<ul><li>The Finance Ministry has increased the threshold limit for the difference between the transaction value and the circle rate to 20% from the current 10%. </li><li>This means under a circle rate of ₹1.2 crore, <keyword id="6371902" type="UNKNOWN" weightage="20" keywordseo="home-buyers">home buyers</keyword> can buy a house of upto ₹1.5 crore rather than just ₹1.33 crore to avail the tax benefits.</li><li>This is the second time that the government has revised the limit — the first was in February when the differential was increased from 5% to 10%.</li></ul>With the prices of homes falling and mortgages being lower than ever, the Finance Ministry has announced <keyword id="422910" type="PERSON" weightage="20" keywordseo="income-tax-relief">income tax relief</keyword> for home buyers and developers. “There’s a lot of inventory, we’re told, in the real estate sector,” said Finance Minister Nirmala Sitharaman during today’s press conference on November 12. <div type="Article" hostid="261" msid="79187044" title="$35 billion Diwali stimulus: Highlights from Finance Minister Nirmala Sitharaman's press conference" mstype="2" mssubtype="0"></div> The government has increased the threshold limit for the difference between the transaction value and the circle rate to 20% from the current 10%. This is the second revision of the limit done by India. The first was in February when the differential was increased from 5% to 10%. What is circle rate and why should I care? Right now, if there is a difference between the cost of the home and the circle rate set by the government. If that difference is more than 10%, any excess income is accounted for as the buyer’s income. Since it comes into the income basket, it is also taxed at the same nominal rates. But going forward, for homes under the price of ₹2 crore, this differential will be increased from 10% to 20% for next seven months, until 30 June 2021. This means that if for instance, if the circle rate is ₹1.2 crore, the price of the home can’t be more ₹1.5 crore for buyers to remain within the 20% differential. Had the limit been 10%, the choice of purchasing a home would be limited to around ₹1.33 crore. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"><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;">Circle rate (assumed) </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;">Home price (assumed) </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;">₹1 </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;">₹2 crore </td></tr></tbody></table> <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"><colgroup></colgroup><col /><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;">Particulars </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;">Existing policy </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;">New policy </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;">Excess allowed </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;">₹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 lakh </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;">Taxable amount </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;">₹90 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;">₹80 lakh </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;">Tax (assuming a rate of 30%) </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;">₹2.7 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;">₹2.4 lakh </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;">Savings </td><td colspan="2" 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;">₹30,000 </td></tr></tbody></table> However, it’s important to note that property prices, circle rates or even demand trends are not uniform across the country. So cities are witnessing better growth which allows for higher prices, while others are lagging behind and will have more to benefit from under the new limit. What’s in it for the developers? It's also a boon for developers, because they can now offer their property at lower rates than the prevailing circle rates. This allows them to monetise any idle assets they haven’t been able to move yet. Clearing their existing inventory in turn allows developers to generate more liquidity to start up new projects or clear liabilities on existing ones. "The <keyword id="6354751" type="UNKNOWN" weightage="20" keywordseo="income-tax">income tax</keyword> relief will ensure tremendous liquidity into the market and the measures will incentivize people to buy homes and is a win-win situation for both developers and home buyers. The reduction in bank guarantees for construction activity will also ensure availability of additional liquidity providing major relief to the industry." Lincoln Bennet Rodrigues, Founder and Chairman, Goa-based Bennet &amp; Bernard Group said. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/diwali-stimulus-highlights-from-finance-minister-nirmala-sitharaman-press-conference-on-atmanirbhar-bharat-programme/articleshow/79187044.cms">Diwali stimulus: Highlights from Finance Minister Nirmala Sitharaman's press conference</a> <a href="https://www.businessinsider.in/policy/economy/news/atmanirbhar-bharat-indian-fm-nirmala-sitharaman-shared-the-progress-of-the-atmanirbhar-abhiyaan/slidelist/79187890.cms">Atmanirbhar Bharat: Indian government’s report card on the implementation of the COVID stimulus so far</a> <a href="https://www.businessinsider.in/finance/news/what-is-atmanirbhar-bharat-rozgar-yojana-scheme-and-what-is-benefits-of-employees-and-companies/articleshow/79188487.cms">Atmanirbhar Bharat Rozgar Yojana: FM announces benefits for EPFO-registered firms hiring new employees — centre to bear PF for new employees</a>

India offers income tax relief for home buyers and developers to boost new property sales

