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PART I : MAJOR CHANGES IN TAX RULES FOR FY 2019-20 CLICK HERE PART 2 : TAX SLABS /RATES FOR FY 2019-20 READ THIS PART BELOW PART 3 : TAX REBATES ,POPULAR TAX SAVING PLANS FOR FY 19-20 CLICK HERE PART 4 : INCOME TAX CALCULATOR FOR FY 2019-20 CLICK HERE PART 5 : TAX ON RETIREMENT BENEFITS CLICK HERE FOR INCOME TAX NEWS
|
Income Range |
General Citizens |
Persons above 60 years and below 80 years |
Persons above 80 years |
Up to Rs 2,50,000 |
NIL |
NIL |
NIL |
Rs 2,50,001 to Rs 3,00,000 |
5% |
NIL |
NIL |
Rs 3,00,001 to Rs 5,00,000 |
5% |
5% |
NIL |
Rs 5,00,001 to Rs 10,00,000 |
20% |
20% |
20% |
Above Rs 10,00,000 |
30% |
30% |
30% |
1. Surcharge of 10 % for income between Rs 50,00,000 to Rs 1 Crore and surcharge of 15% on income above Rs 1 .00 crore .Surcharge at the rate of 25% of such tax,where total income exceeds Rs 2 crores to Rs 5 crores rupee . A surcharge at the rate of 37% of tax, where total income exceeds Rs 5 crores.(Since FM has announced that enhanced cess on income over Rs 2 crores will not be applicable for capital gains out of sale of Equities,MF etc)
2. Education cess of 4% on Tax+ Surcharge
3. Tax rebate under Section 87A of IT Act up to Rs 12,500 for Resident individuals with income less than Rs.5 lakhs.
2. Education cess of 4% on Tax+ Surcharge
3. Tax rebate under Section 87A of IT Act up to Rs 12,500 for Resident individuals with income less than Rs.5 lakhs.
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HAVE CAKE AND EAT IT TOO
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Plan your Expenses and Credit Card use and Tweak your Bank Accounts to earn Extra Income
TAX ON INTEREST INCOME
1.Savings Bank Accounts : Tax free up to Rs 10,000 per year
2.Tax on Fixed Deposits : Fully taxable
3.Recurring Deposits : Fully taxable
4.Tax Saving FDs : Fully taxable
5.National savings Certificates : Fully taxable
6.Kisan Vikas Patra : Fully taxable
7.Senior Citizens savings Scheme : Fully taxable
8.Public Provident Fund : Tax Free
9.Tax Free Bonds : Tax Free
10.Sukanya Samruddhi Yojana : Tax Free
Note : Tax exemption limit is enhanced to Rs 50,000 for interest on bank deposits / postal deposits for senior citizens
2.Tax on Fixed Deposits : Fully taxable
3.Recurring Deposits : Fully taxable
4.Tax Saving FDs : Fully taxable
5.National savings Certificates : Fully taxable
6.Kisan Vikas Patra : Fully taxable
7.Senior Citizens savings Scheme : Fully taxable
8.Public Provident Fund : Tax Free
9.Tax Free Bonds : Tax Free
10.Sukanya Samruddhi Yojana : Tax Free
Note : Tax exemption limit is enhanced to Rs 50,000 for interest on bank deposits / postal deposits for senior citizens
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 up to Rs 1.00 lakh only Long Term Capital Gain ( LTCG ) is taxed at 10 % beyond Rs 1.00 lakh .
Long Term Capital Gain Tax on sale of equity shares and equity oriented mutual funds is introduced at 10 % ,flat and uniform rate for gains more than Rs 10,000 in the financial year .Further no indexation is allowed for calculating the gain . However gains earned up to January 31,2018 will be allowed to grandfathered.Grandfathering is allowing of existing benefits for the previous period . Hence Long Term Profits earned after February 1, 2018 will only be taxed id profits are booked in the financial year 2018-19 i.e from 01.04.2018 to 31.03.2019 .The higher of the purchase price of share or mutual fund or the price as on 31.01.2018 for equity and NAV as on 31.01.2018 for mutual fund will be taken as investment cost for arriving the long term gain .
