Salary Income Tax Final

8/6/2019 Salary Income Tax Final

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TAX PLANNINGTAX PLANNING

for Salariedfor Salaried

IndividualsIndividuals


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Income tax is boring and its payment is painful.Income tax is boring and its payment is painful.

PricePrice forfor civilizationcivilization..

NothingNothing isis suresure exceptexcept deathdeath andand taxestaxes..

BeingBeing SocioSocio--EconomicEconomic law,law, variousvarious exemptionsexemptions andanddeductionsdeductions havehave beenbeen providedprovided.. LifeLife isis changingchangingfast,fast, soso isis IncomeIncome TaxTax lawlaw;; hencehence alsoalso calledcalled oneonetimetime ticketticket..


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Assessee:: InIn incomeincome--taxtax aa personperson whowho hashas toto

complycomply hishis taxtax obligationobligation oror toto getget refundrefund oror

againstagainst whomwhom anyany proceedingsproceedings areare takentaken isis

calledcalled anan assesseeassessee..

Assessment Year:: AssessmentAssessment yearyear meansmeans thethe

periodperiod ofof 1212 monthsmonths startingstarting fromfrom 11stst AprilApril ofof

everyevery yearyear andand endingending onon 3131stst MarchMarch ofof thethe nextnext

yearyear.. HereHere wewe areare goinggoing dealdeal withwith AYAY 20122012--1313

Financial year:: IncomeIncome earnedearned inin aa financialfinancialyearyear isis taxabletaxable inin thethe nextnext year year calledcalled

AssessmentAssessment YearYear..


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FORMS TO BE USED:FORMS TO BE USED:--

TheThe formsforms toto bebe usedused forfor filingfiling thethe returnreturn ofofincomeincome areare mentionedmentioned belowbelow::--

ITRITR 11:: ForFor IndividualsIndividuals havinghaving incomeincome fromfromSalary/Salary/ Pension/familyPension/family pensionpension && InterestInterest;;

ITRITR 22:: ForFor IndividualsIndividuals andand HUFsHUFs notnot havinghavingincomeincome fromfrom BusinessBusiness oror ProfessionProfession..


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TAX RATES FORFINANCIALTAX RATES FORFINANCIAL

YEAR 11YEAR 11--12 A.Y. 1212 A.Y. 12--1313 InIn thethe casecase ofof aa IndividualIndividual (MALE)(MALE),, incomeincome upup toto

RsRs.. 11,,8080,,000000 isis exemptexempt;;

InIn thethe casecase ofof WomenWomen incomeincome upup toto RsRs..11,,9090,,000000 isis

exemptexempt;;

InIn thethe casecase of of SeniorSenior CitizensCitizens incomeincome UpUp toto

RsRs..22,,5050,,000000 isis exemptexempt.. ((AssesseAssesse shouldshould bebe 6060 yearsyearsandand above)above)

InIn casecase ofof SeniorSenior CitizensCitizens havinghaving ageage aboveabove 8080 yearsyears

theirtheir incomeincome isis exemptexempt upup toto RsRs..55,,0000,,000000..


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Tax Rates for Current Financial YearTax Rates for Current Financial Year

andand Asstt.YearAsstt.Year 20122012--1313

RsRs..11,,8080,,001001 55,,0000,,000000 1010%%..

Rs.Rs.5,00,0015,00,001 8,00,000 20%8,00,000 20%

Rs.Rs.8,00,001 upwards 30%8,00,001 upwards 30%


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HEADS OF INCOME

A.-Salaries.

B.-Income from house property.

C.-Profits and gains of business or profession.

D.-Capital gains.

E.-Income from other sources.


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SALARY

SalarySalary receivedreceived oror receivablereceivable fromfrom thethe employeremployer;;

IfIf receivedreceived byby aa partnerpartner fromfrom thethe firmfirm itit isis notnot

salarysalary incomeincome.. "Salary","Salary", "perquisite""perquisite" andand "profits"profits inin lieulieu ofof

salary"salary" defineddefined..

