Tax-Gyaan2014-15

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Tax planning by Central Govt. Employees

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By: venkatacharisrik (1 month(s) ago)

Sir please send me this presentation...i like it very much...send on vsk707@gmail.com. I am having presentations tomorrow at my college

By: Lalit1950 (3 month(s) ago)

Presentation updated for FY 2014-15.

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By: Lalit1950 (15 month(s) ago)

Presentation updated for FY 2013-14.

Presentation Transcript

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TAX GYAAN Presentation By : LALIT KHANDELWAL

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MONEYWISE , BE WISE Saving a rupee in TAX means You have a rupee more to save, spend or invest . ISMEN HI SAMAJHADARI

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TAX GYAAN 2011-12 LALIT KHANDELWAL Income tax is boring and its payment is painful. Price for civilization. Being Socio-Economic law, various exemptions and deductions are available. You must update yourself regularly to avail all admissible benefits to save TAX.

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TAX GYAAN 2011-12 LALIT KHANDELWAL General awareness means to know what income is taxable or exempt, what are deductions, how to calculate tax and how to file Income-tax return. Computerization has made it very easy.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Basics of taxability of salary income Tax slabs and rates of tax Some avenues of tax planning How to File Income Tax Return At the end of this SESSION you will know:

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TAX GYAAN 2011-12 LALIT KHANDELWAL TERMINOLOGY

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TAX GYAAN 2011-12 LALIT KHANDELWAL P.A.N . : ‘ Permanent Account Number’ is a person’s identification number, or it can be termed as “SHRI GANESH OF INCOME TAX”. It is a 10 digit alphanumeric number.

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TAX GYAAN 2011-12 LALIT KHANDELWAL TRANSACTIONS IN WHICH QUOTING OF PAN IS MANDATORY Purchase and sale of immovable property . Purchase and sale of motor vehicles. Transaction in shares exceeding Rs.50,000. Opening of new bank accounts.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Fixed deposits above Rs.50,000. Cash deposits above Rs 50,000. Application for allotment of telephone connections. Payment to hotels exceeding Rs.25,000 . IMPORTANT : Quoting a wrong PAN invites a penalty of Rs 10,000.

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TAX GYAAN 2011-12 LALIT KHANDELWAL INCOME TAX: The direct tax paid by individual ,whose income is more than the maximum limit of prescribed amount, to the Central Government of India. INCOME TAX RETURN: Annual Statement of income received and taxes paid in previous FY. Assessee : Individual who has to comply his tax obligation or to get refund or against whom any proceedings are taken .

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TAX GYAAN 2011-12 LALIT KHANDELWAL ● ● ● FINANCIAL YEAR: Year commencing from FIRST DAY OF APRIL to LAST DAY of MARCH in which income is earned. ASSEMENT YEAR : Year following financial year in which assessment of income and tax paid/due is made. Forms 16 . This form carries the details of salary income in a Financial Year. The last date for issuing Form 16 is May 31 of the assessment year Form 16A : This is a certificate that mentions the tax deduction at source (TDS) on income from sources other than salary.

TAX PLANNING:

TAX GYAAN 2011-12 LALIT KHANDELWAL TAX PLANNING (FOR F.Y. 2011-12) AAPAKA FAYADA

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TAX GYAAN 2011-12 LALIT KHANDELWAL Things you need to keep in mind before arriving at Taxable Income. Fully exempt from tax Partly Taxable Fully Taxable Income TAXABLE INCOME

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TAX GYAAN 2011-12 LALIT KHANDELWAL Band Pay Grade Pay Personal Pay Bonus Dearness Pay Dearness Allowance Over Time Arrears Income from other sources Medical Allowance beyond Rs 15,000 a year. Transport Allowance beyond Rs.9600 p.a. Running Allowance (30%) Medical reimburs ement beyond Rs 50000 Fully Taxable Partly Taxable Fully Non Taxable T.A./ D.A.

