INCOME TAX RULES: Very Useful – INDIA

Posted on January 14, 2008. Filed under: FACTS, family, FELLOWS, life, News, Uncategorized |

ASSESSMENT YEAR 2008-2009
RELEVANT TO FINANCIAL YEAR 2007-2008

http://zoomsays.blogspot.com/2008/01/income-tax-rules-very-useful-india.html

I TAX RATES FOR INDIVIDUALS OTHER THAN II & III Upto 1,10,000 – Nil
1,10,000 to 1,50,000 – 10% of the amount exceeding 1,10,000
1,50,000 to 2,50,000 – Rs.4,000 + 20% of the amount exceeding 1,50,000
2,50,000 & above – Rs.24,000 + 30% of the amount exceeding 2,50,000
II TAX RATES FOR RESIDENT WOMAN BELOW 65 YEARS Upto 1,45,000 – Nil
1,45,000 to 1,50,000 – 10% of the amount exceeding 1,45,000
1,50,000 to 2,50,000 – Rs.500 + 20% of the amount exceeding 1,50,000
2,50,000 & above – Rs.20,500 + 30% of the amount exceeding 2,50,000
III TAX RATES FOR INDIVIDUAL RESIDENTS AGED 65 YRS AND ABOVE Upto 1,95,000 – Nil
1,95,000 to 2,50,000 – 20% of the amount exceeding 1,95,000
2,50,000 & above – Rs.11,000 + 30% of the amount exceeding 2,50,000
SURCHARGE ON INCOMETAX In the case of every Individual, Hindu undivided family, Association of person and body of individuals, Surcharge on income-tax is calculated @10% if the total taxable income exceeds Rs.10,00,000.
EDUCATION CESS The amount of Income-tax and Surcharge shall be further increased by Education Cess of 3% on Income-tax plus Surcharge.
EXEMPTIONS/DEDUCTIONS FROM SALARY
1. VOLUNTARY RETIREMENT – 10(10C)

Amount received or receivable (ie.,in instalments) by an employee on his voluntary retirement in accordance with any scheme of Voluntary Retirement is exempt to the extent of Rs.5,00,000, provided the VRS is in accordance with Rule 2BA of IT Rules.
2. HOUSE RENT ALLOWANCE EXEMPT U/S.10(13A)
a) Actual HRA received : Rs.xxxx
b) Rent paid in excess of 10% of Salary : Rs.xxxx
c) 50% of Salary in Metro Cities or
40% of Salary in other cities : Rs.xxxx
Least of a), b), c) is exempt.NOTE : Here Salary means Basic Salary as well as DA if the terms of employment so provide.
3. CONVEYANCE ALLOWANCE : Any allowance granted to meet the expenditure incurred wholly, necessarily and exclusively on conveyance in performance of the duties of office and so certified by the employer is exempt u/s.10(14). 4. TRANSPORT ALLOWANCE : Any allowance granted to an employee to meet the expenditure for the purpose of commuting between the place of his residence and the place of his duty to the extent upto Rs.800/- per month is exempt u/s.10(14). 5. MEDICAL REIMBURSEMENT : An amount of Rs.15,000 or the actual amount reimbursed by the employer whichever is less is exempt u/s.17(2). 6. PROFESSION TAX : Profession Tax levied by the State Government is allowable as a deduction from Gross Salary provided it has been paid. STANDARD DEDUCTION U/S.16(1) IS NOT ALLOWABLE FOR A.Y.2006-07 DEDUCTIONS FROM HOUSE PROPERTY 1. DEDUCTION U/S.23(1) : For let out property, amount paid by the owner towards taxes levied by any local authority in respect of the property is deductible from Annual value(taxes pertaining to any previous years). 2. DEDUCTION U/S.24(a) : For let out property, deduction of 30% of the Net Annual Value is allowed. No separate deduction for Repairs, Collection Charges, Insurance Premium, Annual Charge and Ground Rent. 3. INTEREST ON BORROWED LOAN(U/S.24(b)):
FOR SELF OCCUPIED PROPERTY