Salary,Salary, wages,wages, feesfees commission,commission, advanceadvance salary,salary,leaveleave encashmentencashment


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PERQUISITEPERQUISITE"" includesincludes--

RentRent--freefree accommodationaccommodation oror ConcessionConcession

providedprovided byby thethe employeremployer;;

InIn casecase ofof furnishedfurnished accommodation,accommodation, increaseincrease itit

byby 1010%%..

AnyAny sumsum paidpaid byby thethe employeremployer inin respectrespect ofof anyany

obligationobligation payablepayable byby thethe employeeemployee;;


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""Profits in lieu of salary"" includesincludes--

AnyAny paymentpayment whichwhich isis notnot exemptexempt fromfrom taxtax

AnyAny paymentpayment receivedreceived fromfrom thethe employeremployer beforebefore

joiningjoining andand afterafter leavingleaving thethe serviceservice..


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Salary Structure of EmployeesSalary Structure of Employees

Particulars Amt (Rs) Deductions to be allowed

Basic Salary (PA) 1,80,000 Ded u/s 80c

D.A (PA) 1,08,000 Contribution to RPF 34,560

Bonus 24,000 Investment in NSC 20,000

Total (A) 3,12,000 LIC premium (sum assured

1,00,000)

15,440

Education (2 Children) 2,400 Contribution to PPF 30,000

Hostel (2 Children) 5,274 Ded u/s 80ccf

Transport 9,600 Investment in Infra Bond 20,000

HRA (rent paid 9K) 1,08,000 Ded u/s 80D

Motor Car 19,200 Medi claim Premium 35,000

Contribution to RPF 34,560 Total Deduction (B) 155000

Profession Tax 2,400 Taxable Salary (A-B) 1,57,000

Interest on RPF (9.5%) 6,566

Total (A+B) 5,00,000


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Assumptions for this ComputationAssumptions for this Computation

HRA working:HRA working: 1) Does not live in his own house1) Does not live in his own house

2) Rent paid by him is 12,000 P.M2) Rent paid by him is 12,000 P.M

Exemption:Exemption: 1) HRA actually received1) HRA actually received

2) Rent Paid2) Rent Paid 10% of Salary *10% of Salary *

3) 40% of salary (Employee is residing in Ahmedabad)3) 40% of salary (Employee is residing in Ahmedabad)

Motor Car Allowance:Motor Car Allowance:

1)1) Employee owns the motor car but the actual running & maintenance chargesEmployee owns the motor car but the actual running & maintenance charges

(including chauffeur's remuneration)are met by the employer.(including chauffeur's remuneration)are met by the employer.

2)2) cubic capacity of engine exceeds 1.6cubic capacity of engine exceeds 1.6 litersliters

3)3) reimbursement is partly for official purpose & partly for private purposereimbursement is partly for official purpose & partly for private purpose

Education perks:Education perks:

1) His son is studying in the same school made by the same company in which he is1) His son is studying in the same school made by the same company in which he is

working.working.


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Particulars Amt.

Basic Salary (PA) 300000 Deduction U/S 80C & 80 CCF

D.A (PA) 200000 Contribution to RPF 60000

Total 5,00,000 Investment in Post Office scheme 15000

Allowances Exempt U/S 10 Investment in MF U/S 10(23) 25000

HRA 250000 Investment in Infra Bonds 20000

Education (2 Children) 2400 Deduction U/S 80D

Hostel (2Children) 7200 Medi Claim Premium 35,000

Uniform 9600 Deduction U/S 80E

Telephone 24000 Interest on Educational Loan 1,25,000

Motor Car 32000 Deduction U/S 80DDB

Contribution To RPF 60000 For Medical Treatment 40,000

Interest on RPF (9.5%) 11400 Total ( C ) 320000

Sports Club 65000 Taxable Salary 1,80,000

Food Allowance 36000

Professional Tax 2400

Total 10,00,000


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AssumptionsAssumptions for this Computationfor this Computation





3) 40% of salary (Employee is residing in Ahmedabad)3) 40% of salary (Employee is residing in Ahmedabad)Motor Car Allowance:Motor Car Allowance:

1)1) Employee owns the motor car but the actual running & maintenance chargesEmployee owns the motor car but the actual running & maintenance charges

(including chauffeur's remuneration)are met by the employer.(including chauffeur's remuneration)are met by the employer.


