Tax Planning For Individuals in India
HOME SERVICES FEEDBACK CONTACT US BLOG X Deepti Arora & Co. – Chartered Accountants Tax Planning For Individuals in India 4 April 2022|employee, house rent allowance, hra, income tax, income tax return, tax Tax planning is a legal and statutory method of minimizing one’s annual tax liabilities. It will help you make the possible use of tax deductions, exemptions, and benefits to minimize your tax burden. To reduce one’s tax burden, one must engage in tax planning. The government provides various tax-saving opportunities. Legal tax planning aims to minimize a taxpayer’s tax burden. Benefits of Tax Planning for Individuals: The following are the primary benefits of tax planning: Tax preparation enables the financial planning process to run smoothly. Tax compliance minimizes legal entanglements Tax planning enables the allocation of taxable income to various investment vehicles. Effective tax planning enables you to save money. Companies can contribute to our country’s economic growth through tax planning. Contributes to economic stability Preferred Tax-Saving Strategies: To minimize your taxable income, make a Rs 1.5 lakh investment under Sec 80C. Further deductions of Rs 50,000 can also be claimed under 80CCD by contributing to NPS (1b). Section 80D permits you to a tax deduction of up to Rs. 100,000 if you get medical insurance. If you are a senior citizen, you and your family can deduct up to Rs. 50,000 from your taxes under this section. Deduct up to Rs 50,000 in interest on home loans under Section 80EE. Additional Tax Savings Options: Fifty thousand rupees for medical insurance premium. (Rs 25000 for self, spouse, and children; Rs 25000 for dependent parents under the age of 60). Medical insurance premiums for senior citizens are eligible for benefits up to Rs 1,00,000 each year. Section 24 allows a deduction for interest charged on a house loan up to Rs 2 lakhs. A home loan might also help you save on taxes because the principal amount of the loan is claimed u/s 80C up to Rs. 1.5 lakh, and also, the amount of the interest is deductible as income from housing property. Any charitable contribution to registered institutions or funds may be deductible under section 80G. Interest on educational loans is deductible under section 80E. Make A Strategy For Your Tax-Saving Investments: Tax-saving investments are best planned at the start of the financial year. Plan your tax savings for the year with these tips: Review your existing tax-saving expenses, such as insurance payments, children’s tuition fees, EPF contributions, and home loan repayment. Subtract this from Rs 1.5 lakh to calculate investment. You are not required to invest the entire amount if expenditures exceed the limit. Tax-saving investments should match your risk level. Popular options include ELSS, PPF, NPS, and fixed deposits. House Rental Allowance: Paying rent is a common way to save income tax. HRA exemption is available to individuals who reside in rented housing (Section 10 (13A) of Income Tax, 1961). You may be entitled to a tax deduction if you match the following criteria: The total amount of HRA received Rent paid lowered by 10% of basic salary 40% of the base salary for non-metro taxpayers and 50% for metro taxpayers Conclusion: It is best to pay taxes regularly. Tax-saving investments assist reduce income taxes and also create wealth over time. In addition, corporate tax planning helps manage expenses, allocate capital budgets, and reduce sales and marketing costs. Facebook-f X-twitter Contact Categories work from home tax self-employed salary slip roc rent paid rent payslip payroll deductions payroll pay slip mca kyc job change ITR india union target India income tax return income tax hra house rent allowance freelancing freelancer Form 16 finance employee compliance budget 2020 budget allowances Deepti Arora & Co. – Chartered Accountants Address 811, SIDCO ARAVALI APARTMENTS, GH-1,SECTOR 1, IMT MANESAR, GURUGRAM 122051 Contact Us +91 9999017642 +91 7827261120
UNION BUDGET 2021 (highlights)
HOME SERVICES FEEDBACK CONTACT US BLOG X Deepti Arora & Co. – Chartered Accountants UNION BUDGET 2021 (highlights) 24 February 2021|budget, income tax, India, india union budget Presentation of the first digital budget announcement, Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman suggested that the Union Budget 2021-2022, inspired by the Covid-19 pandemic, is touted as the best budget in 100 years. This budget has set the benchmark for India to become Aatmanirbhar or self-reliant. Rs. 34.5 Lakh, Crore estimate for 2021-22, is announced by the finance minister in the pandemic context. This 2021-22 budget called for the maximum capital growth of 34.4%, providing railways, roads and defense with more funding. 