INCOME TAX

 

  Income Tax Rates for Individuals and HUFs for the Assessment Year 2015-16 (FY 2014-15) - As Proposed in Budget 2014 by Finance Minister Shri Arun Jaitly on 10.07.2014

A. Individuals and HUFs




In case of individual (other than II, III and IV below) and HUF:-

Income Level / Slabs
Income Tax Rate
i.
Where the total income does not exceed Rs.250,000/-.
NIL
ii.
Where the total income exceeds Rs.2,50,000/- but does not exceed Rs.5,00,000/-.
10% of amount by which the total income exceeds Rs. 2,50,000/-
iii.
Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.10,00,000/-.
Rs. 25,000/- + 20% of the amount by which the total income exceeds Rs.5,00,000/-.
iv.
Where the total income exceeds Rs.10,00,000/-.
Rs. 125,000/- + 30% of the amount by which the total income exceeds Rs.10,00,000/-.
Education Cess:3% of the Income-tax.
II. In case of individual being a woman resident in India and below the age of 60 years at
any time during the previous year:-


Income Level / Slabs
Income Tax Rate
i.
Where the total income does not exceed Rs.2,50,000/-.
NIL
ii.
Where total income exceeds Rs.2,50,000/- but does not exceed Rs.5,00,000/-.
10% of the amount by which the total income exceeds Rs.2,50,000/-.
iii.
Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.10,00,000/-.
Rs. 25,000- + 20% of the amount by which the total income exceeds Rs.5,00,000/-.
iv.
Where the total income exceeds Rs.10,00,000/-
Rs.125,000/- + 30% of the amount by which the total income exceeds Rs.10,00,000/-.
Education Cess:3% of the Income-tax. 
III. In case of an individual resident who is of the age of 60 years or more at any time during the
previous year:-


Income Level / Slabs
Income Tax Rate
i.
Where the total income does not exceed Rs.3,00,000/-.
NIL
ii.
Where the total income exceeds Rs.3,00,000/- but does not exceed Rs.5,00,000/-
10% of the amount by which the total income exceeds Rs.3,00,000/-.
iii.
Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.10,00,000/-
Rs.20,000/- + 20% of the amount by which the total income exceeds Rs.5,00,000/-.
iv.
Where the total income exceeds Rs.10,00,000/-
Rs.120,000/- + 30% of the amount by which the total income exceeds Rs.10,00,000/-.
Surcharge : 10% On Taxpayers with annual income of more than one Crore rupee a year.
Education Cess:3% of the Income-tax.
IV. In case of an individual resident who is of the age of 80 years or more at any time during the
 previous year:-


Income Level / Slabs
Income Tax Rate
i.
Where the total income does not exceed Rs.5,00,000/-.
NIL
ii.
Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.10,00,000/-
20% of the amount by which the total income exceeds Rs.5,00,000/-.
iv.
Where the total income exceeds Rs.10,00,000/-
Rs.100,000/- + 30% of the amount by which the total income exceeds Rs.10,00,000/-.



FY 2015-2016 ON TAX
 FILE WILL UPDATE SOON
tax exemption limit as follows:
CLICK HERE EXCEL FILE
excel file download

Applicable tax slabs and the rate for different income groups
From
To
Tax Rate
0
200000
Nil
0
250000
Nil
0
500000
Nil
200001
500000

250001
500000
10%
500001
1000000
20%
Above
1000001
30%
TAX ON TAXABLE INCOME



TAX ON TAXABLE INCOME

0(a)  As per Finance Act, 2013 section 87A of the Income Tax Act, 1961 additional rebate of Rs.2000/- will be given to the individual tax payer whose total does NOT  exceed Rs 5 lakhs Thus, we can say that a benefit of Rs 2000/- tax credit has been given to persons having an annual income upto Rs 5 lakh.
(b) There is a surcharge of 10% on persons whose taxable income exceeds Rs 1 crore per year. This will apply to individuals, HUFs, firms and entities with similar tax status.
* A tax rebate of Rs 2,000 from tax calculated will be available for people having an annual income upto Rs 5 lakh.   However, this benefit of Rs2,000 tax credit will not be available if you cross the income range of Rs 5 lakh.  Thus we can say that tax payable in 10% slab will be maximum Rs28,000 (taking into account Rs 2000 tax credit), but for people who fall in income range of Rs5 lakh and above, the tax will be Rs30,000 + 20% tax on income above Rs 5 lakh;

1.EXEMPT-EXEMPT-EXEMPT(EEE):
In this we need not pay any tax for our INVESTMENT, INTEREST EARNED(INCOME), MATURITY AMOUNT.
EX:PPF, ELSS, ENDOWMENT POLICY, PF
2. EXEMPT-EXEMPT-TAX(EET):
Here we have to pay tax for the maturity amount only.
Ex:ULIP pension plan, NPS
3. EXEMPT-TAX-EXEMPT(ETE):
Here we have to pay tax for interest income only.
Ex:NSC, tax saver fixed deposits,Senior citizen savings scheme.


Various Forms related to TAX:

FORM 60. Form of Declaration to be filled by a person who does no have either permanent account number.

