Description
Comprehensive presentation on Personal Income Tax.
ASSESSMENT YEAR 2010-11
3
4
A person is a resident for tax purposes if he satisfies any of the following conditions: (i) If he was in India during that PY ,for a period of 182 days or more : OR (ii) A. If he was in India for 365 days or more during the last 4 preceding previous years AND B. he was in India during that PY for 60 days or more
5
(a)
(b)
a citizen of India leaving India for employment or an Indian crew member of an Indian , who leaves India during that PY for employment purpose- becomes a resident only by satisfying cond 1 a citizen of India , or a person of India origin , who being outside India , comes to India on a visit - becomes a resident only by satisfying cond 1
6
? 1.
2.
A resident is an OR only if He has been a resident in India for atleast 2 out of 10 years immediately preceding the PY , AND He has been in India for a period of 730 days or more during the 7 years immediately preceding the PY
7
9
Components Basic salary only Basic+ DA+ commission
Purpose Entertainment allowance Contribution to PF Leave encashment House rent allowance Retrenchment compensation
Basic + all allowances + all amenities + commission
11
13
14
? ?
Pension is taxed under Income from Salary Commuted pension to govt employees- fully exempt
16
17
4)10 months avg salary
19
Step 1 2 3 4
Find Out Period Of occupation HRA received Rent paid salary
Formulae Period during which rented house is occupied A * HRA p.m A * Rent paid p.m A * ( Basic + DA + Commission +Contractual Bonus ) Least of 1.HRA received 2.Rent Paid – 10% of salary 3.50% or 40 % of the Salary
Result A B C D
5
Exemption
20
21
23
24
25
26
27
? 1. 2. 3. 4.
Conditions to be satisfied – There should be a capital asset. There should be transfer of such a capital asset Such transfer should take place in the PY There should be profits or gains out of such transfer
29
? ? 1. 2. 3.
4.
5. 6.
Property of any kind (tangible or intangible ) Exclusions Stock – in – trade Personal effects Agricultural land 6.5% Gold Bonds 1977or 7 % Gold Bonds 1980 or National Defence Gold Bonds 1980 Special Bearer Bonds, 1991 Gold deposit bonds under Gold deposit Scheme ,1999
30
?
? ?
LT capital asset in respect of equities; listed securities and mutual funds – 1 year Other assets – 3 years or more All others Capital Assets are Short Term capital Assets
31
32
?
? ?
In respected of listed securities on which STT is charged STCG is charged at 15% Traders STCG will be business income Other than securities/MF – STCG will be added to income and charged at normal rates
33
34
Indexed Cost Of Acquisition/Improvement = Cost * (CII for the year of transfer/ CII for the year of Acquisition/Improvement) ? Where acquired before 1.4.1981: Market value as on 1.4.1981*(CII of year of sale/ CII for the year 1981-82 ) ? CII- Cost Inflation Index notified by Government every year
35
Tax payable is NIL if the Long Term Capital asset is equity share or units of an equity oriented mutual fund and STT is charged on the transaction ? Other LTCG – with indexation @ 20% without indexation @ 10% ? Any loss under any head can be set off against LTCG and be subjected to 20% tax
?
36
?
Series of investments u/s 54 provide scope for saving tax on LTCG
Sec 54 – Asset – Residential House Property Assessee – Individual /HUF Holding Period of original assets – 3 years Whether reinvestment necessary – Time Limit Yes-In residential house within – 1 year before , Or 2 years after the date of transfer ( if purchased ) Or 3 years after the date of transfer ( if constructed ) Quantam of exemption – The amount of gains is , or the cost of the new asset , whichever is lower.
37
? ? ? ? ? ? ? ? ? ?
?
?
?
?
e.g If you have sold a Residential House Property on 3-6-2007 after holding it for 3 years from 1-62004 to 2-6-2007 and made the LTCG earned are Rs,10,00,000 than you can save tax by reinvesting the whole of LTCG i.e Rs10,00,000/- in the following time frame – 1.you might have purchased a residential house on one year before 3-6-2007 Or You purchase a residential house upto 2 years from 3-6-2007 Or You construct a residential house upto 3 years from 3-6-2007.
38
? ? ? ?
? ? ?
?
