HOW TO SAVE YOUR INCOME TAX ? INCOME TAX ?

TAX PLANNING LALIT KHANDELWAL Increased Income Tax Due to 6 CPC Arrears  The Gross taxable salary has increased Considerably in current F.Y. due to payment of 60% arrears of 6 CPC.  This has resulted into increase in Income Tax when entire amount of 60% arrears is added to current year’s income.

TAX PLANNING LALIT KHANDELWAL As per Rule 21A of Income Tax Rules 1962, we can submit Form 10E to get relief under sec 89(1) as we have received pay commission arrears pertaining to the years , , and (January 2006 to August 2008). Re-assessment of Income Tax for F.Y by submitting form 10-E

TAX PLANNING LALIT KHANDELWAL IT PAYABLE IF FORM 10-E IS NOT SUBMITTED (TABLE A) Sl NoDetailsAmount 1. Income chargeable under "Salaries" (including 60% of 6th Pay Commission arrears of Rs ) Rs Deductions under savings (Section 80C, 80CCC, 80CCD, 80D etc) Rs Net Taxable income (rounded to nearest Rs 10)Rs Tax Payable on Sl 3Rs (a)Education CessRs Total Tax PayableRs 90960

TAX PLANNING LALIT KHANDELWAL Year wise accrual of 60% arrears YEAR AMOUNT (Rs) TOTAL

TAX PLANNING LALIT KHANDELWAL

TAX PLANNING LALIT KHANDELWAL IT PAYABLE AFTER SUBMITTING FORM 10-E (TABLE B) Sl NoDetailsAmount 1.Income chargeable under "Salaries" excluding the 60% arrears Rs Deductions under savings (Section 80C, 80CCC, 80CCD, 80D etc) Rs Net Taxable income Rs Tax Payble on Sl 3 Rs (a)Education cessRs Total Tax Payable Rs Tax Payable for previous year (After revising income of previous year - as per Form 10E) Rs Total tax Payable (Sl 5 and 6) Rs Relief eligible (Sl 5 of Table A - Sl 7 Rs 6160

TAX PLANNING LALIT KHANDELWAL TAX PLANNING Presentation By: LALIT KHANDELWAL (FOR F.Y )

BE WISE MONEYWISE, BE WISE Saving a rupee in TAX means You have a rupee more to save, spend or invest.

TAX PLANNING LALIT KHANDELWAL At the end of this SESSION you will know: ● Basics of taxability of salary income Tax slabs and rates of tax Some avenues of tax planning How to File Income Tax Return INCOME TAX AND ITS PLANNING

TAX PLANNING LALIT KHANDELWAL HELP TO SAVE TAX!

TAX PLANNING LALIT KHANDELWAL TERMINOLOGY INCOME TAX: The direct tax paid by individual,whose income ( from all source) is more than the maximum limit of prescribed amount, to the Central Government of India. INCOME TAX RETURN: Annual Statement of income and taxes paid in previous financial year. ● ● ●

TAX PLANNING LALIT KHANDELWAL ● ● ● Permanent Account Number (PAN) : A number which is used by Income Tax Department as an identification of a person. It is a 10 digit alphanumeric number. FINANCIAL YEAR: Year commencing from FIRST DAY OF APRIL to LAST DAY of MARCH in which income is earned. ASSESSMENT YEAR: Year following financial year in which assessment of income and tax paid/due is made. TERMINOLOGY

TAX PLANNING LALIT KHANDELWAL There are 3 things you need to keep in mind before arriving at Taxable Income. Fully exempt from tax Partly Taxable Fully Taxable Income TAXABLE INCOME

TAX PLANNING LALIT KHANDELWAL Band Pay Grade Pay Personal Pay Bonus Dearness Pay Dearness Allowance Over Time Arrears Income from other sources Medical Allowance beyond Rs 15,000 a year. Transport Allowance beyond Rs.9600 p.a. Running Allowance(30%) Medical reimbursement beyond Rs Fully Taxable Partly Taxable Fully Non Taxable T.A./ D.A.T.A./ D.A.

TAX PLANNING LALIT KHANDELWAL

TAX PLANNING LALIT KHANDELWAL Tax Slabs for INDIVIDUALS ( Less than 65 Years Age ) ( Less than 65 Years Age ) Up to Rs. 1,60,000 Rate: 0% Rs.1,60, ,00,000 Rate: 10% Rs.5,00, ,00,000 Rate: 20% ABOVE Rs 8,00,000 Rate: 30% Education cess is levied at 3% of the tax payable.

