<img class="gwt-Image" src="/photo/58094708.cms" /> 
 
All cash payments of over Rs 2 lakh for paying loans and credit card bills during the 50-day period post demonetisation will have to be disclosed in the new one-page Income Tax return form, according to a PTI news report. 
 
The tax department a few days back notified new Income Tax Return (ITR) forms for filing of returns for the Assessment Year 2017-18 (financial year 2016-17). 
 
Besides providing for declaring income, exemption claimed and tax paid, the forms have a new column providing for declaration for any deposit of over Rs 2 lakh in bank accounts made during November 9 and December 30, 2016 after the old 500 and 1,000 rupee notes were demonetised. 
 
This column is also to be used for declaring cash payments in excess of Rs 2 lakh for repayment of any loan or settlement of credit card bills during this 50-day period, a senior official told PTI here. 
 
"The column is an attempt to match the cash deposits made post demonetisation with the annual income," he said. 
 
While all credit cards are linked to permanent account number (PAN) of the holder, almost all loans by scheduled banks are also provided on furnishing of PAN. 
 
The tax department will collate the data it has of cash payments made in excess of Rs 2 lakh with the returns filed. "We want to see if the income profile matches with the cash payments made," he said. 
 
The move comes amid concerns of unaccounted cash or black money being used to settle bills after credit cards were used to make heavy purchases. It could also be that black money could have been used to repay loans. 
 
Post-demonetisation, the government had provided a 50-day window beginning November 9, 2016 to deposit the junked notes in bank accounts. For those with unaccounted cash, it gave them one last opportunity to come clean by depositing 50 per cent of it as tax and parking another 25 per cent in a zero- interest bearing deposit for four years. 
 
The changes made in ITR are an attempt to catch tax evaders, the official said. 
 
Revenue Secretary Hasmukh Adhia had last week told PTI that the new column of cash deposits made during November 9, 2016 and December 30, 2016 was a one-time feature in the ITR and would not be there in the ITR from next year onwards. 
 
The ITR, he had said, would evolve or change every year depending on the need. 
 
While coming out with new ITRs, the CBDT had also rationalised them and cut down the number of forms to seven from earlier nine. 
 
While all taxpayers will have to now mandatorily link Aadhaar with their PAN cards, ITR1 (Sahaj) form has been shortened from 7 page to 1 page to enable filing of returns by people with income up to Rs 50 lakh by July 31. 
 
ITR2 is to be filed by individuals and HUFs who do not have income from business or profession and ITR3 is filed by individuals and HUFs having income from a proprietary business or profession. 
 
Also ITR 2 and ITR 3 also have a Schedule AL which require assessees to declare their assets and liabilities at the end of the fiscal. 
 
ITR4 (Sugam) is filed by those individuals who have opted for income calculation under presumptive income from business and profession.

Loans,
card payments above Rs 2 Lakh in cash to be shown in ITR

<img class="gwt-Image" src="/photo/51684904.cms" /> 
March is not called the craziest month of the year for nothing; after all those tax-saving and tax-filing processes, tax-payers finally breathe a sigh of relief as it gets over. However, soon into the new financial year, investors and taxpayers should look forward to completing a few pending tasks, which don't take too much time or effort, but help a lot in making your finances controlled. 
 
Here are six ways in which you can plan your next financial year. 
 
Don’t Wait For Yearend To Start <keyword id="136807" type="ORGANIZATION" weightage="100" keywordseo="tax-planning">Tax Planning</keyword> 
Even though the tax-planning season has just ended, this is still the best time to start tax planning, say experts. Investing in equity-linked saving schemes (ELSS) is best done when SIPs are started in April itself. 
As per an ET research, investors who took the SIP route earned more than those who waited till March to invest in ELSS schemes. When your investments are spread across 12 months, you get a cushion against volatility, and it also lightens the burden at the end of the FY. 
 
Get Your Tax Papers Ready 
start collecting whatever documents and information you need for tax filing from the beginning itself, to save yourself the collective efforts at the time of filing. Foreign assets or foreign income earned during the year calls for the collection of these documents right away, as obtaining tax credit receipts, income certificates and other documents from foreign countries might take time and should not be kept for later. 
Organise Investment Portfolio 
Make a detailed portfolio of all your asset allocations and investments. For this you can start using a portfolio tracker via Value Research, by uploading the consolidated mutual fund statement and NPS details, which would incorporate all transactions into the portfolio. 
 
Raise Quantum Of Investments 
As the appraisals are just around the corner, your investments need to be increased in the same proportion. Out of these, some investments like Employee Provident Fund contribution would automatically increase, while for others, you can either increase the existing SIP amount or start fresh SIPs in other funds. 
 
Ask your employers for VPFs 
Small savings schemes have smaller interest rate, which could further fall. However, the interest earned on EPF might not be affected much, which is why you can go for VPF contribution instead of PPF. These are eligible for tax deduction under Sec 80C and are tax free on withdrawal. 
 
Avoid TDS by submitting forms 15G &amp; 15H 
To avoid TDS on interest, this is the right time to file forms 15G or 15H. While form 15G can be filed by investors below 60 years of age having total income from interest less than the basic exemption of Rs 2.5 lakh and don’t have any tax liability, form 15H is for individuals above 60 who don’t have to pay any tax on total income. 
 