The taxation laws in India contain a number of provisions to let the tax payers save on taxes. By taking some informed decisions on how you spend and account, you can save on taxes in a legitimate way. Here we discuss some important deductions under the Income Tax Act 1961. Tips to save on income tax Make the right use of Rs.1.5 lakhs limit allowed under Section 80C Investing up to a limit of Rs. 1.5 lakh in schemes like Tax-Saver FDs, PPF (Public Provident Fund), ELSS Funds, NSC (National Saving Certificate), Life Insurance Premiums, National Pension System (NPS), Home Loan Repayment, Payment of tuition fees of your children, EPF, Senior Citizens Savings Scheme, and Sukanya Samriddhi Yojana can enable you for appropriate tax deductions depending on the case. National Pension System This deduction facilitated by Section 80CCD (1B) allows up to Rs 50,000 for contributing to the National Pension Scheme. The NPS makes it possible to invest in equity and debt pension funds for building a corpus for the retirement life. This can be withdrawn at 60 years of age. Health Insurance Premiums Paying for health insurance premiums can let you qualify for a deduction up to Rs 25,000 under Section 80D. This is permitted on top of all the deductions listed above. In case of senior citizens, this limit is up to Rs. 50,000. The taxpayer contributing towards health insurance premiums for himself as well as for a senior citizen can claim a combined deduction of up to Rs. 75,000 per annum. Deduction on your rent If you are getting HRA, it is possible to claim tax deduction on your House Rent. Though there is no upper limit specified for this, there are some rules that place a cap on the maximum deduction. If you do not get HRA but pay towards rent, a maximum claim of up to Rs. 60,000 per annum is allowed under Section 80GG. Deduction on the home loan interest When you have a home loan running, the interest you pay towards the home loan is tax deductible under Section 24 of the Income tax Act. The maximum limit that you can claim in this regard is Rs. 2 lakh. If the house is rented out, there is no upper limit. Money in your savings account The easiest way to save money on income tax is to keep some money in your savings account. Up to a limit of Rs. 10,000 per year, the interest on savings accounts is tax free under the Section 80TTA. In case of senior citizens, this limit is up to Rs 50,000 applicable in cases of both FD and savings account interest. Give for charity Donations made towards charity enable you for tax deductions. Though there is no upper limit for this, there are different rules that restrict the amount deductible on the contributions towards charities. Across a majority types of donations to the NGOs, this limit is fixed at 50% of the donated amount and up to 10% of the total income that is adjusted. If you want to claim this deduction, the NGOs to which you contribute must have 80 G certificate.

How to save Income Tax in India Schemes to Invest in 2019

In the budget announced in 2018, the total cess on income tax increased by 4%. However, the income tax rates and the existing tax slabs remained unaltered. The two factors that decide the basic exemption limit of an individual are age and residential status. Nirmala Sitharaman, the first full time Finance Minister of the country announced the 2019 budget recently which introduced new surcharges for super-rich category of taxpayers. The EY analysis says once the budget proposals are approved by the Parliament, the effective tax payable by the super-rich will be more than 40% of their income. The said changes will take effect from April 1, 2019. 2019 budget did not announce any change in the <keyword id="120700" type="PERSON" weightage="20" keywordseo="Income-Tax-slabs">income tax slabs</keyword> and rates. Rs. 12,500 rebate is applicable to taxpayers who have a taxable income of Rs. 5 lakhs. Under section 87A, this rebate is made available. The value of standard deduction for the financial year 2019-20 will be Rs. 50,000. Surcharges that will come into force for FY 2019-20 once the budget is passed in the Parliament <table style="border-width: initial; border-style: none;"><colgroup></colgroup><colgroup></colgroup><col /><col /><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;">Taxable Income </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;">Surcharge </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 above Rs 50 lakh but below Rs 1 crore </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;">10% </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 above Rs 1 crore but below Rs 2 crore </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;">15% </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 above Rs 2 crore but below 5 crore </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;">25% </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 above Rs 5 crore </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;">37% </td></tr></tbody></table> As per the 2019 budget, find below the latest income tax slabs that will be applied for the FY 2018-19 and AY 2019-20. The basic exemption limit allowed for an individual depends on age and residential status. Based on age, three categories of tax payers are identified by the taxation procedures. 1. Individuals below 60 years of age 2. Senior citizens between 60 years and 80 years of age 3. Super senior citizens above 80 years of age Income tax slabs for Individuals below 60 years of age <table style="border-width: initial; border-style: none;"><colgroup></colgroup><colgroup></colgroup><col /><col /><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 slabs </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 income tax and cess </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;">Up to Rs 2.5 lakh </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% of (Total income minus Rs 2,50,000) + 4% cess </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 (Total income minus Rs 5 00,000) + 4% cess </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 10,00,001 and above </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 (Total income minus Rs 10,00,000) + 4% cess </td></tr></tbody></table> Income tax slabs for senior citizens between 60 and 80 years of age (Senior Citizen) <table style="border-width: initial; border-style: none;"><colgroup></colgroup><colgroup></colgroup><col /><col /><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 slabs </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 income tax and cess </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;">Up to Rs 3 lakh </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% of (Total income minus Rs 3,00,000) + 4% cess </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 (Total income minus Rs 5, 00,000) + 4% cess </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 10,00,001 and above </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 (Total income minus Rs 10,00,000) + 4% cess </td></tr></tbody></table> Income tax slabs for super senior citizens above 80 years of age (Super Senior Citizen) <table style="border-width: initial; border-style: none;"><colgroup></colgroup><colgroup></colgroup><col /><col /><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 slabs </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 income tax and cess </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;">Up to Rs 5 lakh </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% of (Total income minus Rs 5,00,000) + 4% cess </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 10,00,001 and above </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 (Total income minus Rs 10,00,000) + 4% cess </td></tr></tbody></table>

Income Tax Slab For Filing ITR (Income Tax Return)

