What is Form 12BB? And Why is it important to submit the same?

Every employer seeks a tax declaration from their employees at the beginning of a financial year. This declaration is a list of all tax-saving investments that an employee commits to make in that particular year.

Declaring tax-saving investments is not all! Employees need to submit proof of expenses or investments during the year to support their declaration. If they fail to do so, the employer will have to recover the tax shortfall from the employee’s salary in the remaining months.

What is Form 12BB?

Form 12BB, with effect from 1st June 2016, is a statement of claims by an employee for the purpose of a tax deduction, claiming tax benefits, or a rebate on investments and expenses, which has to be submitted by the end of the financial year.

List of Things to mention in Form 12BB (Income Tax deduction)

Employers provide a cut-off date for submission of investment or expense proof. Generally, this date lies in January or February, so that shortfall of taxes is recovered in the remaining months of the financial year.

Here’s the checklist for employers for the most popular tax-saving investments.

Name and Address of Employer :- Fill the name of your company with Address

PAN Number of employee :- Your PAN Card Number

House Rent Allowance: – As per IT Act 10 (13A), House Rent Allowance gets exemption from Taxable Income. For claiming HRA tax exemption, you need to submit the following details to your employer -

Amount of Rent paid
Name of your landlord
Address of your landlord
PAN No of your landlord in case the total amount of rent paid during the year exceeds Rs.1 lakh.

In Addition, you also need to submit the proof for claiming HRA tax exemption.

1. Evidence/Proof for claiming House Rent Allowance tax exemption:
The proof for claiming HRA tax exemption are the monthly rent receipts.

2. Things to remember when claiming HRA tax exemption:

You can claim HRA tax exemption only when HRA is a part of your CTC.
In case, HRA is not a part of your CTC and you are living in a rented house you can claim tax benefit under section 80GG.
Rent receipt is required only when your monthly rent exceeds Rs. 3,000.
You can’t claim HRA if you are living in your own house.
If you are paying rent to your parents, then ask them to show it as their income at the time of filing their Income Tax Return.
Never submit fake rent receipts, this might land you in big trouble with the income tax authorities.

Leave Travel Allowance (LTA):-

This allowance is one and the only allowance that helps save tax only when you take a holiday.

1. Evidence/Proof for claiming LTA tax exemption: To claim LTA, employees need to submit travel bills like boarding passes, flight tickets, invoice of travel agent, boarding pass etc. to employer.

2. Amount of tax saving on LTA : This tax exemption is allowed only on actual travel cost to the extent specified in CTC.The fare is exempt as per the mentioned conditions.

You need to provide all proof of travel expenses you made from LTA money in 12BB form.

Deduction of Interest on Borrowing:

The information needs to be filled in the Form 12BB are:

Interest Payable/paid to the lender during the financial year
Name of the lender from whom loan is taken
Address of the lender
PAN of the lender: Financial Institutions/Employer/Others, from whoever the loan is taken

1. Evidence/Proof for claiming tax exemption for interest on borrowing:

Documents required to claim deduction u/s 24B on interest payment of home loan are:

Statement / Certificate stating total EMI paid along with Interest and Principal Components.
Possession/construction completion certificate
Self-declaration from the employee whether the house is self-occupied or let out.
Joint Owner if Property is the name of more than one owner.

2. Home Loan Interest :-

a. Tax benefits on payment of interest: If you have taken home loan , you can be exempt from interest paid for home loan under Section 24, Mention the amount you paid as an interest, your name and address and Pan card number.

Tip : Claiming deduction on interest payment shall result in a loss under head house property. This loss can be adjusted against income from other heads in the current year subject to the limit of Rs. 2 lakh

b. Tax benefits on repayment of Principal Amount: In both the cases whether there is self-occupied property or rented property, principal amount repayment is eligible to be claimed under Sec 80C of the income tax act. A maximum of Rs. 1.5 lakh can be claimed under Sec. 80C for the principal amount.(Max. the limit of claiming all deductions under 80c is 1.5 lakh.So, plan accordingly.)

3. Things to remember when claiming Interest on Home Loan tax exemption :

In case, you have taken a home loan jointly then you can claim benefit of the interest deduction proportionately.
If you have taken home loan from a lender other than bank i.e. your friends, relatives or any money lender the interest payment can be claimed as a deduction under section 24.Provided you take a certificate of interest from the person to whom you had paid interest.
Where loan is taken from your friends, relatives or any money lender i.e. other than banks the repayment of principal is not eligible for deduction under section 80C. This part of the form may take more time to finish if you are claiming maximum tax benefits .If you do not have any deductions to make, you can then move on to the last section.

Investments:

Chapter VI-A covers income tax deduction under various sections as follows:

80C: Premium to be paid for life insurance and/or investments to be made in ELSS funds, PPF, NPS and/or school tuition fees for children, etc
80CCC: Premium to be paid for annuity plan
80CCD: Additional contributions made to NPS
80E: Interest to be paid on education loan
80G: Donations to be made to specified organisations
80TTA: Interest income earned from savings bank account
80D: Premium to be paid for medical insurance
To claim deduction, evidence of investment made or expenditure incurred is required.

