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IT RETURNS
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www.plannprogress.com has crossed 300,000 PAGE VIEWS THANK ALL READERS , WELL WISHERS WHO HAVE HELPED US TO REACH THE MILESTONE BUDGET PROPOSALS FOR FY 2017-18 AFFECTING PERSONAL FINANCE , CLICK HERE FOR TAX PLANNING FOR FY 2018-19 , CLICK HERE Have you submitted Form 15G / 15 H if you are eligible ?
Go to Section " All about TDS and Form 15G / 15 H and find out whether you are eligible to submit the forms to avoid Tax Deduction at source . If you are eligible Download the forms and submit to your bank immediately . As year end is approaching , Banks will deduct tax on their interest payment before the year end if you have not submitted the forms . Act earliest to avoid TDS . KEEP YOUR FINANCIAL RECORDS PROPERLY Keep the records of all your financial transactions . Money borrowed from friends , Jewelry inherited / purchased , Gifts received , wedding expenditures , cash remitted to your account etc can be questioned by IT officers and can be taxed up to 83 % of the value if IT Officer is not satisfied about your explanation . As per amended section 115BBE , an assessing officer can invoke 60 % tax , 15 % surcharge , 3 % cess with an added penalty of 10 % . To avoid such hefty payment of tax , keep records of your transactions to enable yourself to explain sources of funds . ATTN STOCK INVESTORS : 1. Profits made out of short term stock holding (for less than a year )to be added to the Income for tax purposes . 2. Short term loss on one stock can be offset by short term gain on another stock 3. Stocks held for more than 12 months are eligible for Long Term Capital Gain and hence profits are tax free 4. Short term losses can be carried forward for 8 years only if you declare the same in your Income Tax returns before due date . 5. Trading in derivatives attract Business tax . 6. Losses made out of stocks held for more than 12 months cannot be offset for Short term gains . INCOME TAX NEWSDated 21.11.2016 : IT Department has issued a notification making quoting of PAN mandatory for cash remittance to a bank / post office exceeding Rs 50,000 in a day and cash transactions exceeding Rs 2,50,000 remitted during the period of 9.11.2016 to 30.12.2016 To access the notification , CLICK HERE and to read relevant Rule 114b , CLICK HERE and type 114B in Rule column Dated 11.11.2016 : Income tax Department, in its Data Matching Exercise , has identified bank accounts with substantial high value cash transactions . PAN Card holders who have registered with Incometaxofindiaefiling.gov.in site may login and go to "Accounts with Cash Transactions" under quick Link . One may find the details of such accounts identified by the Income Tax Department Budget News dated 08.03.2016 : Finance Minister Arun Jaitley has withdrawn the budget proposal on taxation of pension fund.The 40% rebate proposed for the NPS will however continue. NPS is at present fully taxed on withdrawal. This is a relief for NPS subscribers. DATED 29.02.2016 : Highlights of Union Budget tax proposals for the financial year 2016-17 presented by Finance Minister Mr Arun Jaitley : No changes have been made to existing income tax slabs The ceiling of tax rebate under Section 87A of IT Act has been proposed to be raised to Rs 5,000 from Rs 2,000 for individuals with income less than Rs. 5 lakhs. Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses. Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh. Service tax exempted for housing construction of houses less than 60 sq. m 15 per cent surcharge on income above Rs. 1 crore Govt. will pay EPF contribution of 8.33% for all new employees for first three years 40% tax exemption for NPS: FM has proposed to make withdrawal up to 40% of the corpus at the time of retirement tax exempt in the case of National Pension Scheme (NPS).In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made after 1.4.2016. Infrastructure and agriculture cess to be levied. Excise duty raised from 10 to 15 per cent on tobacco products other than beedis 1 per cent service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh. SUVs, Luxury cars to be more expensive. 4% high capacity tax for SUVs. Companies with revenue less than Rs 5 crore to be taxed at 29% plus surcharge Limited tax compliance window from Jun 1 - Sep 30 for declaring undisclosed income at 45% incl. surcharge and penalties Excise 1 per cent imposed on articles of jewellery, excluding silver. 0.5 per cent Krishi Kalyan Cess to be levied on all services. Pollution cess of 1 per cent on small petrol, LPG and CNG cars; 2.5 per cent on diesel cars of certain specifications; 4 per cent on higher-end models. Dividend in excess of Rs. 10 lakh per annum to be taxed at additional 10 per cent. To know , the impact of budget proposals on your personal finance , visit BUDGET PROPOSALS AND PERSONAL FINANCE For text of full speech of the Union Finance Minister , you may visit thehindu.com at following link http://www.thehindu.com/multimedia/archive/02756/Budget_Speech_2756516a.pdf: ADVT
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Instruments qualifying under 80CCC
Payment of premium for annuity plan of LIC or any other insurer.
Instruments qualifying under 80 CCG
Listed Equity shares or listed units of a fund in accordance with Rajiv Gandhi Equity Savings Scheme Subject to following conditions :
Resident Individual being a new retail investor with not more than 10.00 lakhs income and investing with a lock in period of 3 years
Instruments qualifying under 80 D
Health Insurance policies
Payment of premium for annuity plan of LIC or any other insurer.
