Individual Txation FY 203 24
Individual Txation FY 203 24
Tax is a mandatory liability for every citizen of the country. There are two types of tax in
India i.e. direct and indirect.
Taxation in India is rooted from the period of Manu Smriti and Arthasastra. Present Indian
tax system is based on this ancient tax system which was based on the theory of
maximum social welfare.
Brief History of Income Tax in India:
In India, this tax was introduced for the first time in 1860, by Sir James Wilson in order to meet the
losses sustained by the Government on account of the Military Mutiny of 1857.
In 1918, a new income tax was passed and again it was replaced by another new act which was
passed in 1922.This Act remained in force up to the assessment year 1961-62 with numerous
amendments.
In consultation with the Ministry of Law finally the Income Tax Act, 1961 was passed. The Income
Tax Act 1961 has been brought into force with 1 April 1962. It applies to the whole of India and Sikkim
(including Jammu and Kashmir).
Since 1962 several amendments of far-reaching nature have been made in the Income Tax Act by
the Union Budget every year.
Present Scenario in India in case of ITR
37,900,000
8,551,000
2013-14 2016-17 2017-18
2016-17 2017-18
People raise the question 'Why should I pay tax?
They argue:
I have to pay for my food, for my house, for my travel, for my medical treatment, for
owning a vehicle not only cost of vehicle but also vehicle tax and what not.
Even on many roads, one has to pay toll tax! They also say that if we compare with
countries like USA and UK, the people get social security as also medical facilities
virtually without any cost. But India does not offer such facilities.
What Government Do from our TAX?
The Government provide Health care through Government hospitals (usually they offer service without any cost),
Education (In Municipal and Government schools the fee is negligible).
The Government also provides cooking gas at concessional rate or gives subsidy.
Of course the major expenditure of Government has to be incurred on National Defense, Infrastructure
Developments etc.
Taxes are used by the government for carrying out various welfare schemes including employment programs.
There are Lakhs of employees in various departments and the administrative cost has to be borne by the
Government.
Though the judicial process involves delay, yet the Salaries, perks of Judges, Magistrates and judicial staff has also
to be paid by the Government.
Thus on considering these various duties of the Government, we need to appreciate that we must pay tax as per
law. We have to act like a responsible citizen.
Tax Slab
Income Tax slab for AY 2018-19 (AY 2019-20)
General Public (Under 60 Yrs Age) Senior Citizens ( 60 -80 Yrs. age) Very Senior Citizens( More than 80 Yrs Age)
Income tax Slab Rate of Tax Income tax Slab Rate of Tax Income tax Slab Rate of Tax
Upto Rs. 2.5 Lakhs Nil Upto Rs. 3 Lakhs Nil Upto Rs. 5 Lakhs Nil
Rs. 2.5- 5 Lakhs 5% Rs. 3- 5 Lakhs 5% Rs. 5- 10 Lakhs 20%
Rs. 5-10 Lakhs 20% Rs. 5-10 Lakhs 20% Above Rs. 10 Lakhs 30%
Above Rs. 10 Lakhs 30% Above Rs. 10 Lakhs 30%
Education Cess 3% +Health Cess of1 %
Surcharge of 10% on Rs. 50 Lakhs to Rs. 1 crore + Income earners
Surcharge of 15% on Rs. 1 Cr. Plus income earners
Tax credit of Rs. 2,500/- for income upto Rs. 3.5 Lakhs u/s 87A
Standard deduction of Rs. 40,000/-for Salaried and Pensioners
There are no separate slab for male & Female
Important Terms
Assessee
Assessment Year (A.Y. 2019‐20)
Previous Year (F.Y. 2018‐19)
Residential Status
Gross Total Income
Deductions
Total Income
Definition of 'Assessee' – Section 2(7) of Income Tax.
As per S. 2(7) of the Income Tax Act, 1961, unless the context otherwise requires, the term “assessee”
means a person by whom any tax or any other sum of money is payable under this Act, and includes
Person in respect of whom any proceedings under this Act has been taken for assessment of his income
Deemed assessee under provisions of this Act
Any person deemed to be an assesse in default under any provisions of this Act
Assessment Year (A.Y. 2019‐20):
Assessment year means the period starting from
April 1 and ending on March 31 of the next year.
Add: —
2. Allowances —
3. Perquisites —
4. Retirement Benefits —
Gross Salary —
First time Home Buyers can claim an additional Tax deduction of up to Rs.50,000 on home loan interest
payments under this section. Below are the few conditions for this.