3)3) reimbursement is partly for official purpose & partly for private purposereimbursement is partly for official purpose & partly for private purposeEducational Loan:Educational Loan:

1 Principal Amount:1 Principal Amount:-- 10,00,000/10,00,000/--

2 Interest Rate:2 Interest Rate:--12.5%12.5%

Assumed that the total amount of interest paid all the year round tenta amounts to RsAssumed that the total amount of interest paid all the year round tenta amounts to Rs

1,25,000/1,25,000/--


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Particulars Amt (Rs) Amt (Rs)

Basic Salary (PA) 4,92,000 Profession Tax

Gifts allowance

2,400

5,000

D.A (PA) 3,17,229 Total (B) 6,02,030

Bonus 88,740 Deduction U/S 80C & 80 CCF

Total (A) 8,97,969 Contribution to RPF 96,000

Allowances Exempt U/S 10 Investment in MF U/S 10(23) 4,000

Uniform 20,000 Investment in Infra Bonds 20,000

Food 36,000 Deduction U/S 80D

Education (2 Children) 2,400 Medi Claim Premium 35,000

Hostel (2 Children) 7,200 Deduction U/S 80E

Transport 9,600 Interest on Educational Loan 1,50,000

HRA 2,99,983 Deduction U/S 80DD

Motor Car 32,400 For Medical Treatment of father 1,00,000

Entertainment 5,000 Deduction U/S 24(b)

Sports club facilities 55,000 Interest on Housing Loan 1,50,000

Education perks 12,000 Total ( C ) 5,55,000

Contribution to RPF 96,807 Taxable Salary (A-C) 3,42,969


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AssumptionsAssumptions for this Computationfor this Computation





3) 40% of salary (Employee is residing in Ahmedabad)3) 40% of salary (Employee is residing in Ahmedabad)

Motor Car Allowance:Motor Car Allowance:

1)1) Employee owns the motor car but the actual running & maintenance charges (includingEmployee owns the motor car but the actual running & maintenance charges (including

chauffeur's remuneration)are met by the employer.chauffeur's remuneration)are met by the employer.


3)3) reimbursement is partly for official purpose & partly for private purposereimbursement is partly for official purpose & partly for private purpose

Education perks:Education perks:

1)1) His son is studying in the same school made by the same company in which he isHis son is studying in the same school made by the same company in which he isworking.working.

Educational Loan:Educational Loan:

1 Principal Amount:1 Principal Amount:-- 15,00,000/15,00,000/--

2 Interest Rate:2 Interest Rate:--10%10%

Assumed that the total amount of interest paid all the year round tenta amounts to RsAssumed that the total amount of interest paid all the year round tenta amounts to Rs1,50,000/1,50,000/--


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Computation of Taxable IncomeComputation of Taxable Income

Particulars For 5 Lacs For 10 Lacs For 15 Lacs

Gross Taxable Salary 1,57,000 1,80,000 3,42,969

Less : Basic Exempt.

Limit

180000 180000 180000

Taxable Nil Nil 1,62,969

Tax @ 10% Nil Nil 16,297

Edu. Cess @ 2% Nil Nil 326

High Edu. Cess @ 1% Nil Nil 163

Total Tax Payable 16,786


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DEDUCTIONS U/s 80C & CCF

DeductionDeduction inin respectrespect ofof lifelife insuranceinsurance premiapremia,,providentprovident fund,fund, etcetc.. butbut notnot moremore thanthan RsRs..11..22 laclac

Any sums paid towards:Any sums paid towards:

Insurance premiumInsurance premium ContributionContribution toto ProvidentProvident FundFund

National Saving CertificatesNational Saving Certificates

TuitionTuition FeesFees ofof self,self, spousespouse oror childchild (not(not moremorethanthan 22))

Installment of housing loanInstallment of housing loan


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FDR

FDR forfor periodperiod ofof notnot lessless thanthan fivefive yearsyears withwith aascheduledscheduled bank,bank, asas per per schemescheme notifiednotified byby

CentralCentral GovtGovt asas perper BankBank TermTerm DepositDeposit SchemeScheme

20062006..

