Applicability of Tax on Retirement Benefits

Sunday, September 4th, 2016 Amritesh no responses

Employees receive monetary benefits at the time of retirement. Such benefits are taxable under the head, “Salaries” as it is profits paid in lieu of salary. Certain tax exemption wholly or partially is also granted on such benefits under the Income Tax Act, 1961. Tax on Retirement Benefits such as Annuity Pension and interest received on lump sum deposits is applicable as per the provisions of the Income Tax Act.  Tax exemption is available U/S 10 of the Income Tax Act. The exemption granted may be wholly or partially depending on the nature of benefit. These tax exemptions are provided on retirement benefits to reduce the financial burden. Furthermore, these financial benefits are for Individuals to sustain themselves and lead…

Income from Salaries: Tax Implications

Sunday, August 28th, 2016 Amritesh 2 responses

“Salary” is any remuneration paid by an employer to the employee in lieu of the service provided by him/her. Salary may include monetary and non monetary benefits which are taxable as per the Income Tax Act. Any payment made by the employer to employee in lieu of service is chargeable to tax. Salary has a much wider meaning for taxation purpose than it is normally understood. Income from Salaries comprises of various components and we will discuss the tax implications on the same.  Salary includes; Wages Fees, Commission, Perquisites or Profits in Lieu of Salary Advance Salary Leave Encashment Fund transferred from Unrecognized Provident Fund to Recognized Provident Fund Compensation due to variation in Service Contract Contribution to Recognized Provident…

Heads of Income for Tax Computation

Sunday, July 31st, 2016 Amritesh one response

  The various Heads of Income which is taxable under the Income Tax Act has been discussed below. This is a brief of the various Income Heads which are chargeable to tax, details pertaining to the each head will be discussed in my future posts. Income Tax Filing: Types of Income Tax Forms How to e-File Income Tax Return (ITR1- Sahaj)? Various Heads of Income Income from Salary:Any monetary or facility benefit extended by an Employer to Employee in lieu of service provided is called Salary. For computation of income from “Salary” it important to establish an “Employee “, “Employer” relationship between the provider and receiver.   Components of Salary Include: Basic Pay Dearness Allowance House Rent Allowance Allowance Conveyance Allowance Medical Allowance…

Tax Deductions Available Under Various Sections For Financial Year 2016-17

Sunday, May 1st, 2016 Amritesh one response

Individuals whose Annual Income is above Rs 2,50,000/ p.a- will be liable to pay Taxes on the earnings above the prescribed amount. However, Individuals earning below Rs 5,00,000/- p.a can avail Tax Credit up to Rs 5000/- on the Tax payable. Now we will look at the Tax Deductions available under the Income Tax Act and Sections applicable. We would also find out Investment and Savings options which could be availed. DEDUCTIONS U/S 80C   Deductions are available to the Individuals under Section 80C, 80CCD, 80CCC up to the extent Rs 1,50,000/-. These are now effectively clubbed under Section 80C with the aggregate deduction ceiling of Rs 1,50,000/-. SAVING/INVESTMENT SCHEMES RETURN ON INVESTMENT LOCK IN PERIOD Contribution to Employee’s Provident…

Impact Of Income Tax For The Financial Year 2016-17

Sunday, April 10th, 2016 Amritesh one response

 INCOME TAX LIABILITY FOR THE FINANCIAL YEAR 2016-17 (For Individuals Below 60 years)  Income up to Rs 2,50,000/- is exempted from Tax. *Tax Rebate U/S 87A raised to Rs 5,000 from Rs 2,000 for Individuals with Net Income below Rs 5,00,000/-. Assumed Maximum Deduction availed under Various Sections:** Deduction is available on Investment up to Rs 1,50,000/-  U/S 80C.     Deduction is available on Investment up to Rs 50,000/- in National Pension  Scheme U/S 80 CCD (1b).     Deduction is also available on Health Insurance paid for self, spouse, dependent children up to Rs 25,000/- U/S 80 D.*** Education Cess of 3% is levied on Income Tax payable.**** Surcharge of 15% is applicable on Income over Rs 100,00,000/-.Note:Only Deductions directly applicable to Individuals…

