Assessment Year 2008-2009
Relevant to Financial Year 2007-2008
I. TAX RATES FOR INDIVIDUALS OTHER THAN II & III
Up to 1,10,000 - Nil
1,10,000 to 1,50,000 - 10% of the amount exceeding 1,10,000
1,50,000 to 2,50,000 - Rs.4,000 + 20% of the amount exceeding 1,50,000
2,50,000 & above - Rs.24,000 + 30% of the amount exceeding 2,50,000
II. TAX RATES FOR RESIDENT WOMAN BELOW 65 YEARS
Up to 1,45,000 - Nil
1,45,000 to 1,50,000 - 10% of the amount exceeding 1,45,000
1,50,000 to 2,50,000 - Rs.500 + 20% of the amount exceeding 1,50,000
2,50,000 & above - Rs.20,500 + 30% of the amount exceeding 2,50,000
III. TAX RATES FOR INDIVIDUAL RESIDENTS AGED 65 YRS AND ABOVE
Up to 1,95,000 - Nil
1,95,000 to 2,50,000 - 20% of the amount exceeding 1,95,000
2,50,000 & above - Rs.11,000 + 30% of the amount exceeding 2,50,000
SURCHARGE ON INCOME TAX
In the case of every Individual, Hindu undivided family, Association of person and body of individuals, Surcharge on income tax is calculated at 10% if the total taxable income exceeds Rs.10,00,000.
EDUCATION CESS
The amount of Income-tax and Surcharge shall be further increased by Education Cess of 3% on Income-tax plus Surcharge.
EXEMPTIONS/DEDUCTIONS FROM SALARY
1. VOLUNTARY RETIREMENT - 10(10C)
Amount received or receivable (i.e., in installments) by an employee on his voluntary retirement in accordance with any scheme of Voluntary Retirement is exempt to the extent of Rs.5,00,000, provided the VRS is in accordance with Rule 2BA of IT Rules.
2. HOUSE RENT ALLOWANCE EXEMPT U/S.10(13A)
a) Actual HRA received: Rs.xxxx
b) Rent paid in excess of 10% of Salary: Rs.xxxx
c) 50% of Salary in Metro Cities or
40% of Salary in other cities: Rs.xxxx
Least of a), b), c) is exempt.
NOTE: Here Salary means Basic Salary as well as DA if the terms of employment so provide.
3. CONVEYANCE ALLOWANCE: Any allowance granted to meet the expenditure incurred wholly, necessarily, and exclusively on conveyance in performance of the duties of office and so certified by the employer is exempt u/s.10(14).
4. TRANSPORT ALLOWANCE: Any allowance granted to an employee to meet the expenditure for the purpose of commuting between the place of his residence and the place of his duty to the extent up to Rs.800/- per month is exempt u/s.10(14).
5. MEDICAL REIMBURSEMENT: An amount of Rs.15,000 or the actual amount reimbursed by the employer, whichever is less, is exempt u/s.17(2).
6. PROFESSION TAX: Profession Tax levied by the State Government is allowable as a deduction from Gross Salary provided it has been paid.
STANDARD DEDUCTION U/S.16(1) IS NOT ALLOWABLE FOR A.Y.2006-07
DEDUCTIONS FROM HOUSE PROPERTY
1. DEDUCTION U/S.23(1): For let-out property, the amount paid by the owner towards taxes levied by any local authority in respect of the property is deductible from Annual value (taxes pertaining to any previous years).
2. DEDUCTION U/S.24(a): For let-out property, a deduction of 30% of the Net Annual Value is allowed. No separate deduction for Repairs, Collection Charges, Insurance Premium, Annual Charge, and Ground Rent.
3. INTEREST ON BORROWED LOAN(U/S.24(b)):
FOR SELF-OCCUPIED PROPERTY
a. If Property is acquired or constructed with a loan taken after 01/04/99 and construction is completed within 3 years from the end of the financial year in which the capital was borrowed - Rs.1,50,000 or actual interest paid/payable, whichever is less, is deductible.
b. If a new housing loan is taken for the repayment of an old loan (old loan taken after 1/4/99) - Rs.1,50,000 or actual interest paid/payable, whichever is less, is allowed as a deduction.
c. If the property is acquired or constructed with a loan taken before 01/04/99, Rs.30,000 or actual interest paid/payable, whichever is less, is allowed as a deduction.
d. If a loan is taken for Repairs, renewal, reconstruction of property, Rs.30,000 or actual interest paid/payable whichever is less is allowed as a deduction.
