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File your Income Tax Returns in India, before 31st July 2018

Hello guys,

 

Have you filed tax returns for FY 2017-18? With Tax Assist it takes only 3 days to complete it. All you have to do is, send us the Form 16 and the remaining we will do the needful.

To begin with Filing 

NOTE: For Filing FY 2017-18 this year, government have started a penalty system of Rs 5000 late fee for people filing after 31st of July 2018. To avoid getting penalised, hurry now and start your filing today. If you file your income tax returns on time you may get a benefit of easy loan approvals, faster visa to almost all countries, carrying forward the losses in the next financial year, no penalty charges and no notices from the IT Department.

There are many who are still unaware of the penalty system and we are looking forward to help them out to file their returns on time before the 31st of July, 2018.

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To Begin with Tax Return

Also, with us you can earn 10-20% for referring your friends who have not yet filed their IT returns.

Once you are done with filing, you can still refer you friends and family to us and get your IT file done at free of cost and you will still earn on every successful referral. So hurry up.

If you are facing any issue with filing your tax returns, we are here to assist you @ 9830756567. 

 

Happy Filing...

 

What is TDS and Why You need to Submit Tax-Saving Proofs

Understanding TDS

In just few months, the current financial year is coming to an end; your company's accounts department should have initiated you to submit your tax-saving proofs to avoid paying surplus tax deducted at source (TDS).

The name TDS implies, aims at collecting revenue at the very source of income. It is necessarily a method of collecting tax which associates with the concepts of pay as you earn and to collect as it is being earned.

Salaries are subject to TDS

As per the Income Tax Act, the salaries are normally subject to TDS. This means that the payer i.e., the employer is obligated by law to deduct tax on the salary at the time of payment and pay the tax so deducted directly to the government. Therefore, the beginning of a financial year, the accounts department of your company starts calculating taxes on your salary established on your predicted taxable income.

How TDS is calculated

Your predicted taxable income will be equal to your gross total income minus the tax-saving deductions expected to be made during the financial year. TDS on full salary is deducted if no expected tax-saving investment is declared.

Furnishing documentary proof

During the financial year, you have made any tax-saving investments or have any expenditure which qualifies for deduction from gross total income as per the Income Tax Act; you require to provide documentary evidence of such investments/expenditures to your employer. Once the original proof is submitted, the accounts department will count the taxes based on proofs of original investments made by you, which will avoid surplus tax from being deducted from your salary.

Not too late to plan tax-saving

You may have just two months till the end of the financial year, but that does not mean that there is no way out for you from paying higher taxes. Even if you have not made any kind of investments yet, it is still not too late. And if you do not have enough money left to make tax-saving investments then you can use the Section 80C and other tax-breaks applicable as per the I-T Act to reduce your tax outgo. Always remember to submit all the right documents on time to your employer.

Tax Assist is a professional income tax consultancy in India for both corporate houses and individual tax payers; the latter comprising Salaried Individuals, Seafarers, Professionals and Non Resident Indians.

With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.

Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees

Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees under Section 10, Section 24, Section 89(1), Chapter VIA, and Section 87A

Income Tax Rate 2016-17

TAXABLE INCOME RANGE

RATE OF INCOME TAX

   

Up to RS.2,50,000

NIL

   

Rs.2,50,001 to Rs.5,00,000

10% of the amount by which the income exceeds

 

Rs.2,50,000

   

Rs.5,00,001 to Rs.10,00,000

Rs.25,000 plus 20% of the amount by which the income

 

exceeds Rs.5,00,000

   

Above Rs.10,00,001

Rs.1,25,000 plus 30% of the amount by which the

 

income exceeds Rs.10,00,000

   

Education Cess

3% on Total Income Tax Payble


Section 10 (13A) – Exemption in respect of HRA:

Under Sec. 10(13A), an employee who is in receipt of House Rent Allowance (HRA) can claim exemption, if he does not live in his own house, and pays rent in excess of 10% of his salary for his residential accommodation.

Exemption u/s 10(13A) is the least of the following

1. Actual amount of HRA received

2. 50% (for Chennai, Mumbai, Kolkata and Delhi) / 40% (for other places) of the Salary for the relevant period

3. Rent paid Less 10% of Salary for the relevant period.

Section 87A – Rebate of Income Tax for Taxable income up to Rs. 5 Lakh

Finance Act 2016 provides for rebate of Income up to Rs. 5000/- in respect of Persons who have Taxable not exceeding Rs. 5 lakh.

Section 10(14) – Transport Allowance and Children Education Allowance (CEA)

Under Section 10(14), the Budget FY 2016-17 lets you claim Rs. 19,200 tax exemption as transport allowance and Rs. 2,400 tax exemption as Children Education Allowance (CEA) in a financial year.

Section 24(b) – Home Loan

If you have taken a Home Loan, then you can claim a tax deduction on the interest component of the loan under Section 24(b). For self-occupied properties, you can benefit from deductions of up to Rs. 2,00,000.

