FINANCE

The Income Tax Act was changed last year to the benefit of the salariat and other steady earners. The past year was also marked as a period when income tax returns peaked. Though the economic engine has been sputtering, do not overlook the changes to the way you are supposed to pay taxes. 1. No tax up to Rs 5 lakh Income tax assessees with less than Rs 5 lakh of taxable income have been exempted from tax liabilities. However, this is only applicable to those who file income tax returns. According to the Income Tax Act, those who earn more than the basic exemptions are bound to pay taxes. In case the income exceeds Rs 5 lakh, the assessee has to pay tax. 2. Exemption for two houses The taxpayer can now claim exemptions on two houses, instead of the previous one, as long-term capital. There are some restrictions though. The capital that can be raised by selling the houses cannot exceed Rs 2 crore if the taxpayer were to avail of this benefit. One taxpayer can only take advantag...

Deductions under Section 80C for Assessment Year 2020-21 (FY 2019-20) Public Provident Fund (PPF)  Employee Provident Fund (EPF) National Saving Certificate (NSC) Sukanya Samriddhi Yojana (SSY) 5-year Tax Saving Fixed Deposit Senior Citizens Savings Scheme (SCSS) Equity Linked Saving Scheme (ELSS) National Pension System (NPS) Life Insurance Premium Unit Linked Insurance Plans (ULIPs) Infrastructure Bond  Repayment towards principal of Home Loan Children Tuition Fees Contribution pension plan by insurers  For taxpayers at the highest tax bracket of 30%, the cumulative tax savings under Section 80C works to Rs 46,800 (including cess) when they utilise the entire Rs 1.5 lakh limit under this section. This is a very attractive way to reduce tax outgo and encourages taxpayers to use this savings route to suit their circumstances and convenience.  Another popular and useful opportunity to save income tax is thr...

Taxpayers are a harried lot. They are inundated with messages, WhatsApp, emails, and calls by overzealous salespersons soliciting their monies to save tax. For the salaried, there is an additional reminder from the office HR office to furnish proof of tax savings. It could be intimidating for even seasoned taxpayers to be baffled by all the attention, especially as thee approach the last few months of the financial year. A tax saving avenue that has gained wide popularity among taxpayers is the possible ways to save tax under Section 80C of the income tax. Such is the popularity of section 80C that it is undoubtedly the first brush with tax-saving that all taxpayers experience. Taxpayers across generations and income tax slabs claim to save their tax liability under this section, which provides a wide choice of avenues to save tax under this Section up to Rs 1.5 lakh in a financial year. The benefit of contributions in instruments that qualify for deductions under this section can be ...

The income tax department now wants to keep a watch on your foreign travel spends and electric bill payments Here are five things to know about changes in ITR forms from assessment year 2020-21 Before filing income tax returns (ITR) from the next financial year, you will need not only details of your income and investments but also other details related to passport, foreign trips and electricity bills as the income tax department has changed  ITR forms  from assessment year 2020-21. The  income tax department  issues seven forms from ITR-1 to ITR-7 for ITR filing each year. This time, well before the beginning of the new new financial year from April, the income tax department has released ITR 1 (Sahaj) and ITR 4 (Sugam) forms. Other forms are expected to be released soon. Changes in ITR forms from AY 2020-21: 1) From next year, ITR-1 form is not valid for those individuals who have deposited more than ₹1 crore in a current bank account or have spent ₹2 lakh on...

Income Tax Slab Rate for AY 2020-21 for Individuals : 1.1 Individual (resident or non-resident), who is of the age of less than 60 years on the last day of the relevant previous year: Net income range Income-Tax rate Up to Rs. 2,50,000 Nil Rs. 2,50,000- Rs. 5,00,000 5% Rs. 5,00,000- Rs. 10,00,000 20% Above Rs. 10,00,000 30%  1.2 Resident senior citizen, i.e., every individual, being a 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: Net income range Income-Tax rate Up to Rs. 3,00,000 Nil Rs. 3,00,000 – Rs. 5,00,000 5% Rs. 5,00,000- Rs. 10,00,000 20% Above Rs. 10,00,000 30% 1.3 Resident super senior citizen, i.e., every individual, being a resident in India, who is of the age of 80 years or more at any time during the previous year: Net income range Income-Tax rate Up to Rs. 5,00,000 Nil Rs. 5,00,000- Rs....