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<ul><li>STT increased on futures and options trading </li><li>Changes in <keyword id="22258595" type="General" weightage="20" keywordseo="TDS-rates" source="keywords">TDS rates</keyword> (from 5% to 2%) on payments for life insurance policy, brokerage </li><li>Buybacks to be treated as dividends for taxation purposes</li><li>Small savings account rates left unchanged for Oct-Dec 2024</li></ul>Starting October 1st, a lot is set to change with your money. From <keyword id="20852321" type="General" weightage="100" keywordseo="FO-trading" source="keywords">F&amp;O trading</keyword> (futures and options) and buybacks getting more expensive in the hands of the individual, to changes in TDS slabs for payments concerning life insurance, brokerage, and more, here's a ready reckoner for all that you need to know: 1. STT upped for F&amp;O (Futures and Options) trading This budget, in a bid to discourage retail investors from burning their hands in the highly risky F&amp;O segment, the government had proposed raising the STT (securities transaction tax) for both futures and options. Starting today, you will have to pay an STT of 0.1% on premium earned from option sales, as opposed to 0.0625% previously. As for futures, the STT is set to rise to 0.02% of trade price, up from its previous mark of 0.0125%. Notably, STT is levied every time an individual purchases or sells a security, which significantly increases its incidence and coverage. For instance, if the trading price of the futures you're selling today is Rs 1,000, you'd have to pay Rs 0.2 as STT today. Till September 30th, the STT applicable would be Rs 0.12. Similarly, for options, if the settlement price of your options contract is Rs 1,000, your STT payable today would be Re 1, which earlier stood at Rs 0.625 While this may sound super inconvenient for frequent or intraday traders, a recent SEBI study has highlighted that a staggering 93% individual traders have incurred just losses while trading in the F&amp;O segment between FY22 and FY24, with the total losses exceeding Rs 1.8 lakh crore during this period. Only a tiny 1% traders managed to rake in profits above Rs 1,00,000. Perhaps SEBI is thinking along the lines of prevention being better than cure? 2. Changes in Debit card rules for ICICI bank ICICI debit card users, who also happen to be frequent flyers, listen up! Starting today, you will be able to access the complimentary airport lounge service twice, but only if you have spent Rs 10,000 or more via your card in the previous quarter. So, suppose you've spent just Rs 8,000 between July-September 2024 via your ICICI debit card. Since this falls below the Rs 10,000-threshold, you wont be able to access complimentary airport lounge service two times between October-December 2024. 3. Changes in rules for PPF, small savings account The interest rates on various small savings schemes were left unchanged by the Finance Ministry for the upcoming quarter i.e. October-December 2024. For this quarter, Public Provident Funds (PPF) will earn you 7.1% interest p.a., while Sukanya Samriddhi Yojana (SSY) and Senior Citizens Savings Scheme (SCSS) will offer interest at the rate of 8.2% p.a. <div type="Article" hostid="261" msid="113692667" title="Attention! Here's what's changing with your PPF accounts starting 1st October, 2024" mstype="2" mssubtype="0"></div> Also, these changes in PPF accounts will kick in from today: <ul><li>Have a PPF account in your child's name i.e. a minor? This account would earn the same interest as a POSA (Post Office Savings Account) i.e. at 4% p.a. currently. Once your child turns 18, the prevailing PPF interest rate, which is presently at 7.1%, will be levied. </li><li>No more interest earning via multiple PPF accounts! Starting today, only your primary PPF account will be eligible for interest. </li><li>Are you an NRI who currently holds an active PPF account, and you have not disclosed your residency status in Form H (used to extend the tenure of your PPF account by blocks of 5 years)? Starting today, such accounts will earn zero interest. </li></ul>4. Buyback set to get more expensive Buybacks happen when a company decides to buy back its own shares from its existing shareholders. What's in for the shareholders, you ask? The buyback price is usually higher than what is offered by the markets. You are eligible to participate in a company's buyback if you hold its shares on or before the record date that's set by the company. Starting today, buybacks will be treated just like dividends. This means starting today, the burden of tax payable on buybacks will fall on the shareholders selling the shares, and not the company. Buybacks will be taxed as per the individual's personal income tax bracket. 5. Revision of TDS rates Starting today, the TDS (tax deducted at source) on various payments you make for life insurance, lottery tickets and more is also set to change. Here's how TDS rates will look, starting today: <table class="redcator-table-advance"><tbody><tr><td>Category </td><td>Previous TDS rate</td><td>New TDS rate (Effective October 1st, 2024)</td></tr><tr><td>Payment made towards life insurance policies</td><td>5%</td><td>2%</td></tr><tr><td>Commission earned on sale of lottery tickets </td><td>5%</td><td>2%</td></tr><tr><td>Payment of commission/ brokerage </td><td>5%</td><td>2%</td></tr><tr><td>Payment of rent by certain individuals/HUF </td><td>5%</td><td>2%</td></tr><tr><td>Payment made by e-commerce operators/platforms to e-commerce participants/sellers </td><td>1%</td><td>0.1%</td></tr></tbody><tbody></tbody><tbody></tbody></table>

Attention! Here's what's changing with your PPF, F&O trading, and buybacks, starting today!