a. If Property is acquired or constructed with loan taken after 01/04/99 and construction is completed within 3 years from the end of the financial year in which the capital was borrowed – Rs.1,50,000 or actual interest paid/payable whichever is less is deductible.
b. If new housing loan is taken for repayment of old loan (old loan taken after 1/4/99) – Rs.1,50,000 or actual interest paid/payable whichever is less is allowed as deduction.
c. If Property is acquired or constructed with loan taken before 01/04/99, Rs.30,000 or actual interest paid/payable whichever is less is allowed as deduction.
d. If loan taken for Repairs, renewal, reconstruction of property, Rs.30,000 or actual interest paid/payable which ever is less is allowed as deduction.
FOR LET OUT PROPERTY, actual interest paid/payable can be claimed as deduction.
ONLY OWNER OF THE HOUSE PROPERTY CAN AVAIL THE ABOVE DEDUCTIONS. CAPITAL GAINS: With effect from 01/10/2004, Long Term Capital Gains arising on sale of equity shares or unit of equity oriented fund through recognized stock exchange is exempt if such transaction is chargeable to Securities Transaction Tax (u/s.10(38)). With effect from 01/10/2004, Short Term Capital Gains arising on sale of equity shares or unit of equity oriented fund through recognized stock exchange is subject to tax at the rate of 10% if such transaction is chargeable to Securities Transaction Tax. EXEMPTION U/S.54EC:
The Capital Gain arising out of sale of long term capital asset can be invested in National Highways Authority of India, Rural Electrification Corporation Limited, within six months from the date of sale. (Lock-in period is 3 years)
For Cost Inflation Index, refer website.
STANDARD DEDUCTION FOR FAMILY PENSION U/S.57(iia): An amount of Rs.15,000 or 331/3% of family pension whichever is less is allowed as deduction. If an assessee receives arrears of family pension, then Relief u/s.89(1) can be claimed by him.
Family Pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces(including para-military forces) of the union, where the death of such member has occurred in the course of operation is exempt.
EXEMPTIONS – OTHER SOURCES Any income by way of Dividends from company, Income received in respect of units from the Unit Trust of India, Income received in respect of the units of a mutual fund are exempt. DEDUCTIONS FROM GROSS TOTAL INCOME (CHAPTER VIA):

Sl.No I.T. Sec. Nature of Deduction Amount of deduction
1.
a.
b.
c.
80 CCE
80 C
80 CCC
80 CCD

Life Insurance Premia, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to u/s.10(23D), Tuition Fees(max. 2 Children), Repayment of Principal of Housing loan, Bank Fixed Deposit of 5 yrs period, notified Bonds of NABARD etc.Premium paid towards approved Pension Fund (like LIC’s Jeevan Suraksha) max. 1 lakh.Contribution to Central Government Pension Schemes. Upto 10% of salary with matching contribution from Government.
Maximum overall Deductions
allowed u/s. 80C,

80CCC & 80CCD
is Rs. 1,00,000
 2. 80 D (a) Medical Insurance Premium paid by Cheque for policies taken from General Insurance Corporation /other approved Insurance Regulatory and Development Authority.(b) For Senior Citizens Upto Rs.15,000 Upto Rs.20,000
 3.  80 DD (a) Any expenditure for Medical, Nursing & Rehabilitation incurred on dependant suffering from permanent disability including blindness, mental retardation, autism, cerebral palsy or multiple disabilities(b) Deposits under LIC, UTI’s Scheme & other IRDA approved insurers for the benefit of physically handicapped dependent Rs.50,000 with an additional Rs.25,000 if the disability is severe exceeding 80%
 4.  80 DDB (a) Actual expenditure incurred on Medical treatment of Self or dependant or a member of HUF suffering from terminal diseases like Cancer, AIDS, Renal failure etc.(b) For Senior Citizens(self or dependent on whom expenditure on medical treated is taken) Upto Rs.40,000
Upto Rs.60,000
 5.  80 E Interest on loan taken from Financial/Charitable Institutions for Self/Spouse/Children for pursuing Higher Education (for a max. period of 7 yrs) Actual Interest repaid
 6.  80 G (a) Donations made to National Defence Fund, Prime Minister’s Relief Fund, approved Funds of reputed Educational Institutions, National Trust for Welfare of persons with Autism, Cerebral Palsy etc.(b) Donations made to Jawaharlal Memorial Fund, PM’s Drought Relief fund, Any approved Charitable Institutin/Trust, Religious Institutions, a corporation established by the Government for promoting interest of the members of a Minority Community 100% of Donation
50% of Donation restricted to 10% of Adjusted Gross Total Income
 7.  80 GG Deduction in respect of rents paid, provided the assessee is not in receipt of HRA and no house is owned by self, spouse, minor child or HUF in the place of work subject to filing of declaration in Form No.10BA 25% of income
or rent paid in excess of 10% of income
or ceiling of Rs.24,000 p.a whichever is less
 8.  80 U Persons suffering from Permanent Physical Disability as specified in Rule 11D Rs.50,000 (Rs.75,000 in case of severe disability)
       

FRINGE BENEFIT TAX (FBT) Fringe Benefit Tax is a tax for the Fringe Benefits provided to the Employee by his Employer as defined u/s.115WB(1) and (2). It means any privilege, service, facility or amenity, directly or indirectly received by present & former Employees.

