income tax act « Indianprofits.com

September 2, 2010

Impact of Direct Tax Code on Salaried Individuals

Filed under: Economy — Tags: deliberations, direct taxes, disappointment, dtc, fixed deposits, hindu undivided family, income tax act, insurance policies, lakh, lakhs, national savings, nps, nsc, pension system, personal taxation, public provident fund, rs 1, slabs, time education, tuition fees — admin @ 9:38 am

So, it is finally here! After months of deliberations and tweaks, the much-awaited Direct Taxes Code (DTC) will replace the age-old Income Tax Act from April 1, 2012. So how will the new DTC impact you and me and the millions of salaried individuals in this country? Let us see!

Personal taxation slabs: A disappointment!

While there was widespread cheer about the proposed personal taxation slabs in the original form of the DTC when it was proposed last year, the current DTC act wears an insipid look. It has nothing major to offer on personal taxation slabs except that men, women and Hindu Undivided Family (HUF) will now face Rs. 2 lakhs of tax free exemption.

This is how the new tax slabs in DTC will look. There will be no tax up to Rs 2 lakh. There will be 10% tax on income between Rs 2,00,001 and Rs 5 lakh; 20% tax on income between Rs 5,00,001 and Rs 10 lakh; and finally 30% tax for income above Rs 10 lakh.

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July 7, 2010

How much tax can you save in real estate investments?

Filed under: Economy — Tags: 3 years, borrowings, buying a farm, buying a house, capital gains, income tax act, interest outgo, investing in real estate, notional value, preference, proportion, real estate investments, residential properties, residential property, restriction, rural areas, section 24, shortfall, sole purpose, tax implications — admin @ 5:50 pm

The first preference of investment for a majority of us is real estate. Right from buying properties for residential and commercial uses or for renting it out or for buying a farm house or lands in urban and rural areas investing in real estate has always been an exciting proportion.

However real estate investments can attack income tax and tax on capital gains when sold and hence it calls for a thorough planning to save such taxes.

Residential property

When buying a house for self-occupation

If you have only one residential property and occupy it too then you are not liable to pay tax on its notional value of the rent. However, the tax implications could be different if you own more than one residential property and occupy it too. In such a case you will be required to pay taxes on your other residential properties which are calculated on the basis of reasonable rent.

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May 20, 2010

PAN – Permanent Account Number

Filed under: Economy — Tags: april 1, banks, cash flow, central government, domestic payments, double taxation avoidance, immovable property, income tax act, lower taxes, maximum limit, mutual funds, pan number, payee, provisions, repercussions, tax authorities, tds — admin @ 5:56 am

Is your total income exceeding the maximum limit not chargeable to income tax? Then it is time that you get yourself a Permanent Account Number or PAN! Even if your answer is a no to the above question you will still require a PAN number if you are someone coming under the class or group as specified by the central government!

So the next time you file your income tax you are legally obliged to quote your PAN number on all papers including the tax payment challans. Moreover, you should quote your PAN if you:

Buy or sell an immovable property; or
Have deposits in banks that exceeds the allowable limits; or
Buy mutual funds more than the specified limits.

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January 13, 2010

Tax Saving Tools

Do you think tax is a burden? Most of the tax payers believe so. If you are a wealthier man, you have to submit a huge amount as tax for the government. To down your tax payment it is necessary to establish a well tax planning criteria which limits the tax pay. For good tax saving, knowledge about the available deductions and exemptions granted by the income tax act is an essential element. So try to gain all the details about those allowed deductions to feel a fare tax system.

Tax deductions allowed by the IT act will help you to reduce the tax incurred on you. Allowances, educational expenses, home & vehicle repair expenses, medical expenses, Insurance premiums, telephone re imbursement, home loan payments etc are eligible deductions one can possess. The tax exemptions are also come under the tax saving options. So also concentrate on the exemptions you have. Some mode of investments also eligible for deductions. Some of the are investments on stock, bond, real estate, post office schemes, fixed deposit schemes of certain financial institutions, fixed income security schemes like provident fund scheme etc are also come under deduction category.