In a post-budget interaction with industry stakeholders today, <keyword id="20419783" type="General" weightage="20" keywordseo="revenue-secretary" source="keywords">Revenue Secretary</keyword> Sanjay Malhotra highlighted that the government aims to comprehensively review the <keyword id="19985623" type="General" weightage="20" keywordseo="Direct-Tax-Code" source="keywords">Direct Tax Code</keyword> within the next 6 months, and it is too early to say whether or not that would entail any significant overhauls. However, "we would like to have a collaborative approach for its implementation, and would certainly present the draft for public opinion” Malhotra added. Buybacks taxed as dividend Starting October 1, 2024, the amount received by the shareholder on buyback of his/her shares by the company will be treated as dividend income, and will be taxable at the hands of shareholders. Also, the cost incurred by the investor to acquire those shares will not be allowed as a deduction against the income, but can be set off as a capital loss, only against other <keyword id="20619608" type="General" weightage="20" keywordseo="capital-gains" source="keywords">capital gains</keyword>, for a maximum of 8 subsequent years Malhotra explained the government's rationale behind this proviso, noting that buyback does not fundamentally alter the company's capital structure, and like dividend distribution, is a way for the company to give out its surplus. Moreover, it is up to the investor, whether or not they want to participate in a buyback or not. Hence, going ahead, funds from buyback will be deemed as dividend income. Credit on TCS paid Previously, in case your employer has already deducted TCS (tax collected at source) from your monthly salary, it would not be accounted for, or considered while calculating your annual tax liability. As a result, it had to be claimed back separately as a refund, resulting in duplication of processes. However, effective April 1, 2025, salaried employees will be able to adjust the TCS they've already, previously paid while calculating their tax due. The Old tax regime heading towards a sunset? While the officials have given no clarity on this, they noted that the idea of taxation is not to push people into investing, saving or buying insurance for the sole purpose of saving taxes as the old regime did. "It is a moral debate on whether tax regimes are supposed to push people towards financial planning measures like buying health or life insurances. However, as we go ahead, the focus will entirely on greater, more deep-rooted focus on how tax filing and compliance can be simplified and transformed into a hassle-free, smooth process. The new tax regime was finding increased grounding amongst both investors and corporates. For the previous assessment year, 2/3rd of total taxpayers had opted for the new tax regime, while 58% of corporate tax flows had come via them. Loss of indexation benefit only psychological Raman Chopra, Joint Secretary, CBDT, <keyword id="19908390" type="General" weightage="20" keywordseo="Ministry-of-Finance" source="keywords" meta.keywordsubtype="org" meta.entityname="Ministry of Finance" meta.hostid="261" meta.entityid="Ministry of Finance">Ministry of Finance</keyword> noted that scrapping away indexation benefits is only psychological, and tax payers will not have to bear any real losses as such. "Indexation was a complicated process. Think of this as the cost of simplification of the tax process. Now, we only have two holding periods across all asset classes, making it easier. While indexation benefits continues for properties purchased before 2001, investors continue to receive rollover benefits in case they find that their tax incidence under the reduced tax rates is high.

