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Tips & Tricks In Income Tax
Q-21. What are Tax Saving Schemes eligible u/s 80C ?

Saving Instrument

Rate of Int. p.a.

Lock-in Period
( in Yrs.)

Max. Limit (Rs.)

Aggregate Tax Exemption Limit U/s 80C

Bank Depsoit-Tax Saving

8 - 9 %

5

No Limit

1 Lakh

Employee Provident Fund (EPF) 8.5% * 12% of B.P. 1 Lakh
Equity Linked ( ELSS) Fund Scheme Market Defined 3 No Limit 1 Lakh
NABARD Rurla Bonds 8.25% 5 No Limit 1 Lakh
Nationa Saving Certificate (NSC) 8% 6 No Limit 1 Lakh
Post Time Depsot Account ( 5 Yrs.) 7.50% 5 No Limit 1 Lakh
Public Provedent Fund (PPF) 8% 15 70,000 70,000
Unit Linked Insurance Plan ( ULIPs) Market defined variable No Limit 1 Lakh
Prem. paid on Life Insurance Policies including Pension Plan 5 - 7% 3 No Limit 1 Lakh
Senior Citizen Saving Scheme 9% 5 15 Lakhs 1 Lakh
 
Q-22. What are the Documents to be prepared by the Assessee in support of the Return ?

DOCUMENTS TO BE PREPARED BY THE ASSESSEE IN SUPPORT OF THE RETURN.

New return forms have dispensed with the requirement of enclosing any documents in support of the return. However, in the opinion of board of Editors, even though not required to be submitted along with the return, it is advisable that the documents be prepared! obtained beforehand, since the Assessing Officer may, as per section 139C, require an assessee to furnish this documents at any time after the tiling of returns.

1. Statement of Computation of Income and Tax.

2. T.D.S. Certificate in Form 16 or l6Aas applicable.

3. Certificate/Receipts of payment of Insurance Premium, Provident Fund, Purchase of NSCs New equity shares, Mutual Funds, NSS, Medical Insurance, Donations, etc. in support of deductions claimed.

4. Audit report, Balance Sheet, Trading, Profit and Loss account, Personal account of Proprietor or Partners.

5. Statement of receipts and payments, where no regular books of account are maintained.

6. Tax-Audit report obtained under section 44AB, wherever required.

7. Accountants report under section 80-lA, 80-lAB, 80-lB or 80-IC, 80-ID or 80-fE.

8. Certificate of interest on housing loan from the lender, in support of deduction from house property income.

9. Other documents! statements in support of income.

Q-23. How to Save Tax on your Home Loan ? ?

BUYING A HOUSE

Owning a house is not just a dream but a necessity and there are several tax benefits as well. However, when buying a house, you would do well to consider the following…

(a)     Its always advisable to go in for a housing loan. Interest paid on home loans can be deducted from your  taxable income up to a maximum of Rs 1.5 lakh. This can be doubled in the case of joint ownership. If the joint owners equally bear the interest  burden,  each gets a deduction up to Rs. 1.5 lakh. However, the total deduction cannot exceed the actual interest paid by the joint owners. So, if the total yearly interest liability is, say Rs. 4,05,000, and the property is equally owned by three people, then each gets a deduction of Rs 135,000.

(b)     Principal repayment upto Rs 1 lakh is allowed as a deduction from your taxable income u/s 80C, provided the loan is borrowed from a Nationalised Bank / Recognised financial institution.

 
Q-24. How to choose the Right Tax Returns Form ?

CHOOSE THE RIGHT FORM

New tax returns form:

ITR-1: Can be used by individuals having salary, pension, family Pension or interest income

ITR-2: Can be used by individual/HUE having income from any source except from business or profession.

ITR-3: Individuals/HUE’s, being a partner in a firm, not having any income from business/profession under any proprietorship except interest, salary, bonus, commission/remuneration etc. from the firm

ITR-4: To be used by individuals or HUE having proprietary business or profession.

ITR-5: Combined Form for Return of Income for Eirms/AOP’s/BOI’s Form 49A: PAN Application Form

Form 49B: Application form for Tax Deduction Account Number allotment.

Form 60 : Declaration form to be filed by a person who does not have either a PAN or GIR number & makes payments in cash in respect of specified transactions.

Form No. 61: Declaration to be filed by a person who has agricultural income, and no other income chargeable to tax in respect of transactions specified in clauses (a) to (h) of Rule 1148.

 
Q-25. TDS Table & their Limits.

1.

Int. on Debentures & Bonds

10% over Rs. 2,500

2.

lnt. on FD’s in Banks/Hsg. Finance Cos. & 8% taxable bonds

10% over As. 10,000

 3.

lnt. other than lnt. on securities

10% over As. 5,000

4.

Insurance Commission to Agents (Individuals)

10% over As 5,000

5. 

Insurance Commission to Agents (Domestic Cos.)

20% over Rs 5000

6. 

Winnings from Lotteries/Cross-word/Game Shows

30% over As. 5,000

7. 

Commission earned on sale of Lottery Tickets

10% over As. 1,000

8. 

Winnings from Horse Races

30% over As. 2,500

9. 

Payments to Advertising Agency

1% over As. 20,000

10. 

Payments to Contractors (per contract)

2% over Rs.20,000

11. 

Payments to Sub-contractors

1% over As.20,000

12. 

Commission & Brokerage (other than transactions relating to Shares & Securities

10% over As.2,500

13. 

Payment of fees to Professionals / Technical Services p.a.

10% over As.20,000

14. 

Payment of Rent to Individuals/HUF

10% over As.1,20,000

15. 

Payment of Rent to other than Individuals/HUE

10% over As.1,20,000

16. 

Payment of Rent on Plant & Machinery or Equipments

2% over As.1,20,000

 
Q-26. 10 Investments under the Taxman's scanner.
  1. Unsecured loans above Rs. 25 lakh.

  2. Loss shown from house properly above 2.5 lakh.

  3. If investments in property more than 5 timesof gross income.

  4. Sum of short term and long term capital gain is over Rs. 25 lakh.

  5. Sale of property shown in AIR but capital gains not declared.

  6. Commission paid in excess of - Rs. 10 lakh.

  7. Realty business with gross turnover exceeding Rs. 5 Cr.

  8. Hotel and tour operations with gross turnover of Rs 5 crore but net profit shown is less than 0.05%.

  9. Depreciation claims in excess of Rs 25 Iakh,

  10. Net agricultural income more than Rs. 10 Iakh.

 
 
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