He must be an individual (Resident or Non-Resident).
Loan must be taken for the acquisition of the property.
Loan should be sanctioned after 2016-17.
Loan amount should not exceed Rs. 35 Lakh.
The value of the house should not be more than Rs 50 Lakh.
The home buyer should not have any other existing residential house during the sanction of loan.
Do remember that if you claimed the interest under this section, then the same can’t be claimed under other
sections for deductions.
Income from Other Sources
1.) Income:
• Dividend
• Interest- From Savings, Term deposit, income tax refund, other
• Income of winnings from lotteries, crossword puzzles etc.,
excluding income from owning race horses
• Income from the activity of owning and maintaining race
horses
Income from Other Sources -
DEDUCTIONS
Deduction on Interest Income Under Section 80TTA
For a residential individual (age of 60 years or less) or HUF, interest earned upto Rs 10,000 in a
financial year is exempt from tax. The deduction is allowed on interest income earned from:
savings account with a bank;
savings account with a co-operative society carrying on the business of banking; or
savings account with a post office
Senior citizens are not entitled to benefits under section 80TTA.
Interest income in case of Fixed Deposit (PAN)
Tax on Fixed Deposits
Senior citizens, with effect from 1 April 2018, will enjoy an income tax exemption up to Rs.
50,000/- on the interest income they receive from fixed deposits with banks, post offices etc.
under Section 80TTB.
Exempt Income
The PPF and EPF amount you withdraw after maturity is exempt from tax and must
be declared as exempt income from income from other sources.
Note that: The EPF is only tax exempt after five years of continuous service.
Family Pension
If you are collecting pension on behalf of someone who is deceased, then you must show this income under
income from other sources. There is a deduction of Rs 15,000 or one-third of the family pension received
whichever is lower from the Family Pension Income. This will be added to the taxpayer’s income and tax must
be paid at the tax rate that is applicable.
This is the additional tax benefit of up to Rs.50,000 eligible for income tax
deduction and was introduced in the Budget 2015, One can avail the benefit of
this Sect.80CCD (1B) from FY 2015-16.
Both self-employed and employees are eligible for availing this deduction.
This is over and above Sec.80CCD (1).
Deductions under Chapter VI-A
NPS Tax Benefit Summary
Deductions under Chapter VI-A
Section 80D
Deduction under this section is available if you satisfy the following conditions.
Section 80E
If the loan is taken by an individual for any study in India or outside India, then they can claim the
entire interest as deduction under this section. The loan must be taken from notified Financial
institutions/ Approved Charitable institutions or from any Banks.
The interest part of the loan on such education loan can be claimed for deduction for pursuing
individual’s own education or for the education of his relatives (Spouse, children or any student for
whom the individual is legal guardian).
The deduction under section 80E can be claimed for a maximum of 8 assessment years from the
year you start repaying the loan or the interest is fully repaid.
Deductions under Chapter VI-A
Section 80G
Section 80U
To claim tax benefits under Sec.80U, the taxpayer should be an individual and resident of India.
If he is suffering from 40% or more than 40% of any disability, then he can claim a tax deduction.
The disability should also be certified by recognized medical authorities.
You can claim the fixed deduction of Rs.75,000. a higher deduction of Rs.1,25,000 is allowed in
respect of a person with a severe disability (i.e. having a disability of 80% or above).
Rebate under Section 87A
The old tax regime remains the same, i.e. 12,500 for income up to Rs 5
Lakhs for FY 2023-24 (AY 2024-25)
Under the new income tax regime, the amount of the rebate under Section
87A for FY 2023-24 (AY 2024-25) has been modified. A resident individual
with taxable income up to Rs 7 Lakh will receive a Rs 25,000 tax relief.
To avail this benefit, there are certain conditions and they are as below.
The taxpayer must be a resident individual.
Your Total Income (Less Deductions from 80C to 80U) is equal to or less
than Rs.5,00,000.
The rebate is the 100% of income tax on such income or Rs.12,500 (old tax
Income Tax E-Filing ( ITR-1)
ii. The condition of the individual having income from salaries, one house property, other income and having total
income up to Rs 50 lakhs continues
iii. There is a requirement to furnish a break-up of salary. Until now, these details would appear only in Form 16
and the requirement to disclose them in the return had never arisen
iv. There is also a requirement to furnish a break up of Income under House Property which was earlier mandatory
only for ITR -2 and other forms
Name:-CA Sharda S. Shukla