FOR LET OUT PROPERTY, actual interest paid/payable can be claimed as a deduction.
ONLY THE OWNER OF THE HOUSE PROPERTY CAN AVAIL THE ABOVE DEDUCTIONS.
CAPITAL GAINS:
With effect from 01/10/2004, Long Term Capital Gains arising on the sale of equity shares or units of an equity-oriented fund through a recognized stock exchange is exempt if such a transaction is chargeable to Securities Transaction Tax (u/s.10(38)).
With effect from 01/10/2004, Short Term Capital Gains arising on the sale of equity shares or units of an equity-oriented fund through a recognized stock exchange is subject to tax at the rate of 10% if such a transaction is chargeable to Securities Transaction Tax.
EXEMPTION U/S.54EC:
The Capital Gain arising out of the sale of long term capital asset can be invested in National Highways Authority of India, Rural Electrification Corporation Limited, within six months from the date of sale. (Lock-in period is 3 years)
For Cost Inflation Index, refer to the website.
STANDARD DEDUCTION FOR FAMILY PENSION U/S.57 (iia): An amount of Rs.15,000 or 331/3% of family pension, whichever is less, is allowed as a deduction. If an assessee receives arrears of family pension, then Relief u/s.89(1) can be claimed by him.
Family Pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of the union, where the death of such member has occurred in the course of operation is exempt.
EXEMPTIONS - OTHER SOURCES
Any income by way of Dividends from the company, Income received in respect of units from the Unit Trust of India, Income received in respect of the units of a mutual fund are exempt.
DEDUCTIONS FROM GROSS TOTAL INCOME (CHAPTER VIA):
Sl.No
I.T. Sec.
Nature of Deduction
Amount of deduction
1.
a.
b.
c.
80 CCE
80 C
80 CCC
80 CCD
Life Insurance Premium, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to u/s.10(23D), Tuition Fees (max. 2 Children), Repayment of Principal of Housing loan, Bank Fixed Deposit of 5 yrs period, notified Bonds of NABARD, etc.
Premium paid towards approved Pension Fund (like LIC's Jeevan Suraksha) max. 1 lakh.
Contribution to Central Government Pension Schemes. Up to 10% of salary with matching contribution from the Government.
Maximum overall deductions allowed u/s. 80C, 80CCC & 80CCD is Rs. 1,00,000
2.
80 D
(a) Medical Insurance Premium paid by Cheque for policies taken from General Insurance Corporation/other approved Insurance Regulatory and Development Authority.
(b) For Senior Citizens
Up to Rs.15,000
Up to Rs.20,000
3.
80 DD
(a) Any expenditure for Medical, Nursing & Rehabilitation incurred on dependents suffering from permanent disability including blindness, mental retardation, autism, cerebral palsy, or multiple disabilities
(b) Deposits under LIC, UTI's Scheme & other IRDA approved insurers for the benefit of physically handicapped dependent
Rs.50,000 with an additional Rs.25,000 if the disability is severe exceeding 80%
4.
80 DDB
(a) Actual expenditure incurred on Medical treatment of Self or dependent or a member of HUF suffering from terminal diseases like Cancer, AIDS, Renal failure, etc.
(b) For Senior Citizens (self or dependent on whom expenditure on medical treated is taken)
Up to Rs.40,000
Up to Rs.60,000
5.
80 E
Interest on loan taken from Financial/Charitable Institutions for Self/Spouse/Children for pursuing Higher Education (for a max. period of 7 yrs)
Actual Interest repaid
6.
80 G
(a) Donations made to National Defense Fund, Prime Minister's Relief Fund, approved Funds of reputed Educational Institutions, National Trust for Welfare of persons with Autism, Cerebral Palsy, etc.