– For Employers: – Central Board of Direct Taxes (CBDT) has clearly mentioned that Employers need to give proper evidence of the employee’s income and calculate the TDS according to that.

– For employees :- if your income is less than the income tax slab or if you have paid more income tax than your actual income at the end of the financial year, you can claim Income Tax Refund.

Employees can download the PDF format of ITR Form 12BB from this link.

Mode and time of submission

Employers should collate online Form 12BB, income disclosure information, and documentary proofs. The employees will upload these documents to the online portal, and the payroll team can verify the same. Alternatively, some employers manually collate the data or combine both.

The tax declarations and their proofs should be submitted by the cut-off date.

Tax - 12/29/2021

Documents Needed for Filing Income Tax Returns in India

The process of filing your Income Tax Returns in India takes some preparation. This is why the Government usually gives you four months’ window period to compile all documents like salary/income details, bank statements, previous tax statements, etc. The procedure varies as per the income earned per year and income source like salary, business profit, investment profit and so on.

Collating all your documents ready is just one aspect of it. In this article, we will discuss the documents needed for filing Income Tax Returns in India.

To know more about the new income tax portal for easy filing of the return for FY 21-22 - Click here

The various documents required for ITR filing:

1. The appropriate ITR Form

Depending on the type of income, the category the taxpayer falls under, and the income the taxpayer makes, the relevant form must be chosen.

ITR-1 or SAHAJ: For individuals with annual income below INR 50 lakh and not more that one house property
ITR-2: For individual with annual income above INR 50 lakhs
ITR3: Individuals or HUF carrying proprietary business or profession.
ITR-4 or SUGAM: Assess opted for Presumptive Income Scheme or Individual’s, HUF and partnership firms (except LLB’s)
ITR-5: For LLBs, AOPs, AJPs, BOIs, etc
ITR-6: Applicable for all companies except those who are claiming exemption under Section 11
ITR-7: For all assessees covered under Section 139(4A), or 139(4B) or 139(4C) or 139(4D), or 139(4E) or 139(4F)

2. Aadhaar linked with PAN

3. For Salaried Employees:

PAN
Form-16 (it is issued by the employer)
Monthly salary slips.

4. Interest Income related Documents required for ITR filing

Bank statement/passbook for interest on savings account.
Interest income statement for fixed deposits.
Tax Deducted at Source (TDS) Certificate (it is issued by banks).

5. Form 26AS

It is provided by the Income Tax Department- you can download it from the Income tax website.

6. Section 80C Investment Documents

Investment in PPF, NSC, ULIPS, ELSS and LIC comes in deduction under Section 80C. The maximum amount claimed under section 80C is Rs 1.5 lakhs.

For salaried individuals - the Form 12BB and Form 16 (which you would get from your employer is a must)

7. Other Expenses Deduction Documents

Contribution to the Provident Fund.
Children’s school tuition fees.
Life/Health Insurance premium pay.
Stamp-duty and Registration charges.
Principal repayment on home loan.
Mutual Funds investment.

8. Other Investment Documents required for ITR filing

Interest paid on the housing loan.
Education loan interest payments.
Stock trading statement.

Hence, the taxpayers have to maintain the record of certificates and receipts of their transactions made in the annual year for the filing of income tax return and need to attach these with it. Also if it has been asked for the clarification of transactions mentioned in the return then the taxpayers have to submit all the proofs to the AO (Assessing Officer).

Wealth Cafe Advise

As we always advise, do not plan for your ITR at the end of the year but start it from the beginning of the year and keep it a practice to have all documents stored in one place on a drive year wise so whenever required you could access the same easily.

Tax - 12/29/2021

INCOME TAX DEDUCTIONS

Income tax deductions are a specified amount of certain expenses incurred by the taxpayer during the financial year that can be subtracted from their gross income to calculate the tax liability. Income tax deductions are specified under Section 80C to 80U of the Income Tax Act. After following these deductions, the total income of the assessee has arrived & tax is charged on it at prescribed rates.

1. Deductions are not permitted on the following incomes:

Long term capital gains
Short-term capital gains on transfer of equity shares and units of the equity-oriented fund through a recognized stock exchange.
Winning from lotteries & races.

2. The deduction cannot exceed Gross total Income

3. No deduction shall be allowed if the deduction is not claimed in the return of income.

Various Types of Tax Deductions in India

You can reduce your taxable income by increasing your deductions. There are many investment options and forms of expenditure which can help you get reductions on your taxable income. The Indian Income Tax Act provides many provisions for this. Mentioned below are several different tax deduction options.