Sec 54 EC Asset - Any Long term capital asset Assessee – Any Assessee Holding Period of original assets – listed shares, MF units etc . – 1 year Others - 3 years Whether reinvestment necessary – Time Limit Yes-Whole or part of capital gains in bonds issued on or after 1-4-06 by NHAI or REC within 6 months from the date of transfer Quantam of exemption – The amount of gains is , or the cost of the new asset , whichever is lower subject to Rs.50,00,000 lakhs per Assessee during any financial year on or after 1-4-07. e.g If you have sold a Commercial House Property on 3-6-2007 after holding it for 3 years from 1-6-2004 to 2-6-2007 and made the LTCG earned are Rs.60,00,000 than you can save tax by reinvesting the whole of LTCG subject to Rs.50,00,000/- ( Rs.10,00,000 will be taxed as LTCG ) in bonds issued on or after 1-4-06 by NHAI or REC within 6 months from the date of transfer.
39
?
?
?
? ?
STT is charged at 0.125% on delivery based trades on stock exchanges in respect of equities or units of an equity oriented mutual fund – the tax shall be collected by stock exchange and deposited into government treasury In respect of equity oriented mutual funds the STT is charged at 0.25% on repurchase/redemption value – shall be collected by mutual fund STT is to be paid @ 0.017% by the seller in case of sale of an option in securities. STT is to be paid @ 0.125% by the purchaser in case of sale of an option in securities where option is excercised. STT is to be paid @ 0.017% by the seller in case of sale of an futures in securities.
40
?
?
?
STT is not deductible from capital gains amount for arriving at tax liabilities In respect of traders/business of trading on stock exchanges the STT paid is allowed as a business expenditure (earlier it was allowed as rebate from tax payable by them u/s 88E ) these people are not entitled to treat the income as STCG
41
Investments Made u/s 80C –Rs.1,00,000 2. Premium paid for Pension Plan u/s 80CCC – RS.1,00,000/3. Contribution to pension scheme of Central Govt. u/s 80CCD Min of – a. actually contributed b.if he is an employee- 10%*( Basic + DA of the PY) or c. in any other case, ten per cent of his gross total income in the previous year 4. Aggregate amount of deduction u/s 80C,80CCC and 80CCD = Rs.1,00,000
1.
42
5.Medical Insurance premium paid by any other mode than cash u/s 80D a. Individual / HUF = Rs.15,000/- additional Rs.15,000 if he pays for his parents b. Senior Citizen ( 65 years or above ) = Rs.20,000/6.Maintenance including medical treatment of a dependent who is a person with disability u/s 80DD–Rs.50,000 (Rs.1,00,000 in case of severe disability) 7.Interest on loan taken for higher education u/s 80E – whole amount of such interest.
43
9. 80GG – An employee not in receipt of HRA but incurs expenditure on residential accommodation – can claim deduction u/s 80GG subject to minimum of the following: 1. Rent paid minus 10% of total income or 2. Rs 2,000/- p.m. or 3. 25% of total income 10.Deduction to Blind/Handicapped/retarded u/s 80U = Rs.50,000 or Rs.75,000
44
45
?
?
?
Withdrawal Withdrawals are not permitted before 6 months. No interest is payable if deposit is withdrawn after 6 months but before 1 year. If deposits made for 2 years, 3 years, or 5 years are prematurely withdrawn after one year, the interest will be paid at a rate 2% less than the rate applicable to the period for which the deposit has run. For example, where the completed years and months in the case of deposit in a 5 year deposit exceeds 3 years, interest shall be calculated at the rate which shall be 2% less than the rate specified for a deposit of 3 years. Tax benefit Investments in 5-Yr deposits are eligible for tax benefits under Section 80C of Income Tax Act subject to an upper limit of Rs 100,000.
47
Loan
? ?
?
?
?
Depositors can take a loan in the third financial year from the financial year in which the account was opened. Loan can be taken up to 25% of the amount standing at the end of second preceding financial year, repayable in 36 installments having the interest rate 1% higher than he receives. Second, the loan will be given only after the repayment of the first loan. No loan can be obtained after the end of 5th year following the expiry of the year in which the initial subscription was made. In case of death of the subscriber, the nominee/legal heir is liable to pay interest on loans availed of by the subscriber but not paid before his death.
48
Withdrawals
?
?
?
A subscriber is permitted to make one withdrawal every year from the 7th financial year. An amount not exceeding 50% of the balance to his credit at the end of 4th year immediately preceding the year of withdrawal or at the end of preceding year, which ever is lower. The withdrawal can be made even every year.
49
?
In the above case, the subscriber can withdraw Rs 50,000 in the year 2000-01.
50
Withdrawals ? Permitted after 1 year from the date of making the investment. ? If the premature withdrawal is made after 1 year, but before 3 years, then 2% of the initial amount invested is deducted as a penalty. ? Similarly, a premature withdrawal after 3 years will attract a penalty of 1% of the initial amount invested. ? In case of death of a depositor before maturity, the account may be closed and the deposited amount refunded to the nominee/heir along with interest upto the month preceding the month in which refund is made.