<a href="http://intraweb.stockton.edu/eyos/hshs/content/images/2013%20Pics/finance.jpg">Image source</a>

Here’s how you can make the best out of this financial year

<img class="gwt-Image" src="/photo/47586038.cms" /> Doing away with the controversial provision for mandatory disclosure of foreign trips and <keyword id="2889081" type="UNKNOWN" weightage="20" keywordseo="dormant-bank-accounts">dormant bank accounts</keyword>, the <keyword id="156153" type="ORGANIZATION" weightage="20" keywordseo="Ministry-of-Finance">Ministry of Finance</keyword> has recently came out with new three-page <keyword id="6354751" type="COMPANY" weightage="20" keywordseo="Income-Tax">income tax</keyword> return (ITR) forms to impart better taxpaying experiences to those who fall under the I-T brackets, including all expatriate employees working in India. 
 
Let’s take a close look at how the new I-T forms-- ITR 2 and ITR 2A-- will bring in relief for the taxpayers by simplifying the process of the tax return filings. 
 The <keyword id="2889080" type="UNKNOWN" weightage="20" keywordseo="new-ITR-forms">new ITR forms</keyword> consist of just three pages, and if a taxpayer has to mention about some 'other information' that will be captured in the "schedules." 
 
Besides, a new ITR 2A form has been proposed for individuals or Hindu Undivided Families (HUFs) who do not have capital gains, income from business/profession or foreign asset/foreign income, but have income from more than one house property. As per a statement issued by the <keyword id="47209" type="ORGANIZATION" weightage="20" keywordseo="Finance-Ministry">Finance Ministry</keyword>, “Individuals having exempt income without any ceiling (other than agricultural income exceeding Rs 5,000) can now file Form ITR 1 (Sahaj). However, earlier, an individual with exempt income of more than Rs 5,000 had to fill ITR-2. 
 
The new ITR forms have also looked in to the controversial provision of disclosing details of foreign visits. As per the statement issued by the Ministry of Finance, "In lieu of foreign travel details, it is now proposed that only Passport Number, if available, would be required to be given in Forms ITR-2 and ITR-2A. Details of foreign trips or expenditure thereon are not required to be furnished." 
 
The new three-page income tax return forms have also eliminated the disclosure of details of dormant accounts which are not operational during the last three years. According the official statement issued by the ministry, "As regards bank account details in all these forms, only the IFS code, account number of all the current/savings account which are held at any time during the previous year will be required to be filled-up. The balance in accounts will not be required to be furnished." 
 
The new ITR forms come as a breather for expatriates employees. “A foreign national who is in India on a business, employment or student visa (expatriate), will not mandatorily be required to report the foreign assets acquired by him/her during the previous years in which they were a non-resident and if no income is derived from such assets during the relevant previous year,” the statement issued by the home ministry added. 
 
It appears that latest changes which the ministry has introduced in the new ITR forms will improve the taxpaying experiences of individuals, making their lives easy.