Instruments qualifying under 80 CCG
Listed Equity shares or listed units of a fund in accordance with Rajiv Gandhi Equity Savings Scheme Subject to following conditions :
Resident Individual being a new retail investor with not more than 10.00 lakhs income and investing with a lock in period of 3 years
Instruments qualifying under 80 D
Health Insurance policies
POPULAR TAX SAVING SCHEMES
Array of products from
1. Guaranteed return schemes like PPF AND NSC
2. Insurance schemes which cover life risks with units linked to market or otherwise
3.Equity linked mutual funds which have high risk and return probabilities like ELSS
are available for the investors to utilize the rebates on income tax offered by the government .
PPF is a fixed income long term investment while NSC is fixed return medium term investment . Insurance policies which cover life risk are available in unit linked market related schemes and otherwise also . On the other hand ELSS is totally market related mutual fund which carry all the risks of an equity market and have given good returns
Details of Each scheme is given below :
PUBLIC PROVIDENT FUNDS
SALIENT FATURES :
- Ideal investment option for both salaried as well as self employed classes.
- Non-Resident Indians (NRIs) are not eligible.
- Investment up to INR. 1,50,000 per annum qualifies for IT Rebate under section 80 C of IT Act.
- The rate of interest varies quarter to quarter as per announcements made by Government .
- Loan facility available from 3rd financial year upto 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.
- Withdrawal permitted from 6th financial year.
- Free from court attachment.
- An individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of persons.
- Public Provident Fund(Individual account on his behalf or on behalf of minor of whom he is the guardian)INR. 500/- in a financial yearINR. 1,50,000/- in a financial year
- The public provident fund is established by the central government.
- One can voluntarily open an account with any nationalized bank,selected authorized private bank or post office.
- SAFE , SECURE , TAX EFFICIENT AND LIMITED LIQUIDITY AVAILABLE FROM 3RD YEAR BY WAY OF LOAN FACILITY
NATIONAL SAVINGS CERTIFICATES
SOURCE OF INFORMATION INDIA POST
NSC VIII Issue
- Scheme specially designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses.
- No maximum limit for investment.
- No Tax deduction at source.
- Certificates can be kept as collateral security to get loan from banks.
- Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act.
- Trust and HUF cannot invest.
- No maximum limit for investment.
- Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.
- A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
NSCS ARE AVAILABLE ONLY IN POST OFFICES ALL OVER INDIA
LIFE INSURANCE POLICIES
Life insurance policies are the financial instruments which cover Life Risks of the insured along with Tax relief . Various types of life insurance policies are available with wide ranging terms . Some are unit linked policies whose Net Asset value depends up on the equity market and hence carry market risks . For full details on Life Insurance and tips for purchasing such policies , please go the page LIFE INSURANCE
EQUITY LINKED SAVING SCHEME ( ELSS ) is another popular scheme under which investors can invest in stock market mutual fund while enjoying tax benefits under 80C of Income Tax act .
TAX SAVING FIXED DEPOSITS ISSUED BY COMMERCIAL BANKS :
Key highlights of Tax Saver FDs:
- Deposits are opened for a period of 5 years.
- Maximum tax deduction up to Rs.1, 50,000.
- Deduction is available to individuals, members of Hindu undivided family (HUF), senior citizens and NRIs.
- The interest earned from tax saver fixed deposits is taxable. Tax will deducted at source.
- Premature withdrawal is not allowed .
- No loan against tax saver fixed deposits.
- Tax saver deposits can be opened both singly and jointly. In case of a joint account, tax benefit will be availed by first holder of the deposit as per the section 80C of the Income Tax Act, 1961.
WHAT IS AN ELSS SCHEME ?
Subscription to certain notified securities/notified deposits schemes are eligible instruments under section 80C for claiming deductions from taxable income . One such popular investment is tax saving mutual funds or Equity Linked Savings Scheme (ELSS). In this equity diversified fund , investors enjoy the benefits of capital appreciation as well as tax benefits. With recent positive movements in equity market , more interest is being generated in the public on the scheme .
ELSS is basically an equity based diversified Mutual Fund with a lock in period of 3 years . It has got same risk and reward function of any other equity based mutual fund . While under national saving certificate , funds are locked in a period of 6 years , ELSS has lock in period of 3 years only . One who is willing to take market risk , ELSS is a good option as investment is tax free under 80C as also all the returns . Some ELSS funds have been reported giving good tax free returns over a long period of time . One has to carefully study the past performance of the fund as well as fund manager's performance before investing . As returns or principal is not guaranteed and classified as high risk investment , Risk averse persons may avoid such investment .