51
?
Loans Kisan Vikas Patra has been declared as "Public Security" by the Government of Maharashtra. Certificate holders can avail loan from banks against the certificates.
52
Withdrawals ? Investors will be permitted to prematurely liquidate their investments at any time after the expiry of 1 year from the date of opening of the account subject to the following conditions, ? In case the account is closed after the expiry of 1 year but before the expiry of 2 years from the date of opening of the account, an amount equal to 1.5% of the deposit shall be deducted. In case the account is closed on or after the expiry of 2 years from the date of opening of the account, an amount equal to 1% of the deposit shall be deducted
?
53
Income Up to 1,50,000/-*
Rate in % nil
1,50,001 – 3,00,000
3,00,001 – 5,00,000 Above 5,00,000
10
20 30
Notes1. *Threshold limit for resident women assessees below 65 years of age and residents individuals above 65 years age to be increased to Rs.1,80,000/- and Rs.2,25,000/- respectively. 2. Surcharge @ 10% if total income exceeds Rs.10,00,000/3. Education Cess @2% and Sec and H.edu Cess@1% be levied on tax plus surcharge.
54
Income Up to 1,60,000/-*
Rate in % nil
1,60,001 – 3,00,000
3,00,001 – 5,00,000 Above 5,00,000
10
20 30
Notes1. *Threshold limit for resident women assessees below 65 years of age and residents individuals above 65 years age to be increased to Rs.1,90,000/- and Rs.2,40,000/- respectively. 2. Surcharge @ 10% if total income exceeds Rs.10,00,000/3. Education Cess @2% and Sec and H.edu Cess@1% be levied on tax plus surcharge.
55
Income Up to 1,60,000/-*
Rate in % nil
1,60,001 – 5,00,000
5,00,001 – 8,00,000 Above 8,00,000
10
20 30
Notes1. *Threshold limit for resident women assessees below 65 years of age and residents individuals above 65 years age to be increased to Rs.1,90,000/- and Rs.2,40,000/- respectively. 2. Surcharge @ NIL 3. Education Cess @2% and Sec and H.edu Cess@1% be levied on tax plus surcharge.
56
Thank You
57
doc_104157000.pptx
Comprehensive presentation on Personal Income Tax.
ASSESSMENT YEAR 2010-11
3
4
A person is a resident for tax purposes if he satisfies any of the following conditions: (i) If he was in India during that PY ,for a period of 182 days or more : OR (ii) A. If he was in India for 365 days or more during the last 4 preceding previous years AND B. he was in India during that PY for 60 days or more
5
(a)
(b)
a citizen of India leaving India for employment or an Indian crew member of an Indian , who leaves India during that PY for employment purpose- becomes a resident only by satisfying cond 1 a citizen of India , or a person of India origin , who being outside India , comes to India on a visit - becomes a resident only by satisfying cond 1
6
? 1.
2.
A resident is an OR only if He has been a resident in India for atleast 2 out of 10 years immediately preceding the PY , AND He has been in India for a period of 730 days or more during the 7 years immediately preceding the PY
7
9
Components Basic salary only Basic+ DA+ commission
Purpose Entertainment allowance Contribution to PF Leave encashment House rent allowance Retrenchment compensation
Basic + all allowances + all amenities + commission
11
13
14
? ?
Pension is taxed under Income from Salary Commuted pension to govt employees- fully exempt
16
17
4)10 months avg salary
19
Step 1 2 3 4
Find Out Period Of occupation HRA received Rent paid salary
Formulae Period during which rented house is occupied A * HRA p.m A * Rent paid p.m A * ( Basic + DA + Commission +Contractual Bonus ) Least of 1.HRA received 2.Rent Paid – 10% of salary 3.50% or 40 % of the Salary
Result A B C D
5
Exemption
20
21
23
24
25
26
27
? 1. 2. 3. 4.
Conditions to be satisfied – There should be a capital asset. There should be transfer of such a capital asset Such transfer should take place in the PY There should be profits or gains out of such transfer
29
? ? 1. 2. 3.
4.
5. 6.
Property of any kind (tangible or intangible ) Exclusions Stock – in – trade Personal effects Agricultural land 6.5% Gold Bonds 1977or 7 % Gold Bonds 1980 or National Defence Gold Bonds 1980 Special Bearer Bonds, 1991 Gold deposit bonds under Gold deposit Scheme ,1999
30
?
? ?
