TAX : Ready Reckoner for Investments - FY: 2015-16:

TAX : Ready Reckoner for Investments - FY:  2015-16:

Here we give you a ready reckoner for all the tax liabily occurs in any type of invesment we do in our daily life. I hope it may be helpful to understand tax to all of us,

EQUITY:

Stocks:

1. If you hold on to them for a year, the long-term capital gain is tax free
2. Short-term capital gain is taxed at 15%
3. Dividends are tax free

DEBT FIXED INCOME INSTRUMENTS:

Savings a/c:

1. Interest up to Rs 10,000 is tax free, taxed at slab rate after that
2. TDS not deducted on savings interest.

Fixed deposits:

1. Full interest taxed at slab rate
2. TDS of 10% if interest in any financial year crosses Rs 10,000

Recurring deposits:

1. Full interest taxed at slab rate
2. TDS wef. this FY, the interest on RD is also subject to TDS like F.D.

Tax-free bonds:

1. Full interest is tax free
2. The long-term capital gain (after holding for 1 year) taxed at 10%
3. Being interest bearing instruments, no indexation benefit allowed
4. Short-term capital gain taxed at marginal rates.

Normal bonds and debentures:

1. Full interest taxed at slab rate TDS of 10% if interest in any financial year crosses the Rs 5,000 mark
2. The long-term capital gain (after holding for 1 year) taxed at 10%
3. Being interest bearing instruments, no indexation benefit allowed
4. Short-term capital gain taxed at marginal rates. for more contact SAMPARK

A TO Z OF INCOME TAX PROVISIONS AT A GLANCE:

A TO Z OF INCOME TAX PROVISIONS AT A GLANCE:

1. Detailed information of Income Tax is available onwww.incometaxindia.gov.in

2. As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and Other Sources.

3. Salaried person must obtain Form 16 from his Employer Every Year.

4. Income Tax Return should be filed by considering Form 16 and other Income.

5. Transport Allowance is exempt up to Rs.1,600 per month.

6. 30% Standard deduction is available on Income from House Property.

7. Income to be considered as deemed let out on second House property.

8. For self-occupied house property, deduction of Interest on Housing Loan is allowed up to Rs. 200,000/- and for other house property actual expenditure of Interest on Housing Loan is allowed.

9. Repayment of Principal amount of Housing Loan is deductible u/s 80C up to Rs.150,000/-.

10. Tax Audit is compulsory if sales turnover exceeds Rs.1 crore in case of business.

11. Tax Audit is compulsory if the Gross Receipts of Professionals exceeds Rs.25 lakhs.

12. If sales turnover is below Rs. 1 crore, then net profit of 8% or higher is to be taken as business income otherwise tax audit is required.

13. The Due Date for Tax Audit and income Tax Return is 30th September.

14. Assessee other than Company and those eligible for Tax Audit are required to file Income Tax Return before 31st of July. Extended date is 31st Aug for F.Y. 2014-15.

15. Accurate Stock Valuation should be done on 31st of March.

16. Cash payment should not be made to a person in single day exceeding Rs.20,000.

17. Cash Payment limit for Transporters is Rs.35,000/-.

18. Loans, deposits and Immovable Properties transactions should
not be carried out above Rs.20,000 in cash.

19. Business loss can be carried forward to Next 8 Years.

20. Tax Audit applicable assesses should deduct TDS on particular transactions.

21. TDS should be made on the date of Credit or Payment basis of whichever is earlier.

22. TDS payment should be made on or before 7th day of Next Month.

23. TDS Returns are to be filed Quarterly.

24. TDS returns can be revised any number of times.

25. TDS should be deducted and paid if applicable.

26. If TDS is not deducted then deduction of 30% of Expenditure
is not allowed.

27. Late filling of TDS return attracts late filing fees of Rs.200 per day.

28. Long Term Capital Gain will arise if transfer of specified Capital Assets is made after 3 years.

29. Generally Long Term Capital Gains is taxable @ 20%

30. STT paid Long Term Capital Gain on Shares,etc is exempt from Tax.

31. Short Term Capital Gain is Taxable @ 15% if STT is paid.

32. Capital Gain on Immovable Properties is chargeable at Stamp
Duty Value or Selling Price whichever is higher.

33. Dividend received from domestic company is exempt from Tax.

34. Agricultural Income is exempt from Tax.

35. Gifts received form stranger of an Amount exceeding Rs.50,000 is taxable.

36. Income Tax is not chargeable on Gifts received at the time of Marriage, Will, and in case of Succession and from specified relatives.

