This wiki is managed by www.edeskonline.com - an online operating system. Click here to know more.

Income tax in India for Individuals

From EDeskWiki

Jump to: navigation, search

Contents

Screen Shot of ITR-1

Tax return form for individuals
Tax return form for individuals

PDF of ITR-1

Tax return form ready for printing
Tax return form ready for printing

Income Tax Rates / slabs

PERSONAL TAX RATES

For individuals, HUF, Association of Persons (AOP) and Body of individuals (BOI):

For the Assessment Year 2007-08 Taxable income slab (Rs.) Rate (%)

Up to 1,00,000 (for men) NIL

Up to 1,35,000 (for women) NIL

Up to 1,85,000 (for resident individual of 65 years or above) NIL

1,00,000 – 1,50,000 10% education cess 2% (for men)

1,35,000 – 1,50,000 10% education cess 2% (for women)

1,50,001 – 2,50,000 20% education cess 2% (for both)

2,50,001 – 1,000,000 30% education cess 2% (for both)

1,000,001 upwards 30*

  • A surcharge of 10 per cent of the total tax liability is applicable where the total income exceeds Rs 1,000,000.



PERSONAL TAX RATES

For individuals, HUF, Association of Persons (AOP) and Body of individuals (BOI):

For the Assessment Year 2008-09 Taxable income slab (Rs.) Rate (%)

Up to 1,10,000 (For Men) NIL

Up to 1,45,000 (for women)NIL

Up to 1,95,000 (for resident individual of 65 years or above) NIL

1,10,000 – 1,50,000 10

1,50,001 – 2,50,000 20

2,50,001 – 1,000,000 30

1,000,001 upwards 30*

  • A surcharge of 10 per cent of the total tax liability is applicable where the total income exceeds Rs 1,000,000.

Sample Computation of Total Income as per A.Y. 2008 - 2009.

Taxable Income : Rs. 2,96,000 Less : deduction u/s. 80C 1.Post Office R.D. scheme Rs. 500 x 12 = 6,000 2 Post office recurring deposit scheme Rs 2000 pm x 12 = 24,000 3 LIC money plus policy whose premium is Rs. = 20,000 4.ICICI smart kid plan whose premium is Rs = 16,051 

                      Total u/s. 80C                      66,051

Mediclaim policy of LIC whose premium u/s 80D = 3,970 

                                                         __________
                          Total deduction                 70,021

balance taxable 2,25,979

Tax Payable 15,696 Add : 3% Education cess 471 Total Tax 16,167

Total tax payable is Rs. 16,167 if any TDS is deducted from your company same will be reduced.

One can invest upto Rs. 100000 in sec 80C and mediclaim premium upto rs. 15000 to get further benefit.

also please verify the kid smart policy details if sec 80 C is mentioned then deduction is available.

Residency test

Certain concessions are available for persons who stay outside India.

The types of taxable incomes ?

  1. Income from Salary
  2. Income from House Property
  3. Income from Business and Profession
  4. Income from Capital gains
  5. Income from Other Sources

Remuneration for work done in India is taxable irrespective of the place of receipt.

Remuneration includes: Tax upon salaries and wages

Tax upon pension

Tax upon bonus, fees & commissions

Tax upon Gratuity

Tax upon Annuity

Tax upon profits in lieu of or in addition to salary

Tax upon advance salary and perquisites

Others:

Tax upon Allowances

Tax upon Deferred compensation

Tax equalisation

Besides remuneration for work, individuals may be taxed on the following income:

Tax upon Income from house property

The annual value of property shall be chargeable to income tax under the head "Income from House Property".

Tax upon Income from business or professions

Tax upon Income from capital gains


Tax upon Income from other sources


Income of every kind, which is not chargeable to income tax under the heads salary income from house property, profits and gains of business and profession, capital gains can be taxed under the head "income from other sources". However such income should also not fall under income not forming part of total income


Income from Salary

All income received as a salary is taxed under this head. This includes all monies paid by a company to its employees. Employers must withhold tax compulsorily, as Tax Deducted at Source (TDS), and provide their employees with a Form 16 which shows the tax deductions and net paid income. In addition, the Form 16 will contain any other deductions provided from salary such as:

  1. Medical reimbursement: Up to Rs. 15,000 per year is tax free if supported by bills. (Company pays Fringe Benefit Tax on this amount). Any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family so, however, that such sum does not exceed Rs. 15,000/- fifteen thousand rupees in the previous year.
  2. Conveyance allowance: Up to Rs. 800 per month (Rs. 9,600 per year) is tax free if provided as conveyance allowance. No bills are required for this allowance.
  3. Professional taxes: Most states tax employment on a per-professional basis, usually a slabbed amount based on gross income. Such taxes paid are deductible from income tax.