The new ITR forms are easy as taking a walk in the garden

The <keyword id="20449324" type="General" weightage="20" keywordseo="Finance-Bill" source="keywords">Finance Bill</keyword> 2024 was passed by <keyword id="19895394" type="General" weightage="20" keywordseo="Lok-Sabha" source="keywords" meta.keywordsubtype="org" meta.entityname="Lok Sabha" meta.hostid="261" meta.entityid="Lok Sabha">Lok Sabha</keyword> on Wednesday evening, with a few amendments moved by the government. Replying to the debate, Finance Minister Nirmala Sitharman said the approach of the government has been to bring greater simplification of <keyword id="19987671" type="General" weightage="20" keywordseo="tax" source="keywords">tax</keyword> laws and procedures and enable growth and employment in the country. She responded to points made by members. The Finance Minister clarified that in real estate, the roll over provisions have not been withdrawn and are applicable. She said if the capital gain in a property transaction is invested in buying another one or two properties up to a maximum value of Rs 10 crore, no capital gain tax is required to be paid on such profits. <keyword id="20619608" type="General" weightage="20" keywordseo="capital-gains" source="keywords">Capital gains</keyword> can also still be invested in bonds which are notified under Section 54 of the Income Tax Act up to a maximum of Rs 50 lakh annually and save on taxes. To give relief on budget proposals, Sitharaman also moved an amendment in the Finance Bill on the changes in the capital gains tax on <keyword id="20412285" type="General" weightage="20" keywordseo="property-transactions" source="keywords">property transactions</keyword>. The amendment implies that taxpayers can avail either a lower tax of 12.5% without indexation or a rate of 20% with indexation, if the property is acquired prior to July 23, 2024, the day union budget was presented in the Lok Sabha. Sitharaman clarified that taxpayers can compute taxes under both provisions and choose to pay tax under the scheme where lower tax is applied. Effectively, July 23, 2024, is now set as the cut-off date for the calculation of the capital gains versus the earlier cut-off of 2001. Sitharaman said she has proposed these amendments as some members have raised hypothetical calculation to prove that under new provisions taxpayers will have to pay higher taxes. The new tax proposals on capital gains tax was brought in to bring in parity among different asset classes like equities, mutual funds and real estate. In the Finance Bill introduced on July 23, the Finance Minister had proposed a flat long term capital gains tax of 12.5% with no <keyword id="943856" type="General" weightage="100" keywordseo="indexation-benefit" source="Orion">indexation benefit</keyword>s, prior to it property transactions used to be taxed at 20% with indexation benefit. The minister also clarified that the grandfathering proposal will be allowed only for individual and Hindu Undivided Family (HUF) taxpayers and not for companies and Non Resident Individuals. They have to pay flat 12.5% LTCG tax without indexation. The proposed amendment will apply not only on real estate transactions, but also on unlisted equity transactions, which are done before July 23, 2024. All such transactions will be taxed at 10% long term capital gains instead of FY24-25 budget provision of 12.5% tax. With the opposition members demanding removal of <keyword id="19951327" type="General" weightage="20" keywordseo="GST" source="keywords">GST</keyword> on health insurance, Sitharaman said tax was there on medical insurance even before GST was introduced. "There was already a Service Tax on medical insurance, before the GST was introduced. This is not a new tax, it was already there in all the states. Those protesting here, did they discuss regarding the removal of this tax in their states? Did they write to the Finance Ministers of their respective states about it and asked them to raise it in the GST Council where states have 2/3rd part? No, but they are protesting here. This is their double standards, this is their drama," she said. "Wrongful protests have happened recently, and comments have been passed on the basis of a news report which suggested that the 'Centre has pocketed Rs. 24,529 crores of health insurance premiums alone'. This is incorrect and highly misleading. The GST rate of 18% on health insurance comprises of 9% CGST and 9% SGST. Thus, of the total collections of Rs 24,529 crores from health insurance in the last 3 years, Half of it, Rs. 12,264 crores, went straight to the states as SGST. It doesn't even come to the Centre," she added. The minister said that apart from this, roughly 41%of the Centre's share of GST collection on health insurance is devolved back to the states again, as part of Tax Devolution as per the Finance Commission's formula. Sitharaman said the new income tax regime is simpler and offers lower income tax rates for individuals. "It gives flexibility to the taxpayer to see where he wants to put his money in the absence of exemptions which is available in the old income tax regime. The old regime has not been dissolved and is still an alternative to the new tax regime. It still offers benefits of various deductions such as interest on home loan, etc. Individuals without business income can choose between regimes once and can revert back too. Hence, a choice has been provided to assesse," she said. For the previous Assessment Year 2023-24 till December 31, 2023, about 3.8% of taxpayers opted for the new tax regime, which equates to 30.93 lakh individuals, from a total of 7.98 crore ITRs filed in the categories of ITR-1 to ITR-4, she said. "However, for the Assessment Year 2024-25 until July 31, 2024, there was a dramatic increase in adoption of the new regime, with approximately 72.8% of taxpayers choosing the new tax regime. This represents about 5.25 crore individuals, out of a total of 7.22 crore ITRs filed in the same category." Sitharaman said this shows a substantial shift in taxpayer preference towards the new tax regime, over the span of just one year. "Taxpayers opting for the new regime does not mean savings and investments are not happening in the economy by the middle-class. Due to growth in fintech, better awareness, and ease of investment due to UPI, e-KYC, progressive regulations, investments in mutual funds have increased tremendously. On an average, 17.88 lakh new folios have been added every month in the last 5 years since June 2019. The number of unique mutual fund investors has grown from under 1 crore in 2014 to about 4 crore today," she added. The Finance (No.2) Bill, 2024 was passed after amendments moved by opposition were negatived. Sitharaman said the vision of Prime Minister Narendra Modi has been to establish a simple, efficient and fair technology-driven taxation regime in the country. "So, simplification and ease of compliance for the taxpayer has been the primary objective. In the last 10 years, and this year, in the third term of PM Modi, the approach to taxation has been to simplify it, reduce the burden on taxpayer and make sure it is transparent and equitable," she said. "This year also, our approach has been that we bring in greater simplification of tax laws and procedures, and that we enable growth and employment in this country," she added. Sitharaman presented the Union Budget in Parliament on July 23. This is the first full budget of the NDA government led by PM Modi. The BJP-led alliance won a third successive term earlier this year. The Lok Sabha took up discussion on the Finance Bill after the Appropriation Bill for the central government's expenditure for 2024-25 was passed by the House on Monday. The Finance Bill will now be discussed by Rajya Sabha. The passage of bill will complete the budget process.