(b) Donations made to Jawaharlal Memorial Fund, PM's Drought Relief fund, Any approved
From India, Pune
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Relevant to Financial Year 2007-2008
I. TAX RATES FOR INDIVIDUALS OTHER THAN II & III
Up to 1,10,000 - Nil
1,10,000 to 1,50,000 - 10% of the amount exceeding 1,10,000
1,50,000 to 2,50,000 - Rs.4,000 + 20% of the amount exceeding 1,50,000
2,50,000 & above - Rs.24,000 + 30% of the amount exceeding 2,50,000
II. TAX RATES FOR RESIDENT WOMAN BELOW 65 YEARS
Up to 1,45,000 - Nil
1,45,000 to 1,50,000 - 10% of the amount exceeding 1,45,000
1,50,000 to 2,50,000 - Rs.500 + 20% of the amount exceeding 1,50,000
2,50,000 & above - Rs.20,500 + 30% of the amount exceeding 2,50,000
III. TAX RATES FOR INDIVIDUAL RESIDENTS AGED 65 YRS AND ABOVE
Up to 1,95,000 - Nil
1,95,000 to 2,50,000 - 20% of the amount exceeding 1,95,000
2,50,000 & above - Rs.11,000 + 30% of the amount exceeding 2,50,000
SURCHARGE ON INCOME TAX
In the case of every Individual, Hindu undivided family, Association of person and body of individuals, Surcharge on income tax is calculated at 10% if the total taxable income exceeds Rs.10,00,000.
EDUCATION CESS
The amount of Income-tax and Surcharge shall be further increased by Education Cess of 3% on Income-tax plus Surcharge.
EXEMPTIONS/DEDUCTIONS FROM SALARY
1. VOLUNTARY RETIREMENT - 10(10C)
Amount received or receivable (i.e., in installments) by an employee on his voluntary retirement in accordance with any scheme of Voluntary Retirement is exempt to the extent of Rs.5,00,000, provided the VRS is in accordance with Rule 2BA of IT Rules.
2. HOUSE RENT ALLOWANCE EXEMPT U/S.10(13A)
a) Actual HRA received: Rs.xxxx
b) Rent paid in excess of 10% of Salary: Rs.xxxx
c) 50% of Salary in Metro Cities or
40% of Salary in other cities: Rs.xxxx
Least of a), b), c) is exempt.
NOTE: Here Salary means Basic Salary as well as DA if the terms of employment so provide.
3. CONVEYANCE ALLOWANCE: Any allowance granted to meet the expenditure incurred wholly, necessarily, and exclusively on conveyance in performance of the duties of office and so certified by the employer is exempt u/s.10(14).
4. TRANSPORT ALLOWANCE: Any allowance granted to an employee to meet the expenditure for the purpose of commuting between the place of his residence and the place of his duty to the extent up to Rs.800/- per month is exempt u/s.10(14).
5. MEDICAL REIMBURSEMENT: An amount of Rs.15,000 or the actual amount reimbursed by the employer, whichever is less, is exempt u/s.17(2).
6. PROFESSION TAX: Profession Tax levied by the State Government is allowable as a deduction from Gross Salary provided it has been paid.
STANDARD DEDUCTION U/S.16(1) IS NOT ALLOWABLE FOR A.Y.2006-07
DEDUCTIONS FROM HOUSE PROPERTY
1. DEDUCTION U/S.23(1): For let-out property, the amount paid by the owner towards taxes levied by any local authority in respect of the property is deductible from Annual value (taxes pertaining to any previous years).
2. DEDUCTION U/S.24(a): For let-out property, a deduction of 30% of the Net Annual Value is allowed. No separate deduction for Repairs, Collection Charges, Insurance Premium, Annual Charge, and Ground Rent.
3. INTEREST ON BORROWED LOAN(U/S.24(b)):
FOR SELF-OCCUPIED PROPERTY
a. If Property is acquired or constructed with a loan taken after 01/04/99 and construction is completed within 3 years from the end of the financial year in which the capital was borrowed - Rs.1,50,000 or actual interest paid/payable, whichever is less, is deductible.
b. If a new housing loan is taken for the repayment of an old loan (old loan taken after 1/4/99) - Rs.1,50,000 or actual interest paid/payable, whichever is less, is allowed as a deduction.
c. If the property is acquired or constructed with a loan taken before 01/04/99, Rs.30,000 or actual interest paid/payable, whichever is less, is allowed as a deduction.
d. If a loan is taken for Repairs, renewal, reconstruction of property, Rs.30,000 or actual interest paid/payable whichever is less is allowed as a deduction.