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TAX GYAAN 2011-12 LALIT KHANDELWAL TAX SLABS

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TAX GYAAN 2011-12 LALIT KHANDELWAL Tax Slabs for MALES ( Less than 60 Years Age ) Up to Rs. 1,80,000 Rate: 0% Rs.1,80,001 - 5,00,000 Rate: 10% Rs.5,00,001 - 8,00,000 Rate: 20% ABOVE Rs 8,00,000 Rate: 30% Education cess is levied at 3% of the tax payable.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Tax Slabs for FEMALES ( Less than 60 Years Age) Up to Rs. 1,90,000 Rate: 0% Rs.1,90,001 to 5,00,000 Rate: 10% Rs.5,00,001 to 8,00,000 Rate: 20% Above Rs 8,00,000 Rate: 30% Education cess is levied at 3% of the tax payable.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Tax Slabs for Sr. CITIZENS (Age between 60 to 80 Years ) Up to Rs. 2,50,000 Rate: 0% Rs.2,50,001 to 5,00,000 Rate: 10% Rs.5,00,001 to 8,00,000 Rate: 20% Above Rs. 8,00,000 Rate: 30% Education cess is levied at 3% of the tax payable.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Tax Slabs for Very Sr. CITIZENS (Age 80 Years and above ) Up to Rs. 5,00,000 Rate: 0% Rs.5,00,001 to 8,00,000 Rate: 20% Above Rs. 8,00,000 Rate: 30% Education cess is levied at 3% of the tax payable . NEW PROVISION

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TAX GYAAN 2011-12 LALIT KHANDELWAL TAX SAVING AVENUES

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TAX GYAAN 2011-12 LALIT KHANDELWAL 8 c Instruments eligible for tax deductions ( Under Section 80 C ) Plan your Savings From The Beginning Of Financial Year

ELIGIBLE AVENUES TO SAVE TAX:

TAX GYAAN 2011-12 LALIT KHANDELWAL MAXIMUM LIMIT UNDER SEC 80C= Rs 1,00,000 Additional Rs. 20,000 for Infrastructor Bond (Section 80CCF) ELIGIBLE AVENUES TO SAVE TAX INSTRUMENT INVESTMENT LIMIT ( Rs.) MATURITY PERIOD PUBLIC PROVIDENT FUND(PPF ) 70,000 15 Years PROS : Assured Tax free return@ 8% a year. CONS : Very long lock-in period, partial withdrawl after sixth year. EQUITY-LINKED SAVINGS SCHEMES(ELSS) 1,00,000 3 Years PROS : Very high returns in bullish market , returns are tax free. CONS : Returns are not assured (After 3 years there may be loss of capital). TAX SAVING BANK FIXED DEPOSITS 1,00,000 5 Years PROS : Assured returns . CONS : Relatively low Returns and same are Taxable. TAX SAVING POST OFFICE TERM DEPOSITS 1,00,000 5 Years PROS : Assured returns . CONS : Relatively low Returns and same are Taxable. SENIOR CITIZEN SAVINGS SCHEME 1,00,000 5 Years PROS : Assured returns @ 9 %. CONS : Applicable to Sr. Citizens only and interest income is Taxable. NOTE: TUITION FEES , LIC PREMIA , REPAYMENT OF HOUSING LOAN, PF,VPF and NSC are also eligible for deduction under sec 80 C.

MORE WAYS TO SAVE TAX ( Beyond 80C’s Rs 1 lakh +20,000 limit):

TAX GYAAN 2011-12 LALIT KHANDELWAL MORE WAYS TO SAVE TAX ( Beyond 80C’s Rs 1 lakh +20,000 limit ) PAYMENT OF RENT : SEC10(13A) : On availing HRA , exemption is least of 50% of basic pay (40% in non metros) or the actual HRA, or rent paid in excess of 10% of basic pay. INTEREST ON HOUSING LOAN : SEC 24(1)( vi) The interest paid (up to Rs 1.5 lakh ) on a home loan is exempt from taxable income. In joint ownership, both can claim deduction up to Rs 1.5 lakh each. INTEREST ON EDUCATION LOAN : SEC 80E : Interest paid on a loan taken for higher studies is exempt from tax for a maximum of eight successive years without any limit.

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TAX GYAAN 2011-12 LALIT KHANDELWAL HEALTH COVER : SEC 80D: Deductions For premium for health cover Rs 15000 for self , spouse and kids U/S 80D(2A) Rs 15000 for parents (Rs 20,000,if sr. citizen) ( whether dependent or not) U/S 80D(2B). SEC 17(2): Medical reimbursement exmption upto Rs 15,000 annually or actual expenditure incurred on medical treatment. MEDICAL TREATMENT : SEC 80DDB Expenditure incurred on treatment of the individual or his dependents for diseases such as cancer, AIDS, renal failure, Neurological Diseases etc. qualifies for deduction up to Rs 40,000.(Rs 60,000 for Sr Citizens)

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TAX GYAAN 2011-12 LALIT KHANDELWAL SEC 80G :Donations to prime Minister’s Relief fund, National Disaster Fund or any Charitable Trust.(100% or 50% as applicable.) RENT PAID : SEC80GG : Deduction in respect of rent paid. Actual or Rs 24000 max . Sec 80GGA- Donations for Scientific Research work. Sec80GGC : Contribution to a political party . (Max 10% of salary) CAPITAL GAIN BONDS : SEC 54EC : For capital gains from a long term asset ,one can save up to Rs.50 lakh by parking the profits in bonds of NHAI or REC if the investment is made within 6 months of sale.