Income from salary is net of all the above deductions.


Question H. If I would like to file returns

I have an income of around 7 lakhs in last two years including 3 lakhs from scholarship which is tax free, 2. 8 lakhs from agriculture and remaining 1.2 lakhs from other source. I have filed returns second last year but not in last year. I have also started some investments in feb 2006 for which I am getting returns now. If I would like to file returns, What would be tax liability for me. Thanks Husain Amjad (via mail)

Answer: Your question needs several clarifications. Suggest that you use edeskonline's tax calculator (sanjiv swarup)(reply sent- 070731)

Q: tax slabs for salaried individuals

Also one of my colleague has earned Rs.184,255/- by way of salaries from April 2006 to March-2007.He has invested in the following: LIC Premium paid on 20/11/2006 Rs.12,575/-,Savings on NSC :Rs.40,000/-(Sept-06 & March-2007),LIC Pension Plan Rs.14654/-(30/3/2007) ,SBI Tax Saving Mutual Fund(26/3/2007) Total Amount: Rs.84,229/- So The balance amount after the deduction of SAVINGS from his salary is Rs.99,996/-(which is not taxable). Kindly let me know the tax slabs for salaried individuals & also how to fill in the form. --Aparna Sinha (via email)

Answer:

Please see here ..

(reply sent-070719)

Q: are retired prepare our own incometax returns

My wife and i who are retired prepare our own incometax returns. my wife who is below the age 65 has, for assessment year 2007-08, aggregate income of rs.1,35,518. as per our calculations tax due is rs.52 and education cess of rs.1.04 = rs.53.04 rounded off to rs.100 (or is it rs.50?). is this correct? what is the interest payable upto june 07? (no advance tax paid). kindly guide. r.c. suvarna (via mail)

ANSWER

SINCE YOUR WIFE HAS TAXABLE INCOME AND THE TAX PAYABLE SHALL BE rS. 52 + 1 = 53. pAY THE TAX UNDER SELF ASSESSMENT AND FILE THE RETURN ACCORDINGLY. Please also see http://wiki.edeskonline.com/index.php?title=Income_tax_in_India_for_Individuals ssunderagarwal@sify.com (reply sent -070719)

Question: depreciation residential house

I am a chartered accountant and claimed depreciation @ 5% on my residential house being the rate mentioned in Appendix I of the Income Tax Rules. Many a times I carry my office work to my residence or manage my office from my residence from my mobile phone. Honourable Income Tax Officer has denied the depreciation on the ground that it is not a business asset. Please guide me on this . Is it a fit case for appeal . Is there any case law in favour of me. Anand Barpute (via mail)

ANSWER

IT IS A GOOD CASE FOR APPEAL. ssunderagarwal@sify.com Also see http://wiki.edeskonline.com/index.php?title=Income_tax_in_India_for_Individuals

--

Question: I am a doctor on salary in a hospital?

Q: Dear Sir, i am a doctor on salary of hospital. I had paid 8000 Rs for dentures of my mother. Can i claim for deduction of this amount in Income Tax department. if yes than how. --sanjay radhesh agrawal(via email)

ANSWER:

IN THE ACT THE WORD TREATMENT HAS BEEN USED IN MY OPINION DENTURE DOES NOT FALL UNDER THIS CATEGORY AND TO TAKE DEDUCTION IS A RISKY AFFAIRS. ssunderagarwal@sify.com (reply Sent -070611)

Section 10(14) of Income Tax

The provisions of Section 10(14) are very vast. The allowance which are given for specific purpose are exempted up to certain limit under this section. The calaculation are todone as follows: Suppose you are given Rs. 1000 per month for hill or difficult area allowance and it is exempted to the extent of Rs.800 per month the the calculation shall be as under

Allowance for Hill/difficult area 1,000 X 12 = 12,000 Less: Exemption u/s 210(14) 800x 12 = 9,600 Taxable allowance 2,400

For calculation of this your must have the details of salary slip in which full details of headwise payment is shown otherwise it is difficult to calculate the same.

