Aug 302012
 

Income Tax Exemptions under various sections :  Assessment Year 2013-14

Sr No

Section

Details of deductions

Limit

1 80C General deduction for investment in PPF,PF,Life Insurance, ULIP, Stamp duty on house, Fixed deposits for 5 years , bonds etc

Maximum Rs 1 ,00,000 is allowed.

2 80CCC Deduction in case of contribution to pension fund. However, it should be noted that surrender value or employer contribution is considered income. Maximum is Rs 1,00,000
3 80CCD Deduction in respect to contribution to new pension scheme. Employees of central and others are eligible. Maximum is sum of employer’s and employee’s contribution to the maximum : 10 % of salary.
5 80D Medical insurance on self, spouse , children or  parents Rs 15,000 for self , spouse & children
Extra Rs 15,000 for insurance on parents. IF parents are above 65 years, extra sum should be read as Rs 20,000
Thus maximum is Rs. 35,000 p.a.
6 80DD For maintenance including treatment or insurance of physical disable dependent relatives Rs 50,000 . In case disability is severe , the amount is Rs 1,00,000.
7 80DDB For medical treatment of self or relatives suffering from specified disease Acutal amount paid to the extent of Rs 40,000. In case of patient being Sr Citizen , amount is Rs 60,000
8 80E For interest payment on loan taken for higher studies for self or education of spouse or children Actual amount paid as interest and start from the financial year in which he /she starts paying interest and runs till the interest is paid in full.
9 80G Donations to charitable institution 100% or 50% of amount of donation made to 19 entities (National defense fund , Prime minister relief fund etc. )
10 80GG For rent paid. This is only for people not getting any House Rent Allowance. Maximum is Rs 2000 per month.  Rule 11B is method of computation.
11 80GGA For donation to entities in scientific research or rural development. Only those tax payers who have no business income can claim this deduction .Maximum is equivalent to 100 % of donation.

 

Aug 302012
 

What is Form 15G and Form 15H ?

Form 15G and Form 15H are self declaration forms that need to be submitted to avoid TDS deduction from a person’s income where the total income stands below the taxable limit as applicable in the case of men, women and senior citizens. In other words, Form 15G and Form 15H are self declaration forms to be furnished if total taxable income of a person is going to be less than the permissible limits. Form 15H is for senior citizens and Form 15G is for other individuals. However, these forms are not applicable for Non-Residential Indians (NRI’s).

Form 15H can be submitted by a person who is Resident Individuals above 60 yrs of age (w.e.f 01/04/2011). An important point here is that a person should have not have paid any tax in the previous year . So only if one didn’t have any tax liability in the previous year can submit Form 15H . It should be submitted at the start of the year itself.

Form 15G has the same purpose as Form 15H , just that this form should be submitted by a person below 60 yrs old (w.e.f 01/04/2011). This also includes the Hindu Undivided Family(HUF).

Example

Lets take a example, Mrs Verma is a house wife, aged 45 and she has a Fixed Deposit of Rs 2,00,000 /-.

She is earning interest @ 10%. During the last year she has earned interest of Rs 20,000/-.

Mrs Verma’s Bank is under obligation to deduct TDS @ 10.3%  (20.6% in case she has not submitted PAN number to the bank) i.e  TDS of Rs 2,060/- will be deducted by bank.

How can she save the TDS on her Fixed Deposit ?

To save the TDS on her Fixed Deposit, Mrs Verma need to sign and submit Form 15G to the bank. Form 15G is the declaration to the Income tax department, that My (Mrs Verma’s) total income is less than the total taxable limit (Rs 2,00,000/- for Financial year 2012-13).

If Mrs Verma’s age was above 60 yrs of age, then she would need to sign and submit Form 15H to the bank.

Download Form 15H

Download Form 15G

What happens in case of Non Resident Indians (NRI’s)

NRI’s are not eligible to submit the above mentioned Form 15H and Form 15G but that does not mean that they have no option. NRI’s can apply to Income Tax Department proving the deduction of TDS is more than their tax liability and obtain exemption certificate which can then be submitted to payer of funds to avoid TDS deduction.

Aug 302012
 

Filing of Income Tax Return (ITR) is a legal obligation of every person whose total income for the previous year has exceeded the maximum amount that is not chargeable for income tax under the provisions of the I.T Act, 1961. The Income Tax Department has introduced a convenient way to file these returns online using the internet. The website for the same is http://www.incometaxindiaefiling.gov.in

Following are the different types of ITR Form categories for filing of Income Tax Return (ITR)  :-

Income Tax Return (ITR) Form – 1 :-  The ITR Form-1 is applicable for the individuals having income from Salary and Interest. This normally caters to the salaried employees of an organisation based on his annual earnings.

Income Tax Return (ITR) Form – 2 :-   The ITR Form-2 is applicable for the individuals and Hindu Undivided Family(HUF) Member not having income from Business or Profession.

