This article is covering the easy understanding of investments available if you haven’t yet completed the bracket of tax savings. And some important things for filing proper ITR.
Before we go in detail, read this para carefully!
Follow government guidelines. 🆘
Work from home.
Please take care.
#staysafe #covid-19
#we together can fight corona! #Standforunity
Government has also given the extension of time for investing from 31st March, 20 to 30 June, 20. Please read following to get further clarity:
1) FY 2019-20 is not at all extended till 30th June, only the date is extended for some compliances.
2) Belated returns or Revised returns for the FY 2018-19 can be filed till 30th June.
3) In the FY 2019-20, income is taxable till 31st March only and not upto 30th June, i.e. for taxability of income financial year is considered till 31st March only.
4) Deductions under 80C, 80D, etc. can be claimed by investing till 30th June.
5) New LIC, mediclaim, PPF, NPS, etc. policies taken till 30th June will be eligible for the deduction for the FY 2019-20.
6) Payment of Premium of old policies of LIC, mediclaim, PPF, NPS, etc. due upto 31st March can be claimed as deduction even if paid till 30th June.
7) Housing loan interest is eligible for deduction on accrual basis, so interest accrued till 31st March will be eligible for the deduction in FY 2019-20. However Installments due upto 31st March can be claimed as deduction ever if paid till 30th June.
Happy Reading!
1. Tax Slabs
| Taxable Income |
Tax Rate |
|
|
| Upto 2,50,000 |
Nil |
*(Basic Exemption Limit for age below 60) |
For Senior Citizens
(Age: 60-79) – This Limit is Rs. 3,00,000/-
For Super Senior Citizens (Age: 80 & 80+) – Limit is Rs. 5,00,000/-
|
| 2,50,001 to 5,00,000 |
5% |
** |
|
| 5,00,001 to 10,00,000 |
20% |
|
|
| More than 10,00,000 |
30% |
|
|
| |
|
|
|
| ** Rebate – (section 87A) |
Last year – rebate was 2,500/-, this year 12,500/- (only income upto 5.00 Lacs)
Ultimately – No tax till 5.00 Lacs – but if taxable income goes even by Re 1 – 5,00,001 – Tax will be 12,500+ (straight from zero to 12,500+) – Credits to Sec 87A!!
(No such changes made except above)
|
- Standard Deduction (Salaried):
Standard Deduction in case of Employees – Earlier - 40,000/- Now – 50,000/-
(Standard Deduction replace – Medical Reimbursement + Transport Allowance + Conveyance Allowance)
3. Interest needs to be considered:
- RD interest
- FD interest (Tax savings FD, new, renewed, flexi, any form…)
- Dividend on bank shares / (non-taxed dividend)
- Savings bank interest
4. Investment Options :
- 80 C
- Principal repayment of home loan
- LIC
- 5 years lock in FD / Tax savings FD
- Tax Savings Mutual Funds / ELSS
- Provident Fund - Public or employer PF / VPF
- NSC
- Sukanya Sammruddhi Yojana
- Tuition Fees
- Stamp Duty & Registration exp while buying home
- Senior Citizen Saving Scheme
- Pension Funds
80 CCD – Additional 50,000/- (other than 1.50 Lacs cap of 80C) - National Pension Scheme
b. 80 D –
| Scenario |
Premium paid |
Deduction under 80D |
| Self, family,
children
|
Parents |
| Individual and parents below 60 years |
25,000 |
25,000 |
50,000 |
| Individual and family below 60 years but
parents above 60 years
|
25,000 |
50,000 |
75,000 |
| Both individual, family and parents above 60
years
|
50,000 |
50,000 |
1,00,000 |
| Members of HUF |
25,000 |
25,000 |
25,000 |
| Non-resident individual |
25,000 |
25,000 |
25,000 |
***Senior citizen will also include very senior citizen These payments to be made in cheque/ online mode.
Preventive Health Check-up : Any payments made towards preventive health check-ups will entitle a taxpayer to a deduction of up to Rs.5,000, which is within the overall limit of Rs.25,000 / Rs.30,000 (Rs.50,000 w.e.f. 1 April 2018) as the case may be. This deduction can also be claimed either by the individual for himself, spouse, dependent children or parents. The payment for preventive health check-up can be made in cash.