Revenues from corporate taxes is one of the main sources of income for the Government of India. Vide a very important announcement, the government made a surprising lowering in the corporate tax rate on September 20, 2019. Here is what you need to know about corporate taxation in India, tax rates over the past decade and what has changed now. Corporate tax in India Indian Taxation Act mandates that domestic as well as foreign companies need to pay what is known as corporate tax. A domestic company in India is taxed on the basis of its universal income. On the other hand, a foreign company is taxed only on the basis of the income it has earned in India. On the other hand, a foreign company will be taxed only for the earnings it made from India or received in India. For the purpose of calculating the corporate tax, the companies are categorized in the following way. Domestic company The name domestic company in India applies to the one that has been registered in India under the Companies Act of India. This category will also include the companies that are registered in India but have their management and control located in India. The term domestic company will include both private as well as public enterprises. Foreign company For the purpose of taxation, the term foreign company can be understood as the one that is nor registered under the Companies Act of India. In this case, the control and management of these companies will be usually located outside India. What does ‘Income of the company’ means as per taxation laws Before going into the tax rates and how it is calculated in India, we need to define what ‘Income of a company’ in India means. The following earnings are considered as the income of a company. <ul><li>Capital gains </li><li>income generated out of renting out a property </li><li>Profits made from sales </li><li>Incomes generated from other sources like interests and dividends </li></ul>Tax rates that were applicable on corporate taxation applicable for AY 2019-20 Domestic companies and corporate tax rate For gross turnover up to Rs. 250 crores the corporate taxes applicable (for the FY 2016-17) was 25% of the total income. If the gross turnover exceeded Rs. 250 crores, the tax rate will be 30%. Surcharges and cess extra. Foreign companies and corporate tax rate Royalties received or fees collected for technical services from the government or from any other firm in India as per the agreement made before April 1, 1976 which was duly approved by the central government, the tax rate will be 50%. Tax rate on any other kinds of income will be 40%. Surcharges and cess extra. What has changed now? On September 20, 2019, the government made a significant announcement cutting down the corporate tax rate for the domestic companies from 30% to 22%. The new tax rate will be applicable from April 1, 2019. Overview of corporate tax rate in India Over the past 12 years starting from 1997, the corporate tax rate in India averaged 34.52 percent. It reached the all-time high of 38.95 percent in 2001 and came to touch the record low of 25.17 percent in 2019.

What is Corporate Income Tax in India and what has changed after today's announcement?

<ul><li>India’s income tax department will be using big data to help track down tax evaders. </li><li>‘<keyword id="2972107" type="PERSON" weightage="20" keywordseo="Project-Insight">Project Insight</keyword>’ is a machine learning software that will be able to scour through social network posts to find between reported income and actual expenditure.</li><li>Canada, Australia and Belgium also use similar software to keep a check on tax evasion.</li></ul>The upcoming tax season is going to usher in a new era for India where the income tax department is <a href="https://economictimes.indiatimes.com/news/economy/policy/no-country-for-evaders-this-april-1-india-enters-uncharted-tax-territory/articleshow/68574891.cms">going to use</a> big data to improve tax compliance. And, if tax spending patterns don’t line up with tax declarations, tax payers could be in some hot water. Innocently labeled ‘Project Insight’, India’s new ₹1000 crore tax tracker can glean over user’s social networking profiles — scouring through vacation photos, social events, new purchases, spouse details — to catch any purchase that doesn’t match a tax payer’s income. Officials at the income tax department already gained access on March 15. Once it comes into full swing on April 1, India will join nations like Belgium, Canada and Australia who are already using big data to keep an eye on their tax payers. The goal of the Indian government is threefold. One, bring more people under the tax net. Two, catch citizens that are trying to avoid paying their taxes. And, three, close in on tax violators who already have pending demands over ₹10 lakh. How does this change things? Traditionally, the income tax department was primarily dependant on the banks in order to find discrepancies between how much a person actually spend and how much was disclosed on a tax report. But, with Project Insight, the government will now be able to glean over any person’s profile on social networks to find mismatches between reported earnings and expenditure. An expensive car, a foreign vacation or flying first class— anything that looks like an extravagant expenditure not in line with how much a person supposedly earns — will be caught on the income tax department’s radar. The software will help the department gather the relevant evidence like saving specific web pages, photos and documents which could then be used to initiate a probe. There are three ways that the tax department can profile a taxpayer. The first method is the basic tax payer master profile that includes information like name, address and past income tax returns. The ‘Business Intelligence’ part gets a little more creative and ferrets out tax payers that fall under the non compliant category. Then there’s also the ‘Geographic Information System’ that can zero in on specific areas. In each case, the income tax department can filter taxpayers based on income, profit, capital and gains. And, since it’s a machine learning integrate information management system, it will get more efficient over time as it gleans over more data.

India’s new tax tracker will be stalking your vacation photos

The government’s mission to curb <keyword id="6356023" type="UNKNOWN" weightage="100" keywordseo="Black-Money">black money</keyword>, supported by <keyword id="3315394" type="UNKNOWN" weightage="100" keywordseo="demonetisation">demonetisation</keyword> and various other measures, has started showing results as the number of people who filed tax returns has gone up by 95 lakh.The figure, along with the presentation that it was a part of, was shown to <a href="http://www.businessinsider.in/topic/narendra-modi">PM Narendra Modi</a> as part of the revenue department's review on Tuesday. Despite being world’s second largest country in terms of population, India only sees tax returns filed by a little over 1% of the population. This has prompted the government to widen the tax net. FY16 saw as many as 5.28 crore returns, up by 22% over the previous year. The <a href="http://www.businessinsider.in/law-order/Dont-share-PINs-and-passwords-IT-Dept-cautions-taxpayers/articleshow/50868137.cms">income-tax department</a>, which has announced a sort of war against black money, had launched a crackdown against tax evaders after <a href="http://www.businessinsider.in/topic/demonetisation">demonetisation</a>. For this, it had listed 18 lakh names of people whose bank deposits of old currency notes didn’t match their income profiles. Not only this, the department also unearthed details of high-value purchases done after the demonetisation move was announced, clearly with a purpose to dispose off unaccounted money. The department then used the data to identify tax evaders. Called ‘<a href="http://www.businessinsider.in/latest/prepare-to-bequestioned-by-i-t-department-on-unaccounted-money-thanks-to-operation-clean-money/articleshow/56983160.cms">Operation Clean Money</a>’, this move by the government saw the names of tax evaders being made public. This led to people filing their tax returns to avoid being questioned by the authorities in the future. Also read: <a href="http://www.businessinsider.in/Post-demonetisation-tax-officials-detected-Rs-5400-crore-of-black-money-carried-out-over-1100-searches/articleshow/58140962.cms">Post demonetisation, tax officials detected Rs 5,400 crore of black money, carried out over 1100 searches</a>"A substantial chunk of these returns have been filed after the department's communication," an official told <a href="http://economictimes.indiatimes.com/news/economy/policy/number-of-income-tax-returns-filed-jumps-substantially-after-anti-blackmoney-drive/articleshow/58484905.cms">ET</a>.