Fringe Benefits Base Value of FBT
Tour & Travel 5
Entertainment 20
Provision of Hospitality 20
Conference 20
Sales Promotion including publicity 20
Employee Welfare 20
Conveyance 20
Use of Hotel, Boarding & Lodging 20
Repairs, running, maintenance & depreciation on motor cars 20
Repairs, running, maintenance & depreciation on Aircraft 20
Use of Telephone 20
Maintenance of Guest House 20
Festival Celebrations 50
Use of Health Clubs 50
Use of any other Club facility 50
Gifts 50
Scholarships 50
Free or concessional tickets for private journey 100
Contribution by Employer to Approved Superannuation Fund 100
Employee Stock Option  

Fringe Benefit Tax(FBT) is calculated @ 30%(+SC+EC) on the percentage value of Fringe Benefits. TAX ON FRINGE BENEFITS:The tax on fringe benefits provided by their employer to their employee as defined u/s.115WB(1) and (2) is payable by the EMPLOYER.PENALTY U/S.271F: If a person who is required to furnish a return of income as required under section 139(1) or by the proviso to sub-section, fails to furnish such return before the end of the relevant assessment year, shall be liable to pay by way of penalty a sum of Rs.5,000. INTEREST U/S.234A: Where the return of Income of any assessment year u/s.139(1) or 139(4) or in response to a notice u/s.142(1), is furnished after the due date as specified in sub-section 1 of section 139, or is not furnished, the assessee shall be liable to pay simple interest at the rate of one percent for every month or part of a month comprised in the period commencing on the date immediately following the due date. INTEREST U/S.234B: Where an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than 90% of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one percent for every month or part of a month comprised in the period from the 1st day of April following the financial year. INTEREST U/S.234C: Where an assessee other than a Company, who is liable to pay advance tax under section 208 has failed to pay such tax or,
1) The advance tax paid by the assessee on his current income on or before the 15th day of September is less than 30% of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than 60% of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one percent per month for a period of three months on the amount of the shortfall from 30% or, as the case may be, 60% of the tax due on the returned income.
2) The advance tax paid by the assessee on his current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one percent on the amount of the shortfall from the tax due on the returned income.
DUE DATES FOR FILING RETURN OF INCOME : All Individuals/HUF/Firms deriving Income from Salary, House Property, Capital Gains, Business or Other Sources and not covered under section 44AB are required to file the Return of Income by 31st July. All Tax Audit Cases covered under section 44AB, Company returns are required to file the Return of Income by 31st October. PERMANENT ACCOUNT NUMBER: Every assessee is required to obtain 10 Alpha numeric Permanent Account Number (PAN) and quote the same in his returns, challans & correspondence. PAN can be obtained by applying in new Form No.49A at the designated Service Centres of UTITSL OR NSDL(Log on to our website). PAN is essential for processing the Return of Income and for giving credit for taxes paid. If a person who is required to quote his Permanent Account Number fails to do so or intimates false number, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of Rs.10,000.
To Know Your PAN, visit our website.
For PAN Grievances : UTITSL – e-mail – isw.bangalore@utitsl.co.in
NSDL – e-mail – tininfo@nsdl.co.in
TAX PAYMENTS : Advance tax payments and Self-assessment tax payments have to be made in Challan No.280. Please obtain counterfoil of challan containing Challan Identification Number (CIN) from the Bank and enclose copy of the same with the return and quote CIN in the return. This brochure should not be construed as an exhaustive statement of law. In case of doubt, reference should always be made to the relevant provisions of Income Tax Act, Rules or Notifications.

 
This brochure should not be construed as an exhaustive statement of law. In case of doubt, reference should always be made to the relevant provisions of Income Tax Act, Rules or Notifications.

hello boy!!
Chakradhar

www.chakradhar.net

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34 Responses to “INCOME TAX RULES: Very Useful – INDIA”

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Respected Sir,
Please guide me on the following points.
My son has taken Education loan From State Bank of India for his
B.Tech Course.The interest on the amount is being deducted from my
saving Bank account in the same bank Since August-2003 every month.
During financial year 2006-07 interest for two months could not be
deducted due to bank’s fault(negligence)Which ultimately converted
into principal amount and deducted the same during This financial
year2007-08 not as an interest but as a principal amount by the Bank
so that I can not take benefit of interest for saving tax .
for your information It is intimated that my son has not completed
his B.Tech(Mechanical Engg) course as yet even than the bank started
deducting Principal amount. I do not know why?
please help me so that I can get income-tax benefit on entire
interest on Education LOAN Taken For my son for B.Tech course
paid by me(deducted by the Bank) during This financial year 2007-08.