TAX PLANNING LALIT KHANDELWAL Tax Slabs for WOMEN ( Less than 65 Years Age) ( Less than 65 Years Age) Up to Rs. 1,90,000 Rate: 0% Rs.1,90,001 to 5,00,000 Rate: 10% Rs.5,00,001 to 8,00,000 Rate: 20% Above Rs 8,00,000 Rate: 30% Education cess is levied at 3% of the tax payable.

TAX PLANNING LALIT KHANDELWAL Tax Slabs for Sr. CITIZENS ( 65 Years Age & above) Up to Rs. 2,40,000 Rate: 0% Rs.2,40,001 to 5,00,000 Rate: 10% Rs.5,00,001 to 8,00,000 Rate: 20% Abov Rs. 8,00,000 Rate: 30% Education cess is levied at 3% of the tax payable.

TAX PLANNING LALIT KHANDELWAL

TAX PLANNING LALIT KHANDELWAL Tax Planning: The smart way Factors to be considered for Factors to be considered for Tax Planning investment :  Risk appetite  Investment Objective  Tenure of investment

TAX PLANNING LALIT KHANDELWAL 8 c Instruments eligible for tax deductions ( ) ( Under Section 80 C ) Plan your Savings From The Beginning From The Beginning Of Financial Year Of Financial Year

TAX PLANNING LALIT KHANDELWAL MAXIMUM LIMIT UNDER SEC 80C= Rs 1,00,000 Additional Rs. 20,000 for Infrastructor Bond ELIGIBLE AVENUES TO SAVE TAX ELIGIBLE AVENUES TO SAVE TAX INSTRUMENT INVESTMENT LIMIT ( Rs.) MATURITY PERIOD PUBLIC PROVIDENT FUND(PPF ) 70, Years PROS: Assured Tax free 8% a year. CONS: Very long lock-in period, partial withdrawl after sixth year. EQUITY-LINKED SAVINGS SCHEMES(ELSS) 1,00,000 3 Years PROS: Very high returns in bullish market, returns are tax free. CONS: Returns are not assured (After 3 years there may be loss of capital). TAX SAVING BANK FIXED DEPOSITS 1,00,000 5 Years PROS: Assured returns. CONS: Relatively low Returns and same are Taxable. TAX SAVING POST OFFICE TERM DEPOSITS 1,00,000 5 Years PROS: Assured returns. CONS: Relatively low Returns and same are Taxable. SENIOR CITIZEN SAVINGS SCHEME 1,00,000 5 Years PROS: Assured 9 %. CONS: Applicable to Sr. Citizens only and interest income is Taxable. NOTE: TUITION FEES, LIC PREMIA, REPAYMENT OF HOUSING LOAN, PF,VPF and NSC are also eligible for deduction under sec 80 C.

TAX PLANNING LALIT KHANDELWAL *Investment made for the Purpose of tax planning can have a significant impact on your finances over the long term horizon. *Invest Rs 1,00,000 in a manner that saves Taxes as well as achieve your long term financial objectives. *Draw up a plan that suits you best and then be disciplined in executing the same.

TAX PLANNING LALIT KHANDELWAL SMART WAYS TO SAVE TAX ( Beyond 80C’s Rs 1 lakh limit ) PAYMENT OF RENT : SEC 10(13A) : An employee availing HRA can claim exemption which is least of 50% of basic pay (40% in non metros) or the actual HRA, or rent paid in excess of 10% of basic pay. INTEREST ON HOUSING LOAN : SEC 24(B) The interest paid (up to Rs 1.5 lakh ) on a home loan can be deducted from taxable income. In joint ownership, both can claim deduction up to Rs 1.5 lakh each. INTEREST ON EDUCATION LOAN : SEC 80E : Interest paid on a loan taken for higher studies is exempt from tax for a maximum of eight successive years. There is no limit on the amount eligible for exemption.

TAX PLANNING LALIT KHANDELWAL SECTION 80U: When an individual himself is certified by medical authority to be suffering with Autism, Cerebrel Palsy, Mental Retardation etc. a deduction up to Rs 1,00,000 can be claimed as deduction from Taxable Income. SECTION 80DD : Expenditure incurred for Treatment of Dependent spouse, children,parents,brothers or sisters suffering from Autism,Celebral Palsy,Mental retardation etc. a deduction up to Rs 50,000( Rs1,00,000for severe disability) SOME MORE DEDUCTIONS Sec 80 G - Donations to certain funds/charitable institutes. Sec 80GGA- Donations for Scientific Research work.