Mission against black money yields results, number of tax returns filed goes up by 95 lakh

<img class="gwt-Image" src="/photo/52550458.cms" /> <keyword id="770060" type="UNKNOWN" weightage="100" keywordseo="Indian-start-ups">Indian start-ups</keyword> are already worried because of funding prospects and falling valuations, but looks like the government has decided to add more woes to this list. 
 
If reports are to be believed, the government is planning to levy tax on those start-ups whose valuations have fallen recently, stating that the first premium was more than the firm's fair value. 
 
As per tax officials, Section 56 of the Income Tax Act gives them the right to charge tax on excess consideration, more than the fair value, against issue of shares. 
 
"Any consideration received by a company (start up) from a resident, against issue of shares, exceeds the fair market value of such shares, such excess consideration is taxable in the hands of the start-up, as an income," says the cited Section 56 (2) (vii) (b). 
 
In the recent past, we have seen several start-ups being valued lower because of concerns over profitability, growth and intense competition. This has led the tax officials to opine that start-ups should be valued on the basis of the last round of investment, which, if lower than the first round, means that excess premium, more than the fair value, is deemed to have been paid. 
 
However, this controversial move from the tax department will most likely affect only those investments made by funds that are not registered with SEBI and by angel investors. This means that a huge number of start-ups, which were funded by VC funds registered with SEBI will not get affected. 
 
Even though no formal notice has been sent, Indian start-ups have received requests from the Income Tax department, seeking detailed valuation reports for each round of investment. This has led them to smell the coffee, and they have already started to save themselves from the whims of this additional tax. 
 
"The industry was hoping that angel investors would also be exempted from the said tax. However, the lack of implementation of any such exemptions is acting as a major impediment for start-ups," said Archana Khosla, founder partner of Vertices Partners, a law firm specialising in working with the start-ups. 
 

	<a href="http://www.caseycheshire.com/wp-content/uploads/line-graph-down.jpg">Image source</a>

Double whammy: Start-ups might have to pay more tax if valuation falls

An internal committee of the <keyword id="19903456" type="General" weightage="20" keywordseo="Income-Tax-Department" source="keywords" meta.keywordsubtype="org" meta.entityname="Income Tax Department" meta.hostid="153" meta.entityid="Income Tax Department">Income Tax Department</keyword> will review the 1961 <keyword id="22868046" type="General" weightage="20" keywordseo="direct-tax-law" source="keywords">direct tax law</keyword> to eliminate redundant clauses, and adopt best global practices to simplify it for taxpayers for better compliance, <keyword id="19980145" type="General" weightage="20" keywordseo="CBDT" source="keywords">CBDT</keyword> chief Ravi Agrawal has said. The panel, comprising income tax (IT) officials from across the country, has started working on identifying areas of improvement in the Income Tax Act, 1961, he said, and added that the exercise is being conducted under a central government-mandated comprehensive review of the law, which was mentioned by FM Nirmala Sitharaman in the recent <keyword id="19936553" type="General" weightage="20" keywordseo="budget" source="keywords">budget</keyword> presented on July 23rd, 2024. <keyword id="19942037" type="General" weightage="20" keywordseo="Central-Board-of-Direct-Taxes" source="keywords" meta.keywordsubtype="org" meta.entityname="Central Board of Direct Taxes" meta.hostid="153" meta.entityid="Central Board of Direct Taxes">Central Board of Direct Taxes</keyword> (CBDT) chairman Agrawal said the committee is looking at the best global practices that can be adopted, as well as cutting redundancies in the existing law and finding those clauses that have reached their sunset, and hence, can be eliminated. "An internal committee of competent officers of the department from all across the country has been formed. They have started working on identifying areas of improvement. This is a work in progress," he told PTI on Wednesday during an event to mark 165 years of income tax in India. He said the committee is looking at the "problem statement" given to it in the recent Budget. It is trying to find the "best way forward" in giving the country a new direct tax law, Agrawal said. During the event, the CBDT chief assured Union Finance Minister Nirmala Sitharaman that the work of reviewing the Act will be done within the stipulated time-frame of six months, as announced by her in the Budget presented last month. The minister, during the Wednesday event, asked the I-T department to use simple language in its notices and communications with taxpayers, so that they are able to understand these quickly without getting intimidated. Agrawal said this factor is also a part of the I-T law review. The committee is trying to make tax communication simple and easy to understand to encourage compliance of rules by taxpayers, he said. The Income Tax Act, 1961, started its journey in 1922. It contains 298 sections and 23 chapters and other provisions in its current form of 1961. Sitharaman, while presenting the 2024-25 Union Budget, had announced a "comprehensive" review of the Income Tax Act. The purpose is to make the Act concise, lucid, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the taxpayers. It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months, she had said. Agrawal also said the CBDT will "put more officers" within the next 10-15 days to "expeditiously" clear the "substantial" number of appeals pending at the Income Tax Department level.