5. Interest on housing loan:
- Subject to Rs. 2.00 Lacs (demand for interest certificate form banks / FII)
6. Rental Income (recd):
- Any property is rented – the income has to be considered in name of house
- The corporation tax paid can be claimed as deduction apart from 30% given for repairs, etc .
7. Rent paid:
- House rent allowance recd can be exempt – Exemption as follows:
- The exemption for HRA benefit is the minimum of:
- Actual HRA received
- 50% of salary if living in metro cities, or 40% for non-metro cities; and
- Excess of rent paid annually over 10% of annual salary Salary is Basic + DA
- Other than above, if HRA is not recd / not salaried but self-employed - You will be required to file Form 10BA with details of payment of rent. – sec 80GG
Deduction –the lowest of these will be considered as the deduction under this section-
- Rs 5,000 per month
- 25% of the total Income (excluding long-term capital gains, short-term capital gains under section 111A and Income under Section 115A or 115D and deductions under 80C to 80U. Also, income is before making a deduction under section 80GG).
- Actual rent less 10% of Income
(if any self-occupied property is shown, above deduction won’t be allowed)
- 80DDB - medical treatment of a dependant
o Upto 60 years age – 40,000/-
o Above 60 – 1,00,000/-
9. 80 DD –
- dependant-who is differently abled and– is wholly dependent on the individual (or HUF) for support &
- Disability – 40 – 80 % - Rs 75,000/-
- Above 80 % - 1,25,000/-
10. 80 E Interest on Education loan -
11. 80 EE - Interest on Home Loan
- To claim this deduction, you should not own any other house property on the date of the sanction of a loan from a financial institution
- Value of house property < 50.00 Lacs + Loan upto 35.00 Lacs + Sanction date - 1.4.16 to 3.17
-first house only
12. 80 EEA - For 19-20:
Sanction date can be 1-4-2019 to 31-3-2020 – Additional 1.50 Lacs will be given
Value of property less than 45 Lacs + Carpet Area – 645sq ft – else all conditions – same as above
13. Section 80EEB – Deduction in respect of interest paid on loan taken for the purchase of electric vehicle
- individuals + interest payments up to Rs 1,50,000 is available under Section 80EEB. + loan sanction between 1/4/2019 to 31/03/2023
-
80 G – Donation
– in cash – 2000 above than 2000/- - only online transfer / cheque
-
80 TTA
- Savings bank interest - exempt upto 10,000/-
-
80 TTB
– Interest recd - Senior Citizens – exempt upto 50,000/- (savings + all other interest as well)
-
80 U
– deduction for disabled individuals – SELF
- 40- 80% - Rs. 75,000/-
- Above 80% - 1,25,000/-
18. Some facts while filing ITR / giving the documents to CA while preparing ITR
- keep in mind all above
- all bank statements needs to be considered – whether current / savings / loan / personal loan / business loan,
- all bank needs to be reported to IT dept while filing
- PAN & adhaar number must be
- Its suggested to link your valid mobile number and email id to Adhar card & IT portal as
- Pre-validate Your bank account on IT
- Form 16 from employer for salaried individuals is a
- Form 16 A for other TDS deductions ( For example – Interest on FD, contractual receipts, etc)
- Tax savings is not last minute task, prepare yourself well in advance!
Last, but not least,
We all are locked down in our sweet homes, stay safe, earn the time by investing in relations, give yourself the time you wished for!
#Indians will LEARN in this lock-down period!!
#Period!
Disclaimer: The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions.
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