Comprehensive review of the IT Act imminent in 6 months, notes revenue secretary

It's officially tax season! With the July 31st deadline less than 30 days away, it's time to get started on your <keyword id="19897621" type="General" weightage="20" keywordseo="ITR" source="keywords">ITR</keyword>, if you haven't already. By now, most of your employers must have given you a certain Form-16, which is a crucial document you need to have handy while filing your returns. But in case you have not received Form-16 from your employer, there's no escaping filing your taxes. Let us understand how you can file your ITR, with or without Form-16 <h2>What if I have <keyword id="20675983" type="General" weightage="100" keywordseo="Form-16" source="keywords">Form 16</keyword>?</h2> Then you're in luck because you don't have to calculate your tax liability on your own. Form-16 offers you a comprehensive breakdown of your <keyword id="20039947" type="General" weightage="20" keywordseo="salary" source="keywords">salary</keyword>, your taxable <keyword id="20385232" type="General" weightage="20" keywordseo="deductions" source="keywords">deductions</keyword>, and the <keyword id="19948097" type="General" weightage="20" keywordseo="TDS" source="keywords">TDS</keyword> that has been deducted from your income during the year. While the first part of Form-16 contains details of your employer, (their PAN, TAN), it is the second part of Form-16 that is helpful. Here, you'll get a snapshot of your salary, the deductions you've claimed, and your total taxable income after this. So, in case you have invested in <keyword id="103549" type="General" weightage="20" keywordseo="ELSS" source="Orion">ELSS</keyword>, paid health and life insurance premiums, or there are contributions (which you and your employer have made) to a pension scheme, they will all be mentioned in Form 16. This form will also help you see how much tax you have to pay or what is the <keyword id="21144782" type="General" weightage="20" keywordseo="tax-refund" source="keywords">tax refund</keyword> due to you. Long story short, you don't have to go around collecting multiple documents and calculating your tax liability yourself if you have Form 16 handy. Here are a few things you should remember about Form 16: <ul><li>Generally, employers issue Form-16 before June 15th of every year </li><li>If you have changed jobs during the year, be sure to ask both your current and previous employer for Form 16. </li></ul>Here's how you can download your Form-16 from the <keyword id="1258217" type="General" weightage="20" keywordseo="TRACES" source="Orion">TRACES</keyword> (TDS Reconciliation Analysis and Correction Enabling System) website <ul><li>Visit the <a href="https://contents.tdscpc.gov.in/" data-type="tilCustomLink">TRACES </a>site. </li><li>If you are a new user, create a new account. If you are a registered user, fill in your PAN number (User ID) and password to log in. </li><li>Click on Downloads and choose Form 16. </li><li>Select the financial year for which you need Form 16 (in this case, FY 2023–24). </li><li>Verify your PAN details. </li><li>Enter your TDS receipt number and select the TDS date. </li><li>Add the total TDS that has been collected from you during FY. </li><li>Click on the request to download.</li></ul>And your Form-16 is ready. Note that here's how you can get your TDS receipt number: <ul><li>Visit the IT e-filing portal and login to your account </li><li>Select TDS. </li><li>View the filed TDS option on the dashboard. </li><li>Click on the token number. </li><li>Download the provisional receipt.</li></ul><h2>What if you don't have Form 16?</h2>This is where things can get a little tricky. While you can still download Form-16, there's another, manual way to figure out your tax liability. Remember, if your annual income does not exceed the basic exemption limit (Rs 2.5 lakh under the old regime, Rs 3 lakh under the new tax regime), no TDS will be deducted, and hence, no Form 16 will be issued. Here's what you can do in case your employer does not issue a Form 16 : <ul><li>Download all the payslips issued by your employer during the financial year, and see your taxable income. </li><li>Download Form 26AS to match tax deductions. Form 26AS can be downloaded via the IT portal. </li><li>To get your Form 26AS, log on with your account credentials, go to the e-file tab, click IT returns, and select Form 26AS. </li><li>Make a list of all deductions you'll claim (health, life insurance premiums, interest on home, educational loan, investments in ELSS, etc.) </li><li>Include your income from other sources as well, like capital gains on the sale of shares, property etc. </li><li>Check if you are eligible to claim HRA (house rent allowance), to further bring down your tax liability. </li><li>Once you have figured out your tax liability, file for a refund (in case you have paid excess TDS), or pay the deficient amount. </li></ul>Also Read <a href="https://www.businessinsider.in/finance/tax/article/wondering-which-itr-form-is-right-for-you-know-all-about-it-here/articleshow/111406215.cms" data-type="tilCustomLink">Wondering which ITR form is right for you? Know all about it here</a> <a href="https://www.businessinsider.in/personal-finance/income-tax/article/budget-2024-raise-standard-deduction-limit-and-more-whats-in-store/articleshow/111424832.cms" data-type="tilCustomLink">Budget 2024: Increase standard deduction, exemptions and more, an aam aadmi's wishlist</a>

Decoding Form 16: How do you file your taxes if you don't get Form 16?

These are the new TDS, TCS rates applicable on fixed deposits, dividends, contracts and more

