New Section 87A for Tax Rebate of Rs. 2000 w.e.f. 1.04.2014.

Finance Bill, 2013 has been introduced new section 87A for Income Tax Deduction of Rs. 2000/- for Assessment Year 2014-15.  This rebate can be availed Taxpayee/Assessee under section 87A. For more clarity it is necessary to read clauses 19 and 20 of the bill as given below :-

Clauses 19 and 20 of the Bill seek to amend section 87 and insert a new section 87A in the Income-tax Act relating to rebate of income-tax in case of certain individuals.

The proposed new section 87A seeks to provide that an assessee, being an individual resident in India, whose total income does not exceed five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under Chapter VIII of the Income-tax Act) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent. of such income-tax or an amount of two thousand rupees, whichever is less.

Consequential amendments have been proposed in section 87, so as to provide reference to proposed new section 87A.

These amendments will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.

What is the Income Tax Slab for Asstt. Year 2014-15?

Do you check your Income Tax Deduction as TDS from Monthly Salary?

Read More

Contribution as Donations u/s. 80G of the Income Tax Act, 1961 upates.

Inspite of all the contributions made to social causes, there is a huge gap between the demand of money from the needy and the amount donated by philanthropists. This probably, is the reason why the Government has given tax benefits on donations. The amount donated towards charity attracts deduction under section 80G of the Income Tax Act, 1961. Section 80G has been in the law book since financial year 1967-68 and it seems it’s here to stay. Several deductions have been swept away but the tax sop for donations appears to have survived the axe. The main features of tax benefit with respect to charity are as follows:

What kind of Assessee Contribute to 80G?
Any person or ‘assessee’ who makes an eligible donation is entitled to get tax deductions subject to conditions. This section does not restrict the deduction to individuals, companies or any specific category of taxpayer.

What type of Donation is eligible?
Donation in kind do not entitle for any tax benefits. For example, during natural disasters such as floods, earthquake, and many organisations start campaigns for collecting clothes, blankets, food etc. Such donations will not fetch you any tax benefits.

Deduction amount U/s. 80G:
Donations paid to specified institutions qualify for tax deduction under section 80G but is subject to certain ceiling limits. Based on limits, we can broadly divide all eligible donations under section 80G into categories:

• 100% deduction without any qualifying limit (e.g., Prime Minister’s National Relief Fund).
• 50% deduction without any qualifying limit (e.g., Indira Gandhi Memorial Trust).
• 100% deduction subject to qualifying limit (e.g., an approved institution for promoting family planning).
• 50% deduction subject to qualifying limit (e.g., an approved institution for charitable purpose other than promoting family planning).
  

What is the Limit?
The qualifying limits u/s 80G is 10% of the adjusted gross total income. The limit is to be applied to the adjusted gross total income. The ‘adjusted gross total income’ for this purpose is the gross total income (i.e. the sub total of income under various heads) reduced by the following:

• Amount deductible under Sections 80CCC to 80U (but not Section 80G).
• Exempt income.
• Long-term capital gains.
• Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D, relating to non-residents and foreign companies.
  

Read More

Importance of Income Tax Return & Guidelines for eFiling or Online Filing ?

Regarding Income Tax Return, the most important things I will share with you as and hereafter. But on the contrary most of Taxpayee not watch or read the post carefully. So due to this problem I will try to my level best to clarify & escape from Problem of online Income Tax Return Filing for Assessment year 2011-12.

Some are very easy task for layman even you don’t required any software. However you need to know about scrolling of computer mouse. There are lots of benefits to file income tax return online. No need to stand in long queues at the income tax department. No fear of lost any document, one can print and download whenever you wants after log-in your account.
Filing Income Tax Return:

1. Select appropriate type of Return Form
2. Download Return Preparation Software for selected Return Form.
3. Fill your return offline and generate a XML file.
4. Go to Income Tax Department website.
5. Register and create a user id/password
6. Login and click on relevant form on left panel and select “Submit Return”
7. Browse to select XML file and click on “Upload” button
8. On successful upload acknowledgment details would be displayed. Click on “Print” to generate printout of acknowledgment/ITR-V Form.
9. In case the return is digitally signed, on generation of “Acknowledgment” the Return Filing process gets completed. You may take a printout of the Acknowledgment for your record.
10. In case the return is not digitally signed, on successful uploading of e-Return, the ITR-V Form would be generated which needs to be printed by the tax payers. This is an acknowledgment cum verification form. The tax payer has to fill-up the verification part and verify the same.
11. Update: Now you have to send ITR-V to the “Income Tax Department , CPC, Post Box No – 1, Electronic City Post Office, Bangalore – 560100, Karnataka”. They’ll send the acknowledgment receipt at your email address.
12. For any assistance in filing the paper copy of the return please contact by comment form given below.
    

Read More

Medical reimbursement bill exempt from Income Tax.

On medical reimbursement Bill paid to employee by Government/Statement for their annual medical check-ups or major injury medical bills, the Government has said they would no longer have to pay income tax on money drawn from welfare funds for annual medical check-ups. The Central Board of Direct Taxes ( CBDT )) has issued a notification in this regard. As per the notification, no income tax will be levied “to meet the cost of annual medical tests or medical check-ups of the member, his spouse and dependent children” if money is drawn from the welfare fund to meet the expenses.

Earlier, only cash benefits to a member of the welfare fund on superannuation, illness (including spouse or dependent children), or towards education of dependent children were exempted from income tax.

Exemption from taxation is granted under section 10 of the Income Tax Act. The latest exemption has been given under a clause that deals with income received on behalf of a fund established for the welfare of employees or their dependents.

