Professional Documents
Culture Documents
Tax Planning
Tax Planning
9Some Facts..!
Taxes are your largest single annual
expense;
The average Indian works more than
2 or 3 months just to pay their taxes;
In short the less you pay to
Government (for a given level of
income), the more you have for your
personal and financial goals.
Sources of Income
Income From Salary
Income From House Property
Income From Business and Profession
Income from Capital Gain
Income From Other Sources
Income Range
Male &
Female
(Below 60
years)
Senior Citizens
(Male
& Female
above 60
years of age),
but
below 80 years
Very Senior
Citizens (Male
& Female
above 80 years
of age)
Up to Rs. 2,50,000
Nil
Nil
Nil
10%
Nil
Nil
10%
10%
Nil
20%
20%
20%
30%
30%
30%
STCG
20% Tax
You commute from Borivali to Churchgate for office purpose. One way ticket
rate is Rs. 15.
Do Nothing
Planning
Avoidance
Evasio
n
Without
ticket
Nil
Rs. 185
Without Planning
Mr. X having
Basic Salary
`
(P.A.)
13,00,000/-
1,50,000/-
Tax (TDS)
1,75,100/-
11,24,900/-
Basic Salary
6,00,000/-
6,00,000/-
9,600/-
9,600/-
3,00,000/-
Nil
LTA
50,000/-
Nil
80,000/-
Nil
Medical Expenses
15,000/-
Nil
15,600/-
Nil
9,600/-
Nil
2,20,200/-
220,200/-
13,00,000/-
8,29,800/-
Transport Allowance
HRA
`
Taxable
1,50,000/62,789/-
12,37,211
Mr. X
`
Mr. Y
`
CTC
13,00,000/-
13,00,000/-
1,75,100/-
62,789/-
11,24,900/-
12,37,211/-
TDS (Tax)
Net in Hand Salary
1,12,311/-
Tax Planning
Tax Planning, NOT Tax Evasion.
Taking maximum benefits of
Deductions & Exclusions.
Optimizing
the
Investment
Section 10 - Benefit
Q.1 What is Section 10 benefit ?
Ans. Tax Friendly Allocation of CTC.
Q.2 Is it Important for Tax Planning ?
Ans. Yes, for maximizing your tax savings.
Q3. Is it affects the Gross CTC?
Ans. No.
Exempt (Amount)
P.A.
Transportation
Allowances
Rs. 9,600/-
HRA
As per calculation
LTA
Vacations
As per calculation
Reimbursement
of Expenses
As per Actual
expenses incurred
Exempt (Amount)
P.A.
Uniform
Allowance
As per Actual
expenses incurred
Rs. 15,000/-
Daily Meal
Allowance
Refreshment
Children
Allowance
Rs. 2,400/-
Children Hostel
Allowance
Rs. 7,200/-
Section 10 - Benefit
Leave Travel Allowance (LTA)
9 Amount of exemption is9 Where journey is performed by
Air- Economy class of Air
9 Where journey is performed by
Rail First class rail fare
9 Family means- Himself, spouse, two
children and dependent brother,
sister, parents;
9 Exemption available for 2 Journey in a
block of 4 calendar years;
9 Current block is 2014-2017 (January
1,2014 to Dec 31,2017).
Rs 400,000/-.
Self Occupied
Property
(SOP)
Max Benefit
Rs 2,00,000/-
Unlimited
Amount
Hint for Tax Planning 9 If both of house used for resident purpose than its upto you
to declare one house property as SOP and one as DLOP.
9 If both of property is actually let out
and staying on rent than we can claim9 Entire interest on loan of both of property
9 HRA exemption
Loan
UNLIMITED amount.
9 Deduction available for seven year.
9 For full time studies or any vocational
studies after passing SSE.
9 Taken a loan from any FIIs.
Total Benefit
Amount
6,19,800/-(+) Actual Expenses (+)
Unlimited Amount
Any
HUF
9HUF is created by not only to Hindus but it
can be formed by Jains, Sikh and bhudists.
9Source o income of HUF9Business
9Professional
9Capital Gain
9House Property
9Other Sources
9HUF can take advantage separately
9Basic Exemption -
Rs.250,000/-
HUF
9Documentation
9HUF is not a created entity. Only its existence has to be proved.
9How to prove the existence9HUF Affidavit
9PAN
9Bank Account
9Periodically filing your returns.
9Minors income generally are clubbed into the hands of the parent
whose income is greater. Care should be taken to make their income to
accrue in the name of a HUF/Private trust
Amount
6,19,800/-(+) Actual Expenses (+)
Unlimited Amount
2,50,000/-
1,50,000/-
Total Benefit
20,000/-
GIFT
Taxability of gift
9 Gift will be taxable in the hand of recipient
9 Limit- receipts of movable property, fair market
value of which exceeds 50,000 (Fifty thousand
rupees), without consideration or without
adequate consideration is taxable.
9 Who- as income in the hands of Individuals / HUFs.
9 Year: In the year of receipt
Total Benefit
Amount
10,39,800/-(+) Actual Expenses (+)
Unlimited Amount(+) Capital Gain
Up to 50,000/Unlimited Amount
TAX by Investing in
Spouses Name
How to Save
9 To invest a house in wifes name , loan her the money and in exchange,
she can give you her jewellery.
9 If a couple is engaged, and the girl does not have any taxable income
or pays tax at a lower rate, her fianc can transfer money to her. The
income from that wont be included in his income because the
transaction took place before they got married.
Amount
2,50,000/-
1,65,000/-
600,000/-
3,40,000/-
Total Benefit
Most Important
CA Manish P.
manish@financialhospital.net