Section 89(1) – Income Tax relief in respect of Arrears of Salary pertaining to previous years

If arrears of salary has been received in Financial year 2016-17 related to previous years then Relief of Income Tax can be claimed u/s 89(1) by accounting income from arrears in respective years on notional basis.

Deductions allowed under Chapter VI A of Income Tax Act

Deduction Limit – Sec 80CCE. As per Section 80CCE, deduction can be claimed upto Rs. 1,50,000 for the payments / contributions made under Sections 80C, 80CCC and 80CCD

NRI-Efiling-CTA

Section 80C – Subject to overall limit of Rs. 1,50,000 under Section 80CCE

For investments in specified schemes, saving instruments etc.

1. Life insurance premium for policy:
a) in case of individual, on life of assessee, assessee’s spouse and any child of assessee
b) in case of HUF, on life of any member of the HUF.
2. Sum paid under a contract for a deferred annuity:
a) in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity) b) in case of HUF, on life of any member of the HU
3. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]
4. Contributions by an individual made under Employees’ Provident Fund Scheme
5. Contribution to Public Provident Fund Account in the name of:
a) in case of individual, such individual or his spouse or any child of such individual
b) in case of HUF, in the name of any member there of
6. Contribution by an employee to a recognized provident fund
7. Contribution by an employee to an approved superannuation fund
8. Subscription to any notified security or notified deposit scheme of the Central Government. For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction. Amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.
9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
10. Contribution for participation in unit-linked Insurance Plan of UTI:
a) in case of an individual, in the name of the individual, his spouse or any child of such individual
b) in case of a HUF, in the name of any member thereof
11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:
a) in the case of an individual, in the name of the individual, his spouse or any child of such individual
b) in the case of a HUF, in the name of any member thereof
12. Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
13. Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children
14. Certain payments for purchase/construction of residential house property
15. Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both
16. Sum paid towards notified annuity plan of LIC or other insurer
17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
18. Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
20. Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above. 21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.
21. Subscription to notified bonds issued by the NABARD.
22. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
23. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)


Section 80CCC – Subject to overall limit of Rs. 1,50,000 under Section 80CCE

Contribution to certain specified Pension Funds such as LIC or other authorised Insurance Companies

Section 80CCD(1) – – Subject to overall limit of Rs. 1,50,000 under Section 80CCE

Deduction in respect of contributions to National Pension Scheme / System (NPS) notified by Central Government

Limit : 10% of salary in case of employees, 10% of gross total income in case of others

Section 80CCD(1B)

Deduction in respect of the deposit under a pension scheme notified by Central Government (NPS) up to Rs. 50,000/-

Section 80CCD(2)

Deduction in respect of employer contributions to NPS – National Pension Scheme / System – This deduction is available over and above the Rs. 1.5 lakh limit

Section 80 CCG

Amount invested in listed shares covered by Rajiv Gandhi Equity Equity Saving Scheme. Deduction of 50% of total investment subject to maximum of Rs. 25,000 is allowed for 3 consecutive assessment years,

beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired

Section 80D

Amount invested in Health Insurance

In case of Individual, amount paid: a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen) b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 30,000 if parent is a senior citizen or very super senior citizen) In case of HUF, up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen). The aggregate amount of deduction cannot exceed Rs. 60,000/- in case of an individual.

Section 80DD

Expenditure incurred for the medical treatment of a dependent (spouse, children, parents, brothers and sisters of the individual) up to Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Section 80DDB

Expenditure incurred for medical treatment of specified diseases for self, or wholly dependent spouse, children, parents, brothers and sisters up to Rs. 40,000 (Rs. 60,000 in case of senior citizen and Rs. 80,000 in case of very senior citizen)

Section 80E

Interest paid on Educational Loan with no limit

Section 80EE

Interest on loan for acquiring residential house property, sanctioned during the financial year 2016-17. The Housing Loan availed should be up to Rs. 35 lakh and should have been availed in the year 2016-17

Section 80G

Deduction in respect of donations to certain funds, charitable institutions, etc.

Section 80GG

Rent paid for residential accommodation from the income of Tax Payer / assessee who is not in receipt of HRA

Least of the following shall be exempt from tax: a) Rent paid in excess of 10% of total income*; b) 25% of the Total Income; or c) Rs. 5,000 per month.

Section 80 TTA

Interest on Savings Bank accounts subject to maximum of Rs. 10,000

Section 80U

Exemption of income tax for an income up Rs. 75,000 for persons with disability (Rs. 1,25,000 in case of persons with severe disability)


Source: Incometaxindia.gov.in & BPS

Long-terms Capital Gains from Property outside India will be liable to Tax - NRIs and Taxability of Overseas Income

NRIs and taxability of overseas income

The grass is not actually greener on the other side whereas many Indians abroad are figuring it out the hard way. Faced with a gloomy economic and career plan, some are packing their bags and heading back to test the job market.