Here’s how the advertising and marketing industry reacted to Union Budget 2021

New Delhi, May 14 () Tax deducted on payment of dividend, insurance policy, rent, professional fee and on the acquisition of immovable property has been cut by 25 per cent for a period up to March 31, the tax department has said.Following Finance Minister Nirmala Sitharaman's announcement of a reduction in the rate of tax deducted at source (TDS) and tax collected at source (TCS) for non-salaried payments, the Central Board of Direct Taxes (CBDT) notified revised rates that will be applicable from May 14, 2020, to March 31, 2021.Announcing a slew of measures to help companies and taxpayers tide over hardships caused by coronavirus lockdown, Sitharaman had on Wednesday stated that the reduction in TDS/TCS rate would release about Rs 50,000 crore in the hands of people.In the notification, the CBDT said while TCS on sale of the motor vehicle above Rs 10 lakh has been cut to 0.75 per cent from 1 per cent earlier, TDS on 23 items has been reduced.The CBDT said TDS on payment for life insurance policy has been reduced to 3.75 per cent from 5 per cent, while that on dividend and interest as well as rent for immovable property has been cut to 7.5 per cent from 10 per cent earlier.The 1 per cent TDS charged on payment made for the acquisition of immovable property has now been reduced to 0.75 per cent. Payment of rent by individual or HUF has been cut to 3.75 per cent from 5 per cent earlier.TDS on e-commerce participants has also been reduced to 0.75 per cent from 1 pr cent.Similarly, tax on professional fee has been reduced to 1.5 per cent from 2 per cent.TDS on payments in respect of deposits under National Savings Scheme has been reduced to 7.5 per cent from 10 per cent and that on payments for re-purchase of units by Mutual Funds to 15 per cent from 20 per cent.The same on insurance commission and brokerage have been cut to 3.75 per cent from 5 per cent.TDS on payment of dividend by mutual funds has been reduced to 7.5 per cent from 10 per cent.TCS on sale of tendu leaves, scrap, timber, forest produce, and minerals such as coal, lignite or iron ore has also been reduced.The CBDT said there shall be no reduction in rates of TDS or TCS where the tax is required to be deducted or collected at a higher rate due to the non-furnishing of PAN/Aadhaar.Nangia Andersen LLP Director Sandeep Jhunjhunwala said: "The reduction of TDS and TCS rates on non-salaried payments by 25 per cent will set free additional cash in the hands of the vendors, and help increase liquidity in the economy"."This relief could be enjoyed by all businesses and would play a pivotal role in increasing cash flows as the beneficial rates would be available until the end of the current financial year."Deloitte India Partner Rohinton Sidhwa said, "The TDS / TCS cut will release liquidity into the system. Most assessees would have deluged the tax department with applications for lower withholding in any case and this effectively will also reduce administrative burden".PwC India Partner (Tax and Regulatory) Vikram Doshi said, "The immediate reduction of TDS rate by 25 per cent is a direct and practical measure to increase liquidity in the system. While there was an expectation of a higher rate of reduction, the longer period of reduction till March 31, 2021, balances the slightly lower rate."The extension of due dates of various compliances provides additional relief given the practical difficulty in undertaking compliances." ANZ BALBAL

Tax on dividend, rent, insurance payment cut by 25%

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The <keyword id="21180338" type="General" weightage="100" keywordseo="tax-filing-season" source="keywords">tax filing season</keyword> is knocking at our doors, and you have until July 31 to answer it without paying any penalties. But are you confused as to where to start? Does the stack of documents needed to file your <keyword id="19897621" type="General" weightage="20" keywordseo="ITR" source="keywords">ITR</keyword> seem too long? Well, we’ve got you covered. But first off, why do you even need to file an ITR? Simply put, if your <keyword id="21120362" type="General" weightage="20" keywordseo="annual-income" source="keywords">annual income</keyword> is more than Rs 2.5 lakh (if you opt for the old tax regime) or Rs 3 lakh (if you opt for the new tax regime), you are liable to pay taxes and, hence, file an ITR. If you delay