Deduction in respect of health insuranceDeduction in respect of health insurance

premium:premium:

[[UptoUpto RsRs..1515,,000000//--,, andand inin thethe casecase of of seniorsenior

CitizenCitizen itit isis RsRs.. 2020,,000000//--]]

RsRs..2020,,000000//-- infrastructuralinfrastructural bondsbonds..


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Deduction in respect of maintenance including

medical treatment of a dependant who is a

person with disability U/s 80DD.

Rs.Rs.50,000/50,000/--

InIn casecase ofof severesevere disabilitydisability itit isis RsRs.. oneone laclac..

[Medical[Medical certificatecertificate isis requiredrequired toto bebe attachedattached withwith

thethe returnreturn..]]


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DEDUCTION IN RESPECT OFMEDICALDEDUCTION IN RESPECT OFMEDICAL

TREATMENT, ETC. U/s 80DDBTREATMENT, ETC. U/s 80DDB

RsRs.. 4040,,000000//--;; butbut inin thethe casecase ofof aa seniorsenior citizencitizen itit isis

RsRs..6060,,000000//--;;

ProvidedProvided itit isis actuallyactually spentspent for for thethe specifiedspecified

ailmentsailments..


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Deduction in respect of interest on loan

taken for higher education 80E.

ForFor self,self, spouse,spouse, dependentdependent childchild oror for for whomwhom

assesseeassessee isis guardianguardian BeginningBeginning yearyear andand fourfour immediatelyimmediately followingfollowing

yearsyears..


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Deduction in respect of donations paid

in cash only U/s 80G100100%% ofof thethe followingfollowing::

((ii)) thethe NationalNational DefenseDefense FundFund;; oror

(ii)(ii) PrimePrime Minister'sMinister's NationalNational ReliefReliefFundFund;; (iii)(iii) NationalNational FoundationFoundation forfor CommunalCommunal

HarmonyHarmony;; oror

(iv)(iv) LocalLocal authorityauthority anyany for for thethe purposespurposes ofofimprovementimprovement ofof primaryprimary educationeducation inin villagesvillages andand

townstowns

(v)(v) NationalNational oror StateState BloodBlood TransfusionTransfusion CouncilCouncil


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(vi)(vi) StateState GovernmentGovernment FundFund toto provideprovide medicalmedical

reliefrelief toto thethe poorpoor;; oror

(vii)(vii) ArmedArmed forcesforces CentralCentral WelfareWelfare FundFund forfor thethe

welfarewelfare ofof thethe pastpast andand presentpresent membersmembers ofof suchsuch

forcesforces oror theirtheir dependantsdependants;; oror

(viii)(viii) NationalNational SportsSports FundFund;; oror

(ix)(ix) thethe NationalNational CulturalCultural FundFund;; oror

(x)(x) FundFund for for anyany GovtGovt.. for for thethe purposepurpose ofof

promotingpromoting familyfamily planningplanning;;


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50% of the following:

(v)(v)F

undF

und forfor of of thethe GovernmentGovernment oror anyany locallocalauthority,authority, forfor anyany charitablecharitable purposepurpose;; oror

(vi)(vi) anan authorityauthority forfor satisfyingsatisfying thethe needneed for for

housinghousing accommodationaccommodation

(b)(b) anyany sumssums asas donationsdonations forfor thethe renovationrenovation oror

repairrepair ofof anyany suchsuch temple,temple, mosque,mosque, gurdwara,gurdwara,

churchchurch or or other other placeplace of of extraordinaryextraordinary

importanceimportance;;


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80U. Deduction in case of a person with80U. Deduction in case of a person with

disability.disability.

Rs.Rs. 50,000/50,000/-- to resident individual with disability;to resident individual with disability;

Rs.Rs. Rs.1,00,000/Rs.1,00,000/-- with severe disability.with severe disability.

Certificate from the Prescribed medial authorityCertificate from the Prescribed medial authorityshall be attached with the return of income.shall be attached with the return of income.


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GR

ATITUDEGR

ATITUDE

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