1. Section 80C

For	Payment of LIC, PF, NSC, etc
Eligible Assessee	Individual or HUF
Conditions	Deposit or investment in any one or more of the listed items during the previous year
Amount of deduction	The amount deposited/invested or RS 1,50,000 whichever is less
Eligible deposits	Life Insurance Premium paid on the life of the individual, spouse, any child, or any member of HUF Public Provident Fund (PPF) Unit Linked Insurance Plan (ULIP) of UTI or LIC Payment to a notified annuity plan of LIC Recognized Provident Fund Tuition fees paid (max 2 children) Repayment of House Loan (excluding interest on the loan) Superannuation fund Sukanya Samriddhi Account Scheme National Saving Certificates (VIII issue) UTI or Mutual Fund Notified pension fund of Mutual Fund Notified deposit scheme or pension fund of housing finance companies or housing boards Notified deposit scheme of housing finance companies or housing boards Equity shares, debentures, units, etc of Infrastructure undertakings Fixed deposit of 5 years more with a scheduled bank Fixed deposit of 5 years more with a post office Notified Bonds of NABARD Deposit in an account under Senior Citizen Saving Scheme

2. Section 80CCC

For	A contribution made to annuity plans of LIC & other insurers
Eligible Assessee	Individual
Conditions	Deposit during the previous year a sum under an annuity plan of LIC for receiving a pension from the fund
Amount of deduction	The amount deposited/invested or Rs 1,50,000 whichever is less

3. Section 80CCD

For	Contribution toward approved pension scheme
Eligible Assessee	Central Government employee or any other individual assessee
Conditions	Employer & Employee contribution to approved pension scheme of the central government & any amount deposited by any other individual assessee to such scheme
Amount of deduction	In case of salaried employee: Employers contribution: Amount paid in assessee’s account or 10%of salary, whichever is lower; Employee’s Contribution: Amount paid or 10% of salary, whichever is lower; In case of any other individual assessee: The amount deposited in an approved pension scheme or 20% of gross total income in the previous year, whichever is lower
Additional deduction	Up to Rs 50,000 in respect of contribution to NPS of the central government.

Section 80C + Section 80CCC+ Section 80CCD ≤ Rs 1,50,000

4. Section 80D

Eligible Assessee: Individual or HUF

In respect of Payment of Medical Insurance Premia Section 80CCC

Particulars	Individual		HUF
For the benefit of -	Family	Parents	Any member
Medical Insurance Premium	✔	✔	✔
Payment of Preventive Health Checkup	✔	✔	✘
Contribution to CGHS/ Notified Scheme	✔	✘	✘
Maximum Deduction- General Deduction Additional deduction (Policy taken on the life of senior citizen)	Rs 25,000 Rs 25,000	Rs 25,000 Rs 25,000	Rs 25,000 Rs 25,000

5. Section 80DD

For	Medical treatment of disabled dependent
Eligible Assessee	Resident Individual or HUF
Conditions	Expenditure incurred for medical treatment, training, and rehabilitation of a dependent being a person with a disability The amount deposited under any scheme of LIC, UTI, or any other insurer for maintenance of a dependent, being a person with a disability
Amount of deduction	Fixed deduction of Rs 75,000 (Rs 1,25,000 in case a dependent is a person with a severe disability)
Disability Certificate	To furnish along with the return of income

6. Section 80DDB

For	Medical treatment of specified disease
Eligible Assessee	Resident Individual or HUF
Conditions	Expenditure incurred on medical treatment of prescribed disease in respect of an individual, his spouse, children, parents, brothers, and sisters dependent on him and any member of HUF dependent on HUF
Amount of deduction	The actual amount paid or Rs 40,000 (Rs 1,00,000 in case of senior citizen), whichever is lower
Prescription	Should obtain a medical prescription from a doctor

7. Section 80E

For	Repayment of interest on Education Loan
Eligible Assessee	Individual
Conditions	Interest on loan taken from a financial or charitable institution
Amount of deduction	100% of the amount of interest on a loan
Period of deduction	8 assessment years(including initial assessment year)

8. Section 80EE

For	Interest on loan taken for residential house property
Eligible Assessee	Individual
Conditions	The value of the house should be Rs 50 lakhs or less The loan taken for the house must be Rs 35 lakhs or less The loan must be sanctioned by a Financial Institution or a Housing Finance Company The loan must be sanctioned between 01.04.2016 to 31.03.2017 As on the date of the sanction of the loan, no other house property must be owned by you.
Amount of deduction	Interest payable or Rs 50,000, whichever is lower
No double deduction	The deduction is not allowed if interest is already allowed

9. Section 80G

For	Donation to certain funds, charitable institutions, etc
Eligible Assessee	All assessee
Conditions	Donation in kind not eligible No deduction if the amount exceeds Rs 2,000/- unless the amount is paid by any mode other than cash.
Amount of deduction	As given below

Donations eligible for Full Deduction

National Defence Fund set by the Central Govt.
Prime Minister’s National Relief Fund
Prime Minister’s Armenia Earthquake Relief Fund
National Foundation for Communal Harmony
University/ Education Institution of National eminence approved by the prescribed authority
Maharashtra Chief Minister’s Earthquake Relief Fund
Any Fund set-up by the State Govt of Gujarat, exclusively for providing relief to the victims of the earthquake of Gujarat
Zila Saksharta Samiti constituted in any district
National Blood Transfusion Council or any State Blood Transfusion Council
Any fund set up by the state Govt to provide Medical Relief to the poor
Army Central Welfare Fund or Indian Naval Benevolent Fund or the Air Force Central Welfare Fund
National Illness Assistance Fund
Andhra Pradesh Chief Minister’s Cyclone Relief Fund
Chief Minister Relief Fund or the Lieutenant Governor’s Relief Fund in respect of any State or Territory
National Sports Fund set up by the Central Govt
National Cultural Fund set up by the Central Govt
Fund for Technology Development and Application, set up by the Central Govt
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities.