filing your ITR, or file it between August 1 and December 31st, you'll have to pay a fine of Rs 5,000. If your annual income is below Rs 5 lakh, then you'll be fined Rs 1,000 for late filing. But in certain cases, you will also have to file an ITR for the financial year, even if your annual taxable income is below the exemption limit : <ul><li>Deposited more than Rs 50 lakh in a savings bank account</li><li>Spent more than Rs 2 lakh on foreign travel</li><li>Incurred expenses of more than Rs 1 lakh in electricity bills</li><li>If your TDS/TCS deducted is more than Rs 25,000 </li></ul>If you’re a <keyword id="22247326" type="General" weightage="20" keywordseo="salaried-employee" source="keywords">salaried employee</keyword>, here’s a handy list of documents you should collect beforehand before you sit down to file your taxes so that you don't have to scramble for them at the last minute. Firstly, there are your regular documents like PAN and Aadhar card. Also, keep all details of the bank account where you want your IT refund to be credited handy. It is advisable to also have your Annual Income Statement (AIS) ready, so that you can cross-verify and match all your income details while filing your ITR. AIS as a consolidated financial summary of your year <h2>Time to get in <keyword id="22247325" type="General" weightage="20" keywordseo="Form-16" source="keywords">form-16</keyword></h2>Up next is Form-16. This gives you a complete overview of your total earned salary and the TDS deducted. This is issued by the employer to their employee. So, if you have switched jobs during the year, or worked with one or more organizations, you'll have to ask both your current and former employer for Form-16. Additionally, along with Form-16, you should also ask your previous employer to give you a statement of full and final settlement. Generally, form-16 has two parts-A and B. While part-A carries details of the employer and a summary of salary payments made during the year, part-B is where you will find your salary breakup, and the deductions made from your salary, which include payment of life and health insurance premiums, contributions made to pension fund and more.<h2>Keep rent, travel proofs handy while filing ITR </h2>In case you are claiming tax deductions under HRA (house rent agreement), you will need a notarized rent agreement as proof of rent payment. Generally, rent agreements are made for a period of 11 months. Next, in case you have availed LTA (leave travel allowance), you should have all travel-related bills handy. You can claim tax exemption on LTA in two ways. One, you can claim exemption on the amount you've actually spent on your travel. Otherwise, within a 4-year time block (2022-2025), you can claim exemption for a maximum of 2 vacations. This is applicable only for domestic travel, and you can claim exemption for your immediate family members as well. But remember, LTA will not cover your accommodation or food-related expenses incurred on the trip. Up next are your investment proofs and capital gains statement. If you've paid premiums for a life or health insurance policy during the year, or invested in ELSS (equity-linked savings scheme), you need to furnish proofs for the same. You can claim an annual <keyword id="20265008" type="General" weightage="20" keywordseo="tax-deduction" source="keywords">tax deduction</keyword> of up to Rs 25,000 on premiums paid towards your health insurance policy. In fact, your insurance company will send you a certificate to that effect as well. As for ELSS, you can claim an annual tax deduction of up to Rs 1,50,000. But you cannot withdraw money from ELSS before 3 years, so invest carefully. <h2> Pay attention to capital gains while filing ITR</h2>If you've redeemed, or sold some of your investments (property, stocks, mutual funds) during the year and earned profit on them, you'll have to pay <keyword id="20301441" type="General" weightage="20" keywordseo="capital-gains-tax" source="keywords">capital gains tax</keyword>. But this is applicable only if your capital gains are over Rs 1,00,000 in one financial year. If you sold a share/mutual fund unit within 12 months of buying it, you'll have to pay a 15% short term capital gains tax. And if you redeemed an investment after 12 months, you'll be charged 10% long term capital gains tax. That is why it would help to have a capital gains statement handy, which will help you understand how much tax you have to pay.

