All About Tax In India for FY 09 - 10

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This PPT give a brief idea all on TAX in India for FY 2009 - 2010

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All About Tax In India for FY 09 - 10

  1. 1. All about TAXAll about TAX inin Financial YearFinancial Year 2009 – 20102009 – 2010   FromFrom --
  2. 2. Tax Slab for F.Y. 2009 - 2010 Taxable Income of Men Taxable Income of Women Taxable Income of Senior Citizens Tax Upto Rs.1,50,000 Upto Rs.1,80,000 Upto Rs.2,25,000 Nil Rs.1,50,000 To Rs.3,00,000 Rs.1,80,000 To Rs.3,00,000 Rs.2,25,000 To Rs.3,00,000 10% Rs.3,00,000 To Rs.5,00,000 Rs.3,00,000 To Rs.5,00,000 Rs.3,00,000 To Rs.5,00,000 20% Rs.5,00,000 and Above Rs.5,00,000 and Above Rs.5,00,000 and Above 30% Note : 3% Education Cess also on the tax amount after tax and surcharge (if any) What is surcharge? * If salary is above 10 lacs , 10% surcharge will also be applicable.
  3. 3. Following things will be discussed : Following things will be discussed :   1. Tax Slab in 2009 for salaried employees1. Tax Slab in 2009 for salaried employees  2. How much will you save and2. How much will you save and     3. How to Save Tax3. How to Save Tax
  4. 4. The following incomes are completely exempt from Income The following incomes are completely exempt from Income  Tax Without any upper limit.Tax Without any upper limit.    1. Interest on PPF/ GPF / EPF.1. Interest on PPF/ GPF / EPF. 2. Interest on GOI Tax Free Bonds.2. Interest on GOI Tax Free Bonds. 3. Dividends on Shares and on Mutual Funds.3. Dividends on Shares and on Mutual Funds. 4. Any Capital Receipt from Life Insurance Policies. i.e. 4. Any Capital Receipt from Life Insurance Policies. i.e.  sums received either on death of the insured or on Maturity sums received either on death of the insured or on Maturity  of Life Insurance Plans. However, in case of Life Insurance of Life Insurance Plans. However, in case of Life Insurance  Policies issued after March 31, 2004, exemption on Maturity Policies issued after March 31, 2004, exemption on Maturity  payment u/s.10(10)D is available only if premium paid on payment u/s.10(10)D is available only if premium paid on  any year does not exceeds 20% of the Sum Assured.any year does not exceeds 20% of the Sum Assured. Tax Free Incomes :Tax Free Incomes :
  5. 5. 5. Interest on Saving Bank Account in Post Office.5. Interest on Saving Bank Account in Post Office. 6. Long term Capital Gain on sale of shares and equity MF6. Long term Capital Gain on sale of shares and equity MF Dividend Income :Dividend Income :    Dividend income from companies / equity – oriented Mutual Dividend income from companies / equity – oriented Mutual  Funds is Completely Exempt in the hands of investors. Funds is Completely Exempt in the hands of investors.  Dividend is also Tax Free in the hands of investors in case of Dividend is also Tax Free in the hands of investors in case of  debt – oriented Mutual Funds Schemesdebt – oriented Mutual Funds Schemes Tax Free Incomes :Tax Free Incomes :
  6. 6. Gift Tax was abolished with effect from Gift Tax was abolished with effect from  October 1, 1998.October 1, 1998. The gifts are no longer taxable in the hands The gifts are no longer taxable in the hands  of donor or donee.of donor or donee. However, with effect from September 1, However, with effect from September 1,  2004, any gift received by an individual  or 2004, any gift received by an individual  or  HUF will be included in taxable income, HUF will be included in taxable income,  provided the amount of gift exceeds provided the amount of gift exceeds  Rs.50000/-.Rs.50000/-. Gift TaxGift Tax
  7. 7. 1.1. SpouseSpouse 2.2. Brother or Sister.Brother or Sister. 3.3. Brother or Sister of Spouse.Brother or Sister of Spouse. 4.4. Brother or Sister of either of parents of the individual.Brother or Sister of either of parents of the individual. 5.5. Any lineal ascendant or descendant of the individual.Any lineal ascendant or descendant of the individual. 6.6. Any lineal ascendant or descendant of the spouse of the Any lineal ascendant or descendant of the spouse of the  individual.individual. 7.7. Spouse of the persons referred to in  (2) or (6)Spouse of the persons referred to in  (2) or (6) 8.8. Gifts received on the occasion of marriageGifts received on the occasion of marriage 9.9. Gift received under a WILL by way of inheritance are also Gift received under a WILL by way of inheritance are also  tax free.tax free. Gifts received from following is Tax Free.Gifts received from following is Tax Free.