6 Union Budget Pillars for 2021-22: Health and Well-being Infrastructure and physical & financial resources Aspiration India Inclusive Development Human Capital Reinvigorating R&D and innovation Minimal government and maximum governance Important Announcements: Healthcare and Well-Being – The budget for the health and wellness sectors allocated to Rs. 2,83,000 Crores The action plan required nearly 30,000 rural and urban health and wellness facilities to be set up. For the Covid-19 vaccine, the finance minister also funded around Rs. 35,000 Crores with a plan to provide additional funds. Models of Growth & Investment – The finance minister emphasized the government’s commitment to building an expansionary budget for ‘Aatmanirbhar Bharat’ to enhance capital investment, growing spending and promoting better employment opportunities. Major Infrastructural Announcements – Public-Private mode of collaboration in major ports More Government Infrastructure Pipeline projects Public transportation budget of around Rs. 18,000 Crores Development of Metrolite and associated technologies in Tier 2 cities Approximately Rs. 1, 00,000 crores for the construction of 11,000 kilometers of the national highway corridor In The Manufacturing Sector – Establishment of 7 mega parks for textiles Production-Linked incentive program or PLI for a wide range of products in electronics that seeks to make India a worldwide manufacturing and export hub At about Rs. 5.54 Lakh Crores, the government’s capital expenditure for FY22 is very generous, which is 35 percent higher than last year. Investments Announcements – The FDI growth in the insurance company from the current 49% to 74% Public banks recapitalization of approximately Rs. 20,000 Crores was proposed for FY22 The establishment of the Development Finance Organization Balancing the Books and The Budget Deficit – The country’s fiscal deficit is forecast at 9.5% of GDP for FY21, i.e., during April 2020 and March 2021, at the macro level. The finance minister projects a fiscal deficit of 6.8 % for FY22, with a projection to reduce it consistently to below 4.5 percent by 2025-26. Proposed strategy to Handle The FY22 Fiscal Deficit: A total of Rs. 12,00,000 Crores Borrowing Strategic divestment of two banks of the public sector and one general insurance company LIC’s Initial Public Offering (IPO) Sale of BPCL and Air India Selling non-core properties such as surplus land Taxes: There are no significant changes in direct taxation. This budget aimed to improve the tax experience through: Extending the framework of Vivad se Vishwas until 28 Feb 2021 Reduction in the re-opening of tax assessments from 6 to 3 years Reduced litigation involving small taxpayers Increase thresholds for a tax audit. Share this post: Facebook-f X-twitter Contact Categories work from home tax self-employed salary slip roc rent paid rent payslip payroll deductions payroll pay slip mca kyc job change ITR india union target India income tax return income tax hra house rent allowance freelancing freelancer Form 16 finance employee compliance budget 2020 budget allowances Deepti Arora & Co. – Chartered Accountants Address 811, SIDCO ARAVALI APARTMENTS, GH-1,SECTOR 1, IMT MANESAR, GURUGRAM 122051 Contact Us +91 9999017642 +91 7827261120
UNION BUDGET 2020 (highlights)
HOME SERVICES FEEDBACK CONTACT US BLOG X Deepti Arora & Co. – Chartered Accountants UNION BUDGET 2020 (highlights) 6 February 2020 | budget, budget 2020, compliance, finance, Form 16, income tax, India, india union budget India’s big budget for the fiscal year 2020-2021 arrived during a time where the country is witnessing feeble economic growth and a slowdown in macro-economic activities. This scenarios is quite evident from the performance of various key sectors including real estate, infrastructure, manufacturing etc.The budget had to live up to the expectations of all groups of the society ranging from an Individual to a big corporate. The below paragraphs talk some key highlights from this budget: FOR INDIVIDUALS· Instant online allotment of PAN based on Aadhaar. · Extension of tax holiday on affordable housing by 1 year. · Additional deduction of Rs.1.5 lacs for interest paid on affordable housing loans extended until 31 Mar 2021. · Donations made to charitable institutions under 80G to be verified against annual information report filed by these institutions. · New (Optional) Tax Regime For individual taxpayers, new optional income tax regime came into picture. Under the new regime individual assesses with taxable income of less than Rs.15 lakhs slabs can avail of lower tax rates if they forego various exemptions and deductions. New optional tax slabs are rates are FOR CORPORATE Waiver of Dividend Distribution Tax A big boost for the corporate sector came in as the government decided to waive off the Dividend Distribution Tax in the hands of corporate. The dividend will now be taxed in the hands of the investors. FOR COOPERATIVES Tax on cooperative societies comes down to 22% from an earlier rate of 30%. INDIRECT TAXES Rise in customs and excise duties on furniture, footwear and cigarettes. The tax on ESOPs will be deferred by five years encouraging more issue of ESOPs. GST New simplified GST return to be implemented from Apr 1 2020. MSMEs now come under mandatory audit if they reach a turnover threshold of Rs.5 crore as against Rs.1 crore if they carry out less than 5% of their business in cash. VIVAD SE VISHWAS SCHEME The scheme is targeted to boost the collection of Direct Taxes. Government plans to waive off interest and penalty for those tax payers who pay their pending disputed taxes by March 31. Share this post: Facebook-f X-twitter Contact Categories work from home tax self-employed salary slip roc rent paid rent payslip payroll deductions payroll pay slip mca kyc job change ITR india union target India income tax return income tax hra house rent allowance freelancing freelancer Form 16 finance employee compliance budget 2020 budget allowances Deepti Arora & Co. – Chartered Accountants Address 811, SIDCO ARAVALI APARTMENTS, GH-1,SECTOR 1, IMT MANESAR, GURUGRAM 122051 Contact Us +91 9999017642 +91 7827261120
Paying Rent but not getting HRA?