37. Maximum deduction limit u/s 80C, 80CCC and 80 CCD is Rs.1,50,000.

38. Deduction of Medical Insurance Premium is available up to Rs. 25,000.

39. Deduction of Medical Insurance Premium paid for Parents is available up to Rs. 20,000.

40. Deduction limit of Interest earned on Saving Accnt is up to Rs.10, 000.

41. Income earned by a Minor child is clubbed in the hands of Parents.

42. Every Taxpayer should verify his Form 26AS.

43. Form 26AS provides the Information regarding the TDS, Advance Tax paid and details of refund.

44. Notice may be sent to the Taxpayer if the Income mentioned in Form 26AS and the Income Tax Return filed is having difference.

45. Basic Exemption Limit for individuals for FY2015-16 is Rs.2,50,000.

46. Basic Exemption Limit for Senior Citizen i.e. above 60 years age is Rs.3,00,000.

47. Basic Exemption Limit for Super Senior Citizen i.e. above 80 years age is Rs.5,00,000.

48. Advance Tax is to be paid if Tax Liability during the year exceeds Rs. 10,000.

49. 12% of Surcharge is applicable if Income Exceeds Rs. 1Crore.

50. Income Tax Return should be filed if Income exceeds Basic Exemption Limit.

51. 30% of Tax applicable on Income of Partnership Firm, Company, LLP etc.

52. For Companies – Minimum Alternate Tax and for other Assesses
– Alternate Minimum Tax rate is 18.5%.

53. Details of all Bank Accounts have to be given in Income Tax return.

54. Passport number is required to be given in Income Tax return.

55. Detail of Fixed Assets held in Foreign Country is required to be given in Income Tax return.

56. If taxable income of Individual is less than Rs. 5 Lakhs then relief of Rs.2,000/- is available in Tax.

57. Aadhar Card No. is required to be mentioned in Income Tax return.

58. E-filling of return is compulsory if income exceeds Rs. 5 lakhs.

59. In Income Tax, E-filling of return can be done for Previous 2 Years only.

60. PAN Card is essential for Taxpayer and it should not be used as Id Proof.

61. From FY 2014-15 Depreciation is to be calculated as per New Companies Act.

62. Domestic Transfer Pricing is applicable on transaction exceeding an Amount Rs.20 Crores.

Issued in public Interest !!
More on http://samparkonline.co.in

5 Easy Steps for Tax Planning :

 Tax planning is an important component of personal finance and you must invest time to understand it and do it for your income. There are different ways to minimize tax liability and depending on your income and risk profile, you should choose the most optimum ones. 

I know the word tax brings terror in the minds and hearts of people. Moreover once you file your taxes for the year, many of you sit back and relax till the date of the next filing of returns comes close. But tax planning is an important component of personal finance and fear not, I will help you make your journey in tax planning easier and maybe less scary

TAX SAVING WITH WEALTH CREATION :

EARN MONEY SAVE TAX

Tax planning may seem like a tedious exercise requiring lot of efforts that may make an ordinary investor nervous at the first glance. Equity Linked Savings Scheme (ELSS) offers a simple way to get tax benefits and at the same time get an opportunity to gain from the potential of Indian equity markets.

What is ELSS?

Simply put, ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act, and offers the twin-advantage of capital appreciation and tax benefits. It comes with a lock-in period of three years.

Why should one invest in an ELSS?

ELSS funds are one of the best avenues to save tax under Section 80C. This is because along with the tax deduction, the investor also gets the potential upside of investing in the equity markets. Also, no tax is levied on the long-term capital gains from these funds. Moreover, compared to other tax saving options, ELSS has the shortest lock-in period of three years.