LT capital asset in respect of equities; listed securities and mutual funds – 1 year Other assets – 3 years or more All others Capital Assets are Short Term capital Assets
31
32
?
? ?
In respected of listed securities on which STT is charged STCG is charged at 15% Traders STCG will be business income Other than securities/MF – STCG will be added to income and charged at normal rates
33
34
Indexed Cost Of Acquisition/Improvement = Cost * (CII for the year of transfer/ CII for the year of Acquisition/Improvement) ? Where acquired before 1.4.1981: Market value as on 1.4.1981*(CII of year of sale/ CII for the year 1981-82 ) ? CII- Cost Inflation Index notified by Government every year
35
Tax payable is NIL if the Long Term Capital asset is equity share or units of an equity oriented mutual fund and STT is charged on the transaction ? Other LTCG – with indexation @ 20% without indexation @ 10% ? Any loss under any head can be set off against LTCG and be subjected to 20% tax
?
36
?
Series of investments u/s 54 provide scope for saving tax on LTCG
Sec 54 – Asset – Residential House Property Assessee – Individual /HUF Holding Period of original assets – 3 years Whether reinvestment necessary – Time Limit Yes-In residential house within – 1 year before , Or 2 years after the date of transfer ( if purchased ) Or 3 years after the date of transfer ( if constructed ) Quantam of exemption – The amount of gains is , or the cost of the new asset , whichever is lower.
37
? ? ? ? ? ? ? ? ? ?
?
?
?
?
e.g If you have sold a Residential House Property on 3-6-2007 after holding it for 3 years from 1-62004 to 2-6-2007 and made the LTCG earned are Rs,10,00,000 than you can save tax by reinvesting the whole of LTCG i.e Rs10,00,000/- in the following time frame – 1.you might have purchased a residential house on one year before 3-6-2007 Or You purchase a residential house upto 2 years from 3-6-2007 Or You construct a residential house upto 3 years from 3-6-2007.
38
? ? ? ?
? ? ?
?
Sec 54 EC Asset - Any Long term capital asset Assessee – Any Assessee Holding Period of original assets – listed shares, MF units etc . – 1 year Others - 3 years Whether reinvestment necessary – Time Limit Yes-Whole or part of capital gains in bonds issued on or after 1-4-06 by NHAI or REC within 6 months from the date of transfer Quantam of exemption – The amount of gains is , or the cost of the new asset , whichever is lower subject to Rs.50,00,000 lakhs per Assessee during any financial year on or after 1-4-07. e.g If you have sold a Commercial House Property on 3-6-2007 after holding it for 3 years from 1-6-2004 to 2-6-2007 and made the LTCG earned are Rs.60,00,000 than you can save tax by reinvesting the whole of LTCG subject to Rs.50,00,000/- ( Rs.10,00,000 will be taxed as LTCG ) in bonds issued on or after 1-4-06 by NHAI or REC within 6 months from the date of transfer.
39
?
?
?
? ?
STT is charged at 0.125% on delivery based trades on stock exchanges in respect of equities or units of an equity oriented mutual fund – the tax shall be collected by stock exchange and deposited into government treasury In respect of equity oriented mutual funds the STT is charged at 0.25% on repurchase/redemption value – shall be collected by mutual fund STT is to be paid @ 0.017% by the seller in case of sale of an option in securities. STT is to be paid @ 0.125% by the purchaser in case of sale of an option in securities where option is excercised. STT is to be paid @ 0.017% by the seller in case of sale of an futures in securities.
40
?
?
?
STT is not deductible from capital gains amount for arriving at tax liabilities In respect of traders/business of trading on stock exchanges the STT paid is allowed as a business expenditure (earlier it was allowed as rebate from tax payable by them u/s 88E ) these people are not entitled to treat the income as STCG
41
Investments Made u/s 80C –Rs.1,00,000 2. Premium paid for Pension Plan u/s 80CCC – RS.1,00,000/3. Contribution to pension scheme of Central Govt. u/s 80CCD Min of – a. actually contributed b.if he is an employee- 10%*( Basic + DA of the PY) or c. in any other case, ten per cent of his gross total income in the previous year 4. Aggregate amount of deduction u/s 80C,80CCC and 80CCD = Rs.1,00,000
1.
42
5.Medical Insurance premium paid by any other mode than cash u/s 80D a. Individual / HUF = Rs.15,000/- additional Rs.15,000 if he pays for his parents b. Senior Citizen ( 65 years or above ) = Rs.20,000/6.Maintenance including medical treatment of a dependent who is a person with disability u/s 80DD–Rs.50,000 (Rs.1,00,000 in case of severe disability) 7.Interest on loan taken for higher education u/s 80E – whole amount of such interest.