HOME SERVICES FEEDBACK CONTACT US BLOG X Deepti Arora & Co. – Chartered Accountants Paying Rent but not getting HRA? 10 August 2018 | allowances, employee, house rent allowance, hra, income tax, income tax return, ITR, payroll, payslip, rent, rent paid, salary slip, self-employed Are you A self-employed businessman or professional or a salaried employee? Staying in a rented accommodation and paying rent? You or your spouse don’t own a residential accommodation at the place where you reside or are working and are also paying rent? Not receiving any House Rent Allowance or HRA ? Can you still take any benefit on the rent paid? The answer is Which section allows you to claim exemption? As per the provisions of the Income Tax Act, 1961, you can still claim benefit of rent paid under section 80GG. What is the limit for exemption? The section allows an individual to claim exemption as the minimum of: – Rs. 5000 per month – 25% of Total Income – Actual Rent paid less 10% of Total Income What you need to do? Just fill Form 10BA with all the details related to payment of rent and you are good to claim the exemption. Still have any confusion/concerns? Reach out to us and we will be happy to help! Share this post: Facebook-f X-twitter Contact Categories work from home tax self-employed salary slip roc rent paid rent payslip payroll deductions payroll pay slip mca kyc job change ITR india union target India income tax return income tax hra house rent allowance freelancing freelancer Form 16 finance employee compliance budget 2020 budget allowances Deepti Arora & Co. – Chartered Accountants Address 811, SIDCO ARAVALI APARTMENTS, GH-1,SECTOR 1, IMT MANESAR, GURUGRAM 122051 Contact Us +91 9999017642 +91 7827261120
Changed job Lately?? Things to Do from income tax standpoint
HOME SERVICES FEEDBACK CONTACT US BLOG X Deepti Arora & Co. – Chartered Accountants Changed job Lately?? Things to Do from income tax standpoint 2 August 2018 | accounting, allowances, finance, Form 16, income tax, income tax return, India, ITR, job change, pay slip, payroll, payroll deductions, payslip, salary slip Switching jobs is usual. There are a lot of reasons while people change jobs. Some people change for financial gains while some change for career growth. The reasons can be plenty. Whatever is the reason, there is always an element of excitement of joining a new organization and you have new hopes and dreams with this change. To ensure that this excitement and enthusiasm continues and is not dampened by income tax issues, keep in mind the following points whenever you make a job change. 1. Make sure you always declare your income earned from previous employer to your current employer: I have come across a lot of cases where the employees changed jobs during a financial year and failed to declare the income from previous employer to the current one. The result : while filing their Income Tax Return they not only had to pay the differential tax but also had to pay interest on the tax which was not deducted by the employers. 2. Your tax slab can change when you combine the salary you have received from the different employers. 3. Provide all necessary documents to the employers so that you can claim benefit of exempted allowances, investments made, housing loan principal and interest benefit etc. 4. Don’t claim any exemptions twice: While you will submit the necessary proofs to take benefits allowable under income tax, at the same time ensure that you don’t end up taking any benefit more than once. 5. Don’t think you can hide the salary income: Your Form 26AS would reflect all the employers you have worked for and the salary they have paid to you. The same can be viewed when you logon to the income tax e-filing website: https://www.incometax.gov.in/ The income tax department too have access to this data so don’t think you can hide the salary you received during the year. My advise: next time you change a job, keep all these points in mind to ensure a smooth income tax compliance process. Still have any doubts, call us at 9999017642 Share this post: Facebook-f X-twitter Contact Deepti Arora & Co. – Chartered Accountants Address 811, SIDCO ARAVALI APARTMENTS, GH-1,SECTOR 1, IMT MANESAR, GURUGRAM 122051 Contact Us +91 9999017642 +91 7827261120