Donations eligible for 50% Deduction

Jawaharlal Nehru Memorial Fund
Prime Minister’s Drought Relief Fund
National Children’s Fund
Indira Gandhi Memorial Fund
Rajiv Gandhi Foundation

Deductions with a max limit of 10% of Adjusted Gross Total Income*

Government or any local authority, institution, or association for promoting family planning
Indian Olympic association
Renovation or repair of the temple, mosque, gurudwara, church, or other places notified by the CG
Corporation for promoting the interest of minority community

*Adjusted Gross total income= Gross total income - Long-term capital gains, Short-term capital gains subject to STT, and all deductions available u/s 80 except section 80G

10. Section 80GG

For	Rent paid
Eligible Assessee	Individual
Conditions	Must not be receipt of rent allowance Any residential accommodation must not be owned by the assessee or his spouse or minor child at the place where he originally resides or performs duties of his office or employment or carries on his business profession
Amount of deduction	Least of the following: Rs.5,000 per month 25% of the adjusted total Income Rent paid - 10% of adjusted total Income

11. Section 80TTA

For	Interest on saving deposit
Eligible Assessee	Individual or HUF
Conditions	Interest on saving deposit maintained with bank or post office
Amount of deduction	100% of interest income or Rs 10,000 whichever lower

12. Section 80 TTB

For	Interest on all kinds of deposits
Eligible Assessee	Resident senior citizen
Conditions	Interest on deposits maintained with bank or post office
Amount of deduction	100% of interest income or Rs 10,000 whichever lower

Note: Apart from all the sections discussed above under chapter VI-A, there are many other sections that have not been covered, keeping in mind the importance and relevance of the sections to the mass.

Tax - 12/15/2021

Things you must know about the new income tax portal for easy filing of the return for FY 21-22.

Income Tax Return ITR E-Filing Direct Link

There is a direct link for the e-filing of Income Tax returns. It is the official portal of Income Tax India.
You need to visit – www.incometaxindiaefiling.gov.in to file your income tax return.
Taxpayers can file ITR, verify income tax returns, link Aadhaar with PAN, know Aadhaar-PAN link status, e-pay tax, track status of e-filed Income Tax Return status, know tax deductors across India etc.

Here are key things to know about filing ITR:

What are the new options for filing ITR on the new portal?

The I-T department has encouraged taxpayers to update their profiles to avail accurate pre-filled ITRs and enhanced user experience.

On the top of the new website, one can find the tab to access individual-based help content. Clicking on the application tab takes an individual to view guidance on how to file ITRs and applicable forms for the same. Deductions, refund status, tax slab and other related information are also present there.

The department has claimed that the new IT return e-filing portal and the new mobile app will be easy to use for taxpayers.

What are the additional features of the new portal in terms of ITR filing?

The new portal has a drop-down menu for taxpayers for checking instructions on ITR filing, refund status, and tax slabs. The new site also has detailed user manuals, FAQs and videos to help taxpayers understand various services available on the portal.

What are the forms of return prescribed under the income tax law?

The Income Tax Department has notified 7 forms for filing ITR this year. These forms include Sahaj (ITR-1), Form ITR-2, Form ITR-3, Form Sugam (ITR-4), Form ITR-5, Form ITR-6 and Form ITR-7.

What are the different modes of filing the return of income?

The return form can be filed with the Income-tax Department in any of the following ways, -

(i) by furnishing the return in a paper form;

(ii) by furnishing the return electronically under digital signature;

(iii) by transmitting the data in the return electronically under electronic verification code;

(iv) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;

How to file the return of income electronically?

The Income-tax Department has established an independent portal for e-filing of return of income. The taxpayers can log on to https://www.incometax.gov.in for e-filing the return of income.

What are the benefits of filing my return of income?

Filing of return earns an individual the dignity of consciously contributing to the development of the nation. Apart from this, income tax returns validate an individual's credit-worthiness before financial institutions and make it possible for him/her to access many financial benefits such as bank credits, etc.

Income Tax / Tax - 08/10/2021

Income-Tax Relief For Home Buyers

Hello fellow investors

As a part of various relief measures taken by the Government in response to the economic slowdown post-COVID-19, the Finance Minister (FM) has announced a very attractive income tax relief for home buyers (new residential properties of value up to Rs 2 crore). Here is what you need to know.

Income Tax relief for home buyers

In case the declared purchase consideration of the land/building is less than the stamp value (circle rate) by up to 20%, there will be no additional tax outgo for both the seller and the purchaser for the period 12th November 2020 to 30th June 2021. Earlier, the acceptable difference was 5% which was to be enhanced to 10% with effect from 01 st April 2021.

