salary income tax final
TRANSCRIPT
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TAX PLANNINGTAX PLANNING
for Salariedfor Salaried
IndividualsIndividuals
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Income tax is boring and its payment is painful.Income tax is boring and its payment is painful.
PricePrice forfor civilizationcivilization..
NothingNothing isis suresure exceptexcept deathdeath andand taxestaxes..
BeingBeing SocioSocio--EconomicEconomic law,law, variousvarious exemptionsexemptions andanddeductionsdeductions havehave beenbeen providedprovided.. LifeLife isis changingchangingfast,fast, soso isis IncomeIncome TaxTax lawlaw;; hencehence alsoalso calledcalled oneonetimetime ticketticket..
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Assessee:: InIn incomeincome--taxtax aa personperson whowho hashas toto
complycomply hishis taxtax obligationobligation oror toto getget refundrefund oror
againstagainst whomwhom anyany proceedingsproceedings areare takentaken isis
calledcalled anan assesseeassessee..
Assessment Year:: AssessmentAssessment yearyear meansmeans thethe
periodperiod ofof 1212 monthsmonths startingstarting fromfrom 11stst AprilApril ofof
everyevery yearyear andand endingending onon 3131stst MarchMarch ofof thethe nextnext
yearyear.. HereHere wewe areare goinggoing dealdeal withwith AYAY 20122012--1313
Financial year:: IncomeIncome earnedearned inin aa financialfinancialyearyear isis taxabletaxable inin thethe nextnext year year calledcalled
AssessmentAssessment YearYear..
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FORMS TO BE USED:FORMS TO BE USED:--
TheThe formsforms toto bebe usedused forfor filingfiling thethe returnreturn ofofincomeincome areare mentionedmentioned belowbelow::--
ITRITR 11:: ForFor IndividualsIndividuals havinghaving incomeincome fromfromSalary/Salary/ Pension/familyPension/family pensionpension && InterestInterest;;
ITRITR 22:: ForFor IndividualsIndividuals andand HUFsHUFs notnot havinghavingincomeincome fromfrom BusinessBusiness oror ProfessionProfession..
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TAX RATES FORFINANCIALTAX RATES FORFINANCIAL
YEAR 11YEAR 11--12 A.Y. 1212 A.Y. 12--1313 InIn thethe casecase ofof aa IndividualIndividual (MALE)(MALE),, incomeincome upup toto
RsRs.. 11,,8080,,000000 isis exemptexempt;;
InIn thethe casecase ofof WomenWomen incomeincome upup toto RsRs..11,,9090,,000000 isis
exemptexempt;;
InIn thethe casecase of of SeniorSenior CitizensCitizens incomeincome UpUp toto
RsRs..22,,5050,,000000 isis exemptexempt.. ((AssesseAssesse shouldshould bebe 6060 yearsyearsandand above)above)
InIn casecase ofof SeniorSenior CitizensCitizens havinghaving ageage aboveabove 8080 yearsyears
theirtheir incomeincome isis exemptexempt upup toto RsRs..55,,0000,,000000..
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Tax Rates for Current Financial YearTax Rates for Current Financial Year
andand Asstt.YearAsstt.Year 20122012--1313
RsRs..11,,8080,,001001 55,,0000,,000000 1010%%..
Rs.Rs.5,00,0015,00,001 8,00,000 20%8,00,000 20%
Rs.Rs.8,00,001 upwards 30%8,00,001 upwards 30%
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HEADS OF INCOME
A.-Salaries.
B.-Income from house property.
C.-Profits and gains of business or profession.
D.-Capital gains.
E.-Income from other sources.
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SALARY
SalarySalary receivedreceived oror receivablereceivable fromfrom thethe employeremployer;;
IfIf receivedreceived byby aa partnerpartner fromfrom thethe firmfirm itit isis notnot
salarysalary incomeincome.. "Salary","Salary", "perquisite""perquisite" andand "profits"profits inin lieulieu ofof
salary"salary" defineddefined..
Salary,Salary, wages,wages, feesfees commission,commission, advanceadvance salary,salary,leaveleave encashmentencashment
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PERQUISITEPERQUISITE"" includesincludes--
RentRent--freefree accommodationaccommodation oror ConcessionConcession
providedprovided byby thethe employeremployer;;
InIn casecase ofof furnishedfurnished accommodation,accommodation, increaseincrease itit
byby 1010%%..