Deductions

Section 80 C Deductions

Section 80C of the Income Tax Act allows certain investments and expenditure to be tax-exempt. The total limit under this section is Rs. 100,000 (Rs. 1 lakh) which can be any combination of the below:

  • Contribution to Provident Fund or Public Provident Fund
  • Payment of life insurance premium
  • Investment in pension Plans
  • Investment in Equity Linked Savings schemes (ELSS) of mutual funds (which usually have "Tax Saving" in their names)
  • Investment in specified government infrastructure bonds
  • Investment in National Savings Certificates (interest of past NSCs is reinvested every year and can be added to the Section 80C limit)
  • Payments towards principal repayment of housing loans.
  • Payments towards education fees for children. (Only for 2 children)


Question: My wife has availed loan from bank?

..My wife has availed loan from bank for house construction and repayments will be due now on. The house is in my wife's name and she got the loan sanctioned to her on the strength of my son's support( he is working as engineer) as co-borrower and my name appears as spouse I am shown as tax payer ( as I am also working as consultant and my income is shown in the loan application). Now I request you to let me know whether either my son or myself or each of us can avail the tax benefits for the loan deductions under the tax rules. My wife is not earning but is shown as getting some small amount under MIS from post office which is in her name. In case we are not eligible, what is the way out ? B SESHA SAYEE (via email)

Answer:

All co owners can avail the benefit only to the extent of their contribution in the property. So it has to be divided in the proportion of individual investment. Bhavik Parikh (reply sent -070621)

Question: medical bill allowance ?

I would like to know about medical bill allowance while declaring tax , If i show my father medical bills worth 15000 pa is it necessary that the bill should be paid by me ie should my name be mentioned on the bill.

ANSWER:

YOU HAVE TO PAY BY AN ACCOUNT PAYEE CHEQUE FROM ACCOUNT. ssunderagarwal@sify.com
(reply sent-070705)

Question: Is it legal to claim exemption?

Is it legal to claim exemption for rent paid under section 80GG where the house, for which the rent is paid, is owned by the assessee's mother? Avijit Mukherjee (via email)

Answer: Yes it is legal to claim. CA Bhavik Parikh (reply sent - 070621)

Interest on Housing Loans

In case the property that is a self occupied property ('SOP'), payment of interest on a housing loan up to Rs 150,000 per year is exempt from tax. However, this is only applicable for a residence constructed within three financial years after the loan is taken.

In case of a property that is a Let out property ('LOP') payment of interest on a housing loan is exempt without any upper limit.

Rent received

30% of rent received (or annual rental value) from an owned property is exempt from tax.

Refunds

Question: I have paid excess amount towards the tax?

I am a salaried employee. I have paid qn excess amunt of around Rs10000/- towards the tax in the last year (05-06). I have submitted all the documents and filed the saral also. When I will get this amount back? Can you help me to get an answer for this. Ajitha Purushothaman(via email)

Answer:

Generally You should get this amount within period of one year if there is no discripencies in your return. But you have to follow up with the department if you have not received within one year. Bhavik Parikh (reply sent -070621)

Interest to be paid to the IT Department

Question: Would i pay interest u\s 234a

I am a salaried person my annual tax on salary is 5500/- & tax on other income is 2000/- my total tax on my income is 7500/- & co. Deduct tds from my salary 5500/- on march, i had deposited saral on jan?07 , my question is :- Would i pay interest u\s 234a,b & c , if i am not liable to pay interest on such income under any section 234a,b,c why ? jiwan_pokhariya@yahoo.com)

ANSWER SINCE YOUR TAX LIABILITY IS BELOW 5,000 YOU ARE NOT SUBJECT TO 234 B AND 234C BUT SINCE YOU HAVE DELAYED YOUR RETURN 234A IS ATTRACTED BUT NO INTEREST IS PAYABLE AS FULL TAX HAS BEEN DEDUCTED AT SOURCE AND THERE IS NO TAX LIABILITY PAYABLE BY YOU. S. S. AGARWAL. ssunderagarwal@sify.com 9870243410 (reply sent-070716)

Questions and answers

Question:house rent allowance

The house rent allowance received from employer is taxable or tax exempt ?

Answer: Exempt subject to certain terms.(sanjiv swarup)

Question: Please study the definition of employer from google.

If company is paying me a salary, do the company have to show me as a registered employer.(akumar.agarwal@gmail.com)

ANSWER: Why should the company show you as an amployer. Please study the definition of employer from google. (reply sent -070727)

See also



Retrieved from "http://wiki.edeskonline.com/Income_tax_in_India_for_Individuals"
Personal tools