This move will also help developers in selling off their unsold inventory at up to 20% below the circle rate and the buyers in getting cheaper homes without any additional tax burden on either party. Let’s look at the relevant provisions of the Income Tax Act to understand the applicable tax relief.

Section 43CA of the Income-tax Act - for the seller

This section provided for deeming of the stamp duty value (circle rate) as sale consideration for the transfer of real estate inventory in the case the circle rate exceeded the declared consideration. The circle rate is the minimum rate per unit area fixed by the state governments for the sale of land or property and is
aimed at reducing stamp duty evasion by declaring lower sale values in the sale-purchase deeds.

Thus, even if the real estate was sold at a price below the circle rate, the circle rate was considered as the sale value for the calculation of the business profits of the seller. For example, if a house is sold by a developer for Rs 80 lakh but its value as per the circle rate is Rs 96 lakh, the developer is supposed to take Rs 96 lakh as the sale value for
calculating his profit.

Through Finance Act 2018, a difference of 5% between the two rates was declared to be acceptable. This was increased to 10% through Finance Act 2020. Now, the FM has raised this acceptable difference to 20%. Thus, in the above case, the difference is exactly 20% as seen below and the developer can consider Rs 80 lakh for calculating his profits from the sale.

Section 56(2)(x) of the Income-tax Act for the buyer

This section is applicable to the buyer and provides for stamp duty value to be deemed as purchase consideration even if the purchase was made at a lower price. As per the above example, the buyer is deemed to have received Rs 16 lakh (the difference between the stamp value and the sale consideration) and was supposed to declare this amount as ‘Income from other sources and pay tax on the same. Now, he will not have to pay any tax if the difference is up to 20% as is the case in the above example.

In summary, this announcement by the FM comes as a major relief to real estate developers who were struggling to offload their inventory due to lower demand in the market. The benefit is applicable, however, only for the primary sale of residential properties and not for commercial and secondary sales.

Income Tax / Insurance / Investments / Making Money / Money tips / Real Estate / Tax - 09/20/2020

Income-tax Rates FY 2020-21 (AY 2021-22)

Before knowing the tax rates, it is very important to understand the terms Financial year (FY) and Assessment Year (AY).

The below-mentioned tax rates/ slab is on the income earned for the period 1 April 2020 to 31 March 2021. FY stands for the ‘financial year’ which is from 1 April 2020 to 31 March 2021. AY stands for Assessment year which 2021-22.

For individuals, the due date to file the income tax return for the income earned from 1 April 2020 to 31 March 2021 is 31 July 2021. However, this year due to COVID 19 economic relaxations, the due date is pushed to 30 November 2021

Income tax Rates

Income Tax Rate & Slab for Individuals & HUF:
1. Individual (Resident or Resident but not Ordinarily Resident or non-resident), who is of the age of less than 60 years on the last day of the relevant previous year & for HUF:

Taxable income	Tax Rate (Existing Scheme)	Tax Rate (New Scheme)
Up to Rs. 2,50,000	Nil	Nil
Rs. 2,50,001 to Rs. 5,00,000	5%	5%
Rs. 5,00,001 to Rs. 7,50,000	20%	10%
Rs. 7,50,001 to Rs. 10,00,000	20%	15%
Rs. 10,00,001 to Rs. 12,50,000	30%	20%
Rs. 12,50,001 to Rs. 15,00,000	30%	25%
Above Rs. 15,00,000	30%	30%

Resident or Resident but not Ordinarily Resident senior citizen, i.e., every individual, being a resident or Resident but not Ordinarily Resident in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year:

Taxable income	Tax Rate (Existing Scheme)	Tax Rate (New Scheme)
Up to Rs. 2,50,000	Nil	Nil
Rs. 2,50,001 to Rs. 3,00,000	Nil	5%
Rs. 3,00,001 to Rs. 5,00,000	5%	5%
Rs. 5,00,001 to Rs. 7,50,000	20%	10%
Rs. 7,50,001 to Rs. 10,00,000	20%	15%
Rs. 10,00,001 to Rs. 12,50,000	30%	20%
Rs. 12,50,001 to Rs. 15,00,000	30%	25%
Above Rs. 15,00,000	30%	30%

Resident or Resident but not Ordinarily Resident super senior citizen, i.e., every individual, being a resident or Resident but not Ordinarily Resident in India, who is of the age of 80 years or more at any time during the previous year:

Taxable income	Tax Rate (Existing Scheme)	Tax Rate (New Scheme)
Up to Rs. 2,50,000	Nil	Nil
Rs. 2,50,001 to Rs. 5,00,000	Nil	5%
Rs. 5,00,001 to Rs. 7,50,000	20%	10%
Rs. 7,50,001 to Rs. 10,00,000	20%	15%
Rs. 10,00,001 to Rs. 12,50,000	30%	20%
Rs. 12,50,001 to Rs. 15,00,000	30%	25%
Above Rs. 15,00,000	30%	30%

Surcharge:
a) 10% of Income tax where total income exceeds Rs.50 lakh
b) 15% of Income tax where total income exceeds Rs.1 crore
c) 25% of Income tax where total income exceeds Rs.2 crore
d) 37% of Income tax where total income exceeds Rs.5 crore
Note:Enhanced Surcharge rate (25% or 37%) is not applicable in case of specified incomes I.e. short-term capital gain u/s 111A, long-term capital gain u/s 112A & short-term or long-term capital gain u/s 115AD(1)(b).
Education cess:4% of income tax plus surcharge
Note: A resident or Resident but not Ordinarily Resident individual is entitled to rebate under section 87A if his total income does not exceed Rs. 5, 00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less. rebate under section 87A is available in both schemes I.e. existing scheme as well as new scheme.

