceeding Rs.3.5 lakh. Receipt in respect of commutation of pension as per specified limits. Leave encashment not exceeding 8 months salary and subject to specified conditions. Receipt of amount on voluntary retirement up to ` 5,00,000. Payment on a Life insurance policy, including bonus thereon but excluding therefrom amounts received u/s 80DDA(3). Receipt of Payment from Public provident fund or Statutory Provident Fund. Receipt of Payment from superannuation fund. Special benefits and allowance to employee viz., house rent allowance. Interest payable to any bank incorporated outside India and approved by RBI. Scholarships granted to meet the cost of education Receipt of any amount in connection with an award instituted by Government etc. Income of a university or other educational institution. Income of a hospital or other such institution working exclusively for philanthropic purposes. Income of news agency having been set up in India for the sole purpose of collection & distribution of news. Income of specified mutual funds registered and/or set up under /by SEBI Act, 1992. Income of Exchange risk administration fund having been set up by public financial institutions either jointly or separately as per specified conditions.