AnyAny sumsum paidpaid byby thethe employeremployer inin respectrespect ofof anyany
obligationobligation payablepayable byby thethe employeeemployee;;
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""Profits in lieu of salary"" includesincludes--
AnyAny paymentpayment whichwhich isis notnot exemptexempt fromfrom taxtax
AnyAny paymentpayment receivedreceived fromfrom thethe employeremployer beforebefore
joiningjoining andand afterafter leavingleaving thethe serviceservice..
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Salary Structure of EmployeesSalary Structure of Employees
Particulars Amt (Rs) Deductions to be allowed
Basic Salary (PA) 1,80,000 Ded u/s 80c
D.A (PA) 1,08,000 Contribution to RPF 34,560
Bonus 24,000 Investment in NSC 20,000
Total (A) 3,12,000 LIC premium (sum assured
1,00,000)
15,440
Education (2 Children) 2,400 Contribution to PPF 30,000
Hostel (2 Children) 5,274 Ded u/s 80ccf
Transport 9,600 Investment in Infra Bond 20,000
HRA (rent paid 9K) 1,08,000 Ded u/s 80D
Motor Car 19,200 Medi claim Premium 35,000
Contribution to RPF 34,560 Total Deduction (B) 155000
Profession Tax 2,400 Taxable Salary (A-B) 1,57,000
Interest on RPF (9.5%) 6,566
Total (A+B) 5,00,000
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Assumptions for this ComputationAssumptions for this Computation
HRA working:HRA working: 1) Does not live in his own house1) Does not live in his own house
2) Rent paid by him is 12,000 P.M2) Rent paid by him is 12,000 P.M
Exemption:Exemption: 1) HRA actually received1) HRA actually received
2) Rent Paid2) Rent Paid 10% of Salary *10% of Salary *
3) 40% of salary (Employee is residing in Ahmedabad)3) 40% of salary (Employee is residing in Ahmedabad)
Motor Car Allowance:Motor Car Allowance:
1)1) Employee owns the motor car but the actual running & maintenance chargesEmployee owns the motor car but the actual running & maintenance charges
(including chauffeur's remuneration)are met by the employer.(including chauffeur's remuneration)are met by the employer.
2)2) cubic capacity of engine exceeds 1.6cubic capacity of engine exceeds 1.6 litersliters
3)3) reimbursement is partly for official purpose & partly for private purposereimbursement is partly for official purpose & partly for private purpose
Education perks:Education perks:
1) His son is studying in the same school made by the same company in which he is1) His son is studying in the same school made by the same company in which he is
working.working.
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Particulars Amt.
Basic Salary (PA) 300000 Deduction U/S 80C & 80 CCF
D.A (PA) 200000 Contribution to RPF 60000
Total 5,00,000 Investment in Post Office scheme 15000
Allowances Exempt U/S 10 Investment in MF U/S 10(23) 25000
HRA 250000 Investment in Infra Bonds 20000
Education (2 Children) 2400 Deduction U/S 80D
Hostel (2Children) 7200 Medi Claim Premium 35,000
Uniform 9600 Deduction U/S 80E
Telephone 24000 Interest on Educational Loan 1,25,000
Motor Car 32000 Deduction U/S 80DDB
Contribution To RPF 60000 For Medical Treatment 40,000
Interest on RPF (9.5%) 11400 Total ( C ) 320000
Sports Club 65000 Taxable Salary 1,80,000
Food Allowance 36000
Professional Tax 2400
Total 10,00,000
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AssumptionsAssumptions for this Computationfor this Computation
HRA working:HRA working: 1) Does not live in his own house1) Does not live in his own house
2) Rent paid by him is 25,000 P.M2) Rent paid by him is 25,000 P.M
Exemption:Exemption: 1) HRA actually received1) HRA actually received
2) Rent Paid2) Rent Paid 10% of Salary *10% of Salary *
3) 40% of salary (Employee is residing in Ahmedabad)3) 40% of salary (Employee is residing in Ahmedabad)Motor Car Allowance:Motor Car Allowance:
1)1) Employee owns the motor car but the actual running & maintenance chargesEmployee owns the motor car but the actual running & maintenance charges
(including chauffeur's remuneration)are met by the employer.(including chauffeur's remuneration)are met by the employer.