Income Tax Rates for AOP/BOI/Any other Artificial Juridical Person:

Taxable income	Tax Rate
Up to Rs. 2,50,000	Nil
Rs. 2,50,001 to Rs. 5,00,000	5%
Rs. 5,00,001 to Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

Surcharge:
a) 10% of Income tax where total income exceeds Rs.50 lakh
b) 15% of Income tax where total income exceeds Rs.1 crore
c) 25% of Income tax where total income exceeds Rs.2 crore
d) 37% of Income tax where total income exceeds Rs.5 crore

Note: Enhanced Surcharge rate (25% or 37%) is not applicable in case of specified incomes I.e. short-term capital gain u/s 111A, long-term capital gain u/s 112A & short-term or long-term capital gain u/s 115AD(1)(b).

Education cess: 4% of tax plus surcharge

Tax Rate for Partnership Firm:

A partnership firm (including LLP) is taxable at 30%.

Surcharge: 12% of Income tax where total income exceeds Rs. 1 crore

Education cess: 4% of Income tax plus surcharge

Income Tax Slab Rate for Local Authority:

A local authority is Income taxable at 30%.

Surcharge: 12% of Income tax where total income exceeds Rs. 1 crore

Education cess: 4% of tax plus surcharge

Tax Slab Rate for Domestic Company:

A domestic company is taxable at 30%. However, the tax rate is 25% if turnover or gross receipt of the company does not exceed Rs. 400 crore in the previous year.

Particulars	Tax Rate(%)
If turnover or gross receipt of the company does not exceed Rs. 400 crore in the previous year 2018-19	25%
If the company opted section 115BA (Note 1)	25%
If the company opted for section 115BAA (Note 2)	22%
If the company opted for section 115BAB (Note 3)	15%
Any other domestic company	30%

Note 1: Section 115BA - A domestic company which is registered on or after March 1, 2016 and engaged in the business of manufacture or production of any article or thing and research in relation to (or distribution of) such article or thing manufactured or produced by it and also It is not claiming any deduction u/s 10AA, 32AC, 32AD, 33AB, 33ABA, 35(1)(ii)/(iia)/(iii)/35(2AA)/(2AB), 35AC, 35AD, 35CCC, 35CCD, section 80H to 80TT (Other than 80JJAA) or additional depreciation, can opt section 115BA on or before the due date of return by filing Form 10-IB online. Company cannot claim any brought forwarded losses (if such loss is related to the deductions specified in above point).

Note 2: Section 115BAA - Total income of a company is taxable at the rate of 22% (from A.Y 2020-21), if the following conditions are satisfied:
- Company is not claiming any deduction u/s 10AA or 32(1)(iia) or 32AD or 33AB or 33ABA or 35(1)(ii)/(iia)/(iii)/35(2AA)/(2AB) or 35AD or 35CCC or 35CCD or section 80H to 80TT (Other than 80JJAA).
- Company is not claiming any brought forwarded losses (if such loss is related to the deductions specified in above point).
- Provisions of MAT is not applicable on such company after exercising of option. company cannot claim the MAT credit (if any available at the time of exercising of section 115BAA).

Note 3: Section 115BAB - Total income of a company is taxable at the rate of 15% (from A.Y 2020-21), if the following conditions are satisfied:

- Company (not covered in section 115BA and 115BAA) is registered on or after October 1, 2019 and commenced manufacturing on or before 31st March, 2023.
- Company is not formed by splitting up or reconstruction of a business already in existence.
- Company does not use any machinery or plant previously used for any purpose.
- Company does not use any building previously used as a hotel or a convention center, as the case may be.
- Company is not engaged in any business other than the business of manufacture or production of any article or thing and research in relation to (or distribution of) such article or thing manufactured or produced by it. Business of manufacture or production shall not includes business of -

Development of computer software;
Mining ;
Conversion of marble blocks or similar items into slabs;
Bottling of gas into cylinder;
Printing of books or production of cinematographic film; or
Any other notified by Central Govt.

- Company is not claiming any deduction u/s 10AA or 32(1)(iia) or 32AD or 33AB or 33ABA or 35(1)(ii)/(iia)/(iii)/35(2AA)/(2AB) or 35AD or 35CCC or 35CCD or section 80H to 80TT (Other than 80JJAA and 80M).

- Company is not claiming any brought forwarded losses (if such loss is related to the deductions specified in above point).

- Provisions of MAT is not applicable on such company after exercising of option. company cannot claim the MAT credit (if any available at the time of exercising of section 115BAA).