CBDT forms committee for IT Act review; 'sunset' clauses to be eliminated

<ul><li>Despite their physical presence abroad, NRIs maintain tax obligations on their Indian-sourced income. </li><li>The capital gains tax provisions for NRIs are similar to those for resident individuals, except for the applicability of TDS provisions. </li><li>It is important for NRIs to carefully consider their tax liabilities in both India and the country where they are a resident. </li></ul>You are a non resident Indian (NRI) if you live abroad. More specifically, you are classified as "non-resident" of India for a specific financial year as per the Income Tax Act. Despite their physical presence abroad, NRIs maintain tax obligations on their Indian-sourced income. This includes income sources such as salary received for services provided in India, interest earned from fixed deposits or savings bank accounts in India, as well as any capital gains arising from the sale of assets located in India. “NRIs are not taxed on their foreign income, which is not received in India or deemed to accrue or arise in India. However, they may be subject to tax in the country where the income is earned,” says Archit Gupta, CEO, Clear, a fintech company. <cmsannotation type="cmsannotation" annotationid="How income in India is taxed for NRIs" comment="subhead" text="How income in India is taxed for NRIs">How income in India is taxed for NRIs</cmsannotation> Let us take a look at how income in India is taxed for NRIs. <cmsannotation type="cmsannotation" annotationid="Income from salary" comment="subhead" text="Income from salary">Income from salary</cmsannotation> NRIs are subject to income tax in India on their salary if the services are rendered in India. “The income is taxed according to the income tax slabs applicable to residents,” says Akhil Chandna, Partner, Grant Thornton Bharat, a professional services firm. <cmsannotation type="cmsannotation" annotationid="Income from business and profession" comment="subhead" text="Income from business and profession">Income from business and profession</cmsannotation> Income earned by NRIs who have business connections in India is liable to be taxed in the country. The taxation of this income follows the same slab rates that are applicable to residents, and it is calculated based on the total income earned within India. <cmsannotation type="cmsannotation" annotationid="Rental income" comment="subhead" text="Rental income">Rental income</cmsannotation> There are no distinct rules for the taxation of house property in India based on residency status. The taxation rules for rental income from properties situated in India are the same for both residents and non-residents (NRIs). The rental income is taxable in the hands of the property owner, regardless of whether they are an NRI or a resident Indian. <cmsannotation type="cmsannotation" annotationid="Income from other sources" comment="subhead" text="Income from other sources">Income from other sources</cmsannotation> "Other Sources" income typically includes interest income from fixed deposits and savings bank accounts held in India, dividend income, etc. “Interest earned on Non-Residential External (NRE) and Foreign Currency Non-Resident Account (FCNR) accounts is fully exempt from tax. However, interest on non-resident ordinary (NRO) accounts is fully taxable,” says Chandna. He adds that for NRIs, income from "Other Sources" is subject to slab rates applicable to them. However, in many cases, income paid to an NRI is subject to TDS at a flat rate of 30% plus the applicable surcharge and health and education cess. <cmsannotation type="cmsannotation" annotationid="Taxation on investment gains" comment="subhead" text="Taxation on investment gains">Taxation on investment gains</cmsannotation> The capital gains tax provisions for NRIs are similar to those for resident individuals, except for the applicability of TDS provisions. The taxability of capital gains depends on the holding period and the type of investments sold. <table style="border-width: initial; border-style: none;"><colgroup></colgroup><col /><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:#e7e6e6;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:#e7e6e6;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:#e7e6e6;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:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Rate of Tax </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </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 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;">Less than 12 months </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;">Short Term </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;">15% </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><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;">More than 12 months </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;">Long Term </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;">10% on gain in excess of INR 1,00,000 </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td rowspan="4" 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;">Unlisted Shares/ Immovable Property </td><td rowspan="3" 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;">Less than 24 months </td><td rowspan="3" 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;">Short Term </td><td rowspan="3" 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;">Slab Rates </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><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;">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;border-top: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;border-top: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><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td rowspan="4" 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;">Debt Funds and Other Capital Assets </td><td rowspan="3" 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;">Less than 36 months </td><td rowspan="3" 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;">Short Term </td><td rowspan="3" 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;">15% </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><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;">More than 36 months </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;">Long Term </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;">20% (with indexation) </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr></tbody></table> Source: Grant Thornton <cmsannotation type="cmsannotation" annotationid="Taxation on money remitted to India" comment="subhead" text="Taxation on money remitted to India">Taxation on money remitted to India</cmsannotation> Since the money being remitted is from the NRIs income in a foreign country, it may be subject to income tax in that country. “Hence, in most cases, the NRI will not have to pay income tax on the remittance in India as it is already taxed in the foreign country. Further, if the money is being remitted for personal use by the NRI's family in India, such as for their living expenses or education, there is no tax liability,” says Chandna. <cmsannotation type="cmsannotation" annotationid="How NRIs can reduce their tax liability" comment="subhead" text="How NRIs can reduce their tax liability">How NRIs can reduce their tax liability</cmsannotation> NRIs can avail tax deductions under the Indian Income Tax Act, including deductions under Section 80C for investments in specified financial instruments, Section 80D for health insurance premiums, Section 80G for charitable donations, and Section 24 for home loan interest. “NRIs can minimise capital gain tax by investing in specified assets, such as residential properties and specific bonds, within a stipulated time period,’ says Chandna. <cmsannotation type="cmsannotation" annotationid="What to do if your PAN is inoperative" comment="subhead" text="What to do if your PAN is inoperative">What to do if your PAN is inoperative</cmsannotation> An NRI is not required to obtain an Aadhaar Card in India, and hence they are not required to link their PAN and Aadhaar. However, it is likely that some NRIs will find their PANs inoperative after June 30. “This is because the residential status of the individuals may not be updated in the records of the Income Tax (IT) Department as "Non-Residents". The IT Department has clarified that NRIs whose PAN has become inoperative shall reach out to their jurisdictional AOs along with supporting documents (such as a passport copy) to prove that they are NRs in India,” says Chandna. “It is important for NRIs to carefully consider their tax liabilities in both India and the country where they are resident, as double taxation may arise if they are taxed on the same income in both countries,” says Gupta. NRIs can claim relief from double taxation under the provisions of a tax treaty (DTAA) between India and the country where they are residents or through the use of the foreign tax credit provisions under Indian tax law.