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TAX GYAAN 2011-12 LALIT KHANDELWAL SECTION 80U : When an individual himself is suffering with Autism, Cerebrel Palsy, Mental Retardation etc., up to Rs 50,000 (Rs 1,00,000 for severe disability) can be claimed as deduction. SECTION 80DD : Expenditure, incurred for Treatment of Depen- dent spouse, children, parents, brothers or sisters suffering from Autism, Celebral Palsy, Mental retardation etc up to Rs 50,000 ( Rs1,00,000 for severe disability)

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TAX GYAAN 2011-12 LALIT KHANDELWAL RETIREMENT BENEFITS EXEMPTED FROM INCOME TAX Death-cum-retirement gratuity : Section10(10). Commutation of pension – Section10(10A). Leave encashment: Section10(10AA). Life insurance policy : Section10(D), Payment from provident fund– Section10(11). RETIREMENT PROCEEDINGS ARE FULLY EXEMPTED FROM INCOME TAX FOR GOVT.EMPLOYEES under Sec 10.

Tax Planning: The smart way:

TAX GYAAN 2011-12 LALIT KHANDELWAL Tax Planning: The smart way Factors to be considered For Tax Planning investment : Risk appetite Investment Objective Tenure of investment

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TAX GYAAN 2011-12 LALIT KHANDELWAL * Investment for tax planning can have a significant impact on your finances over the long term horizon. * Invest in a manner that saves Taxes as well as achieve your long term financial objectives . * Draw up a plan that suits you best and then be disciplined in executing the same. Investment for Tax Plan is a road map to help you achieve your life’s Financial Goals

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TAX GYAAN 2011-12 LALIT KHANDELWAL EXPLAINATIONS

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TAX GYAAN 2011-12 LALIT KHANDELWAL Interest deductible up to Rs. 1,50,000 (Sec 24) Home Loan Repayment Interest Principal Principal deductible up to Rs. 1,00,000 (Sec 80C) ORIGINAL+ADDITIONAL

House Rent Allowance exempt u/s 10(13A):

TAX GYAAN 2011-12 LALIT KHANDELWAL House Rent Allowance exempt u/s 10(13A) SAMPLE CALCULATIONS: Basic+DA = Rs 3,50,000 H.R.A. = Rs 70,000 House Rent Paid = Rs 1,00,000 Least of: Actual amount of HRA received = Rs 70,000 Expenditure of rent in excess of 10%of salary (Basic+DA)(100000-10%of 3,50,000) = Rs 65000 40% of salary (Basic+DA) = Rs 1,40,000 ( 50% for Metro Cities) Exemption Admissible = Rs 65,000 The balance HRA of Rs 5,000 (70,000-65,000) would be taxable. Please note that HRA exemptions are only available on submission of rent receipts or the rent agreement

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TAX GYAAN 2011-12 LALIT KHANDELWAL 80CCE ( Total Rs.1 lac) 80C Instruments 80CCC Pension Plans 80CCD NPS for C.G.E. Maximum Deduction under Sec 80C+SEC80CCC+SEC80CCD is Rs 1,00,000 Investment towards a Pension Plan?

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TAX GYAAN 2011-12 LALIT KHANDELWAL Is a policy taken on wife’s name eligible for tax benefits? YES. a premium paid towards Insurance policy taken in the name of self, spouse and children only is allowable as deduction. If you pay a premium towards your parent’s policy , then the premium paid does not qualify for deduction. Insurance premium will qualify for deduction only up to 20% of Sum Assured.