Also, earlier this year, the government had withdrawn a proposal to impose 5 per cent service tax on services provided by air conditioned hospitals of more than 25 beds and on diagnostic services.

Read More

Income Tax Rebates and eFilling Tax Return

<!--[if gte mso 9]> Normal 0 false false false EN-US X-NONE HI MicrosoftInternetExplorer4

Friends, Most of people do not have clear idea about their income tax status. This is to mean that they do no know what amount they should pay for tax against what they earn in a year. They can calculate the extent of tax they are paying, and they will learn that they are paying much more towards tax than what they should have paid. They do not, usually, maintain accounts of daily expenditure. Income tax is received by the state from its citizens in every year on what they earn. Income tax rebate tips are, therefore, important. Everyone must file his income tax return on annual income within a stipulated date of the calendar year.

Tax system has been classified in two categories: progressive and digressive. Tax is fixed on entire annual income of a person, and this is known as progressive process. The digressive process is applied for the corporate, and tax is fixed on the net income in their case. A person must get all kinds of financial operation done by him in a year. He must also get his total annual income or net income, as the case may be. It is, then, possible for him to file his income tax return.

Most of the persons do not have the habit of keeping the data necessary for filling their tax return. They can seek assistance from income tax consultants. Income tax consultants play great role for filing income tax return for the corporate sectors where there are huge operations in financial transaction.

It is important to identify the areas in which one can avail rebates in income tax:

The people who are engaged in business can highlight travel expenditure. Travel for conferences or seminars, airfare, vehicles rental, toll fees, parking fees, hotel charges, tips etc are deductible travel costs.

A person who maintains two businesses should adjust spending of the first into the second and that of second into the first. By doing so, he will get benefit.

Everybody should preserve medical bills. Some of the medical expenditure (dental insurance, health insurance etc) may be transformed into personal health expenditure, and this will help towards the growth of business.

One must not keep all jobs associated with filling of income tax returns to be done just before the final day of tax return submission. Instead of acting this way, one should prepare day-to-day transactions so that one will not have much trouble and anxiety while submitting the tax return within the scheduled date.

Husband and wife live together, usually. They should submit income tax return separately. This will reduce their amount of tax considerably.

Read More

Income Tax & Important Dates.

Friends,

Every Tax payee always remember the following important dates for Income Tax Return Filing.

14th January
Submission of tax deduction against interest, dividend or any other amount paid to non-resident during 1st, October - 31st, December. Form No: 27

15th March
In case of other than company - Payment of 3rd installment of advance for the financial year In case of a company - Payment of 4th installment of advance for the financial year

14th April
Submission of statement of tax deduction against interest, dividend or amount paid to non-resident during 1st, January - 31st, March. Form No: 27

30th April
(i) Certificates of such taxes which are deducted due to payment given to employees as their salary. From No: 16
(ii) Certificates of such taxes, which are deducted due to amount, paid as insurance commissions. Form No: 16A
(iii) Certificate of tax deducted other than salary Form No: 16A
(iv) filing annual return of dividend and income in terms of units under section 206 of Income Tax Act 1961. Form No: 26

31st May
(i) filing of annual return against earning from prize, lottery. Form No: 26B
(ii) filing of annual return against earning from horse races. Form No: 26BB
(iii) filing of annual return against salary paid. Form No: 24

15th June
In case of company - Payment of 1st installment of advance for the financial year

30th June
(i) filing of income tax return if assessee is not a corporate/ cooperative and having no source of income from business/ profession. Form No: 3/2A
(ii) filing of income tax return against insurance commissions/ commission paid without deduction of tax. Form No: 26D, 26E
(iii) filing of income tax return against interest either on securities or on any other. Form No: 25, 26A
(iv) filing of income tax return against payment to contractors Form No: 26C
(v) filing of income tax return against deposits under national saving schemes Form No: 26F
(vi) filing of income tax return against payment for purchasing of Mutual Funds Form No: 26G
(vii) filing of income tax return against payment of commission on sale of lottery Form No: 26H
(viii) filing of income tax return against payment of rent Form No: 26J

14th July
Submitting date for the statement of tax deducted from interest on amount paid to non residents during 1st, April - 30th, June Form No: 27

31st August
filing of income tax return if
(i) Assessee is not a corporate/ cooperative
(ii) There is no need of auditing accounts under any law
(iii) Total income includes income through business or other profession. Form No: 2

15th September
In case of other than company/ corporate: Payment of 1st installment of advance income tax In case of a company/ corporate: Payment of 2nd installment of advance income tax

14th October
Submitting date for the statement of deduction of tax interest, dividend and other amount paid to non resident during 1st July - 30th September. Form No: 27

31st October
(i) In case of non corporate: Submitting auditing report under section 44AB of Income Tax Act. Form No: 3CA, 3CB, 3CC, 3CD, 3CE
(ii) In case of cooperative/ non corporate: filing of income tax return of the relevant assessment year if it require to get his account audited under Income Tax Act. Form No: 2

filing of half yearly return against tax collected during 1st April - 30th September Form No: 27EA, 27EB, 27EC, 27ED Date of submission of annual audited account for approved programs under section 35 (2AA) of Income Tax Act 1961.

30th November
In case of a company - filing of annual return with auditing report under section 44AB
For annual return filing: Form 1
For submitting auditing report: Form 3CA & 3CD

15th December
In case of other than company - Payment of 2nd installment of advance for the financial year In case of a company - Payment of 3rd installment of advance for the financial year

Read More