Are you an NRI having income in India? Here’s how you will be taxed

<ul><li>Everyone who earns over ₹ 2.5 lakh has to pay income tax in India.</li><li>The Indian Finance Ministry has clarified that earnings from <keyword id="2721952" type="PERSON" weightage="20" keywordseo="crypto" source="Orion">crypto</keyword> investments are not exempted.</li><li>The extent of liability could vary based on taxpayer profile.</li></ul>Bitcoin has come a long way – from being ignored by the financial world, to a global company like Tesla holding $1.3 billion as a digital asset. <a href="http://coindcx.com">Cryptocurrencies</a> can be used for transactions and even be held as assets. This unique nature makes it a particularly attractive <keyword id="6355120" type="General" weightage="20" keywordseo="investment" source="Orion">investment</keyword>. Several investors have entered the ‘rich list’ and<a href="https://www.forbes.com/sites/jeffkauflin/2021/02/02/meet-the-11-billionaires-cashing-in-on-bitcoins-wild-rise/"> made billions</a>, by investing in <keyword id="2420795" type="PERSON" weightage="20" keywordseo="cryptocurrencies" source="Orion">cryptocurrencies</keyword> and associated services. And, a retail investor can accumulate more of this asset when they ‘<a href="https://www.businessinsider.in/investment/news/how-to-mine-bitcoin-hardware-software-and-other-things-needed/slidelist/85003097.cms">mine</a>’ for it. Others looking to dip their toe in the crypto market, may be wondering how profits for investing in cryptocurrencies are taxed — if at all. Here’s a quick look. <cmsannotation type="cmsannotation" annotationid="Why pay taxes on crypto gains?" comment="subhead" text="Why pay taxes on crypto gains?">Why pay taxes on crypto gains?</cmsannotation> Laws and regulators move slower than technology,<a href="https://en.wikipedia.org/wiki/Music_piracy"> illustrated</a> at every step of the Internet’s advances. This is true in India as well with guidelines slowly changing to let retail investors participate in cryptocurrency, and allowing banks to send money to crypto exchanges. India’s central bank, the Reserve Bank of India (RBI),<a href="https://economictimes.indiatimes.com/markets/cryptocurrency/relief-for-investors-as-rbi-clarifies-on-banks-warning-to-crypto-dealing-clients/articleshow/83116747.cms"> has indicated</a> that trading in digital currency is allowed but has warned investors of the potential risks. <div type="ExtQuote" text="The RBI has major concerns with respect to private cryptocurrencies. We have conveyed these concerns to the government. The government will examine the issue and act accordingly." auname="Reserve Bank of India (RBI) governor, Shaktikanta Das, during the RBI’s Monetary Policy press conference on 6 August 2021"></div> India’s tax laws have yet to catch up, so consultants rely on interpreting existing laws in a grey area. However, the Indian MoS for Finance Ministry, Anurag Thakur, has<a href="https://www.financialexpress.com/market/bitcoin-alert-govt-says-crypto-gains-taxable-as-income-gst-applicable-on-services-by-crypto-exchanges/2222192/"> made it clear</a> that crypto earnings are taxed since it is not specifically exempted. <img src="https://lh4.googleusercontent.com/qAASHSkJZ6TTJ__ijVmry35DoxHSozY_ab9d4ISqYSRIAQ-4NCJ1q6AZrCMe81jLbcBU2b1GQ6hamfjRASEHoMLNfe1s7BA0we-Wz6DGJ16ABPfe8AZjg8WD49pwXxYXcRiAQdcp" /> <div type="ExtQuote" text="Disclosing gains and paying applicable taxes helps you to minimise tax compliance hassles. I recommend evaluating your current liability, even if you think laws may change soon in a fluid financial world." auname="Mr Charan G from the Commercial Taxes Department of Andhra Pradesh State"></div> <cmsannotation type="cmsannotation" annotationid="Who needs to think about paying taxes?" comment="subhead" text="Who needs to think about paying taxes?">Who needs to think about paying taxes?</cmsannotation> In brief, everyone who receives profits in hand. Earning from cryptocurrency in any form is not listed in the<a href="https://www.bankbazaar.com/tax/tax-exemption.html"> income categories</a> exempt from tax. To clarify, income taxes are only applicable to gains received in hand. So, if one invested ₹10,000 into Bitcoin and the coin’s price tripled since then, that gain is theoretical — with no tax due. Similarly, if a Bitcoin miner mined a certain number of Bitcoin but has not sold it for monetary gain in rupees, the Bitcoin held has only theoretical value, with no tax due on it. But if you ‘cash out’ by selling some of that coin at a profit and receive rupees in the bank, the profit you gained is now taxable. <cmsannotation type="cmsannotation" annotationid="When should you think about paying taxes?" comment="subhead" text="When should you think about paying taxes?">When should you think about paying taxes?</cmsannotation> If you have cashed out partly or wholly and a profit has reached you, you need to consider your tax liability. If you had invested a certain amount that continues to grow – and you haven’t pulled that money out – you do not have to think about taxes yet. Because of long-term capital gains tax (LTCG) — explained further below — the longer you stay invested, the less tax you pay. <cmsannotation type="cmsannotation" annotationid="How much would you need to pay?" comment="subhead" text="How much would you need to pay?">How much would you need to pay?</cmsannotation> There are no specific tax laws for cryptocurrency in India yet, but there are existing paths that guide us. Personal Income (a) For relatively small profits, gains from cryptocurrencies can be listed under “other income” in the tax form, and pay as per the tax bracket applicable. Personal Income (b) For relatively larger profits from cryptocurrency, it would be advantageous to note it as an investment holding, and pay capital gains tax accordingly. Investments held for less than three years would be subject to short-term capital gains tax (STCG). In this case, STCG tax would be paid at the same income tax bracket a person already is in for that year. If an investment is held for more than three years before cashing in, the profits would be subject to long-term capital gains tax (LTCG). In this case, the applicable LTCG tax would be 20%. If a person is in a higher tax bracket than that for the year, LTCG would be preferable. Business Income You would pay taxes as usual, including for realised cryptocurrency gains. You can deduct expenses incurred by the business, thus lowering tax liability. If your main business was to mine cryptocurrency, you could deduct expenses incurred towards mining. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[<div id="5BF9C613369130B1059077FB9A83A6E3DD4_74692"><div id="5BF9C613369130B1059077FB9A83A6E3DD4_74692_robot"><a href="https://cloud.smartdraw.com/share.aspx/?widgetToken=5BF9C613369130B1059077FB9A83A6E3DD4" target="_blank"><img src="https://cloud.smartdraw.com/cloudstorage/5BF9C613369130B1059077FB9A83A6E3DD4/preview2.png"></a></div></div><script src="https://cloud.smartdraw.com/plugins/html/js/sdjswidget_html.js" type="text/javascript"></script><script type="text/javascript">SDJS_Widget("5BF9C613369130B1059077FB9A83A6E3DD4",74692,1,"");</script> ]]></cdata></div> <cmsannotation type="cmsannotation" annotationid="The maximum and minimum tax liability" comment="subhead" text="The maximum and minimum tax liability">The maximum and minimum tax liability</cmsannotation> To summarize, the maximum tax liability you are accountable for is the income tax bracket applicable to your earnings. The income tax payable could be zero, if net income is less than ₹2.5 lakh after applicable deductions and if no LTCG tax is applicable, for individuals aged below 60 years. At the other extreme, there may be losses that were released after cashing out of a cryptocurrency investment during a market dip. That loss could still be useful, but in a different way. Those who file tax returns for their business (Form 3 or 4 in India) may be able to offset losses against income in a future year, on a Chartered Accountant’s advice. We have barely entered the second decade of cryptocurrency as an appreciating asset, and the markets are still learning how to harness it. Individuals who understand their risk appetite can get the most out of such an investment. While we have explained that Bitcoin is subject to tax in India, this is not intended to be financial advice. We recommend making any major decisions after speaking to your tax consultant. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/apple-pay-and-google-pay-are-coming-to-coinbase-allowing-users-to-buy-cryptocurrencies/articleshow/85096650.cms">Coinbase now lets you purchase crypto via Apple Pay, Google Pay option to arrive soon as well</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/venezuela-announces-its-own-central-bank-digital-currency/articleshow/85097126.cms">Venezuela is set to launch its government-backed digital currency in October as the bolivar gets a makeover</a>