Lok Sabha passes Finance Bill, provision on LTCG tax on property transactions amended

With the last date to file your <keyword id="22335084" type="General" weightage="20" keywordseo="IT-returns" source="keywords">IT returns</keyword> inching closer every passing day, it's time you choose your <keyword id="19901478" type="General" weightage="20" keywordseo="income-tax" source="keywords">income tax</keyword> regime-whether you want to opt for the old one or go for the new regime. But why is it important to make this choice carefully? Under what circumstances can the <keyword id="19935168" type="General" weightage="100" keywordseo="new-tax-regime" source="keywords">new tax regime</keyword> benefit you, and how does it differ from the old <keyword id="20301439" type="General" weightage="20" keywordseo="tax-regime" source="keywords">tax regime</keyword>? Let's find out all about it The new tax regime was introduced in <keyword id="22335085" type="General" weightage="20" keywordseo="Budget-2020" source="keywords">Budget 2020</keyword> as a means to simplify tax calculations and offer concessional tax rates. So, unless you do not categorically opt for the old tax regime, the new tax regime is assumed as default, and hence, your income tax liability is calculated according to it. Also, if you fail to file your taxes till 31st July, you will have to go ahead with the new tax regime, since the option to choose old regime will not be available anymore. <h2> What are the tax rates under the new regime? </h2>Here's a quick snapshot of the applicable tax rates under the new regime: <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Income Slab </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tax rates under the new tax regime </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to Rs 2.5 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Exempt </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Over Rs. 2.5 lakh to Rs. 3 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Over Rs. 3 lakh to Rs. 5 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Over Rs. 5 lakh to Rs. 6 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Over Rs. 6 lakh to Rs. 9 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Over Rs. 9 lakh to Rs. 10 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Over Rs. 10 lakh to Rs. 12 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Over Rs. 12 lakh to Rs. 15 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Above Rs. 15 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td></tr></tbody><tbody></tbody></table> <h2>What deductions does the new tax regime offer?</h2> Unlike its old counterpart, which had over 70 exemptions and deductions to bring down an individual's taxable income and hence, their tax liability, the new regime does not offer much deductions. Except for a <keyword id="20429578" type="General" weightage="20" keywordseo="standard-deduction" source="keywords">standard deduction</keyword> of Rs 50,000 and deductions for employer's contribution to your <keyword id="19919089" type="General" weightage="20" keywordseo="NPS" source="keywords">NPS</keyword>, there are only a handful of deductions allowed, which include: Transport allowance (if the individual is specially abled) Conveyance allowance (to meet cost of travel and tour) Perquisites for official purposes Interest on home loan paid for a rented property Then, there are specific exemptions with regards to voluntary retirement, leave encashment and gratuity that you can also avail under the old regime. The new regime offers a rebate of Rs 25,000 on income of up to Rs 7,00,000. This means that anyone whose total taxable salary does not exceed Rs 7 lakh annually can claim a rebate of up to Rs 25,000. But remember, you will not be able to avail common exemptions and deductions that are available under the old regime, which include health insurance premiums, investments in tax-saving FDs, ELSS, house rent agreement (HRA), leave travel allowance (<keyword id="20091793" type="General" weightage="20" keywordseo="lta" source="keywords">LTA</keyword>), PPF, EPF and more. So, if you live on rent, or are diligently saving your hard earned money across mutual funds, PPF and more, the new regime will not have much to offer you. <h2>When can new tax regime be better for you? </h2>But in case you do not want excessive deductions from your income, the new tax regime works better for you. It is simple and straightforward, and can work well for those who do not want to face documentation hassles while filing their ITR, since the old regime demands multiple investment proofs. Also, if your income is up to Rs 5,00,000, you can choose the new tax regime, given that the basic exemption limit (income up to which one does not need to pay any taxes) is slightly higher in new regime at Rs 3,00,000, as compared to Rs 2.5 lakh in old regime. Experts also note that if the total of all your deductions does not exceed Rs 1.5 lakh, new regime could be better for you. However, do not make this decision simply by looking at low tax rates. Assess your outflows and then the deductions and exemptions you are eligible under both the regimes. It is a good idea to also compare your income under both the regimes using IT department's tax calculator. Only then, take a final call.