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TAX GYAAN 2011-12 LALIT KHANDELWAL A life insurance policy has matured and I have received Rs. 5,00,000 . I have also received a bank interest of Rs. 1 lac . Will I have to pay tax on all these Rs 6,00,000 ? MATURITY OF LIFE INSURANCE POLICY

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TAX GYAAN 2011-12 LALIT KHANDELWAL Proceeds from an insurance policy is completely tax-free under Sec 10(10)D provided that Sum Assured is at least 5 times of premium. In case this condition is violated, then the entire proceeds of Rs 5,00,000 becomes taxable as income from other sources . Income from Bank Interest is to be added as income from other sources to Gross Income for Tax purpose

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TAX GYAAN 2011-12 LALIT KHANDELWAL HEALTH INSURANCE

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TAX GYAAN 2011-12 LALIT KHANDELWAL Health Insurance Section 80D Investment can be made in the name of self, spouse, parents and dependent children for deduction under Sec 80D. Rs. 15000 for self,spouse and dependent children Rs. 15000 ( For Parents) Rs. 20000 ( If parents are Senior Citizens) +

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TAX GYAAN 2011-12 LALIT KHANDELWAL For example, an individual assessee pays ( through any mode other than cash ) during the previous year medical insurance premia as under: (i) Rs 12,000 /- to keep in force an insurance policy on his health and on the health of his wife and dependent children; (ii) Rs 19,000 /- to keep in force an insurance policy on the health of his parents who are sr. citizens. Under the proposed new provisions, he will be allowed a deduction of Rs 31,000 (Rs. 12,000/- + Rs. 19,000/-) If the person ,whose health is covered, has attained at least 60 years of age , then the maximum allowable deduction will be raised to Rs 20,000 in both cases.

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TAX GYAAN 2011-12 LALIT KHANDELWAL There can be income from sources other than salary as well. OTHER INCOME House Property Business & Profession Bank Interest Other Sources Capital Gains OTHER INCOME

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TAX GYAAN 2011-12 LALIT KHANDELWAL Filing Of Income Tax Return

Filing Your Returns Need not be Taxing:

Filing Your Returns Need not be Taxing Filing Tax Returns can be a rigmarole for many. But taking care of some basic things will ensure that you don’t sweat over it.

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TAX GYAAN 2011-12 LALIT KHANDELWAL From the financial year 2010-11 , salaried individuals with taxable income of less than Rs 5 lakh have not to file returns , provided the entire income is accrued from a single employer and there is no interest income of more than Rs 10,000 from your savings accounts and included in Form 16.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Filing of Income Tax Return is compulsory for everyone whose gross total income - the income under the five heads before allowing for any deductions- exceeds notified limit. Filing your tax returns is an annual activity that most of us have to take care of so that we operate within the law.

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TAX GYAAN 2011-12 LALIT KHANDELWAL There are two income tax return forms, ITR-1(SAHAJ) and ITR-2, for salaried individuals . Your sources of income will decide your form. You will have to submit the filled form to the tax authorities and get an acknowledgement from them.

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TAX GYAAN 2011-12 LALIT KHANDELWAL INCOME SOURCE DECIDES RETURN FORM ITR-1(SAHAJ) - Income from salary, pension, Income from other sources, income from one house property (except where loss is brought forward from previous year). ITR-2 - Income or loss from house property if carried forward, Capital Gains from sale of house property or shares . Submit the filled form to the tax authorities and get an acknowledgement from them.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Think . Why not do it yourself ? Believe it or not, it's really not all that tough. All you need to do is to get a bit proactive and collect some important documents, something you would need to do anyway, even if you use the services of a professional. YOU CAN DO IT !

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TAX GYAAN 2011-12 LALIT KHANDELWAL Offline : You could either hire a chartered accountant or can do it yourself. In the first case , you need to just sign on the relevant ITR form. The CA would fill it up and submit the form to the income tax office and provide you the acknowledgement. But then nothing comes for free. The CA may typically charge you anywhere between Rs 200 and Rs 3,000. The second option before you is doing it yourself . Download the relevant ITR Form from http://www.incometaxindia.gov.in/ . Fill up the required details in the form, submit it at the ward concerned at the income-tax office and collect the acknowledgement. ITR Filing

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TAX GYAAN 2011-12 LALIT KHANDELWAL Online : The online facility is available for filing I-T returns . Some popular websites offering the e-filing facility include www. taxspanner.com, www. taxshax. com, www. taxsmile. com and www. taxsum.com. The government, too, has a site designated for this purpose, the services for which are free -- www.incometaxindiaefiling.gov.in/portal/index.jsp. Send signed ITR-V form to centralised processing centre, Bangalore.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Using a service provider : Most service providers have in-built, self-designed, user-friendly software on their website, which need not be downloaded. You just need to follow instructions and fill up the form. Still others require you to just send the soft copy of your Form 16 so that they can do the groundwork and send you the filled-up ITR form for further processing. Whether it's the government website or a service provider, once you have filled up the ITR form, you have to submit it online only.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Before you start filing the return, check if you would be getting a refund or have to pay tax . In case of the latter you should first get hold of Form 280 , fill it up and deposit it in any bank along with the tax payable. You can also pay tax through Inter net banking. In both cases, you will get a receipt number which has to be quoted in the ITR form .