6 tips to consider during tax planning for the year :

I know you must be busy with tax planning for the year FY 2013-14. It’s that time of the year when you hear nothing but ‘saving tax’.  You will also be flooded by calls from agents as well as advertisements in media stating various tax saving investments you should consider for the year to save tax. A lot of you might have already made some tax saving investments. Some of you would be planning to do so now. If you have not yet thought about anything, do it now. Do not delay it till the last date as you may not able to take sensible decisions at the last moment. Here are 6 tips for you to consider during tax planning for the year:

Different Types Of Section For Income Tax Saving :

Quite often, you might have heard about income tax saving sections such as section 80C. Here is a glance at all those sections which help you save tax: 

Section 80C
Deduction under section 80C can be claimed through instruments such as life insurance premium, PPF, NSC, tuition fees, EPF, ELSS, Home loan principal, etc. Deduction limit for this section is Rs. 1 lakh. This is one of the most popular are most utilized sections when it comes to tax saving.

Important Income Tax Changes for 2014 :

There have been a few changes in income tax for individuals as well as companies for 2014. Some of these are significant ones, especially for individuals. Let us now look into some of these tax changes :

Tax credit of Rs. 2000
Individuals with total income up to Rs. 5 lakh p.a will receive tax credit of Rs. 2000. This will virtually raise the tax exemption limit from Rs. 2 lakh to Rs 2.20 lakh. The benefit is available for all individuals of age up to 60 years. The move will benefit more than 42,000 tax payers.

A brief guide on TDS (Tax Deducted at Source)

A lot of investors still do not understand what is the meaning of TDS (Tax Deducted at source) is and how it’s related to their taxation. While the concept is very easy overall, I have seen that tons of investors still get confused when TDS is cut on their Fixed Deposits at maturity and they feel that they don’t need to pay any tax now, or feel that they don’t have to pay any tax on their Fixed Deposit interest just because it was below 10,000 and TDS was not cut.

So in this article, let me make sure that you are 100% clear about TDS and what it means.

Prudent Tax Planning- why this should be your resolution this fiscal?

Last minute adjustments can lead to mistakes and this is so true in your tax planning. Many of you must have bought a life insurance policy to save taxes, which most probably doesn’t suit your requirements. Rather insurance policies are being sold as an instrument to avail tax deductions under section 80C on many occasions. But one must understand tax planning is just one aspect of financial planning. Any investment decision has to be consistent with your long term financial plan and any ignorance there may cost you a pretty penny later. We resolute to start something anew at the beginning of every year then why not commit to our finances at the start of a new financial year?

Is tax-planning on your 'to do' list?

Here’s a thought when it comes to investing in the normal course, investors are willing to spend time, evaluate various options and meticulously plan the entire process. But when it comes to tax-planning, handling it in a rushed manner towards the end of the financial year is an acceptable proposition. While investing can be a sporadic activity, tax-planning is an annual exercise and hence can have far greater implications on one’s finances. Finally, when investments are made in designated avenues for the purpose of tax-planning, they deliver dual benefits i.e. reduce the tax liability and generate optimum returns.

Despite the obvious benefits that tax-planning offers, the apathy displayed by some investors towards it is rather surprising. Perhaps these investors continue to look at tax-planning as just another annual obligation that must be fulfilled. As a result, they haven’t fully understood the benefits that the tax-planning exercise can deliver.

Have you read your Tax Credit Statement (Form 26AS)

Being a responsible citizen, it is your moral duty to pay your taxes to the government, both direct as well as indirect. If you are a salaried person, or an entrepreneur running your business, or have any other source of income, it might be usual that your Tax is deducted at Source (TDS) by your employer or the party you are dealing with; or being a business man you may have even paid an advance tax to the government. Once you have fulfilled your tax commitment, you feel relaxed, but how do you make sure that the tax paid by you has been actually received by the government and has been credited against your account.

Equity Link Savings Scheme u/s 80C

An ELSS is a diversified equity fund that invests In stocks and is not concentrated in a sector or market category, and is thus a less risky way to invest in equity market—with a three-year lock-

in. Within the tax-saving set, it is the only one that offers advantages of investing in equity.

ELSS is a mutual fund similar to any diversified equity mutual fund that routes your investments

into equity markets. ELSS carries a tax benefit on the amount invested with lock in of 3 Years.