Tax implications of investing in cryptocurrencies — here’s how you can make the most of your investment

<img class="gwt-Image" src="/photo/49981136.cms" />Section 80C of the Income Tax of India allows a deduction of certain investments and expenditures up to a maximum of Rs 1,50,000 from the gross total income of an individual in a given financial year. So, if your total investment is say Rs 2,50,000 in a financial year, you can claim tax deduction up to Rs 1,50,000 under Section 80C. 
 
This deduction is provided by the government to encourage household savings. The benefit of Section 80C tax deduction is applicable to individuals (service, profession and business) and Hindu Undivided Family (HUF). 
 
<table align="left" border="0" cellpadding="0" cellspacing="0" width="385">
	<tbody>
		<tr>
			<td colspan="2">
				Tax Savings Under Section 80C</td>
		</tr>
		<tr>
			<td>
				Taxable Income</td>
			<td>
				Tax Saving Up to</td>
		</tr>
		<tr>
			<td>
				2,50,000 – 5,00,000</td>
			<td>
				15,450</td>
		</tr>
		<tr>
			<td>
				5,00,001- 10,00,000</td>
			<td>
				30,900</td>
		</tr>
		<tr>
			<td>
				Above 10,00,000</td>
			<td>
				46,350</td>
		</tr>
	</tbody>
</table>
 
 
 
 
 
 
 
 
 
 
<img class="gwt-Image" src="/photo/49981064.cms" /> 
(<a href="http://www.fingyan.com/tax-planning-to-claim-deduction-under-section-80c/">Source</a>) 
 