ITR filing: Documents you need to file your income tax return

<ul><li>Salaried individuals who have started their careers can file their taxes on their own, as the e-filing portal has been simplified over the last few years. </li><li>Based on the deductions one can avail, one needs to decide whether to opt for the old or the new tax regime. </li><li>It is important to add all <keyword id="672797" type="General" weightage="20" keywordseo="interest-income" source="Orion">interest income</keyword> from savings accounts, fixed deposits, etc, and declare it when filing taxes. </li></ul>It is that time of the year again – when we have to file our taxes. While we can take the services of a professional to help us file our taxes, many of us may prefer doing this on our own since the process has been simplified in recent times. While many of us may be overwhelmed by the perceived complexity of filing taxes, it need not be such a difficult task. If you have just started working and/or if you have limited sources of income, you can easily file your returns on your own. “Salaried individuals who have started their careers can file their taxes on their own, as the e-filing portal has been simplified from the last few years. A lot of information is pre-filled when one files their India tax return," says Akhil Chandna, partner, Grant Thornton Bharat, a professional services firm. If an individual has a limited number of income sources such as salary, interest from deposits with banks, etc, and has a basic understanding of the tax laws and regulations, she can choose to file her taxes on her own. Chandna says that if you are filing your own taxes, here are some of the things that you need to do. <cmsannotation type="cmsannotation" annotationid="subhead" text="Gather all the necessary documents:">Gather all the necessary documents:</cmsannotation> Collect your salary slips, bank statements, Form 16, investment receipts, any donations made, rent receipts, Form 26AS, AIS/TIS etc, and have them all in one place. <cmsannotation type="cmsannotation" annotationid="subhead" text="Choose the correct Income Tax Return (ITR )Form:">Choose the correct <keyword id="104359" type="General" weightage="20" keywordseo="income-tax-return" source="Orion">Income Tax Return</keyword> (ITR )Form: </cmsannotation>There are different tax forms applicable for different types of income, so it is important to know <a href="https://www.businessinsider.in/personal-finance/news/which-itr-form-should-you-use-to-file-your-taxes/articleshow/100964135.cms">which form is required to be filled</a>. Choosing an incorrect form may result in an error in filing returns, necessitating a revision of the tax return. <cmsannotation type="cmsannotation" annotationid="subhead" text="Selecting the old or the new tax regime:">Selecting the old or the new tax regime:</cmsannotation> From Budget 2023-24, the new tax regime is the default tax regime. The new tax regime has a revised set of slabs that can reduce tax outgo. However, most of the deductions like 80C, 80D, and deductions on home loan principal, and interest repayment are not available under the new tax regime. For this reason, many<a href="https://www.businessinsider.in/personal-finance/news/investments-like-elss-ppf-and-tax-saving-fixed-deposits-are-likely-to-lose-their-sheen-in-new-tax-regime/articleshow/100464933.cms"> popular tax-saving investments</a> have lost their charm under the new tax regime. Therefore, it is important to consider all the available deductions, and choose the right tax regime. In most cases, if you do not have a home loan – which you are not likely to have when you start your job – the <a href="https://www.businessinsider.in/personal-finance/news/how-to-take-home-loan-benefit-in-2023-24/articleshow/99575363.cms">new tax regime</a> would make more sense. <cmsannotation type="cmsannotation" annotationid="subhead" text="Disclosures to be made:">Disclosures to be made: </cmsannotation>Where applicable, these disclosures need to be made: bank accounts, assets and liabilities schedule, schedule of foreign assets, number of days’ presence in India, details of directorships, unlisted shares, etc. <cmsannotation type="cmsannotation" annotationid="subhead" text="Common mistakes to avoid">Common mistakes to avoid</cmsannotation> <keyword id="189207" type="General" weightage="20" keywordseo="tax-filing" source="Orion">Tax filing</keyword> involves many steps, and there are some mistakes that one may be making. This is how you can avoid them: <cmsannotation type="cmsannotation" annotationid="subhead" text="Not declaring interest income:">Not declaring interest income:</cmsannotation> “Remember to declare the interest on savings bank a/c, income tax refund (if any), etc, in your income. Many times, people miss out on the same,” says Vivek Jalan, partner, Tax Connect Advisory. He adds that interest on fixed deposits/debentures/etc as available in Form 26AS/AIS should be declared as income. There may be a difference in the amounts reported in 26AS, and what you actually receive in your bank account due to the fact that interest accrues periodically, but may be paid only on maturity. However, TDS (tax deducted at source) may be cut on an accrual basis. <cmsannotation type="cmsannotation" annotationid="subhead" text="Not disclosing exempt income:">Not disclosing exempt income:</cmsannotation> All income must be disclosed, irrespective of whether it is taxable or exempt. Many taxpayers, out of ignorance, fail to provide details of proceeds from life insurance policies or gifts from relatives, which are exempt from tax. Though such income is not liable to be taxed, however, it’s mandatory to disclose this income in your tax return. <cmsannotation type="cmsannotation" annotationid="subhead" text="Not e-verifying tax returns on time:">Not e-verifying tax returns on time:</cmsannotation> The timeline to e-verify tax returns has been reduced from 90 days to 30 days for all tax returns being filed after 01 August 2022. Therefore, one should e-verify the tax return immediately after filing the tax return. <cmsannotation type="cmsannotation" annotationid="subhead" text="When in doubt, seek help from a professional">When in doubt, seek help from a professional</cmsannotation> India is the second-most complicated tax jurisdiction in Asia Pacific after China. “It has become all the more complicated with the massive data analytics and data mining conducted by the Income Tax Department and also sharing of the data between various agencies like banks, investment vehicles, GST, etc,” says Jalan. Incorrectly filing taxes may result in a tax notice. While you can file your own taxes, especially if you have just started your career, you should be sure to seek the guidance of a tax expert in case of doubts.