Please send your views at the earliest.
Thanks.
PRADEEP CHANDRA JHA
peeceejhaa@yahoo.co.in
Education Loan Account Number-10933264630

Respected Sir
NAMASKAR.
SUBJECT:- AN URGENT QUERY ON INTEREST ON EDUCATION
LOAN TAKEN BY MY SON

I have taken Education Loan from State Bank of India
for Rupees one lakh thirty six thousand
only(Rs136100)for my son for Engineering Degree course
Since August 2003.
Suppose an interest of Rs16008/-per annum
(@Rs1334/-per month )is being deducted from my saving
Bank account each year.[I was not claiming any Tax-
Rebate or any Tax-deduction from my salary income till
date(FY2006-07)].
During last year(Financial year 2006-07)The Bank
could deducted only Rs13340/-instead of Rs16008/-as
part of interest due to his negligence and he added
the balance amount of Rs2668/-{which was to be
deducted last year(FY2006-07) as an interest},in
principal loan of Rs136500/-totalling to Rs139168/-.
When I reminded the bank about the fact, then he
deducted Rs2668/-+ Rs16008/- = Rs18678/-[the balance
amount of interest of last year(FY-2006)+ the amount
of interest during Financial year 2007-08](THIS
YEAR)totaling to Rs18678.
But the Bank is not issuing the certificate of
deducting Rs18678/-during the financial year
2007-08(This year)and tells that the interest during
financial year2007-08 becomes only Rs16008/-and
Rs2668/-was the interest of last year(Financial
year-2006-07) and because it was not deducted at that
time (F.Y-2006-07), the same converted into the
principal amount during this year(F.Y 2007-08) and
hence certificate of interest paid by me during this
year(FY2007-08)will be issued only for Rs16008/-
instead of Rs18678/-.
1) Please guide me which amount is to be claimed as
————————————————-
an interest Rs16008/- or Rs18678/-
—————————————
2)Can I claim entire interest paid by me since
————————————————
AUGUST-2003 as I was not claiming any Tax- Rebate
——————————————————
or any Tax-deduction from my salary income till date
——————————————————
(FY2007-08)since AUGUST-2003.
———————————
This request may be taken /replied on an urgent basis.
Thanking you very much Sir for the same.
Yours Faith fully
(P.C.JHA)
Education Loan Account Number-10933264630

E Mail:- peeceejhaa@yahoo.co.in
*****************************************************

Great Work Chakrdhar

[…] Here’s an interesting post I found today.Have a look for your self, Here’s an excerpt, please read the full story at the blogIf new housing loan is taken for repayment of old loan (old loan taken after 1/4/99) – Rs.1,50000 or actual interest paid/payable whichever is less is allowed as deduction. c. If Property is acquired or constructed with loan taken … […]

respected sir,
i m a medical student persuing higher
education in urology.i m getting salary
(stypend) Rs 15000/ per month.i m paying
Rs 50000/per year as my tution fees.can this
fees be deducted from incom tax i m paying.

thank u

Thanks for the valuable information. Best Wishes

Am Staying in a rental Accomodation, and i had
paid Brokege money of one month rent plus 12.36%
% Tax, with Bill, i like to Know Will i get any income tax rebate on this House Rent Brokege amount?

Thanks.
and i like to findout income tax rebate on House rent Brokege charges

dear sir regarding 80c section my children tution fees & school fees how much iam elgible 1class,2class kindly give your valuable information

hats off to you putting it all so succinctly! i even searched the govt sites but didnt find it all
thanks for yeoman service!

DEAR SIR
KINDLY CLARIFY WHETHER CONTRIBUTION MADE BY EMPLOYER UNDER NEW PENSIOIN SCHEME WILL BE COUNTED RS ONE LAC OR EXCLUDED FROM ONE LAC DEDUCTION UNDER CHAPTER VI A.