TAX PLANNING LALIT KHANDELWAL HEALTH COVER : SEC 80D: Deductions For premium for health cover Rs for self, spouse and kids U/S 80D(2A) Rs for parents ( whether dependent or not) U/S 80D(2B) Rs for parents, if senior citizen. CAPITAL GAIN BONDS : SEC 54EC: For capital gains from a long term asset,one can save up to Rs.50 lakh by parking the profits in bonds of NHAI or REC if the investment is made within 6 months of sale. MEDICAL TREATMENT : SEC 80DDB Expenditure incurred on treatment of the individual or his dependents for diseases such as cancer, AIDS, renal failure, Neurological Diseases etc. qualifies for deduction up to Rs 40,000.(Rs 60,000 for Sr Citizens)

TAX PLANNING LALIT KHANDELWAL

TAX PLANNING LALIT KHANDELWAL

TAX PLANNING LALIT KHANDELWAL Q. Will a policy taken on wife’s name be eligible for tax benefits? YES. a premium paid towards Insurance policy taken in the name of self, spouse and children only is allowable as deduction. If you pay a premium towards your parent’s policy, then the premium paid does not qualify for deduction. Insurance premium will qualify for deduction only up to 20% of Sum Assured.

TAX PLANNING LALIT KHANDELWAL

TAX PLANNING LALIT KHANDELWAL There can be income from sources other than salary as well. OTHER INCOME House Property Business & Profession Bank Interest Other Sources Capital Gains OTHER INCOME

TAX PLANNING LALIT KHANDELWAL Q. My life insurance policy has matured and I have received Rs. 5,00,000. I have also received a bank interest of Rs. 1 lac. Will I have to pay tax on all these Rs 6,00,000 ?

TAX PLANNING LALIT KHANDELWAL Proceeds from an insurance policy is completely tax-free under Sec 10(10)D provided that Sum Assured is at least 5 times of premium. In case this condition is violated, then the entire proceeds of Rs 5,00,000 becomes taxable as income from other sources. Income from Bank Interest is to be added as income from other sources to Gross Income for Tax purpose INCOME FROM RETIREMENT PROCEEDINGS ARE FULLY EXEMPTED FROM INCOME TAX FOR GOVT.EMPLOYEES under Sec 10.

TAX PLANNING LALIT KHANDELWAL Filing of Income Tax Return is compulsory for everyone whose gross total income - the income under the five heads (salary, business, capital gains, house property or other sources) before allowing for any deductions exceeds the basic exemption limit. ●● ● Filing of the RETURN

TAX PLANNING LALIT KHANDELWAL ●●● Filing of the RETURN There are two income tax return forms, ITR-1 and ITR-2, for salaried individuals. Your sources of income (they will fall under one or more of the five sources mentioned earlier) will decide your form. You will have to submit the filled form to the tax authorities and get an acknowledgement from them.

TAX PLANNING LALIT KHANDELWAL INCOME SOURCE DECIDES RETURN FORM ITR-1 - Income from salary, pension or interest earned in a financial Year. ITR-2 - Income or loss from house property, Capital Gains, income from any other source. Submit the filled form to the tax authorities and get an acknowledgement from them.

TAX PLANNING LALIT KHANDELWAL Checklist Keep ITR-1, ITR-2 forms handy * Enter all the details in CAPITAL letters * Ensure that name, address and other personal details are entered correctly * Double-check PAN number, bank account details and the MICR code you write * Store the acknowledgement safely. Ensure disclosure of all income from other sources, if any.

TAX PLANNING LALIT KHANDELWAL Before you start filing the return, check if you would be getting a refund from the IT Department or have to pay tax. In case of the latter, even before starting the filing process, you should first get hold of Form 280, fill it up and deposit it in any bank along with the tax payable in cash or cheque. You can also pay tax through Inter net banking. In both cases, you will get a receipt number which has to be quoted in the ITR form.

TAX PLANNING LALIT KHANDELWAL

TAX PLANNING LALIT KHANDELWAL WEB SITES Major sites offering e-filing facilities are : Taxspanner, Taxsmile and Taxshax. All the three sites are secure and easy to navigate Site for Downloading IT FORMS : WebSite for SALARY & INCOME TAX CALCULATIONS: irtsa.net.in

TAX PLANNING LALIT KHANDELWAL Stick to the deadline Whether you are going offline or online, make sure you are on the right side of 31st July. If tax is due and return is not filed till 31st March of the following year, a penalty of Rs 5,000 is levied. ALL THIS INFORMATION WILL ENABLE YOU TO FILE YOUR INCOME TAX RETURN YOURSELF

TAX PLANNING LALIT KHANDELWAL DISCLAIMER  This presentation is for information only.  Please Refer latest IT rules before filing your Income Tax Return.

TAX PLANNING LALIT KHANDELWAL

TAX PLANNING LALIT KHANDELWAL THE END