Surcharge:
a) 7% of Income tax where total income exceeds Rs.1 crore
b) 12% of Income tax where total income exceeds Rs.10 crore
c) 10% of income tax where domestic company opted for section 115BAA and 115BAB

Education cess: 4% of Income tax plus surcharge.

Tax Rates for Foreign Company:

A foreign company is taxable at 40%

Surcharge:
a) 2% of Income tax where total income exceeds Rs. 1 crore
b) 5% of Income tax where total income exceeds Rs. 10 crore

Education cess: 4% of Income tax plus surcharge.

Taxable income	Tax Rate (Existing Scheme)	Tax Rate (New Scheme)
Up to Rs. 10,000	10%	-
Rs. 10,001 to Rs. 20,000	20%	22%
Above Rs. 20,000	30%	-

Income Tax Slab for Co-operative Society:

Surcharge:

a) 12% of Income tax where total income exceeds Rs. 1 crore
b) In case of Concessional scheme, surcharge rate is 10%

Education cess: 4% of Income tax plus surcharge.

Disclaimer: - The articles are for information purposes only. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. You must consult a financial advisor who understands your specific circumstances and situation before taking an investment decision.

Alternative Assets / Income Tax / Insurance / Investments / Salary / Tax - 06/03/2019

Income Tax Slab Rate & Deductions - FY 2017-18 (AY 2018-19)

What is Income Tax Slab?

Income tax is that percentage of income paid to the government by the taxpayers for the betterment of the public at large. This income is categorized into different groups on the basis of the amount of income. Each such group is known as a Tax Slab. Tax is charged at different rates on the range of income falling under different income tax slabs.
The Income Tax Act 1961 is the law that governs the provisions for our income tax in India.
The income tax slab rates are usually revised every year during the budget. Various deductions are allowed to a taxpayer under Section 80C, Section 80D, etc.

Income Tax Slab Rate Post Budget 2017

The tax is calculated according to the income tax slabs announced by the government every year in the Budget. The finance minister has announced the changes in the tax slab structure in union budget for 2017.
Following are the income tax slab rates and deductions in India for different categories of tax payers:

Income Tax Slab Rate For Men below 60 Years of Age

Income Tax Slab	Income Tax Rate	Education Cess	Secondary and Higher Education Cess
Income upto Rs. 2,50,000	Nil	Nil	Nil
Income between Rs. 2,50,001 - Rs. 500,000	5% of Income exceeding Rs. 2,50,000	2% of income tax	1% of income tax
Income between Rs. 500,001 - Rs. 10,00,000	20% of Income exceeding Rs. 5,00,000	2% of income tax	1% of income tax
Income above Rs. 10,00,000	30% of Income exceeding Rs. 10,00,000	2% of income tax	1% of income tax

Income Tax Slab Rate For Women below 60 Years of Age

Income Tax Slab	Income Tax Rate	Education Cess	Secondary and Higher Education Cess
Income upto Rs. 2,50,000	Nil	Nil	Nil
Income between Rs. 2,50,001 - Rs. 500,000	5% of Income exceeding Rs. 2,50,000	2% of income tax	1% of income tax
Income between Rs. 500,001 - Rs. 10,00,000	20% of Income exceeding Rs. 5,00,000	2% of income tax	1% of income tax
Income above Rs. 10,00,000	30% of Income exceeding Rs. 10,00,000	2% of income tax	1% of income tax

Income Tax Slab Rate For Senior Citizens (Age 60 years or more but less than 80 years)

Income Tax Slab	Income Tax Rate	Education Cess	Secondary and Higher Education Cess
Income upto Rs. 3,00,000	Nil	Nil	Nil
Income between Rs. 3,00,001 - Rs. 500,000	5% of Income exceeding Rs. 2,50,000	2% of income tax	1% of income tax
Income between Rs. 500,001 - Rs. 10,00,000	20% of Income exceeding Rs. 5,00,000	2% of income tax	1% of income tax
Income above Rs. 10,00,000	30% of Income exceeding Rs. 10,00,000	2% of income tax	1% of income tax

Income Tax Slab Rate For Senior Citizens (Age 80 years or more)

Income Tax Slab	Income Tax Rate	Education Cess	Secondary and Higher Education Cess
Income upto Rs. 5,00,000	Nil	Nil	Nil
Income between Rs. 500,001 - Rs. 10,00,000	20% of Income exceeding Rs. 5,00,000	2% of income tax	1% of income tax
Income above Rs. 10,00,000	30% of Income exceeding Rs. 10,00,000	2% of income tax	1% of income tax

Income Tax Slab Rate Hindu Undivided Families (HUF)

Income Tax Slab	Income Tax Slab Rate
Up to Rs.2,50,000	Nil
Rs.2,50,000 to Rs.5,00,000	10% Income exceeding Rs. 2,50,000
Rs.5,00,000 to Rs.10,00,000	20% Income exceeding Rs. 5,00,000
Over Rs.10,00,000	30% Income exceeding Rs. 10,00,000