Income Tax Return (ITR) Form – 3 :-   The ITR Form-3 is applicable for the individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship.

Income Tax Return (ITR) Form – 4 :-   The ITR Form-4 is applicable for the individuals/HUFs having income from a proprietory business or profession.

Income Tax Return (ITR) Form – 4s :-  The ITR Form-4s is applicable for the individuals having income from Presemptive business.

Income Tax Return (ITR) Form – 5 :-   The ITR Form-5 is applicable for firms, AOPs and BOIs.

Income Tax Return (ITR) Form – 6 :-   The ITR Form-6 is applicable for companies other than companies claiming exemption under section 11.

Income Tax Return (ITR) Form – 7 :-   The ITR Form-7 is applicable for persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D).

Aug 292012
 

Calculation of HRA Exemption

Employees generally receive a house rent allowance (HRA) from their employers.  HRA is an allowance and is subject to income tax. An employee can claim exemption on his HRA under the Income Tax Act if he stays in a rented house and is in receipt of HRA from his/her employer.

In order to claim the deduction, an employee must actually pay rent for the house which he occupies. The rented premises must not be owned by him. In case one stays in an own house, nothing is deductible and the entire amount of HRA received is subject to tax. As long as the rented house is not owned by the assessee, the exemption of HRA will be available up to the the minimum of the following three options:

* The actual amount of HRA received

* 40% of salary. This increases to 50% if you are renting out the house in major metros in India

* Rent paid minus 10% of salary (basic component + dearness allowance)

Salary here means basic salary which  includes dearness allowance if the terms of employment provide for it, and commission based on a fixed percentage of turnover achieved by the employee. The deduction will be available only for the period during which the rented house is occupied by the employee and not for any period after that.

Example for Calculation of HRA Exemption

HRA per month = Rs 15,000

Basic monthly salary = Rs 30,000

Dearness Allowance = Nil

Monthly rent = Rs 12,000

Rental accommodation is in Mumbai.

Exemption

Actual amount of HRA = Rs 15,000

50% of salary = 50% x (30,000 + 0) = Rs 15,000

Actual rent paid – 10% of salary = Rs 12,000 – [10% of (30,000 + 0)] = 12,000 – 3,000 = Rs 9,000

Rs 9,000 being the least of the three amounts will be the exemption from HRA. The balance HRA of Rs 6,000 (15,000-Rs 9,000) is taxable.

Aug 272012
 

INCOME TAX RATE CHART FY 2012-2013 

A. Normal Rates of tax:

1. The Total Income is less than Rs. 2,00,000/-. Nil
2.  The Total Income is between Rs. 2,00,000/- and Rs. 5,00,000/- 10 per cent of the amount by which the total income exceeds Rs.2,00,000/-
3.  The Total Income is between Rs. 5,00,000/- and Rs. 10,00,000/-. Rs. 30,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
     4.The Total Income exceeds Rs. 10,00,000/-. Rs. 130,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-.

B. Rates of tax for a woman, resident in India and below sixty years of age at any time during the financial year:

1. The Total Income is less than Rs.2,00,000/-. Nil
2.  The Total Income is between Rs. 2,00,000/- and Rs. 5,00,000/- 10 per cent, of the amount by which the total income exceeds Rs. 2,00,000/-
3.  The Total Income is between Rs. 5,00,000/- and Rs. 10,00,000/- Rs. 30,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
       4.The Total Income exceeds Rs. 10,00,000/-. Rs. 130,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-.

C. Rates of tax for an individual, resident in India and of the age of sixty years or more but less than eighty years at any time during the financial year:

1. The Total Income is less than Rs.2,50,000/-. Nil
2.  The Total Income is between Rs. 2,50,000/- and Rs. 5,00,000/- 10 per cent, of the amount by which the total income exceeds Rs. 2,50,000/-
3.  The Total Income is between Rs. 5,00,000/- and Rs. 10,00,000/- Rs. 25,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
       4.The Total Income exceeds Rs. 10,00,000/-. Rs. 125,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-.

D. In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year:

1.  The Total Income is less than Rs.5,00,000/-. Nil
 2.  The Total Income is between Rs. 5,00,000/- and Rs. 10,00,000/- 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-
       3.The Total Income exceeds Rs.10,00,000/- Rs. 1,00,000/- plus 30 per cent of the amount by which the total income exceeds Rs.10,00,000/-
Aug 132012
 

 

Due dates for TDS Quarterly Return

Quarters Due date for Form 24Q/26Q/27Q Due date for Form 27EQ
Quarter 1 (April-June)

15th July

15th July

Quarter 2 (July-September)

15th October

15th October

Quarter 3 (October-December)

15th January

15th January

Quarter 4 (January-March)

15th May

15th May