Moreover, amount given as gift from the taxable income is merely an application of such income and hence no exemption is available under the Income tax Act, 1962. Invest in the Gold bond scheme wherein you earn 3-4 per cent interest which is free of income tax, wealth tax and capital gains tax. However, if you are on an assignment for an agency outside India, you are eligible for certain deductions from the income so earned by virtue of which you will not be required to pay any tax or be required to pay tax on a lower amount . With 20 per cent tax imposed on dividend distributed by debt mutual funds in the recent budget, it is advisable to go for equity oriented mutual funds. Forget long queues to pay your income tax.
Income tax is now payable at all nationalized banks.