  8. 8. 1. Filing of income Tax Return is Compulsory 1. Filing of income Tax Return is Compulsory  for all individuals whose Gross Annual for all individuals whose Gross Annual  Income exceeds the Maximum Amount which Income exceeds the Maximum Amount which  is not chargeable to income tax i.e. is not chargeable to income tax i.e.  Rs.1,80,000 for  Resident Women, Rs. Rs.1,80,000 for  Resident Women, Rs.  2,25,000 for Senior Citizens and Rs. 2,25,000 for Senior Citizens and Rs.  1,50,000 for other individuals and HUFs.1,50,000 for other individuals and HUFs. 2. The last date of filing income tax return is 2. The last date of filing income tax return is  July 31, in case of individuals who are not July 31, in case of individuals who are not  covered in point 3 below.covered in point 3 below. Filing of Income Tax Return :Filing of Income Tax Return :
  9. 9. 3.  If the income includes business or 3.  If the income includes business or  professional income requiring tax audit professional income requiring tax audit  (turn over Rs.40 Lakhs), the last date for (turn over Rs.40 Lakhs), the last date for  filing the return is September 30.filing the return is September 30. 4.  The penalty for Non- Filing of Income 4.  The penalty for Non- Filing of Income  Tax Return is Rs.5000 (after Tax Return is Rs.5000 (after  Assessment Year).Assessment Year). Filing of Income Tax Return :Filing of Income Tax Return :
  10. 10. Income is Computed under the foll.  5 Heads:Income is Computed under the foll.  5 Heads: 1.      Income from salaries1.      Income from salaries 2.      Income from House Properties2.      Income from House Properties 3.      Profit & Gains of Business & Profession3.      Profit & Gains of Business & Profession 4.      Capital Gains4.      Capital Gains 5.      Income from Other Sources 5.      Income from Other Sources     Computation of GrossComputation of Gross Taxable IncomeTaxable Income
  11. 11. Salary or Pension IncomeSalary or Pension Income  The pay which you get has many components , The pay which you get has many components ,  like HRA , conveyance allowance and others.like HRA , conveyance allowance and others.  Out of this income some things are deductible Out of this income some things are deductible  on your hand and after deducting you arrive at a on your hand and after deducting you arrive at a  amount called Taxable income , on which you amount called Taxable income , on which you  have to pay tax.have to pay tax.
  12. 12. Income from House PropertyIncome from House Property  If the property is self occupied then the IncomeIf the property is self occupied then the Income from House Property is treated as NIL.from House Property is treated as NIL.  If any loan is taken for the purchase of theIf any loan is taken for the purchase of the property then the amount paid towards interestproperty then the amount paid towards interest up to a maximum of Rs. 1,50,000/- is deductedup to a maximum of Rs. 1,50,000/- is deducted from taxable income.from taxable income.
  13. 13. Income from House PropertyIncome from House Property  In case Property is given on rent, then we haveIn case Property is given on rent, then we have to find out the :to find out the :  Annual Rental IncomeAnnual Rental Income  From this deduct Property Tax paid if anyFrom this deduct Property Tax paid if any  From balance amount-deduct30% towardsFrom balance amount-deduct30% towards repairs & maintenancerepairs & maintenance  From the residual figure- deduct the amount ofFrom the residual figure- deduct the amount of interest paid on loan taken for the purchase ofinterest paid on loan taken for the purchase of the property.the property.  The resultant figure is the Income from HouseThe resultant figure is the Income from House PropertyProperty
  14. 14. Profit from Business / professionProfit from Business / profession Income as arrived on theIncome as arrived on the basis of Profit & Loss A/cbasis of Profit & Loss A/c
  15. 15. Income from InterestIncome from Interest  Interest Income from the followingInterest Income from the following sources to be included in Grosssources to be included in Gross Taxable Income:Taxable Income:  Interest on company deposits.Interest on company deposits.  Interest on debentures/bonds.Interest on debentures/bonds.  Interest on savings bank account/ fixedInterest on savings bank account/ fixed deposits with banks.deposits with banks.