All you need to know about the new tax regime

<ul><li>When considering the <keyword id="47201" type="General" weightage="20" keywordseo="income" source="Orion">income</keyword> of minors, distinguish between two forms of income - earned and unearned.</li><li><keyword id="19679475" type="General" weightage="20" keywordseo="earned-income" source="Orion">Earned income</keyword> isn’t clubbed with the parent’s income.</li><li><keyword id="6306327" type="General" weightage="20" keywordseo="unearned-income" source="Orion">Unearned income</keyword> offers certain deductions to the parent. </li></ul>12-year old Mayank has become the youngest child to win ₹1 crore at the ‘Kaun Banega Crorepati 15’ in its ‘KBC Juniors Week.’ When talented kids like Mayank win prize money in contests and shows, how is the income taxed? Also, how is other income of a child taxed? We take a look. How the income of a <keyword id="43583" type="General" weightage="20" keywordseo="minor" source="Orion">minor</keyword> is taxed Income earned by a minor child from activities involving their skills, talent, or specialised knowledge, such as winnings from contests like KBC, is generally subject to taxation. “According to section 115BB of the Act, minors are required to pay tax on this income at a flat rate of 30% on a gross basis. Additionally, there's a health and education cess of 4 % on the basic tax liability,” says Abhishek Soni, CEO, Tax2Win.in, a tax filing platform. The entity that disbursed this income would have already deducted tax from the prize money at a flat rate of 30%, plus health and education cess of 4%. Importantly, no tax deduction or exemption is allowed against this type of income for minors. Distinguishing between ‘earned’ and ‘unearned’ income When considering the income of minors, it is important to distinguish between two forms of income - earned and unearned income. Earned income: If the child earns income through prizes in competitions, shows, sports, or engages in personal business must be treated as earned income. “Basically, earned income refers to the money a minor earns through manual work or by applying their skills, talents, specialised knowledge, or experience. Earned income will not be clubbed with parent’s income. It will be taxed in the hands of the minor,” says Archit Gupta, Founder and CEO, Clear, a fintech company. Unearned income: Under the <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">Income Tax</keyword> Act, if a minor receives funds as gifts or earns interest through savings, fixed deposits, or investments made in their name by parents, relatives, or friends, it's categorised as unearned income. This includes interest accrued from savings accounts or investments in the minor's name facilitated by parents. “According to section 64(1A) of the Act, any such income received by a minor is included in the parent's income, known as "clubbing of income”, says Soni. Here, there can be two scenarios. Minor's income up to ₹1,500/-year: If the minor's annual income remains within ₹1,500, it won't be added to the parent's income. Section 10(32) allows for tax exemption on income up to ₹1,500 per child, with a maximum of two minor children. This exempted income can include amounts transferred by parents, grandparents, or any other person. Minor's income exceeding ₹1,500/year: If the minor's income exceeds ₹1,500 annually, it will be clubbed with the higher-earning parent's income for tax purposes. However, a tax exemption of ₹1,500 per child per year, up to a maximum of two children, is available to parents. This exemption is claimed under section 10(32) of the Income Tax Act. However, the parent claiming this deduction on the minor's clubbed income must opt for the old tax regime; it's not applicable in the new tax regime. Tax implications when income of a minor is invested Parents can invest in bank fixed deposits (FDs) or various post office schemes in the name of their minor child. When it comes to investing in mutual funds or equities in the name of a minor there is no restriction. However, this process usually requires offline procedures, including physical documentation. “Parents cannot make these investments online on behalf of their children. For investing in equities, a parent can open a demat account specifically in the name of the minor. This account allows for the purchase and holding of shares in the minor's name,” say Soni. Income from any such investment falls under the category of unearned income and is hence taxed in the way mentioned above. Does a child need to file income tax returns? A minor can have a PAN card. The parents or guardian can apply for a PAN card on behalf of the minor child. “If the minor child’s tax returns are being filed independently, he will need to have a PAN card along with other details like bank account, mobile number, e-mail ID etc,” says Gupta. So, if a minor generates income from sources like winnings in competitions, performances, sports, or through personal business, self-employment, or part-time work, it qualifies as earned income. This income remains separate from the parent's or guardian's earnings. The minor must file an income tax Return (ITR) and must obtain a PAN card for this purpose.