Professional Tax For The Financial Year 2016-17

Saturday, April 2nd, 2016 Amritesh 101 responses

Professional tax is a tax levied by the various State Governments of India on salaried individuals, working in government or non-government entities, or in practice of any profession, including Chartered Accountants, Doctors, Lawyers etc or carry out some form of business. This form of tax is in practice for a long time and States were conferred the power of leveling the Tax under Clause (2) of Article 276. The rate at which Professional tax is charged is based on the Income Slabs set by the respective State Governments. However, the maximum Professional Tax that may be levied by any State has been capped at Rs 2500/-. The total amount of professional tax paid during the year is allowed as Deduction…

Income Tax Slabs And Rates For The Financial Year 2016-17 (Assessment Year 2017-18)

Sunday, March 6th, 2016 Amritesh one response

INCOME SLABS (INDIVIDUALS BELOW 60 YRS) TAX RATES 1.) Taxable Income not exceeding Rs 2,50,000/- Nil 2.) Rs 2,50,001 but not exceeding Rs 5,00,000/- 10% of Amount above Rs 2,50,000/-* 3.) Rs 5,00,001-Rs 10,00,000/- Rs 25,000/- Plus 20% of the amount exceeding Rs 5,00,001/- 4.) Above Rs 10,00,001/- Rs 1,25,000/- Plus 30% of the amount exceeding Rs 10,00,001/-** NOTE: *A Tax Rebate of 10% (Rs 5000/- maximum) is available under Sec 87A to individuals whose Taxable Income is in the range of Rs 2,00,001-5,00,000/-. However if the taxable income exceeds Rs 5,00,000/- the rebate is withdrawn.   **Surcharge of 15% if the Total Income exceeds 1 Crore.   Education Cess of 3% is payable on Total Income Tax and on…

Tax Saving Investment Options For Financial Year 2015-16

Thursday, February 11th, 2016 Amritesh one response

We are in the last quarter of the Financial Year and again it is the time when everybody is looking at various investment options not for the sake of investing but solely to reduce their tax burden. It is good to plan your taxes well in advance but it is equally important to invest wisely. Thus one should make most of the Tax exemption available under various Sections while being very careful with their Investments. It is advisable to diversify your investments so that you are adequately covered and are able to maximize your wealth at the same time.In this post, I will discuss some of the potential investment options for the Investors. Individuals based on their needs and preference…

Professional Tax For The Financial Year 2015-16

Monday, March 30th, 2015 Amritesh 175 responses

Professional tax is a tax levied by the various State Governments of India on salaried individuals, working in government or non-government entities, or in practice of any profession, including Chartered Accountants, Doctors, Lawyers etc or carry out some form of business. This form of tax is in practice for a long time and States were conferred the power of leveling the Tax under Clause (2) of Article 276. The rate at which Professional tax is charged is based on the Income Slabs set by the respective State Governments. However the maximum Professional Tax that can be levied by any State till date is Rs 2500/-. The total amount of professional tax paid during the year is allowed as Deduction under…

Tax Deductions Available Under Various Sections For Financial Year 2015-16

Sunday, March 8th, 2015 Amritesh no responses

Individuals whose Annual Income is above Rs 2,50,000/ p.a will be liable to pay Taxes on the earnings above the prescribed amount. Individuals earning below Rs 5,00,000/- p.a can avail Tax Credit up to Rs 2000/- on the Tax payable. Now we will look at the Tax Deductions available under the Income Tax Act and Sections applicable. We would also find out Investment and Saving options which could be availed. DEDUCTIONS U/S 80CDeductions are available to the Individuals under Section 80C, 80CCD, 80CCC up to the extent Rs 1,50,000/-. These are now effectively clubbed under Section 80C with the aggregate deduction ceiling of Rs 1,50,000/-. SAVING/INVESTMENT SCHEMES RETURN ON INVESTMENT LOCK IN PERIOD Contribution to Employee’s Provident Fund (EPF) Varies year…