Are RGESS eligible mutual fund schemes a worthy investment?

The Government of India introduced Rajiv Gandhi Equity Savings Scheme (RGESS) in the previous Union budget 2012-13, and is targeted towards attracting the new retail investors into equity markets. Through RGESS the new first time investor can claim tax saving benefit on his investment up to Rs.50,000/- in eligible securities under section 80 CCG.This benefit can be availed in addition to deductions available u/s Sec 80C.

The objective of the RGESS is to encourage flow of savings in the financial instruments and improve the depth of the domestic capital market.

In December 2012, the Securities Exchange and Board of India (SEBI) pronounced norms for investing in RGESS. It clarified which securities would be eligible for availing tax benefit under the aforesaid scheme.

Seven ways to earn tax-free income :

Summer is a good two months away, but some of us are already sweating. And for good reason. North Block has hinted at a higher tax for the rich and, perhaps, even an inheritance tax. Though the latter is not likely soon, the former is a distinct possibility.

Five questions to ask on ELSS investment :

Equity-linked saving schemes are among the options that are eligible for tax benefits under Section 80C. Here are some facts that will help you make better investment decisions.

1) What are the tax benefits?

Up to Rs 1 lakh invested in ELSS funds in a year is eligible for deduction under Section 80C. However, unlike the life insurance policies, you cannot invest on behalf of a minor and avail of tax deduction. No tax is levied when you redeem your investment after the lock-in period.

Since ELSS funds have more than 65% of their corpus invested in stocks, they enjoy the exemption from tax on long-term capital gains as is the case with any other equity fund. The dividend income is also tax-free.

National Pension Scheme (NPS)?

As we would end the financial year in couple of months from now, we are quite sure that many of you would be busy evaluating investment avenues to save tax prudently. There are of course galore of avenues through which you could undertake your tax planning activity prudently, but in this edition we thought of apprising you all about the New Pension Schemes (NPS).NPS was earlier available only for Government employees, but later on May 1, 2009 also introduced for people in the unorganised (private) sector, as need for deeper participation in the pension contribution (through this product) was felt.

Five facts about Rajiv Gandhi Equity Savings Scheme :

The Rajiv Gandhi Equity Savings Scheme (RGESS) has been officially notified and will be launched by Finance Minister P Chidambaram this week. ET Wealth explains what you should consider before opting for this tax-saving option available under Section 80CCG.

Who is eligible?

RGESS is available to all resident individuals whose gross total income is less than Rs 10 lakh and who are investing in equity for the first time. A first-timer has been defined as the one who has not opened a demat account as a 'first holder' before the notification date of 23 November 2012, even if his name appears in a joint demat account opened before this date. The investor who has opened a demat account as first holder before the notification date but has not bought any shares or traded in the futures and options segment will also be considered as a first-time investor.

5 things to avoid while planning to save tax this year

It is that time of the year again - the time when we suddenly start taking interest in our finances. After months of hibernation, we suddenly wake up and start planning for saving income tax.

While this is certainly better than not doing anything to save tax, this last minute rush can lead to some costly mistakes. Here are a few things that you should avoid.

Tax planning at the beginning of the year :

 This year, there is something to cheer about if your net taxable income is in excess of Rs 10 lakh as you will have an additional savings of around Rs 2,000 every month as a result of the increase in exemption limit and change in the 20 per cent tax slab but when it comes to investment in tax saving instruments there is hardly anything to rejoice as the government slashed the EPFO interest rate by 1.25 percentage point to 8.25 per cent and clarity is still awaited on the Rajiv Gandhi Equity Savings Scheme. There is another dampener. All those who were investing into the infrastructure bonds to claim additional tax benefit on Rs 20,000 under Section 80CCF will not be able to do so in FY2012—13 as the Budget did not mention it.

Five resolutions to follow this financial year to create wealth :

 It’s the beginning of a new financial year; a year to look forward to with hope. To reach a goal, you need a path. Similarly, with the help of resolutions — financial resolutions, in this case — you can draw a road map and, with discipline, you can reach your goals. Let us adopt a few resolutions that are easy to follow and implement.