Here are the top <a href="http://www.businessinsider.in/10-best-tax-saving-investments/articleshow/28474526.cms">tax saving instruments</a> below: 
<h2>
	Personal Provident Fund (PPF)</h2>
PPF is considered one of the safest tax saving instruments for those who have a conservative risk appetite. The interest rate is linked to the Government of India bond, and hence fluctuates every year. Presently, PPF offers an annual interest of 8.70% compounded annually. Any individual can open a PPF account in any nationalized bank, notified private sector bank or post office for a period of 15 years. Minimum of Rs 500 to a maximum of Rs 1,50,000 can be deposited yearly. Loan can also be availed against PPF after the 3rd year, excluding the year of deposit. Interest earned on PPF during the financial year is <a href="file:///C:/Users/akanksha.jain/Desktop/edits/%E2%80%A2%09http:/articles.economictimes.indiatimes.com/2015-01-05/news/57705269_1_ppf-public-provident-fund-dividend-option">also tax free</a>. You can partially withdraw money from the sixth year of the date of opening the account. 
 
National Saving Certificates (NSC) 
NSC is again a safe investment instrument as the interest is linked to the government bond yield. NSC can be purchased at any post office for a period of 5 years or 10 years. Minimum amount of Rs 500 can be invested in NSC to earn an annual interest of 8.5% and 8.75%, if purchased for 5 years and 10 years respectively. Interest on NSC is taxable, but since the interest in reinvested in NSC, it’s eligible for deduction under section 80C. There are penalty charges if you withdraw funds before the expiry of the duration of the certificate. However, you can avail loans against NSC. 
 
Tax Saving Fixed Deposits 
One of the most popular investment options among conservative investors in the lowest tax bracket is the tax saving fixed deposits. It is similar to regular fixed deposits with an exception. There is a lock in period of 5 years on tax saving FDs. It can be opened with any scheduled bank. There is no premature exit option, but loan can be availed against these FDs. The interest earned on these deposits is taxable as regular income of the individual. 
 
National Pension Plans (NPS) 
NPS is a government backed investment plan managed by Pension Fund Regulatory Development Authority, which aims to provide post-retirement income to all Indian citizens. NPS can be availed by employees of government, private institution, organized and unorganized sector. The contributory amount is invested in the markets. At the time of retirement, investors get a lump sum amount depending on the performance of the fund. While NPS contribution has tax benefits under Section 80C, the annuity amount is taxable. 
 
Life Insurance Plans 
The premium paid for the life insurance plans is eligible for deduction under Section 80C. Life insurance plans provide a security to the family members of the insured person. It makes sure that they have a handsome amount of money to lead a decent life in case of death of the insured person. One can have more than one insurance policy and the aggregate premium paid on all the policies paid during the financial year, including premium paid on policies taken for spouse and children (dependent or not) is eligible for deduction. The maturity amount is also tax free. 
 
Home Loans 
The tax saving on buying a property is available on two components – principal and interest amount. While Section 80C gives a deduction on repayment of principal, Section 24 gives a deduction on the interest. The first time buyers can claim an additional deduction of Rs 1,00,000. 
 
Equity Linked Saving Scheme (ELSS) 
ELSS is the kind of mutual fund that are specially designed for the purpose of tax saving. These funds have a lock in period of 3 years, which is least in comparison to all other investment options eligible for 80C. These funds are suitable for the investors with high risk tolerance to market volatility. These funds beat inflation and provide higher returns in the long term, but there is no premature withdrawal option until you pay an exit load. 
 
Unit Linked Insurance Plans (ULIPs) 
ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with strong wealth creation opportunities. A ULIP can be referred to a hybrid insurance plan that combines the benefit of insurance as well as the investment. In case of ULIPs, the premium is divided into two parts – one part goes towards life cover and other is invested in market-linked funds of your choice. For taxation purposes, unit linked insurance plans are considered as life insurance policies. At the time of investment, there is a deduction of tax that is available on premium paid on life insurance policies under Section 80C. Even the maturity and death benefit amount is tax free under Section 10 (10D). 
 
<img class="gwt-Image" src="/photo/49981081.cms" /> 
(<a href="http://timesofindia.indiatimes.com/business/india-business/Why-you-should-invest-in-Ulips-now/articleshow/44458163.cms">Source</a>) 
 
ULIPs tend to give higher returns in comparison to all the fixed income investments For companies like <a href="http://www.iciciprulife.com/public/plans.htm#Wealth-Plan?UID=1313">ICICI Prudential</a>, close to 96% of their <a href="http://timesofindia.indiatimes.com/topic/ULIP">ULIP</a> funds have outperformed respective benchmarks since inception, across debt, equity and balanced funds. ULIPs also has following features. 
 
· An investor has an option of partial withdrawals of up to 20% the fund value every year from the 6th year onwards. 
· An investor has an option to make unlimited fund switches based on market fluctuations or investment goals. He has a control over his investments. 
 
 A Snapshot Summary of Section 80C Investment Options 
 
<img class="gwt-Image" src="/photo/49981105.cms" /> 
(<a href="http://timesofindia.indiatimes.com/business/mf-simplified/mf-news/Best-ways-to-cut-tax-under-Sec-80C/articleshow/40035217.cms">Source</a>) 
 
Planning of investments for claiming deductions under <a href="http://taxguru.in/income-tax/all-about-deduction-under-section-80c-and-tax-planning.html">Section 80C provides</a> gives investors two opportunities - the investor can save tax and the invested money gives returns in future. Based on your financial goals and the features of the above mentioned plans, take an informed decision regarding where you want to invest under Section 80C. 
 
(This article is written by Utkarsh Sahu. He writes for various tech mags and admires technology with paradigm-shifting attributes.)

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