I have a loss in f & O trading and Profit in
business . Can I set Off the Loss with profit

with regards
Anil Hombal

can i get nsc intt in 80c

my company do not give me hra. but i m paying
rent for house. can i show my recipts for
tax deduction.
my salary is 20000/m and my rent is 3500/m.
please tell me my duducable house rent

is their any thing like that ,the deduction of lic is not allowed for the income of more that 5 lack

Hi,
I have one question to ask. If we are receiving allowance in foreign land and we are converting that to INR then how is the tax computed on that amount. If we have spend more than 182 days in a financial year outside India then are we having some benefits or the same applies.
Thanks,
Ankur

Dear Madam/Sir,
I was NRI till 29/12/2006. I was informed by a friend of mine that I will enjoy RNOR status for for two years.I was also informed that during this status and in the first yesr the amount transferred and the interest on this amount is tax free for nest seven years. Can I claim the TDS deducted on the interest.
Thank you for your co-operation
Anand Kane

Dear Sir,I am working in sssihms, a trust hospital for last six years.I want to resign for my distress personal reasons.I have given 35 days notice since I do not have time for 90 days.They ask me to pay 57 days pay to relieve me from my duty which amounts more than 70 thousand rupees.
My question is whether this amount should be deducted in the form-16 from the total salary for the calculation of tax in the next a.y. so that I can get tax relief on the said amount?
Please advise me on this subject soon.
Sincerely,Dr.Sahoo

Please send information on exemption for
income or allowence received from World Bank and also gie the section
please send immediately

Dear Mr. Chakradhar,

Myself and my wife have taken a loan jointly to purcgase a second house. The loan amount is Rs. 10 lacs and the EMI is Rs. 21,000/- p. m. Out of total EMI, I am paying Rs. 18,000 and my wife’s share is Rs. 3000 p. m. The house is also in the joint name of my wife as well as myself. Are we eligible for IT exemption on principle amount and interest amount in the proportion of our repayment figures. Kindly let us know at an earliest.
Thanks, Regards,

Dr. Ginde .

Thanks for such a indepth analysis and information. pls tell the income tax payable on sale of agriculture land ? how can the tax be saved from such profit

I am a Senior citizen. I have received pension arrears as per sixth pay commission,to the tune of about Rs. 54000. Is it tax exempt u/s89(1)?

Hi There is there a tax rebate in India on payment in liew of notice.

I am a PSU employee.
My daughter is studying in 4-th Std. in a CBSE School in Chennai. I have submitted the attested photo copies of the receipts to my employer. I have paid Rs.13895/, of which Rs.5600/- falls under the head ‘other fees’ as per school receipt, which my employer disallows while arrivng at my 80c rebate.
Whereas, the school authorities are not forthcoming with the break-up for the fees collected under the head ‘Other Fees’. I am now sandwiched between my employer, school & the tax authorities, to claim exemtion u/s 80c!

Could you please advise me, whether the employer is correct in arriving at this figure & disallow, to determine my tax liability for F-16 purposes?

Dear Sir, Pl.guide me for following comment,
I have one home in ambernath which i had purchased in the year 2001, the housing loan(HDFC) ballance for the same is is Rs. 60000 whichis going to be completed in april2010
I am seeking for second Home & will take home loan from SBI. Shall I get tax Exemption u/s 80c & 24c for the loan which I am going to take from SBI for the financial year 2009-2010.

Will students receiving Junior Reseach Fellowship (JRF)/Senior Research Feloowship(SRF) given by ICMR is taxable?
is it exempted from the payment of income tax under 10(16) of IT Act, 1961.
kindly help me to clarifiy.
thanks
dhamu

I am receiving Senior Research Feloowship(SRF) given by ICMR. Is it taxable?

kindly clarify

dear sir
Will students receiving Junior Reseach Fellowship (JRF)/Senior Research Feloowship(SRF) given by ICMR is taxable?
is it exempted from the payment of income tax under 10(16) of IT Act, 1961.
kindly help me to clarifiy.
thanks
dhamu

dear sir,
i am resident indian. i had australia company sha
shares with me. if i sold this shares for profit
it results in long term capital gain. if STT is pai
paid on these shares in australa,can i claim exemption
u/s10(38)

dear sir
income of minir child can be clubbed with
the assessees total income.like that loss of minot
child can be clubbed with the assessees total income

i have gote a Rs. 21000/= rent Per Month Fromgovt office karyalay ow many PercentT.D.S. Deducated in my rent

SIR, i got pay arreas from 1.1.2006. can i consider relief under section 89 for the 2008-2009 only for f.y. 2009-2010 and adjust the arreas which i got for 2008-2009 only

Hi
i am going to construte a new house with my mother’s name. My mother is a house wife. But i am going to get a home loan with my name and my mother as a co-applicant. so can i get the tax benefits….? Finally once again saying the property going to be registered as my mother’s name
So my doubt is that whether can i get tax benefit if mother is a owner of the property

I am using my own car for official use only and has been paid 13000 Rs as allowances ( 6000 Rs for chefur and 7000 Rs for petrol allowances etc ) if I my taxable income is is 800,000 Rs what will be my tax liability for the amount on petrol allowances ?

is any part of freelance income tax free?


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