INCOME TAX INDIA

 

Income Tax Return is a proof that you have paid your income tax. It contains details about your annual income and the amount of tax you have paid. Every year, Indian citizens who earn taxable income have to file Income Tax Return (ITR). Filing ITR will help you in getting a refund in case you pay more tax than what you are required to pay. If you fail to file your ITR, you might have to bear penalty etc. Income tax return form ranges from ITR 1 to ITR 7 which can be choose on the basis of Nature of Income, Nature of Person.

 

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Income Tax     Deductions Salary Income Other Income Capital Gains   Gift Income   

Income from Other Sources

Any income that is not covered in the other four heads of income is taxable under income from other sources, because of this, it is known as residuary head of income. All the incomes excluded from salary, capital gains, house property or business & profession (PGBP) are included in IFOS, except those which are exempt under the Income Tax Act.

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Section 56- Incomes taxable only in Income from Other Sources are ?

  1. Dividend Income;
  2. Income earned from winning lotteries, crossword puzzles, races (including horse race), gambling or betting of any kind;
  3. Money or movable/immovable property received without consideration or inadequate consideration during previous year;
  4. Interest on compensation or enhanced compensation received;
  5. Advance money received or money received in negotiation for transfer of a capital asset (only if the money is forfeited and it doesn’t result in the transfer of such asset).

Incomes taxable under IFOS, only if not taxable under Profits and Gains of Business or Profession (PGBP):

  1. Any sum contributed towards provident funds, ESI, etc. by employee to the employer, only if not deposited in the relevant fund;
  2. Interest earned on Securities;
  3. Income received from the letting of a plant, machinery or furniture, with or without building.

Incomes taxable under IFOS, only if not taxable under PGBP or Salaries:

  1. Keyman Insurance Policy;
  2. Salary of MP/MLA.
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What is the tax treatment of arrears of rent?

​​​The amount received on account of arrears of rent (not charged to tax earlier) will be charged to tax after deducting a sum equal to 30% of such arrears. It is charged to tax in the year in which it is received. Such amount is charged to tax whether or not the taxpayer owns the property in the year of receipt.​

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Can interest paid on loans taken from friends and relatives be claimed as deduction while calculating house property income?

Yes, if the loan is taken for purchase, construction, repair, renewal or reconstruction of the house. If the loan is taken for personal or other purposes then the interest on such loan cannot be claimed as deduction.​

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Section 57- Expenditures allowed as deductions ?

 

  • Expenses incurred for realisation of dividend or interest income;
  • Deductions to the extent amount remitted within due date are authorised in respect to contribution towards funds for the welfare of employees;
  • Family Pension- deduction is allowed to the extent of 33-1/3% of pension or Rs. 15000 whichever is less;
  • Deductions for current repairs, insurance and depreciation, will be allowed for income earned by way of lease rental;
  • A deduction equal to 50% will be allowed for interest received on compensation or enhanced compensation.

 

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How to compute income from a property which is let out throughout the year?

Income chargeable to tax under the head “Income from house property” in the case of a let-out property is computed in the following manner:

 

Particulars Amount
Gross annual value XXXX
Less:- Municipal taxes paid during the year XXXX
Net Annual Value (NAV) XXXX
Less:- Deduction under section 24  

➣Deduction under section 24(a)) at 30% of NAV

➣Deduction under section 24(b​)) on account of interest on borrowed capital

(XXXX)

 

(XXXX)
Income from house property XXXX​

NSE Stock Detail from Investing.com

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TDS?

Who can file ITR 1 (SAHAJ) ?
For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakhs.
Income Chargeable to Tax?
Your income is not equal to your salary. You could earn income from several other sources other than your salary income. Your total income, according to the Income Tax Department, could be from house property, profit or loss from selling stocks or from interest on a savings account or on fixed deposits. All these numbers get added up to become your gross income.

Income from Salary All the money you receive while rendering your job as a result of an employment contract
Income from house property Income from house property you own; property can be self-occupied or rented out.
Income from other sources Income accrued from fixed deposits and savings account come under this head.
Income from capital gains Income earned from the sale of a capital asset (mutual funds or house property).
Income from business and profession Income/loss arising as a result of carrying on a business or profession. Freelancers income come under this head.
Tax Rates?
Add up all your income from the heads listed above. This is your gross total income. From your gross total income, deductions under Section 80 are allowed to be claimed. The resulting number is the income on which you have to pay tax. Your tax is calculated as per the slabs mentioned below. Income Tax Rates for taxpayers under 60 years of age in FY 2018-19, FY 2017-18 and FY 2016-17.