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January 7, 2010

Tax Breaks How to avail them

Filed under: Economy — Tags: educational expenses, financial profits, formalities, health care expenses, home mortgage, income tax act, income tax act 1961, maximum tax, mortgage payment, official document, payment strategies, repair expenses, tax break, tax deduction, tax deductions, tax exemption, tax exemptions, tax payers, tax saving tips, taxable income — admin @ 1:31 am

Tax related rules should evolve with time. There is no pre defined principles related to the tax rules. As we are going to the end of the current financial year it is necessary to set the formalities for tax saving. Tax break simply means tax saving. ie; anything that reduces the total cost of tax payment. It includes

Tax deduction

Tax exemption

Tax credit

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September 15, 2009

Medical Insurance Policies – Mediclaim

health Medical Insurance Policies Mediclaim

Of course you would have heard of Mediclaim and medical insurance policies that are offered by almost all insurance companies. This is an insurance policy that provides medical cover for both self and the dependents. This means that a person can get medical insurance for their spouse, parents and children.

There are a number of medical insurance coverage’s that are available with a number of variations. These insurance covers provide for the treatment, procedures, hospitalization and other associated costs for major and minor ailments. Along with the basic coverage, other add on coverage’s are also available. For this the insurance holder would need to pay extra premium.
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June 5, 2009

What is section 80C ? Saving Tax with 80C

Filed under: News and Views — Tags: amount of money, earning potential, elss, employee provident fund, family pension, income tax act, intrust, maximum investment, minimum investment, national savings, nsc, pension plan, pension schemes, ppf, public provident fund, rs 500, senior citizen, tax deduction, tax deductions, taxable income — admin @ 11:58 am

tax What is section 80C ? Saving Tax with 80C

When its March and you go on a ride for getting the most benefits of tax deductions. If you plan well then you can surely save some good amount of money with your tax plans. One of the most common option that we Indians use for Tax deduction instruments is Section 80C of the Income Tax Act. Some of you might have heard about it and others would certainly know what they are too. (One of the most popular contributions/investments are the EPF (Employee Provident Fund) and PPF (Public Provident Fund). There are some other investments options too which work under this.

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May 29, 2009

Equity Linked Savings Scheme (ELSS)

Filed under: Stocks — Tags: allotment, diversified equity, dividend, dividends, economic crisis, equity fund, financial instruments, income tax act, investment tax, maturity period, minimum investment, minimum period, mutual fund schemes, rs 500, sip, stock market, systematic investment, term weakness, three months, time frame — admin @ 5:23 pm

future investment value 2 278x300 Equity Linked Savings Scheme (ELSS)

Its a variety of diversified equity fund. You can make your investment tax deductible under Section 80C of the Income Tax Act. The ELSS fund has a locking period of three years, its equipped with all other normal abilities of a equity fund. The investor also has the option to choose between growth and dividend options, and systematic investment plans (SIP). The dividends earned in this scheme ELSS are tax free. The returns at the maturity period is also tax free. The limit under Section 80C is for 1 lakh. The present situation is bad with ELSS too, since the stock market were beaten down negatively following the economic crisis.

The returns with the ELSS before the fall of the markets was greater than any other tax saving option. ELSS is the best option for investors who are looking with a time frame of 3-5 years. The short term weakness in the market will glide down and will earn the investor with better returns in the long run. The performance and the ability of the stocks in the long run can never be beaten with any other financial instruments. The ELSS beats mostly all the equity based mutual fund schemes. It has a mandatory lock in period of three years. The minimum investment that can be made on ELSS is Rs.500 and multiples of it. The fund should be allotted to the investors to those who have applied with the prescribed form before March 31 every year. The plan would be open for a minimum period of three months. From the date of allotment the fund should be hold for three years. On the completion of the three years the investor gets the option to tender the units for repurchase.

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