Though finding a job will be easier in India, specifically for those with good degrees and employment background, figuring out the tax liability - specifically in the basic years which can be an intimidate task. If you are returning to India for employment then there are some tax issues which you have to acknowledge before taking the final decision.

This is essential because the taxability of overseas income like rental income from property outside India, for returning Indians largely depends on their residential status in India. Planning the timing of one's return is very important.

Residential status

Residency rules play an essential role in determining the income that is taxable in India. Indian residency is obtained in either of the following situations: 1) The individual is in India in that financial year for 182 or more days; or 2) The individual is in India in that financial year for 60 or more days and 365 days or more in the 4 financial years previous to that financial year.

If either of the above conditions is not satisfied, the individual will be considered as a non-resident. Even if one satisfies either of the above two conditions, and, therefore, certified as a resident, Indian tax laws give a relief for a category of individuals who are ‘not ordinarily resident’ (NOR).

One can become a NOR either if his/her stay in India in the 7 financial years rapidly preceding that financial year is less than 729 days or if he/she was a non-resident for 9 of the 10 financial years rapidly preceding that financial year. Generally, a resident other than a NOR is referred to as ordinary resident.

Selling your property abroad

As a returning Indian, if you are trying to sell your overseas property while you are still a 'not ordinarily resident' (NOR) or 'non-resident' (NR). As a NOR or NR, if you sell any overseas properties and receive the sale profits outside India then you don’t require to pay any taxes in India. If you require to purchase a house in India out of the sale profits then you can first receive the sale profits in a foreign bank account and thereafter remit part or whole of the profits back to India without creating any Indian tax liability.

Always keep in the mind that the sale of property at a profit will apparently create tax liability in the country where the property is situated. In other countries, it creates sales tax and other liabilities as well.

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Long-terms capital gains from property outside India will be liable to tax

You have become an Indian resident by selling the house liable for taxes both in the country where the property is situated as well as in India. Generally, the country where the property is situated will have the primary taxing rights i.e., the right to accumulate the tax while India will have the liability to give a credit for taxes paid in the foreign country and accumulate only the balance tax, if there is any. The actual tax treatment will be guided by the domestic tax laws of India and the foreign country as well as the tax treaty between the two countries, if there is one.

For an Indian tax resident, long-terms capital gains from a property outside India will ordinarily be liable to tax that can be reduced to some extent by claiming the credit for taxes, if any, paid overseas or by making investments in specific bonds or acquiring a residential property in India and holding such bonds or property for a specific period of time.

Rental income earned abroad

While in India, the rental income is taxable whereas the returning Indians must note that the assumed rental income from more than one self-occupied property is also considered as taxable. It is because an exemption is allowed for only one self-occupied house property irrespective of where it is situated.

An assumed valuation will need to be made of the rent that the self-occupied property will have retrieved and offered to tax in India. The saving grace is that the individual has the choice of selecting one among his several self-occupied properties for claiming the exemption, and he can, therefore, select the property that has the higher rental value as self-occupied.

Further, a deduction of 30% of the net rent (after deduction of tax levies by a local authority) is allowed. Also, the interest due on loans taken to finance the purchase or construction of the house is also allowed as deduction from the rental income.

Dividends of interest from overseas investments will be taxable in India as ordinary income. Dividends from shares held in an Indian company are not taxable in the hands of the recipient.

Generally, losses acquired from the sale of one investment can be set off against gains from sale of another investment liable to the setoff and carry-forward rules administered in the Income Tax Act.

One-time financial settlement

Generally, if the financial settlement relates to the employment exercised overseas, it must not be taxed in India.

But at the time of settlement, the individual is an Indian resident where the circumstance of the settlement is being taxed in both countries. The double tax treaty will help mitigate double taxation depending on the efficient rates of taxes in the two countries.

Assets will either qualify as long-term capital assets, if held for 36 months or more or as short-term capital assets, if held for less than 36 months. As an exception, the shares which are held in a company enable as long-term capital asset if held for 12 months. With long-term capital assets, the cost of buying or developing them are allowed to be indexed and the indexed cost is allowed to be diminished from the sale value. In the case of short-term capital assets, the costs cannot be indexed.

The indexation advantage is meant to take into account the inflationary aims between the year of purchase and the year of sale. The costs acquired on the sale like brokerage charges which are allowed as deduction while calculating gains from the sale of both short-term and long-term assets.

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India tax laws allow tax exemptions if the sale profits or the gains from the sale are re-invested in specific assets. For instance, an exemption can be claimed in respect of gains from the sale of a house property where the gain is re-invested in the purchase or construction of another house property, liable to certain conditions and timelines.

Income received in foreign currency must be changed into Indian rupees at the rates administered by the SBI as on the specific date. The specific date varies depending on the type of income earned.

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