4. Dividend Distribution Tax of 10 % to be paid on equity mutual funds. The tax at 10 % will be deducted from the dividend to be paid by AMC of mutual fund before giving credit to the investors .
5. Short term losses can be carried forward for 8 years only if you declare the same in your Income Tax returns before due date .
6. Trading in derivatives attract Business tax .
7. 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 up to Rs 1.00 lakh only Long Term Capital Gain ( LTCG ) is taxed at 10 % beyond Rs 1.00 lakh .
Long Term Capital Gain Tax on sale of equity shares and equity oriented mutual funds is introduced at 10 % ,flat and uniform rate for gains more than Rs 10,000 in the financial year .Further no indexation is allowed for calculating the gain . However gains earned up to January 31,2018 will be allowed to grandfathered.Grandfathering is allowing of existing benefits for the previous period . Hence Long Term Profits earned after February 1, 2018 will only be taxed id profits are booked in the financial year 2018-19 i.e from 01.04.2018 to 31.03.2019 .The higher of the purchase price of share or mutual fund or the price as on 31.01.2018 for equity and NAV as on 31.01.2018 for mutual fund will be taken as investment cost for arriving the long term gain .
4. Dividend Distribution Tax of 10 % to be paid on equity mutual funds. The tax at 10 % will be deducted from the dividend to be paid by AMC of mutual fund before giving credit to the investors .
5. Short term losses can be carried forward for 8 years only if you declare the same in your Income Tax returns before due date .
6. Trading in derivatives attract Business tax .
7. Losses made out of stocks held for more than 12 months cannot be offset for Short term gains .
TAX ON MUTUAL FUNDS
1. For Tax purpose , a Mutual fund that invests more than 65% in equities is classified as Equity Funds .
2. Diversified funds and arbitrage funds are also considered Equity Funds .
3. Profits on Equity funds held less than 12 months is considered as Short term Capital Gain and to be included in the taxable income.Short Term Capital Gain attracts a tax of 15 %
4. Profits on Equity Funds held for more than 12 months is considered as Long term Capital Gain and is exempted from tax up to Rs 1.00 lakh only . Long Term Capital Gain ( LTCG ) is taxed at 10 % beyond Rs 1.00 lakh .
5. Profit on Debt Funds are considered Long Term , if held for more than 3 years .
6. Tax on Long Term Capital gain on debt Funds is 20% . However investors can get the benefit of indexation,which allows the original investment to be adjusted for inflation .
7. Short Term Debt Funds for debt funds sold within 3 years is to be added to the taxable income and will be taxed according to slab 8. Dividends on Mutual funds are tax free ,as Mutual Fund Houses would have paid Dividend Distribution Tax ,currently at 28.84%
2. Diversified funds and arbitrage funds are also considered Equity Funds .
3. Profits on Equity funds held less than 12 months is considered as Short term Capital Gain and to be included in the taxable income.Short Term Capital Gain attracts a tax of 15 %
4. Profits on Equity Funds held for more than 12 months is considered as Long term Capital Gain and is exempted from tax up to Rs 1.00 lakh only . Long Term Capital Gain ( LTCG ) is taxed at 10 % beyond Rs 1.00 lakh .
5. Profit on Debt Funds are considered Long Term , if held for more than 3 years .
6. Tax on Long Term Capital gain on debt Funds is 20% . However investors can get the benefit of indexation,which allows the original investment to be adjusted for inflation .
7. Short Term Debt Funds for debt funds sold within 3 years is to be added to the taxable income and will be taxed according to slab 8. Dividends on Mutual funds are tax free ,as Mutual Fund Houses would have paid Dividend Distribution Tax ,currently at 28.84%
TAX ON INSURANCE POLICIES
Under 80 C of Income tax Act , life insurance premia paid on life indurance policies is one of the eligible instruments for total tax exemption up to Rs 1,50,000 only . However be cautious and confirm with policy issuers whether the contribution made to the particular policy is eligible for such exemption . The reason is there are riders for contributions made to be eligible for exemption .