Tax implications on income of a minor – What every parent should know

<ul><li>India has tax-treaties with several countries to eliminate double taxation for the taxpayers.</li><li>Selecting the appropriate tax return form (ITR 2 or ITR 3) based on the sources of income is important.</li><li>Employees should be careful to report income if any stock options are provided to them in a foreign country. </li></ul>When filing your taxes, you need to report income earned anywhere in the world, not just in India. The rules pertaining to foreign income could be different, hence it is important to be aware of them. <cmsannotation type="cmsannotation" annotationid="Mandatory to report" comment="subhead" text="Mandatory to report">Mandatory to report</cmsannotation> The Income-tax Act, 1961 does not provide a specific definition for the term 'foreign income.' Generally, foreign income refers to the earnings or profits derived from sources outside of India. It includes income that does not accrue or arise in India, or is not deemed to accrue or arise in India. In other words, any income generated from a source located outside India would be considered foreign income for tax purposes. “Firstly those who have income earned from foreign sources (sources outside India) and are resident in India must mandatorily file an <keyword id="104359" type="General" weightage="20" keywordseo="income-tax-return" source="Orion">income tax return</keyword>, and report such income. This applies even when their total taxable income is below the minimum exemption limit,” says Archit Gupta, CEO, Clear, a fintech company. Foreign income schedules are available in the Income Tax Return (ITR), those must be duly filled and reported in. The following information must be provided : country of origin, country code, institution paying, opening and closing balances, amounts credited etc. <cmsannotation type="cmsannotation" annotationid="Types of foreign income" comment="subhead" text="Types of foreign income">Types of foreign income</cmsannotation> Different types of foreign income have different tax treatment. We take a look. <cmsannotation type="cmsannotation" annotationid="Income from shares (outside India)" comment="subhead" text="Income from shares (outside India)">Income from shares (outside India)</cmsannotation> If the shares are held as capital assets, the gains or profits arising from their transfer are treated as capital gains. “If the capital gains are arising out of the shares held outside India, the individual taxpayer who is an ROR in India would be taxable as per the rates in the Indian tax laws,” says Akhil Chandna, Partner, <keyword id="10410446" type="General" weightage="50" keywordseo="grant-thornton-bharat" source="Orion">Grant Thornton Bharat</keyword>, a professional services firm. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Type of Shares </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Holding Period </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Category </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Rate of Tax </td></tr><tr><td rowspan="2" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Listed or unlisted shares of company outside India </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Less than 24 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Short Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Applicable Slab rates </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">More than 24 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Long Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% (with indexation) </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: Grant Thornton Bharat Taxation is different for dividend income, which would vary from country to country. For example, in the US, dividends are subject to a flat tax rate of 25%, with the company deducting the taxes before distributing the remaining amount to the investor. <cmsannotation type="cmsannotation" annotationid="Income from ESOP received outside India" comment="subhead" text="Income from ESOP received outside India">Income from ESOP received outside India</cmsannotation> Income from ESOPs received outside India is taxable in India to the extent the same is provided to the individual for rendering services in India. “If a person is qualifying as an ROR in India, he is subject to tax on his global income. Accordingly, the said income would be taxable for him in India subject to the availability of Foreign Tax Credit (FTC),” says Chandna. Employees should be careful to report income if any stock options are provided to them in a foreign country. <cmsannotation type="cmsannotation" annotationid="Income from any property outside India" comment="subhead" text="Income from any property outside India">Income from any property outside India</cmsannotation> Any income generated from a property located outside India, such as rental income, or capital gains from selling the property, is taxable in India if the individual qualifies to be a ROR in India as per the Indian tax laws. “The rental income is taxed at applicable slab rates as “Income from House Property” whereas the capital gains are offered to tax at 20% as long term capital gains in case the holding period is more than 36 months, and at applicable tax rates as short term capital gains if the holding period is less than 36 months,” says Chandana. <cmsannotation type="cmsannotation" annotationid="How to avoid double taxation" comment="subhead" text="How to avoid double taxation">How to avoid double taxation</cmsannotation> Ideally, you should not pay taxes on the same income twice. India has established tax treaties with numerous countries to address the issue of double taxation for taxpayers. These treaties outline specific mechanisms to determine the tax obligations of individuals who earn income in both India and another country. They also allocate the taxing rights for each country concerning the respective sources of income. By utilising the provisions outlined in these treaties, taxpayers can effectively eliminate the burden of being taxed twice on the same income. “When you are a resident of one country but have earned an income from another country; naturally you want to avoid paying tax twice on the same income in both the countries. To avoid paying double tax, one has to refer to the DTAA (Double Tax Avoidance Agreement) between the two countries,” says Gupta. Also, where any source of income is subject to tax in both India and the other country, the tax treaty provides for claiming foreign tax credit in the country of residence. “This allows taxpayers to eliminate double taxation by offsetting the tax liability in India with taxes paid outside India,” says Chandana. For example taxes on capital gains paid for US shares can be used to offset income tax payable in India. “When you are a resident of one country but have earned an income from another country; naturally you want to avoid paying tax twice on the same income in both the countries. To avoid paying double tax, one has to refer to the DTAA (Double Tax Avoidance Agreement) between the two countries,” says Gupta. India has signed tax-treaties with several countries to eliminate double taxation for the taxpayers. “These treaties provide mechanisms to determine the tax liability of individuals who have income in both India and the other country and accordingly determine the taxing rights for each of the countries with respect to such source of income. By applying the provisions of said treaties, taxpayers can eliminate double taxation. <cmsannotation type="cmsannotation" annotationid="What to keep in mind" comment="subhead" text="What to keep in mind">What to keep in mind</cmsannotation> To report income earned outside India accurately, consider the following points: 1.Select the appropriate tax return form (ITR 2 or ITR 3) based on the sources of income. 2.Understand the taxability of foreign income based on Indian tax laws, and relevant DTAAs. 3.Report taxable income under the correct head while exempt income is mentioned in the 'Exempt Income Schedule' of the tax return. 4.Convert overseas income to Indian Rupees using the prescribed exchange rates mentioned in Rule 115 of the Income-tax Rules, 1962. 5.Resident and Ordinary Resident (ROR) individuals are required to disclose foreign assets, or accounts under the 'Foreign Asset Reporting' Schedule, including bank accounts, properties, and financial interests such as shares, employee stock ownership plans (ESOPs), etc. It's important to consult with a tax professional and refer to the specific provisions of Indian tax laws and relevant DTAAs to ensure accurate reporting of income earned outside India.