  16. 16. Income from InterestIncome from Interest  Interest on post office savings schemesInterest on post office savings schemes like MIS, NSC, KVP etc.like MIS, NSC, KVP etc.  Interest on private loans given to relatives,Interest on private loans given to relatives, friends or any other entity.friends or any other entity.  Interest on government securities.Interest on government securities.  Note: Deduction u/s 80 L has beenNote: Deduction u/s 80 L has been omitted now and accordingly,interestomitted now and accordingly,interest income from the above sources is Fullyincome from the above sources is Fully Taxable now.Taxable now.
  17. 17. Capital GainsCapital Gains  Capital gain arises when certain assetsCapital gain arises when certain assets like property (plot or a built uplike property (plot or a built up commercial / residential unit) or shares /commercial / residential unit) or shares / mutual fund units / bonds etc are sold formutual fund units / bonds etc are sold for a profit.a profit.  The treatment of capital gains is slightlyThe treatment of capital gains is slightly different.different.  It mainly depends upon whether theIt mainly depends upon whether the capital gain (profit on sale) is Short Termcapital gain (profit on sale) is Short Term or Long Term.or Long Term.
  18. 18. Short Term Capital GainShort Term Capital Gain  Capital gain is considered to be short termCapital gain is considered to be short term if immovable property is sold / transferredif immovable property is sold / transferred within THREE years of acquisition.within THREE years of acquisition.  Similarly, if shares or other financialSimilarly, if shares or other financial securities such as mutual fund units aresecurities such as mutual fund units are sold within ONE year of purchase, thesold within ONE year of purchase, the profit earned is treated as short termprofit earned is treated as short term capital gain.capital gain.
  19. 19. Tax Treatment on Short TermTax Treatment on Short Term Capital GainCapital Gain  It is included in the gross taxableIt is included in the gross taxable income like other sources ofincome like other sources of income and normal rates of taxincome and normal rates of tax apply, which depend on the grossapply, which depend on the gross taxable income from all sourcestaxable income from all sources including short term capital gains.including short term capital gains.
  20. 20. Tax Treatment on Short TermTax Treatment on Short Term Capital GainCapital Gain  In case of Sale of equity shares orIn case of Sale of equity shares or units of equity oriented Mutualunits of equity oriented Mutual Fund schemes, short term capitalFund schemes, short term capital gains are taxed at a Flat Rate ofgains are taxed at a Flat Rate of 15%, irrespective of the tax slab15%, irrespective of the tax slab on other sources of income,on other sources of income, provided securities Transactionprovided securities Transaction Tax is paid on such sale.Tax is paid on such sale.
  21. 21. Long Term Capital GainLong Term Capital Gain  If Immovable Property is sold after THREEIf Immovable Property is sold after THREE years of purchase, Oryears of purchase, Or  Financial securities such as shares, deepFinancial securities such as shares, deep discount bonds, units of open - ended ordiscount bonds, units of open - ended or close – ended schemes of mutual fundsclose – ended schemes of mutual funds are sold/redeemed/transferred afterare sold/redeemed/transferred after holding the same for more than Twelveholding the same for more than Twelve Months, then the gain is considered to beMonths, then the gain is considered to be long term capital gain.long term capital gain.
  22. 22. Tax Treatment on Long TermTax Treatment on Long Term Capital GainCapital Gain  With effect from October 1, 2004,With effect from October 1, 2004, long term capital gain on transferlong term capital gain on transfer of listed shares/units of equityof listed shares/units of equity oriented mutual funds schemesoriented mutual funds schemes has been exempted from tax,has been exempted from tax, provided securities transaction taxprovided securities transaction tax has been paid on such sale.has been paid on such sale.
  23. 23. Long Term Capital GainLong Term Capital Gain  Non listed shares/units of equityNon listed shares/units of equity oriented mutual fund schemes,oriented mutual fund schemes, tax is payable in respect of longtax is payable in respect of long term capital gains at a flat rateterm capital gains at a flat rate 20% and the amount of gain has20% and the amount of gain has to be adjusted for inflation. Thisto be adjusted for inflation. This inflation adjustment is known asinflation adjustment is known as indexation benefit.indexation benefit.