Looking to file taxes on your own? Here is what you need to keep in mind

Currently, one-third of India's population reside in cities and it is estimated to go up to 50 per cent by 2030. There is a steady rise in the number of households with a shift towards nuclear families and increased urbanisation. The 66 per cent young population - below 35 years of age, are emerging as young millennial borrowers of home-loans. It is also true that home-loans market is driven by young borrowers within the age group of 26-35 years - about 25 per cent and also by people in the age group of 36-45 years - about 28 per cent. These are all active home-loan audience and jointly account for 53 per cent of annual originations. The average ticket size of a home-loan of young borrowers has continued to increase over the last 5 years, with a CAGR of 6.2 per cent. The ticket size continues to increase more for women than men. The cumulative active home-loan base of these borrowers has seen continuous growth over the last 3 years at a CAGR of 3.5 per cent. These young borrowers have been the reason for change in the home-loan market. Within the affordable segment, volume growth in home-loans of Rs 15-35 lakh, over the last 4-5 years, indicate shifting preferences of buyers towards higher ticket sizes. Rural Housing demand for mid-range and higher ticket sizes has continued to increase over the last 5 years too. Share of annual originations (volume) of Rs 35-75 lakh ticket size has increased by 4 per cent in the last 5 years. Share of annual originations of Rs 75 lakh plus ticket size has increased from 0.37 per cent to 0.87 per cent in the last 5 years. Share of annual originations of Rs 15 lakh ticket size has declined over the last 5 years, largely due to falling demand for very small ticket size segment of Rs 2 lakh. The dearth of disposable income has been a deterrent factor for salaried class towards taking home-loan and buying real-estate. Since the input cost in real-estate has increased the rates, the salaried class is left with no other option but to approach for home-loans from financial institutions. Interestingly, the tenure of repayment of home-loan is fluctuating between 11-30 years. There is also a deterrent factor for salaried class in home-loans and EMIs. The EMIs are no more supportive since the financial institutions first draw larger part of interest in the EMIs and principal component is kept less in more than first 50 per cent of the EMIs. As the EMIs near completion, the interest component becomes negligible and principal component is much higher. Even if the buyer has the provision of pre-payment of home-loan, he ends up paying the larger portion of principal amount rather than saving on the interest. Further, the financial institutions also levy heavy fees on pre-closure of loans. In case the buyer opts for higher tenure for loan repayment, it then makes it difficult for the buyer to invest in second property. One question that has been asked frequently is - "If the principal and interest amount are predefined, why the EMIs can't have equal amount throughout the tenure." Coming to tax benefit, repayment of principal amount in a home-loan qualifies for deduction under section 80C, which has an upper limit of Rs 1.50 lakh per annum. Since the same section - 80C, accounts a number of other investments including PF, PPF and life insurance policies etc, it becomes impossible for a buyer to take advantage of any benefit out of this section. Buyers are looking forward to increase in this limit in Union Budget-2022 since this limit has not been increased in last many years. On the tax benefit for interest payment, since under section 20(b) of the Income Tax Act, there is a cap of Rs 2 lakh per annum on the interest part of the home-loan, home-loans being larger in size, the buyers are unable to take much benefit of the same too. To extend tax benefit to the buyers the government has also added few sub-sections 80EE, 80EEA under the Income Tax Act but the volume of loan is not allowing buyers to gain desired additional benefits out of these sub-sections. What perhaps needed in the Union <keyword id="10547300" type="General" weightage="20" keywordseo="Budget-2022" source="Orion">Budget 2022</keyword> is to bring dynamic changes in the income-tax slabs and increase the rebates under section 80C, 80EE, 80EEA and 24(b) of the Income Tax Act. One of the greatest philanthropists <keyword id="310500" type="General" weightage="20" keywordseo="andrew-carnegie" source="Orion">Andrew Carnegie</keyword> said - "Ninety percent of all millionaires become so through owning real-estate." Andrew Carnegie is one of the five people who built America, the other four being Cornelius Vanderbilt, John D. Rockefeller, J.P. Morgan, and <keyword id="6629386" type="General" weightage="20" keywordseo="henry-ford" source="Orion">Henry Ford</keyword>. Harv Eker, an author and businessman, known for his theories on wealth and motivation said - "Don't wait to buy 'real-estate', buy real-estate and wait". These two statements said all about owning real-estate and what it could mean to a buyer. Globally, investment in real-estate is directly related to the future of a buyer and also growth of the economy, and so be in India. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/investment/news/budget-2022-could-consider-levying-tds/tcs-on-crypto-trading-make-it-reportable-in-sft/articleshow/88943733.cms">Budget 2022 could consider levying TDS/TCS on crypto trading, make it reportable in SFT</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/570-job-openings-at-indian-oil-corporation-for-freshers-who-havent-graduated-yet/articleshow/88948126.cms">There are 570 job openings at Indian Oil Corporation for freshers who haven’t graduated yet</a>