Have income from foreign source? Keep this in mind while filing taxes

<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

New Delhi, Feb 1 () Some disability rights NGOs have expressed disappointment over differently-abled people being allegedly "neglected" in the 2021-22 Budget unveiled on Monday. Other than exempting senior citizens above 75 from filing ITR and easier dividend payout, the Budget has no specific mention of inclusion and schemes for persons with disabilities, they alleged. Arman Ali, the executive director of the National Centre for Promotion of Employment for Disabled People (NCPEDP), said the Budget document talks about it being dependent on six pillars, one of them being inclusive development for aspirational India, but persons with disabilities have once again been "neglected". "Year after year, disability sector sends its asks to the Govt of India but this time again these asks were not even mentioned. This budget was of utmost importance due to the ongoing pandemic as people have lost jobs and children have dropped out of schools because of the lack of facilities," he said. Ali said the 'Atma Nirbhar Swasthya Bharat Scheme', which is the highlight of this budget, focuses on strengthening primary and secondary healtcare centres but has no word on persons with disabilities. "However, we hope that all disabled people are included under the announced health schemes. The saddest part is that the budget document is still referring to the Persons with Disabilities Act,1995. We have entered into the 5th year of RPWD Act 2016 and yet, time and again, we have to remind the government about the latest laws on disability," he said. The allocation for the Department of Empowerment of Persons with Disabilities (DePwD) has been reduced to 1,171.76 crore from 1,325.39 crore, with an approximate cut of Rs. 150 Crores, Ali said. "As a sector, we are all disappointed and concerned about the future of persons with disabilities in our country," he added. National Platform for the Rights of the Disabled, in a statement, said it lodges its "strong protest" at the substantial reduction in budgetary support to the Department of Empowerment of Persons with Disabilities. This substantial reduction of nearly 12 per cent will adversely impact various schemes and programmes that are being undertaken by the department, it said. Meanwhile, Civil society group DaDi DaDa Foundation (DDF) welcomed the government announcement to exempt elders from filing their income tax returns (ITRs). DDF Director Muni Shankar Pandey said exempting older persons aged 75 years will help a large number of elderly people get rid of hassles faced during filing of income tax returns during a crucial phase of their lives. In the Budget, the government also proposed a budget outlay of Rs 2,23,846 crore for health and wellbeing in 2021-2022, an increase of 137 per cent from the previous fiscal, with Rs 35,000 crore earmarked for COVID-19 vaccine in the upcoming financial year. Pandey said, "This will address the health concerns of senior citizens. The government has time and again always cared about the makers and senior citizens of the country." Dadi Dada Foundation is an organisation working for the welfare of senior citizens in India. UZM ABI UZM TIR TIR

People with disabilities neglected in Budget: Disability rights NGOs

New Delhi, Feb 6 () The Income-Tax Department has launched an e-calculator for individuals to estimate their tax liability if they opt for the new tax slabs, without claiming deductions and exemptions, for ITR filing as announced in the recent Budget, officials said on Thursday.The calculator, with a comparative table to compare taxes in the old and the new tax regime, for resident individuals (financial year 2020-21) has been hosted on the official e-filing website of the department--https://www.incometaxindiaefiling.gov.in.The web portal is used for filing of electronic income tax returns (ITRs) by individuals and various other categories of taxpayers.Taxpayers in three age categories of normal citizen (below 60 years), senior citizen (60-79 years) and super senior citizen (above 79 years) can punch in their estimated annual income from all sources, total eligible deductions and exemptions to see what will be there total taxable income if they continue in the old regime or opt for the new one.The calculator takes into account eligible exemptions and deductions, as proposed under the new regime, after being extracted from the Budget memorandum 2020.In the new personal income tax regime, as proposed by Union Finance Minister Nirmala Sitharaman in her Budget speech on February 1, 5 per cent tax is levied on an annual income between Rs 2.5 lakh to Rs 5 lakh. The tax rate rises to 10 per cent, 15 per cent, 20 per cent and 25 per cent for every Rs 2.5 lakh addition. A 30 per cent tax is charged for income over Rs 15 lakh.The old or the existing income tax rate regime allows a standard deduction of Rs 50,000 and investment of Rs 1.5 lakh in saving schemes with a rate of 5 per cent, 10 per cent or 30 per cent tax depending on various income levels. NES IJT

I-T dept launches e-calculator to compare due tax under new, old regime

New Delhi, Feb 6 () The Income Tax Department on Thursday launched an e-calculator for individuals to estimate and compare their tax liability under the new tax slabs as compared to the existing regime, officials said on Thursday.The calculator, launched earlier in the day, was updated by the department in the evening to make it more "user friendly". It largely gives the user three broad results based on the kind of individual financial data fed into it, a senior official said. It will either tell the user about the tax benefit as per the new regime (as proposed in the budget), tax benefit as per the existing or old system and lastly if tax outflow for the user is same in both old and new regime. This will help an individual take an informed decision of opting either the tax slab while filing their income tax return (ITR) next year, the official said. Taxpayers in three age categories of normal citizen (below 60 years), senior citizen (60-79 years) and super senior citizen (above 79 years) can punch in their estimated annual income, total eligible deductions and exemptions to see what will be their total taxable income if they continue in the old regime or opt for the new one which will not allow any deductions and exemptions.The calculator, once fed with data, promptly informs the user about the actual amount of money that can be saved by opting either of the two regimes.A tab for the calculator has been placed on the homepage of the official e-filing website of the department -- https://www.incometaxindiaefiling.gov.in -- and upon clicking it takes the user to the next page meant for calculating tax liability for resident individuals (financial year 2020-21). This web portal is otherwise used for filing of e-ITRs by individuals and various other categories of taxpayers."This calculator is only meant to provide basic idea of the estimated impact of the new provisions. Refer to the Income Tax provisions for the actual provisions and eligibility," a disclaimer posted on the link said.In the new personal income tax regime as proposed by Union Finance Minister Nirmala Sitharaman in her budget speech on February 1, five per cent tax is levied on an annual income between Rs 2.5 lakh to Rs 5 lakh. The tax rate rises to 10 per cent, 15 per cent, 20 per cent and 25 per cent for every Rs 2.5 lakh addition. A 30 per cent tax is charged for income over Rs 15 lakh.The old or the existing income tax rate regime allows a standard deduction of Rs 50,000 and investment of Rs 1.5 lakh in saving schemes with a rate of 5 per cent, 10 per cent or 30 per cent tax depending on various income levels. NES KJ