Income Tax Slab Rate Legal Entities Registered as Associations of Persons

Income Tax Slab	Income Tax Slab Rate
Up to Rs.2,50,000	Nil
Rs.2,50,000 to Rs.5,00,000	10% Income exceeding Rs. 2,50,000
Rs.5,00,000 to Rs.10,00,000	20% Income exceeding Rs. 5,00,000
Over Rs.10,00,000	30% Income exceeding Rs. 10,00,000

Income Tax Slab Rate Legal Entities Registered as Bodies of Individuals

Income Tax Slab	Income Tax Slab Rate
Up to Rs.2,50,000	Nil
Rs.2,50,000 to Rs.5,00,000	10% Income exceeding Rs. 2,50,000
Rs.5,00,000 to Rs.10,00,000	20% Income exceeding Rs. 5,00,000
Over Rs.10,00,000	30% Income exceeding Rs. 10,00,000

Partnership Firms:

Partnership Firms and LLPs (Limited Liability Partnerships) are to be taxed at the rate of 30%

Local Authorities:

Local Authorities are to be taxed at the rate of 30%.

Domestic Companies:

Domestic Companies are to be taxed at the rate of 30%

Income Tax Slab RateCo-operative Societies

Income Tax Slab	Income Tax Slab Rate
Up to Rs.10,000	10% Income
Rs.10,000 to Rs 20,000	20% Income exceeding Rs. 10,000
Over Rs. 20,000	30% Income exceeding Rs. 20,000

Also,

Surcharge:

2% of the income tax amount (If income is greater than Rs.1,00,00,000/-)
5% of the income tax amount. Subject to marginal relief (If income is greater than Rs.10,00,00,000/-)

Education Cess: 2% extra (charged on the amount of income tax + surcharge being paid)

Secondary and Higher Education Cess: 1% extra (charged on the amount of income tax + surcharge being paid)

Comparison Of Income Tax Slabs For FY 2017-18 and FY 2016-17

Income Tax Slab	Income Tax For FY 2017-18	Income Tax For FY 2016-17
Income upto Rs. 2,50,000	Nil	Nil
Income between Rs. 2,50,001 - Rs. 500,000	5% of Income exceeding Rs. 2,50,000	10% of Income exceeding Rs. 2,50,000
Income between Rs. 500,001 - Rs. 10,00,000	20% of Income exceeding Rs. 5,00,000	20% of Income exceeding Rs. 5,00,000
Income above Rs. 10,00,000	30% of Income exceeding Rs. 10,00,000	30% of Income exceeding Rs. 10,00,000

Disclaimer: – The articles are for information purposes only. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. You must consult a financial advisor who understands your specific circumstances and situation before taking an investment decision.

Income Tax / Insurance / Investments / Uncategorized - 03/05/2019

Income Tax Rate FY 2016 - 17 (AY 2017-18)

What is Income Tax Slab?

The Income Tax Act 1961 is the law that governs the provisions for our income tax.

The income tax rates are usually revised every year during the budget. Various deductions that are allowed to a taxpayer under Section 80C, Section 80D etc.

Income Tax Slab Rate

Following are the income tax slab rates and deductions for different categories of tax payers:

For Individuals Below 60 Years Of Age

Income Level	Tax Rate
Rs. 2,50,000	Nil
Rs. 2,50,001 - Rs. 500,000	10%
Rs. 500,001 - Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

For Senior Citizens (Age 60 years or more but less than 80 years)

Income Level	Tax Rate
Upto Rs. 3,00,000	Nil
Rs. 3,00,001 - Rs. 500,000	10%
Rs. 500,001 - Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

For Senior Citizens (Age 80 years or more)

Income Level	Tax Rate
Upto Rs. 5,00,000	Nil
Rs. 500,001 - Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

Surcharge @ 15% of tax will be payable by individuals having total income exceeding Rs. 100,00,000.

Income Tax Deductions and Exemptions

Income Tax Section	Gross Annual Salary	How Much Tax Can You Save?	HDFC Standard Life Plans
Sec. 80C	Across all income slabs	Upto Rs. 46,350/-saved on investment of Rs. 1,50,000/-	All our Life Insurance Plans Buy Life Insurance and Save Tax
Sec. 80CCC	Across all income slabs	Upto Rs.30,900/-saved on Investment of Rs.1,50,000/-	All our Pension Plans Buy Pension Plans and Save Tax
Sec. 80 D*	Across all income slabs	Upto Rs. 10,815/-saved on investment of Rs.35,000/- (Inclusive of Rs. 20,000/- towards health insurance of parents who are senior citizens)	All our Health Insurance Plans All the health insurance riders available with our Conventional Plans Buy Health Insurance and Save Tax
Total Savings Possible **	Rs. 57,165/- Rs. 46,350/- under Sec. 80C and Sec. 80CCC and Rs. 10,815/- under Sec. 80D Above figures calculated for an individual with gross annual income exceeding Rs. 10,00,000/-
Sec. 10 (10)D	Under Sec. 10(10D), the benefits received by you are completely tax-free, subject to conditions specified therein

Income Tax / Insurance / Investments / Making Money / Uncategorized - 03/05/2019

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