Tax Slab FY 2018-19  FY 2017-18 Tax Rate Tax Slab FY 2016-17 Tax Rate
Up to Rs 2,50,000 No tax Up to Rs 2,50,000 No tax
Rs 2,50,000 – Rs 5,00,000 5% Rs 2,50,000 – Rs 5,00,000 10%
Rs 5,00,000 – Rs 10,00,000 20% Rs 5,00,000 – Rs 10,00,000 20%
Rs 10,00,000 and beyond 30% Rs 10,00,000 and beyond 30%

Cess:

  • For FY 2018-19 – Health and education cess is 4% on the sum of total income tax and surcharge.
  • For FY 2017-18 and 2016-17 Higher education and secondary cess is 3% on the sum of total income tax and surcharge.

Exemption for senior citizens (age of 60 years or more but up to 80 years)

  • For FY 2018-19 2017-18 and 2016-17 is Rs. 3,00,000

Exemption for super senior citizens (age of 80 years or more)

  • For FY 2018-19 2017-18 is Rs. 5,00,000
Taxes for Salaried Individuals?

As soon as the filing season begins, salaried class are in a frenzy about taxes they must shell out for the said financial year. It is important to understand your tax slab and what each of your salary breakup component means. This can help you figure out how to save on taxes. If you want to understand your salary components or want to learn how you can save tax on your salary income, this guide is for you.

SECTION I – Understanding Your Payslip

1. Basic Salary

This is a fixed component in your paycheck and forms the basis of other portions of your salary, hence the name. For instance, HRA is defined as a percentage (as per the company’s discretion) of this basic salary. Your PF is deducted at 12% of your basic salary. It is usually a large portion of your total salary.

2. House Rent Allowance

Salaried individuals, who live in a rented house/apartment, can claim house rent allowance or HRA to lower tax outgo. This can be partially or completely exempt from taxes. The income tax laws have prescribed a method for computing the HRA that can be claimed as an exemption.

Also do note that, if you receive HRA and don’t live on rent your HRA shall be fully taxable.

Case Study: Malvika works at an MNC in Bangalore. Her company provides her with a house rent allowance. But she doesn’t live in a rented accommodation as she lives with her parents.

How can Malvika make use of this allowance?

Malvika can pay rent to her parents and claim the allowance provided they own the place they currently live in. All she has to do is enter into a rental agreement with her parents and transfer money to them every month. This way Malvika can make a nice gesture and give back to her parents, and two, save some taxes. But remember, Malvika’s parents will have to show the rent she paid in their income tax returns.

3. Employee Contribution to Provident Fund (PF)

Both employer and employee contribute a 10% equivalent of the employee’s basic salary every month toward employee’s pension and provident fund. An interest of about 8.5% gets accrued on it. This is a retirement benefit that companies with over 20 employees must provide as per the EPF Act, 1952.

4. Standard Deduction

Standard Deduction has been reintroduced in the 2018 budget. This deduction has replaced the conveyance allowance and medical allowance. The employee can now claim a flat Rs. 40,000 deduction from the total income, thereby reducing the tax outgo.

5. Professional Tax

Professional tax or tax on employment is a tax levied by a state, just like income tax which is levied by the central government. The maximum amount of professional tax that can be levied by a state is Rs 2,500. It is usually deducted by the employer and deposited with the state government. In your income tax return, professional tax is allowed as a deduction from your salary income.

TDS on Salary?
TDS is tax deducted at source. Your employer deducts a portion of your salary every month and pays it to the Income Tax Department on your behalf. Based on your total salary for the whole year and your investments in tax-saving products, your employer determines how much TDS has to be deducted from your salary each month. For a salaried employee, TDS forms a major portion of an employee’s income tax payment. Your employer will provide you with a TDS certificate called Form 16 typically around June or July showing you how much tax was deducted each month. Your bank may also deduct tax at source when you earn interest from a fixed deposit. The bank deducts TDS at 10% on FDs usually. A 20% TDS is deducted when the bank does not have your PAN information.