As per Income tax law ,
Quote ; "
Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80 C.Payment of premium which is in excess of 10 percent (if policy is issued on or after 1-4-2013 , 15 % in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80 DDB/ rule 11DD)of actual capital sum assured shall not be included in gross qualifying amount .The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise,over the sum actually assured , which is to be or may be received under the policy by any person ,shall not be taken in to account for the purpose of calculating the actual capital sum assured .The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into acc ount--
(i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person. "unquote"
For full page of Income tax website relevant to the above rule , CLICK HERE
Hence premiere paid one time premium policies may not be eligible to qualify for exemption as the insured amount may not be ten times the premium .Further amount received under those policies may be treated as Taxable Income and tax calculated. Hence double check with insurance companies before purchasing as selling agents may not reveal you correctly .
As per Income tax law ,
Quote ; "
Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80 C.Payment of premium which is in excess of 10 percent (if policy is issued on or after 1-4-2013 , 15 % in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80 DDB/ rule 11DD)of actual capital sum assured shall not be included in gross qualifying amount .The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise,over the sum actually assured , which is to be or may be received under the policy by any person ,shall not be taken in to account for the purpose of calculating the actual capital sum assured .The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into acc ount--
(i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person. "unquote"
For full page of Income tax website relevant to the above rule , CLICK HERE
Hence premiere paid one time premium policies may not be eligible to qualify for exemption as the insured amount may not be ten times the premium .Further amount received under those policies may be treated as Taxable Income and tax calculated. Hence double check with insurance companies before purchasing as selling agents may not reveal you correctly .
ADVANCE TAX
Under Section 208 of Income-tax Act, every assesses 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 TAX CALENDAR / DUE DATE SCHEDULE FOR BOTH INDIVIDUALS AND CORPORATE
ADVANCE TAX CALENDAR / DUE DATE SCHEDULE FOR BOTH INDIVIDUALS AND CORPORATE
DUE DATE |
ADVANCE TAX PAYABLE |
Before 15th June 19 |
15% of advance tax |
Before 15th Sept 19 |
45% of advance tax |
Before 15th Dec 19 |
75% of advance tax |
Before 15th March 2020 |
100 % of advance tax |
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 .
For calculating Advance tax Payable , CLICK HERE
For calculating Advance tax Payable , CLICK HERE
For Tax on Retirement Benefits CLICK HERE
The Article on " TAX PLANNING FOR FY 2019-20 CONTAINS 5 PARTS
PART I: MAJOR CHANGES IN TAX RULES FOR FY 2019-20 CLICK HERE
PART 2: TAX RATES/SLABS FOR FY 2019-20 READ THE ABOVE PART
PART 3: TAX REBATES AND POPULAR TAX SAVING SCHEMES CLICK HERE
PART 4: INCOME TAX CALCULATOR FOR FY 2019-20 CLICK HERE
:
PART 5: TAX ON RETIREMENT BENEFITS CLICK HERE
PART I: MAJOR CHANGES IN TAX RULES FOR FY 2019-20 CLICK HERE
PART 2: TAX RATES/SLABS FOR FY 2019-20 READ THE ABOVE PART
PART 3: TAX REBATES AND POPULAR TAX SAVING SCHEMES CLICK HERE
PART 4: INCOME TAX CALCULATOR FOR FY 2019-20 CLICK HERE
:
PART 5: TAX ON RETIREMENT BENEFITS CLICK HERE
FOR DETAILS ON AAYKAR SETHU ,
NEW MOBILE APPLICATION FROM INCOME TAX DEPT , CLICK HERE NEW ARTICLES ON
SMALL FINANCE BANKS PAYMENT BANKS
UNIFIED PAYMENT INTERFACE BHARAT BILL PAYMENT SYSTEM
BHIM APP AADHAR
e-INSURANCE Account ( eIA )
NEW MOBILE APPLICATION FROM INCOME TAX DEPT , CLICK HERE NEW ARTICLES ON
SMALL FINANCE BANKS PAYMENT BANKS
UNIFIED PAYMENT INTERFACE BHARAT BILL PAYMENT SYSTEM
BHIM APP AADHAR
e-INSURANCE Account ( eIA )
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 .