Persons interested in investing in ELSS may understand Mutual Funds and go to the websites of Mutual fund Issuers
ELSS is basically an equity based diversified Mutual Fund with a lock in period of 3 years . It has got same risk and reward function of any other equity based mutual fund . While under national saving certificate , funds are locked in a period of 6 years , ELSS has lock in period of 3 years only . One who is willing to take market risk , ELSS is a good option as investment is tax free under 80C as also all the returns . Some ELSS funds have been reported giving good tax free returns over a long period of time . One has to carefully study the past performance of the fund as well as fund manager's performance before investing . As returns or principal is not guaranteed and classified as high risk investment , Risk averse persons may avoid such investment .
Persons interested in investing in ELSS may understand Mutual Funds and go to the websites of Mutual fund Issuers
TAX ON STOCK MARKET TRANSACTIONS
1. Profits made out of short term stock holding (for less than a year )to be added to the Income for tax purposes .
2. Short term loss on one stock can be offset by short term gain on another stock
3. Stocks held for more than 12 months are eligible for Long Term Capital Gain and hence profits are tax free
4. Short term losses can be carried forward for 8 years only if you declare the same in your Income Tax returns before due date .
5. Trading in derivatives attract Business tax .
6. Losses made out of stocks held for more than 12 months cannot be offset for Short term gains .
2. Short term loss on one stock can be offset by short term gain on another stock
3. Stocks held for more than 12 months are eligible for Long Term Capital Gain and hence profits are tax free
4. Short term losses can be carried forward for 8 years only if you declare the same in your Income Tax returns before due date .
5. Trading in derivatives attract Business tax .
6. Losses made out of stocks held for more than 12 months cannot be offset for Short term gains .
THIS ARTICLE CARRIES INFORMATION ON VARIOUS TAX PROVISIONS WHICH ARE GENERALLY USEFUL . YET IT DOES NOT CARRY ALL THE PROVISIONS AND HENCE YOU ARE ADVISED TO GO THROUGH INCOME TAX DEPARTMENT WEBSITES FOR AUTHENTIC COMPLETE INFORMATION , ESPECIALLY FOR THOSE WHO HAVE GOT MULTIPLE STREAMS OF INCOME OR COMPLEX INVESTMENTS . YOU MAY ALSO CONSULT A QUALIFIED TAX CONSULTANT / CHARTERED
ACCOUNTANT FOR ANY CLARIFICATION. READERS ARE ALSO WELCOME TO SEND FEEDBACK , FORM AVAILABLE BELOW . WE ARE OPEN FOR CORRECTION IF NEEDED
ADVANCE PAYMENT OF TAX
Under Section 208 of Income-tax Act, every assessee is required to pay advance tax if the tax liability for the previous year exceeds ten thousand rupees. The Tax payable during the financial year itself is called Advance Tax . For individuals with salary as sole source of income , TDS is to deducted by the employer during disbursal of salary and hence question of paying advance tax separately may not arise. Advance payment schedule is 15 % of advance tax liability before 15th June , 45 % of total advance tax liability is to be paid before 15th Sept of the year . 75 % of advance tax liability is to be paid before 15th december . 100 % of Advance Tax liability is to be paid before 15th march of the financial year .
However a Resident senior Citizen is exempted for paying advance tax , if he has no income from business or profession . . He can discharge his tax liability by paying self assessment tax .
However a Resident senior Citizen is exempted for paying advance tax , if he has no income from business or profession . . He can discharge his tax liability by paying self assessment tax .
VERIFY YOUR TAX CREDIT
Your employer or your banker would have deducted income tax from your salary / interest etc and remitted to Income Tax Department . You could have also paid tax directly . Whether such amounts have gone to your account only ? Whether there was any error from TDS payers while remitting ? You can verify yourself on line whether all the amounts deducted have gone to your account only . There are two methods . One method is to register at TRACES ( TDS Analysis and Correction Enabling System ) and you can view your tax credit form 26AS since assessment year 2009-10 . The other method is to get by your Income Tax e- filing website https://incometaxindiaefiling.gov.in . if you have not registered there , you can register and view your tax credits . .
If you find any discrepancies in your tax credits , you can contact the TDS Deductors , find the reasons and get it rectified . This step will save you in future in avoiding unnecessary tax demands from the department .
If you find any discrepancies in your tax credits , you can contact the TDS Deductors , find the reasons and get it rectified . This step will save you in future in avoiding unnecessary tax demands from the department .
FILING OF INCOME TAX RETURNS
Income Tax returns can be filed on line . For further details visit IT RETURNS Page
For Tax on Retirement Benefits CLICK HERE
FOR AUTHENTIC INFORMATION AND TIPS ON INCOME TAX MATTERS
Income tax dept of Govt of India has a very useful portal which churns out valuable guidance for tax payers . One can go through and understand the basics .
Link to the portal is http://india.gov.in/spotlight/filing-income-tax-returns#itr2
Further there are practical tips for computing tax which can be read and used . For example , the link how to compute other income. One can make use of the portal in understanding law, making payment and also to file returns .
Link to the portal is http://india.gov.in/spotlight/filing-income-tax-returns#itr2
Further there are practical tips for computing tax which can be read and used . For example , the link how to compute other income. One can make use of the portal in understanding law, making payment and also to file returns .