  24. 24. Section 54 ECSection 54 EC  Long-Term Capital Gain Tax (after availingLong-Term Capital Gain Tax (after availing indexation benefit ) can be saved by investingindexation benefit ) can be saved by investing amount within 6amount within 6thth months in any of the followingmonths in any of the following two schemes specified under section 54 ECtwo schemes specified under section 54 EC ( upto Rs. 50 Lakhs only):( upto Rs. 50 Lakhs only): 1 Bonds issued by Rural Electrification1 Bonds issued by Rural Electrification Corporation ( REC )Corporation ( REC ) 2 Bonds issued by NHAI (National Highways2 Bonds issued by NHAI (National Highways Authority of India)Authority of India)
  25. 25. There are various Tax SavingThere are various Tax Saving Schemes:Schemes:  Life Insurance Premium.Life Insurance Premium.  Contributions to Employees ProvidentContributions to Employees Provident Fund/ GPFFund/ GPF  Unit-Linked Insurance PlanUnit-Linked Insurance Plan  Contribution to Public Provident FundContribution to Public Provident Fund Scheme (Max. Rs.70,000).Scheme (Max. Rs.70,000).  National Savings Certificates VIIINational Savings Certificates VIII  Tuition Fees Upto Two Children.Tuition Fees Upto Two Children.  Repayment of Housing Loan ( Principal)Repayment of Housing Loan ( Principal)
  26. 26.  Pension scheme of LIC of India or anyPension scheme of LIC of India or any other insurance company.other insurance company.  Subscription to eligible issue of units ofSubscription to eligible issue of units of Mutual Fund (ELSS).Mutual Fund (ELSS).  Interest accrued in respect of NSC VIII issue.Interest accrued in respect of NSC VIII issue.  Fixed Deposit with Banks having a lock – inFixed Deposit with Banks having a lock – in period of 5 Yearsperiod of 5 Years  Premium on Mediclaim Policy.Premium on Mediclaim Policy.
  27. 27. Life insurance Premium:Life insurance Premium:  Life insurance is a Very Good Investment.Life insurance is a Very Good Investment. It gives Risk Cover, Tax Saving and GoodIt gives Risk Cover, Tax Saving and Good returns.returns.  It is a contract that pledges payment of anIt is a contract that pledges payment of an amount to the person assured (or hisamount to the person assured (or his nominee) on the death of insured person.nominee) on the death of insured person.
  28. 28.  Savings through life insurance guaranteeSavings through life insurance guarantee full protection against risk of death of thefull protection against risk of death of the saver.saver.  Also, in case of demise, life insuranceAlso, in case of demise, life insurance assures payment of the entire amountassures payment of the entire amount assured (with bonuses whereverassured (with bonuses wherever applicable)applicable)  whereas in other savings schemes,whereas in other savings schemes, only the amount saved (withonly the amount saved (with interest) is payable.interest) is payable.
  29. 29.  Long-term savingsLong-term savings  ““EASY Instalment” facility.EASY Instalment” facility.  Premium payment for insurance is eitherPremium payment for insurance is either monthly, quarterly, half yearly or yearly.monthly, quarterly, half yearly or yearly.
  30. 30.  LOAN Facility Available.LOAN Facility Available.  Also generally accepted as security, evenAlso generally accepted as security, even for a commercial loan.for a commercial loan.
  31. 31.  A policy that has a suitable insurance planA policy that has a suitable insurance plan or a combination of different plans can beor a combination of different plans can be effectively used to meet certain monetaryeffectively used to meet certain monetary needs that may arise from time-to-time.needs that may arise from time-to-time.  Children's education, start-in-life orChildren's education, start-in-life or marriage provision or even periodicalmarriage provision or even periodical needs for cash over a stretch of time canneeds for cash over a stretch of time can be less stressful with the help of thesebe less stressful with the help of these policies.policies.
  32. 32.  Alternatively, policy money can be madeAlternatively, policy money can be made available at the time of one's retirementavailable at the time of one's retirement from service and used for any specificfrom service and used for any specific purpose, such as, purchase of a house orpurpose, such as, purchase of a house or for other investments.for other investments.  Loans are granted to policyholders forLoans are granted to policyholders for house building or for purchase of flatshouse building or for purchase of flats (subject to certain conditions).(subject to certain conditions).
  33. 33. National Savings CertificatesNational Savings Certificates (NSC) :(NSC) :  National Saving Schemes (NSC) is used to beNational Saving Schemes (NSC) is used to be one of the popular Income Tax Savingone of the popular Income Tax Saving schemes. But nowadays it is not so lucrative.schemes. But nowadays it is not so lucrative.  This scheme is available throughout the year.This scheme is available throughout the year.  It can be operated singly, jointly, or by aIt can be operated singly, jointly, or by a minor with his/her parent or guardian.minor with his/her parent or guardian.  Return on this scheme at interest rate of 8%.Return on this scheme at interest rate of 8%.
  34. 34.  The minimum investment limitation of theThe minimum investment limitation of the scheme is Rs.100/- and with no upperscheme is Rs.100/- and with no upper limit.limit.  This scheme has a maturity period of 6This scheme has a maturity period of 6 years.years.  There is a provision of loan on the basis ofThere is a provision of loan on the basis of this scheme.this scheme.