2)2) cubic capacity of engine exceeds 1.6cubic capacity of engine exceeds 1.6 litersliters
3)3) reimbursement is partly for official purpose & partly for private purposereimbursement is partly for official purpose & partly for private purposeEducational Loan:Educational Loan:
1 Principal Amount:1 Principal Amount:-- 10,00,000/10,00,000/--
2 Interest Rate:2 Interest Rate:--12.5%12.5%
Assumed that the total amount of interest paid all the year round tenta amounts to RsAssumed that the total amount of interest paid all the year round tenta amounts to Rs
1,25,000/1,25,000/--
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Particulars Amt (Rs) Amt (Rs)
Basic Salary (PA) 4,92,000 Profession Tax
Gifts allowance
2,400
5,000
D.A (PA) 3,17,229 Total (B) 6,02,030
Bonus 88,740 Deduction U/S 80C & 80 CCF
Total (A) 8,97,969 Contribution to RPF 96,000
Allowances Exempt U/S 10 Investment in MF U/S 10(23) 4,000
Uniform 20,000 Investment in Infra Bonds 20,000
Food 36,000 Deduction U/S 80D
Education (2 Children) 2,400 Medi Claim Premium 35,000
Hostel (2 Children) 7,200 Deduction U/S 80E
Transport 9,600 Interest on Educational Loan 1,50,000
HRA 2,99,983 Deduction U/S 80DD
Motor Car 32,400 For Medical Treatment of father 1,00,000
Entertainment 5,000 Deduction U/S 24(b)
Sports club facilities 55,000 Interest on Housing Loan 1,50,000
Education perks 12,000 Total ( C ) 5,55,000
Contribution to RPF 96,807 Taxable Salary (A-C) 3,42,969
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AssumptionsAssumptions for this Computationfor this Computation
HRA working:HRA working: 1) Does not live in his own house1) Does not live in his own house
2) Rent paid by him is 35,000 P.M2) Rent paid by him is 35,000 P.M
Exemption:Exemption: 1) HRA actually received1) HRA actually received
2) Rent Paid2) Rent Paid 10% of Salary *10% of Salary *
3) 40% of salary (Employee is residing in Ahmedabad)3) 40% of salary (Employee is residing in Ahmedabad)
Motor Car Allowance:Motor Car Allowance:
1)1) Employee owns the motor car but the actual running & maintenance charges (includingEmployee owns the motor car but the actual running & maintenance charges (including
chauffeur's remuneration)are met by the employer.chauffeur's remuneration)are met by the employer.
2)2) cubic capacity of engine exceeds 1.6cubic capacity of engine exceeds 1.6 litersliters
3)3) reimbursement is partly for official purpose & partly for private purposereimbursement is partly for official purpose & partly for private purpose
Education perks:Education perks:
1)1) His son is studying in the same school made by the same company in which he isHis son is studying in the same school made by the same company in which he isworking.working.
Educational Loan:Educational Loan:
1 Principal Amount:1 Principal Amount:-- 15,00,000/15,00,000/--
2 Interest Rate:2 Interest Rate:--10%10%
Assumed that the total amount of interest paid all the year round tenta amounts to RsAssumed that the total amount of interest paid all the year round tenta amounts to Rs1,50,000/1,50,000/--
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Computation of Taxable IncomeComputation of Taxable Income
Particulars For 5 Lacs For 10 Lacs For 15 Lacs
Gross Taxable Salary 1,57,000 1,80,000 3,42,969
Less : Basic Exempt.
Limit
180000 180000 180000
Taxable Nil Nil 1,62,969
Tax @ 10% Nil Nil 16,297
Edu. Cess @ 2% Nil Nil 326
High Edu. Cess @ 1% Nil Nil 163
Total Tax Payable 16,786
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DEDUCTIONS U/s 80C & CCF
DeductionDeduction inin respectrespect ofof lifelife insuranceinsurance premiapremia,,providentprovident fund,fund, etcetc.. butbut notnot moremore thanthan RsRs..11..22 laclac
Any sums paid towards:Any sums paid towards:
Insurance premiumInsurance premium ContributionContribution toto ProvidentProvident FundFund
National Saving CertificatesNational Saving Certificates
TuitionTuition FeesFees ofof self,self, spousespouse oror childchild (not(not moremorethanthan 22))
Installment of housing loanInstallment of housing loan
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FDR
FDR forfor periodperiod ofof notnot lessless thanthan fivefive yearsyears withwith aascheduledscheduled bank,bank, asas per per schemescheme notifiednotified byby
CentralCentral GovtGovt asas perper BankBank TermTerm DepositDeposit SchemeScheme
20062006..