43
9. 80GG – An employee not in receipt of HRA but incurs expenditure on residential accommodation – can claim deduction u/s 80GG subject to minimum of the following: 1. Rent paid minus 10% of total income or 2. Rs 2,000/- p.m. or 3. 25% of total income 10.Deduction to Blind/Handicapped/retarded u/s 80U = Rs.50,000 or Rs.75,000
44
45
?
?
?
Withdrawal Withdrawals are not permitted before 6 months. No interest is payable if deposit is withdrawn after 6 months but before 1 year. If deposits made for 2 years, 3 years, or 5 years are prematurely withdrawn after one year, the interest will be paid at a rate 2% less than the rate applicable to the period for which the deposit has run. For example, where the completed years and months in the case of deposit in a 5 year deposit exceeds 3 years, interest shall be calculated at the rate which shall be 2% less than the rate specified for a deposit of 3 years. Tax benefit Investments in 5-Yr deposits are eligible for tax benefits under Section 80C of Income Tax Act subject to an upper limit of Rs 100,000.
47
Loan
? ?
?
?
?
Depositors can take a loan in the third financial year from the financial year in which the account was opened. Loan can be taken up to 25% of the amount standing at the end of second preceding financial year, repayable in 36 installments having the interest rate 1% higher than he receives. Second, the loan will be given only after the repayment of the first loan. No loan can be obtained after the end of 5th year following the expiry of the year in which the initial subscription was made. In case of death of the subscriber, the nominee/legal heir is liable to pay interest on loans availed of by the subscriber but not paid before his death.
48
Withdrawals
?
?
?
A subscriber is permitted to make one withdrawal every year from the 7th financial year. An amount not exceeding 50% of the balance to his credit at the end of 4th year immediately preceding the year of withdrawal or at the end of preceding year, which ever is lower. The withdrawal can be made even every year.
49
?
In the above case, the subscriber can withdraw Rs 50,000 in the year 2000-01.
50
Withdrawals ? Permitted after 1 year from the date of making the investment. ? If the premature withdrawal is made after 1 year, but before 3 years, then 2% of the initial amount invested is deducted as a penalty. ? Similarly, a premature withdrawal after 3 years will attract a penalty of 1% of the initial amount invested. ? In case of death of a depositor before maturity, the account may be closed and the deposited amount refunded to the nominee/heir along with interest upto the month preceding the month in which refund is made.
51
?
Loans Kisan Vikas Patra has been declared as "Public Security" by the Government of Maharashtra. Certificate holders can avail loan from banks against the certificates.
52
Withdrawals ? Investors will be permitted to prematurely liquidate their investments at any time after the expiry of 1 year from the date of opening of the account subject to the following conditions, ? In case the account is closed after the expiry of 1 year but before the expiry of 2 years from the date of opening of the account, an amount equal to 1.5% of the deposit shall be deducted. In case the account is closed on or after the expiry of 2 years from the date of opening of the account, an amount equal to 1% of the deposit shall be deducted
?
53
Income Up to 1,50,000/-*
Rate in % nil
1,50,001 – 3,00,000
3,00,001 – 5,00,000 Above 5,00,000
10
20 30
Notes1. *Threshold limit for resident women assessees below 65 years of age and residents individuals above 65 years age to be increased to Rs.1,80,000/- and Rs.2,25,000/- respectively. 2. Surcharge @ 10% if total income exceeds Rs.10,00,000/3. Education Cess @2% and Sec and H.edu Cess@1% be levied on tax plus surcharge.
54
Income Up to 1,60,000/-*
Rate in % nil
1,60,001 – 3,00,000
3,00,001 – 5,00,000 Above 5,00,000
10
20 30
Notes1. *Threshold limit for resident women assessees below 65 years of age and residents individuals above 65 years age to be increased to Rs.1,90,000/- and Rs.2,40,000/- respectively. 2. Surcharge @ 10% if total income exceeds Rs.10,00,000/3. Education Cess @2% and Sec and H.edu Cess@1% be levied on tax plus surcharge.
55
Income Up to 1,60,000/-*
Rate in % nil
1,60,001 – 5,00,000
5,00,001 – 8,00,000 Above 8,00,000
10
20 30
Notes1. *Threshold limit for resident women assessees below 65 years of age and residents individuals above 65 years age to be increased to Rs.1,90,000/- and Rs.2,40,000/- respectively. 2. Surcharge @ NIL 3. Education Cess @2% and Sec and H.edu Cess@1% be levied on tax plus surcharge.
56
Thank You
57
doc_104157000.pptx