  • TDS exists to help government get tax throughout the year. There’s a prescribed table on how much tax deducted under what circumstances.
  • Your employer cuts TDS based on the information available to him about you. So if you’ve made investments, but have not declared or if you live in a rented house, but have not shared rent receipts, your finance department will have no choice but to deduct tax based on only thing they know – your CTC.
  • This is why the investment proofs deadline in your office is super important. Save yourself some headache and submit your investment proofs on time.
  • Banks don’t know if you’re working in a company or if income from fixed deposits is what you solely rely on. So they deduct a standard 10% tax before they give away the interest. Now if you fall in the 20% or 30% bracket, it’s on you to pay the remainder of the income tax. That’s why sometimes you may find yourself paying some tax at the time of filing a tax return.
  • Make sure banks have your PAN number. They deduct 20% tax if they don’t have your PAN in their records.
  • Anyone who’s receiving an income of a specified nature say salary, interest, commission, rent, professional income etc. will have some percentage of tax withheld as prescribed by the government.
Form 16?
If you need to know whether or not your company has given you some tax allowance like your offer letter says, or want to see how much tax has been deducted throughout the year, or need to see EPF contributions, wouldn’t it be easier if you could see them all in one place? That’s your Form 16. Form 16 has:
  • a summary of all the tax deducted by each quarter
  • all the tax benefits and allowances you’ve availed as a salaried individual
  • Section 80C deductions you’ve claimed through your employer
  • and your taxable income after allowances and Section 80C deductions
This is a super important document for all salaried individuals. And having a Form 16 makes e-filing your income tax return very simple. You can upload your Form 16 and e-file your income tax return. No income tax login required.
Who can use ITR – 4 (SUGAM)?
​​Form ITR – 4 (SUGAM) can be used by an Individual/HUF/Firm (Other than LLP)​ whose total income for the year includes: (a) Business income computed as per the provisions of section 44AD or ​44AE; or​; (b) Income from Profession as computed as per the provisions of ​44ADA; or (c) Income from salary/pension; or (d) Income from one house property (excluding cases where loss is brought forward from previous years); or (e) Income from other sources (excluding winnings from lottery and income from race horses). Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used where income to be clubbed falls in any of the above categories.
All Indian Banks tool-free Number:

Public-Sector Bank

Allahabad Bank – 1800 22 0363/1800 22 6061
Andhra Bank – 1800 425 1515
Bank of Baroda – 1800 102 4455
Bank of India – 1800 22 0229
Bank of Maharashtra – 1800 233 4526
Canara Bank – 1800 425 1906
Central Bank of India – 1800 22 1911
Corporation Bank – 1800 425 3555
Dena Bank – 1800 233 6427
Indian Bank – 1800 4250 0000
Indian Overseas Bank – 1800 425 4445
IDBI Bank – 1800 200 1947
Oriental Bank of Commerce – 1800 180 1235
Punjab and Sindh Bank – 1800-419-8300
State Bank of India – 1800 425 3800
Syndicate Bank – 1800 3011 3333
UCO Bank – 1800 274 0123
Union Bank of India – 1800 22 2244
United Bank of India – 1800 345 0345
Vijaya Bank – 1800 425 5885 , 1800 425 9992, 1800 425 4066

Private-Sector Banks

Axis Bank – 1860 419 5555
Bandhan Bank – 1800 258 8181
Catholic Syrian Bank – 1800 266 9090
City Union Bank – 044 7122 5000
DCB Bank – 1800 209 5363
Dhanlaxmi Bank – 1800 425 1747
Federal Bank – 1800 420 1199
HDFC Bank – 1800 266 4332
ICICI Bank – 1800 103 8181
IDFC Bank – 1800 419 4332
IndusInd Bank – 1860 500 5004
Jammu and Kashmir Bank – 1800 1800 234
Karnataka Bank – 1800 425 1444
Karur Vysya Bank – 1860 200 1916
Kotak Mahindra Bank – 1860 266 2666
Lakshmi Vilas Bank – 1800 425 2233
Nainital Bank – 1800 180 4031
RBL Bank – 1800 123 8040
South Indian Bank – 1800 425 1809
Tamilnad Mercantile Bank – +91 9842 461 461
Yes Bank – 1800 2000

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My Findings on Stock Market :

Stock Market
  1. Investing in Stock Market is like swimming with Sarc.
  2. Investment stocks and Positional Trading Stocks are different.
  3. Study Quality and Quantity of Stock while buying stocks.
  4. Always procure stock in small quantity,
  5. Do not dream for Crore pati from one lakh
  6. Proper allocation of Stocks  i.e 70%  for large cap, 20% mid  cap and 10% for small cap.
  7. invest max 2% of your investment in a particular stock.
  8. Do not go  with news and events while buying positional stocks.
  9. Invest with leader stocks of a sector
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