FOR LET OUT PROPERTY, actual interest paid/payable can be claimed as a deduction.
ONLY THE OWNER OF THE HOUSE PROPERTY CAN AVAIL THE ABOVE DEDUCTIONS.
CAPITAL GAINS:
With effect from 01/10/2004, Long Term Capital Gains arising on the sale of equity shares or units of an equity-oriented fund through a recognized stock exchange is exempt if such a transaction is chargeable to Securities Transaction Tax (u/s.10(38)).
With effect from 01/10/2004, Short Term Capital Gains arising on the sale of equity shares or units of an equity-oriented fund through a recognized stock exchange is subject to tax at the rate of 10% if such a transaction is chargeable to Securities Transaction Tax.
EXEMPTION U/S.54EC:
The Capital Gain arising out of the sale of long term capital asset can be invested in National Highways Authority of India, Rural Electrification Corporation Limited, within six months from the date of sale. (Lock-in period is 3 years)
For Cost Inflation Index, refer to the website.
STANDARD DEDUCTION FOR FAMILY PENSION U/S.57 (iia): An amount of Rs.15,000 or 331/3% of family pension, whichever is less, is allowed as a deduction. If an assessee receives arrears of family pension, then Relief u/s.89(1) can be claimed by him.
Family Pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of the union, where the death of such member has occurred in the course of operation is exempt.
EXEMPTIONS - OTHER SOURCES
Any income by way of Dividends from the company, Income received in respect of units from the Unit Trust of India, Income received in respect of the units of a mutual fund are exempt.
DEDUCTIONS FROM GROSS TOTAL INCOME (CHAPTER VIA):
Sl.No
I.T. Sec.
Nature of Deduction
Amount of deduction
1.
a.
b.
c.
80 CCE
80 C
80 CCC
80 CCD
Life Insurance Premium, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to u/s.10(23D), Tuition Fees (max. 2 Children), Repayment of Principal of Housing loan, Bank Fixed Deposit of 5 yrs period, notified Bonds of NABARD, etc.
Premium paid towards approved Pension Fund (like LIC's Jeevan Suraksha) max. 1 lakh.
Contribution to Central Government Pension Schemes. Up to 10% of salary with matching contribution from the Government.
Maximum overall deductions allowed u/s. 80C, 80CCC & 80CCD is Rs. 1,00,000
2.
80 D
(a) Medical Insurance Premium paid by Cheque for policies taken from General Insurance Corporation/other approved Insurance Regulatory and Development Authority.
(b) For Senior Citizens
Up to Rs.15,000
Up to Rs.20,000
3.
80 DD
(a) Any expenditure for Medical, Nursing & Rehabilitation incurred on dependents suffering from permanent disability including blindness, mental retardation, autism, cerebral palsy, or multiple disabilities
(b) Deposits under LIC, UTI's Scheme & other IRDA approved insurers for the benefit of physically handicapped dependent
Rs.50,000 with an additional Rs.25,000 if the disability is severe exceeding 80%
4.
80 DDB
(a) Actual expenditure incurred on Medical treatment of Self or dependent or a member of HUF suffering from terminal diseases like Cancer, AIDS, Renal failure, etc.
(b) For Senior Citizens (self or dependent on whom expenditure on medical treated is taken)
Up to Rs.40,000
Up to Rs.60,000
5.
80 E
Interest on loan taken from Financial/Charitable Institutions for Self/Spouse/Children for pursuing Higher Education (for a max. period of 7 yrs)
Actual Interest repaid
6.
80 G
(a) Donations made to National Defense Fund, Prime Minister's Relief Fund, approved Funds of reputed Educational Institutions, National Trust for Welfare of persons with Autism, Cerebral Palsy, etc.
(b) Donations made to Jawaharlal Memorial Fund, PM's Drought Relief fund, Any approved
From India, Pune
Acknowledge(0)Amend(0)
Thank you, Sam, for the valuable information. Are you sure about the last date for filling in the case of companies where an audit is compulsory? According to me, it's September 30th of the Assessment Year. Could you please double-check and get back to me?
Many thanks,
Manjeet Mehra
From China
Acknowledge(0)Amend(0)
Many thanks,
Manjeet Mehra
From China
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