Budget 2022: Expectations for hike in tax deduction on home loans

For administering the country, the government generates money through different channels. India follows a system of charging taxes on the income earned by individuals. <keyword id="6354751" type="UNKNOWN" weightage="20" keywordseo="income-tax">Income tax</keyword> is one of the chief revenue sources of a country’s governance. Hence, income tax is the most common topic of every citizen in the country. Here we discuss how income tax is calculated in India. Income tax slabs To know how income tax is calculated in India, you must first know about the income tax slabs. Income Tax Slab is the kind of parameter applied by the Income Tax Department in India to decide how taxes are levied to different individuals and non-individuals. Year on year, the tax slab whether revised or continued is announced as part of the Union Budget. Tax Slabs Overview for individuals (male and female) <table style="border-width: initial; border-style: none;"></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Income Range </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rate of Tax </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Income up to 2,50,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Nil. </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 2,50,001 to Rs. 5,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">5% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 5,00,001 to Rs. 10,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 12,500 + 20% of the income that exceeds Rs. 500,000. </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Above Rs. 10,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 1,12,500 + 30% of Income that exceeds Rs. 10,00,000. </td></tr></tbody></table> Tax Slabs Overview for senior citizens in the age group 60 to 80 <table style="border-width: initial; border-style: none;"></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Income Range </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rate of Tax </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Income up to 3,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Nil. </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 3,00,001 to Rs. 5,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">5% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 5,00,001 to Rs. 10,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 10,000 + 20% of the income that exceeds Rs. 500,000. </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Above Rs. 10,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 1,10,000 + 30% of Income that exceeds Rs. 10,00,000. </td></tr></tbody></table> Tax Slabs Overview for senior citizens in the age group above 80 <table style="border-width: initial; border-style: none;"></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Income Range </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rate of Tax </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Income up to 5,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Nil. </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 5,00,001 to Rs. 10,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">20% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Above Rs. 10,00,000 </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;">Rs. 1,00,000 + 30% of Income that exceeds Rs. 10,00,000. </td></tr></tbody></table> New changes The Union Budget 2019 – 20 has announced a revision that allows a full tax rebate for income that is up to Rs. 5 lacs under Section 87 A. This change lifts up the existing tax slab. Calculation of income tax Taxable income of individuals is worked out based on several factors including tax slab of the individual or entity, the different kinds of deductions applicable to the concerned tax payer, the taxes already paid including advance tax and tax deducted at source (TDS). How to know the income tax payable? In the first slab, know your income tax slab. Work out all the deductions applicable in your case. For example, deduction can be claimed for investment in life insurance for premiums up to Rs. 1.5 lacs. Under Section 80C, you can also claim deduction for investments in PPF (Public Provident Fund), NSC (National Savings Certificate) and other instruments like home loan principal repayment. Section 80 D enables a deduction for investments in health insurance plans up to Rs. 25,000 for the individual and his or her family and up to Rs. 25,000 for parents aged above 60 years. Section 24 enables deduction on home loan interest up to Rs. 2 lac. These deductions can help lower the overall tax outgo. Filing <keyword id="6374875" type="UNKNOWN" weightage="20" keywordseo="itr">ITR</keyword> For individuals making less than Rs. 2.5 lacs per annum, it is not compulsory to file income tax returns. However, if you have a PAN number, experts advise you to file income tax returns even when you have an income below the taxable threshold. In this case, you can file a Nil return.

How Income Tax Is Calculated

Unlike you might imagine, filing <keyword id="6374875" type="UNKNOWN" weightage="20" keywordseo="itr">ITR</keyword> is a straightforward and user friendly process. When you set out to file your ITR, here are the documents you need to keep ready by your side. Choose the right ITR form Go through the options and choose the right kind of ITR form applicable in your case. Link your Aadhaar with PAN It is compulsory for all taxpayers to link their Aadhaar with their PAN before filing the ITR. Salaried Employees Salaried employees must keep these documents ready while e-filing the income tax returns. PAN Form-16 issued by your employer Salary slips (month wise) Starting from the AY 2019-20, it is necessary to have all the information ready on the taxable allowances you have received and the amounts you have claimed except the ones towards house rent, leave travel and others. You need to disclose the same while filing. Documents pertaining to income through interests Bank statement/passbook for the interests earned on <keyword id="114757" type="PERSON" weightage="20" keywordseo="Savings-Account">savings account</keyword>. Interest <keyword id="7135061" type="UNKNOWN" weightage="20" keywordseo="Income-statement">income statement</keyword> regarding the fixed deposits. TDS certificate issued by the banks and other financial institutions. Form 26AS We can say Form 26AS is a kind of summary of the taxes deducted behalf of you and the taxes you have already paid. The Income Tax Department provides the necessary data on this. The details you will get from the IT department will show the taxes deducted behalf of you by the deductors, the details about the tax the taxpayers have deposited the tax refunds you received in a given financial year. All this information can be gathered from the IT official website. Section 80 Investments Documents related to Section 80C investments. This will include investments done under PPF, NSC, ULIPS, ELSS, and LIC which are all eligible for deductions under Section 80C. Documents needed for claiming some expenses as deductions Get ready with the following documents with you for claiming the following expenses as deductions. Contribution to Provident Fund School tuition fees of your children Life insurance premium payment Stamp-duty and registration charges Repayment of the principal on your home loan Savings schemes related to equity and mutual funds investment The maximum amount you can claim under Section 80C is Rs 1.5 lakhs. Other Investment Documents you will need The interest amount paid towards housing loan: Note that the interest amount paid towards housing loan is eligible for a tax saving up to a maximum limit of Rs 2,00,000. This is pertaining to a self-occupied home. In case of let out or deemed property, there is no upper limit on the interest amount on the housing loans that are eligible for saving tax till the FY 2016-17. Starting from FY 2017-18, the total loss from the property that is found available for setting against other kinds of income has an upper limit of Rs 2 lakhs. So, the interest on housing loan can be considered eligible for saving on taxes for an upper limit of Rs 2,00,000 even in case of property that is let out. Interest payments on education loans Statement on stock trading: the statements regarding the stock trades you accomplished in the year which will be considered under the capital gains.

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