I-T Dept launches e-calculator to compare due tax under new, old regime

The Good and Service Tax has been rolled out. Finance Minister Arun Jaitley had stated that those food items which were imposed an average of 12.5% under the VAT laws will subsequently be cut-down to 5% under the new GST regime. As per the GST law, all items falling under its regime will be imposed tax rates at 5%, 8%, 18% and 28%. GST will not have any impact on the list of products and services which come below the term ‘Essential’, and this list will have zero tax rate. A survey by All India ITR shows that personal care products, entertainment activities and household items under GST will become cheaper than its current rate. However, many of the services such as mobile phone services, healthcare services as well as transportation charges are expected to attract a tax rate of 18%, which is 3% more than its current 15% tax rate. Once the new rates will come into action, your monthly household budget will also be impacted. The analysis shows that entertainment tax rate under GST will successively be reduced to a 28% tax rate as against its current 30% tax rate. The effect of GST on the current tax rate To keep a surveillance of the goods manufacturers and service providers, the GST council has also taken the resolution to form an anti-profiteering committee. This committee will be the authority responsible for taking care of the grievances to ensure that the benefit of GST upon the lower tax rates doesn't get tampered. It has been declared that the committee will be formed by officials of the central and state revenue departments. <table> <tbody><tr> <td> Goods and Services </td> <td> The Impact of GST </td> </tr> <tr> <td> GST Tax Rate on Automobiles: </td> <td> The GST rate will be higher for SUVs (55% to 43%) as compared to smaller cars (30% to 29%). </td> </tr> <tr> <td> GST Tax Rate on Beauty and Makeup Products: </td> <td> The current tax rate of 26% on these items will increase to 28% (applicable on items like perfumes, skin care products, shampoos etc.). </td> </tr> <tr> <td> GST Tax Rate on Gold Ornaments: </td> <td> The tax rate on gold metal will be 3% while 5% rate will be imposed on making charges. </td> </tr> <tr> <td> GST Tax Rate on Hotel Stay: </td> <td> GST is not applicable for hotel rooms that cost below Rs. 1,000, any cost above this will be taxed progressively, however, all room charges above Rs. 5000 will be charged a whopping 28% tax rate. </td> </tr> <tr> <td> GST Tax Rate on Refined Cooking Oil: </td> <td> Edible oil will be taxed at 5%, a subsequent decrease from its current tax rate. </td> </tr> <tr> <td> GST Tax Rate on Air Travel </td> <td> An economy-class air ticket which is currently taxed at 5.6% will decrease to 5%. While business class travelers will have to shell out a lot more than which is currently charged since it will increase from 8.4% to 12%. </td> </tr> <tr> <td> GST Tax Rate on Telecom </td> <td> The existing tax rate of 15% on telecom services will increase to 18% as these services will not benefit much input tax credit. </td> </tr> <tr> <td> GST Tax Rate on Eating Out </td> <td> Non-AC eateries will charge 12% against GST on your total bill. But, you will have to pay the price of eating out at a 5-star restaurant as 28% in GST will be the tax rate (an increase from the existing 18%). </td> </tr> </tbody></table> A List of Items Exempted from GST Here are a few commonly utilized goods and services which have been exempted from the GST regime. Unprocessed cereals (rice, wheat etc.) Unprocessed proteins (milk, vegetables, meat, fish etc.) Train travel via local and sleeper class. Education. Healthcare (exclusive of medicines). Hotel stay or lodges with room rented at less than Rs. 1,000. Kid’s Stationery items (color pencils, crayons, drawing books etc.) Bindis, sindoor, bangles etc. All India ITR summarizes that the upcoming GST Law will have its own sets of pros and cons - many necessities will get cheaper but in the meanwhile, the rest of the necessities that falls under the higher GST tax rate bracket will ultimately cause a discomfort in the household budget. <keyword id="6360118" type="UNKNOWN" weightage="20" keywordseo="GST-Rates">GST rates</keyword> will also bring about a bigger tax burden on the use or purchase of goods and services which are deemed as luxurious. (This article has been written by Vikas Dahiya, founder, and CEO of <a href="https://www.allindiaitr.com/">All India ITR</a>)

You Searched For "ITR exemption" and got 12 results

Loans, card payments above Rs 2 Lakh in cash to be shown in ITR

BI India Bureau

Here’s how you can make the best out of this financial year

BI India Bureau

The new ITR forms are easy as taking a walk in the garden

BI India Bureau

Lok Sabha passes Finance Bill, provision on LTCG tax on property transactions amended

ANI

All you need to know about the new tax regime

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Tax implications on income of a minor – What every parent should know

Anagh Pal

Have income from foreign source? Keep this in mind while filing taxes

Anagh Pal

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

Anagh Pal

People with disabilities neglected in Budget: Disability rights NGOs

PTI

I-T dept launches e-calculator to compare due tax under new, old regime

PTI

I-T Dept launches e-calculator to compare due tax under new, old regime

PTI

Here's how GST rates will impact your monthly household budget

Guest Author