  35. 35. Working on NSC InterestWorking on NSC Interest  Amt Invested Rs. 100.00Amt Invested Rs. 100.00  Interest Earned @ 8% P.A. Rs. 8.00Interest Earned @ 8% P.A. Rs. 8.00  Tax @ 30% on Rs.8/-Tax @ 30% on Rs.8/- Rs. 2.40Rs. 2.40  Net Interest ReceivedNet Interest Received Rs.Rs. 5.605.60
  36. 36. Public Provident Fund (PPF) :Public Provident Fund (PPF) :  Under this scheme, there is a return at theUnder this scheme, there is a return at the interest rate of 8% p.a.interest rate of 8% p.a.  The minimum investment limit is Rs. 500/-The minimum investment limit is Rs. 500/- and maximum limitation is Rs. 70,000/-.and maximum limitation is Rs. 70,000/-.  It can be opened any time throughout theIt can be opened any time throughout the year. It can be operated either singly oryear. It can be operated either singly or jointly. In case of minor, with parent /jointly. In case of minor, with parent / guardian.
  37. 37.  This scheme has a maturity period of 15This scheme has a maturity period of 15 years.years.  Loan Facility is available.Loan Facility is available.
  38. 38.  Loan amount can be returned in maximumLoan amount can be returned in maximum of 36 installments.of 36 installments.  A person can withdraw an amount (notA person can withdraw an amount (not more than 50% of the balance).more than 50% of the balance).  Tax Benefit Under Section 80C of IncomeTax Benefit Under Section 80C of Income Tax Act, 1961 is available.Tax Act, 1961 is available.
  39. 39. Mutual Fund (ELSS) / ULIP PLANSMutual Fund (ELSS) / ULIP PLANS  An ELSS (Equity Linked Savings Scheme) is aAn ELSS (Equity Linked Savings Scheme) is a mutual fund scheme that invests in equity &mutual fund scheme that invests in equity & equity-related securities.equity-related securities.  ULIP Plans (ULIP Plans (Unit Linked Insurance Plan) is aUnit Linked Insurance Plan) is a Plan that offers Tripple BenefitPlan that offers Tripple Benefit  Tax BenefitTax Benefit  Insurance CoverInsurance Cover  Benefit from the long term growth potential ofBenefit from the long term growth potential of equities.equities.
  40. 40.  ULIP & ELSS are also eligible investmentsULIP & ELSS are also eligible investments under section 80Cunder section 80C of Income Tax Act 1961.of Income Tax Act 1961.  ELSS have a lock-in period of three years.ELSS have a lock-in period of three years. This allows the investors to benefit from theThis allows the investors to benefit from the long term growth potential of equities.long term growth potential of equities.
  41. 41. ELSS / ULIP – Key DifferentiationELSS / ULIP – Key Differentiation ELSS is the only investment product that offers …. Twin Advantages • Equity Returns • Tax Benefits
  42. 42. ELSS / ULIP – A ComparisonELSS / ULIP – A Comparison Instrument Expected Returns Lock-In Period National Savings Certificate - NSC 8.00% 6 years Public Provident Fund - PPF 8.00% Up to 15 years Mutual Fund ELSS / ULIP Around 15%-20% 3 years Investment 1 Lac End Value of Investment in Rs. Lac after - Years Avenue Returns 3 6 8 10 15 20 NSC 8.16% 1.27 1.60 1.87 2.19 3.24 4.80 PPF 8.00% 1.28 1.63 1.92 2.26 3.40 5.11 ELSS / ULIP 15.00% 1.52 2.31 3.06 4.05 8.14 16.37 Mutual Fund ELSS/ ULIP Plans returns are the assumed returns dependent on the markets and are not guaranteed or assured
  43. 43. Deduction u/s 80DDeduction u/s 80D Mediclaim PolicyMediclaim Policy  Medical Insurance Premium paid forMedical Insurance Premium paid for  (Self, Spouse and Children Rs. 15,000/-)(Self, Spouse and Children Rs. 15,000/-)  additional for parent Rs. 15,000/- andadditional for parent Rs. 15,000/- and  in case of senior citizen Rs. 20,000/-in case of senior citizen Rs. 20,000/-
  44. 44. I hope this information was helpful. If you need any further help you can get in touch with me via my email id harishsoneji@hotmail.com You can also get in touch with me on www.squamble.com

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