FORM 15G/15H:

TDS on Interest is deducted if the Interest Payment is more than Rs. 10000. This can be avoided by furnishing Form 15G/Form 15H.(for senior citizens)

FORM 16:

In simple words, Form 16 is the document proof given by an employer to all its employees with the complete details of income (salary) , the amount deducted as income tax (TDS) for each month and the total tax payment. This document will be used by employee to submit the income tax returns to the government. He need not submit the form 16, it is only proof for his income and the tax payment. It is safe to keep all your form 16, if there is any issue in the income tax returns, form 16 has to be used as the proof. Note that, issuing form 16 is applicable only for the salaried employees. Normally, form 16 would issued after the current financial year

Deduction under Section 80C:

Under Section 80C benefits, you can get an exemption of up to Rs 1 lakh on contributions to a wide range of investments. These include Employee Provident Fund (EPF), Public Provident Fund (PPF), National Savings Certificate (NSC), 5-year bank fixed deposits, life insurance policies, equity-linked savings schemes (ELSS), and unit linked insurance plans (Ulips), among others.
However, you needn’t always make an investment or save money to avail tax benefits under Section 80C. You can also claim a deduction for the school or university tuition fees you pay for your children provided they are enrolled in a full-time course at any institute in India. Likewise, your home loan principal repayment also qualifies for deduction under the overall limit of Section 80C.
Also, the amount you pay as stamp duty when you buy a house and the amount you pay for the registration of the documents of the house can also be claimed as deduction under section 80C. However, this can be done only in the year of purchase of the house.

KNOW ABOUT 80C:

The new section 80C has become effective w.e.f. 1st April, 2006. Even the section 80CCC on pension scheme contributions was merged with the above 80C.Section 80C of the Income Tax Act allows certain investments and expenditure to be tax-exempt. The total limit under this section is Rs 1 lakh. Included under this heading are many small savings schemes like NSC, PPF and other pension plans. Payment of life insurance premiums and investment in specified government infrastructure bonds are also eligible for deduction under Section 80C
Besides these investments, the payments towards the principal amount of your home loan are also eligible for an income deduction. Education expense of children is increasing by the day. Under this section, there is provision that makes payments towards the education fees for children eligible for an income deduction

Provident Fund (PF) & Voluntary Provident Fund (VPF:

PF is automatically deducted from your salary(12% of basic and DA). Both you and your employer contribute to it. While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF). Current rate of interest is 8.5% per annum (p.a.) and is tax-free.
Public Provident Fund (PPF): Among all the assured returns small saving schemes, Public Provident Fund (PPF) is one of the best.Lock in period is 15 years.
Interest on PPF is 8.60% and Investment Limit is Rs. 1,00,000/-

Life Insurance Premiums:

Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. Please note that life insurance premium paid by you for your parents (father / mother / both) or your in-laws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included. So its better to take TERM policy which should 10 times higher than your annual salary.

Equity Linked Savings Scheme (ELSS):

There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C.

Home Loan Principal Repayment: This also coming under 80C. we can get tax concession max 100000 for our repayment of principal portion .and 150000 towards interest portion of Home loan.
Stamp Duty and Registration Charges for a home: The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.

National Savings Certificate (NSC):

National Savings Certificate (NSC) is a 5-Yr small savings instrument eligible for section 80C tax benefit. Rate of interest is eight to nine per cent

Infrastructure Bonds:

These are also popularly called Infra Bonds. These are issued by infrastructure companies, and not the government. The amount that you invest in these bonds can also be included in Sec 80C deductions.

Pension Funds – Section 80CCC:

This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it means that the total deduction available for 80CCC and 80C is Rs. 1 Lakh.This also means that your investment in pension funds upto Rs. 1 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed Rs. 1 Lakh.

5-Yr bank fixed deposits (FDs):

Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.

Senior Citizen Savings Scheme 2004 (SCSS):

A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens(60 years age). Current rate of interest is 9% per annum payable quarterly.

5-Yr post office time deposit (POTD) scheme:

POTDs are similar to bank fixed deposits. Although available for varying time duration like one year, two year, three year and five year, only 5-Yr post-office time deposit (POTD) – which currently offers 7.5 per cent rate of interest –qualifies for tax saving under section 80C. Effective rate works out to be 7.71% per annum (p.a.) as the rate of interest is compounded quarterly but paid annually. The Interest is entirely taxable.

Unit linked Insurance Plan :

ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments.They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term.

Others:

Apart form the major avenues listed above, there are some other things, like children’s education expense (for which you need receipts), that can be claimed as deductions under Sec 80C.
Also following exemptions available:
80 D -Medical claim .Tax concession of 15000 for premium.For senior citizen 20000.
80DDB major illness.
80E education loan
80G donations to trust and charitable institutions.

Deduction in respect of Donation U/s. 80G

All donations are 100% tax-free is not true. True, deduction is available under Section 80G of the I-T Act in respect of donations made by an individual to certain funds, charitable institutions and so on. There is also no restriction on the amount of charity.

Deduction 80GG for those who paying House rent but not receiving HRA U/s.:

A tax exemption is available to a salaried employee if he receives house rent allowance (HRA) as part of his compensation from his employer. The exemption is calculated as per the limits prescribed under the law. However, the maximum exemption which can be availed will be equal to the amount of actual HRA received by the employee.
For an individual other than one receiving HRA (whether self employed or otherwise), deduction is available under Section 80GG of the Income Tax Act, 1961 for payment of rent on accommodation. In this case, however, the maximum deduction that can be availed is Rs 2,000 per month or 25 per cent of total income (whichever is less)

Rajiv Gandhi equity savings scheme(80CCG):

Proposed in 2011-12 budget.
Total investment limit :50000
We can claim tax concession for 25000 only also our annual income should be less than 10 lac

National pension scheme (80CCD):

Introduced in 2009 for the benefit of unorganized private workers.
Age limit:18 to 60
Min investment :500
Max investment per year :6000
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