Deduction in respect of health insuranceDeduction in respect of health insurance
premium:premium:
[[UptoUpto RsRs..1515,,000000//--,, andand inin thethe casecase of of seniorsenior
CitizenCitizen itit isis RsRs.. 2020,,000000//--]]
RsRs..2020,,000000//-- infrastructuralinfrastructural bondsbonds..
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Deduction in respect of maintenance including
medical treatment of a dependant who is a
person with disability U/s 80DD.
Rs.Rs.50,000/50,000/--
InIn casecase ofof severesevere disabilitydisability itit isis RsRs.. oneone laclac..
[Medical[Medical certificatecertificate isis requiredrequired toto bebe attachedattached withwith
thethe returnreturn..]]
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DEDUCTION IN RESPECT OFMEDICALDEDUCTION IN RESPECT OFMEDICAL
TREATMENT, ETC. U/s 80DDBTREATMENT, ETC. U/s 80DDB
RsRs.. 4040,,000000//--;; butbut inin thethe casecase ofof aa seniorsenior citizencitizen itit isis
RsRs..6060,,000000//--;;
ProvidedProvided itit isis actuallyactually spentspent for for thethe specifiedspecified
ailmentsailments..
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Deduction in respect of interest on loan
taken for higher education 80E.
ForFor self,self, spouse,spouse, dependentdependent childchild oror for for whomwhom
assesseeassessee isis guardianguardian BeginningBeginning yearyear andand fourfour immediatelyimmediately followingfollowing
yearsyears..
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Deduction in respect of donations paid
in cash only U/s 80G100100%% ofof thethe followingfollowing::
((ii)) thethe NationalNational DefenseDefense FundFund;; oror
(ii)(ii) PrimePrime Minister'sMinister's NationalNational ReliefReliefFundFund;; (iii)(iii) NationalNational FoundationFoundation forfor CommunalCommunal
HarmonyHarmony;; oror
(iv)(iv) LocalLocal authorityauthority anyany for for thethe purposespurposes ofofimprovementimprovement ofof primaryprimary educationeducation inin villagesvillages andand
townstowns
(v)(v) NationalNational oror StateState BloodBlood TransfusionTransfusion CouncilCouncil
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(vi)(vi) StateState GovernmentGovernment FundFund toto provideprovide medicalmedical
reliefrelief toto thethe poorpoor;; oror
(vii)(vii) ArmedArmed forcesforces CentralCentral WelfareWelfare FundFund forfor thethe
welfarewelfare ofof thethe pastpast andand presentpresent membersmembers ofof suchsuch
forcesforces oror theirtheir dependantsdependants;; oror
(viii)(viii) NationalNational SportsSports FundFund;; oror
(ix)(ix) thethe NationalNational CulturalCultural FundFund;; oror
(x)(x) FundFund for for anyany GovtGovt.. for for thethe purposepurpose ofof
promotingpromoting familyfamily planningplanning;;
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50% of the following:
(v)(v)F
undF
und forfor of of thethe GovernmentGovernment oror anyany locallocalauthority,authority, forfor anyany charitablecharitable purposepurpose;; oror
(vi)(vi) anan authorityauthority forfor satisfyingsatisfying thethe needneed for for
housinghousing accommodationaccommodation
(b)(b) anyany sumssums asas donationsdonations forfor thethe renovationrenovation oror
repairrepair ofof anyany suchsuch temple,temple, mosque,mosque, gurdwara,gurdwara,
churchchurch or or other other placeplace of of extraordinaryextraordinary
importanceimportance;;
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80U. Deduction in case of a person with80U. Deduction in case of a person with
disability.disability.
Rs.Rs. 50,000/50,000/-- to resident individual with disability;to resident individual with disability;
Rs.Rs. Rs.1,00,000/Rs.1,00,000/-- with severe disability.with severe disability.
Certificate from the Prescribed medial authorityCertificate from the Prescribed medial authorityshall be attached with the return of income.shall be attached with the return of income.
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GR
ATITUDEGR
ATITUDE
We are thankful to KPC who gave us the opportunity to workWe are thankful to KPC who gave us the opportunity to workas a team to share our skills and knowledge through thisas a team to share our skills and knowledge through thispresentation.presentation.
From : TeamFrom : Team -- 22
JatanJatan WalaWala JatinJatin PatelPatel
ShreyaShreya ShahShah
BrijeshBrijesh ShahShah
RajeevRajeevY
adavY
adav