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TAX GYAAN 2011-12 LALIT KHANDELWAL Checklist Keep ITR-1, ITR-2 forms handy * Enter all the details in CAPITAL letters * Ensure that name, address and other personal details are entered correctly * Double-check PAN number, bank account details and the MICR code you write * Store the acknowledgement safely. Ensure disclosure of all income from other sources, if any.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Get good advice . For most people, income tax is not a topic in which they have extensive experience. The complexity in tax law can be confusing . So get good advice for preparing the return.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Fill out your correct Permanent Account Number (PAN) number you might have to pay a penalty of Rs10,000 for not quoting or mis-quoting your PAN. Tax Return Filing Tips To Avoid Tax Problems To get in good shape for filing tax returns here is a handy guide with 10 tips to keep in mind. July 31 deadline – avoid coming close to it Don’t wait till the July 31 deadline, file your return today also, keep in mind that closer to the deadline, the tax department servers get overloaded. You don’t need a CA to prepare your returns, consider online filing If you want, you can fill out your own tax return online, or use the services of many of the online tax filing companies. You don’t always need to rely on going to a chartered accountant. File a return even if Tax has been deducted source You must file tax return if your combined annual income from all sources is above the exemption limit depending upon your age and gender.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Organize TDS certificates from all deductors Your employer has to give you your Form 16 that states the amount of tax that has been paid by you. Additionally, you will need to obtain a TDS certificate in Form 16A if you have rental income, interest income, Fully disclose all sources of income Why invite trouble by not disclosing all sources of income you might have. Many tax filers willingly don’t disclose interest income earned from one’s savings balance, fixed deposits or small savings schemes. Don’t expose yourself by omitting any obvious disclosure. Pay off any self-assessment tax if required, before you file your return In case you have a tax liability then this needs to be paid off Annual Information Return (AIR) details must be filled ITR forms require you to declare certain types of large transactions. The mismatch of disclosure might lead to an investigation into your finances.

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TAX GYAAN 2011-12 LALIT KHANDELWAL State your correct bank details to ensure timely refunds Give your correct bank account number and MICR code. State complete details related to your tax deductions Your tax credit depends upon the authenticity and completeness of the data you transcribe on your ITR from the TDS certificates and Self Assessment Tax Challan. Ensure that there are no errors when stating the TAN of the employer or deductor, the amount and date of the deduction. Also, in case of self assessment challans, ensure that the name, branch address and the BSR code of the bank where the tax is deposited, challan serial number, amount and date of the deposit are clearly stated.

WEB SITES:

TAX GYAAN 2011-12 LALIT KHANDELWAL WEB SITES All sites are secure and easy to navigate Site for Downloading IT FORMS : www.incometaxindia.gov.in Sites for e-filing of return: incometaxindia.gov.in incometaxindiaefiling.gov.in tin-nsdl.com taxsmile.com taxspanner.com taxshax.com taxsum.com Site for SALARY & INCOME TAX CALCULATIONS: irtsa.net.in

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TAX GYAAN 2011-12 LALIT KHANDELWAL Stick to the deadline Whether you are going offline or online , make sure you are on the right side of 31st July . If tax is due and return is not filed till 31st March of the following year, a penalty of Rs 5,000 is levied.

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TAX GYAAN 2011-12 LALIT KHANDELWAL Tax Calculations

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TAX GYAAN 2011-12 LALIT KHANDELWAL Calculating income taxes is very easy. Let’s understand this in three quick steps: Step 1 : Identify and tabulate all sources of income – salary, income from house property , interest, rental, capital gains & choose relevent ITR form. Step 2 : Identify which deductions and tax savings are applicable to you – 80C deductions ,any other admissible deductions , HBA interest repayment Step 3 : Apply the relevant tax slab depending upon your sex and age, after taking the deductions and savings How to calculate taxes?

DISCLAIMER:

TAX GYAAN 2011-12 LALIT KHANDELWAL DISCLAIMER This presentation is for information only. Please Refer latest IT rules before filing your Income Tax Return.

GRATITUDE:

TAX GYAAN 2011-12 LALIT KHANDELWAL GRATITUDE Contact details: e-mail ID : lalit_kh@rediffmail.com

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TAX GYAAN 2011-12 LALIT KHANDELWAL THE END