INTRODUCTION TO THE TOPIC

Introduction

What is Tax?
Taxes are levied by governments on their citizens to generate income for undertaking projects to
boost the economy of the country and to raise the standard of living of its citizens. The authority
of the government to levy tax in India is derived from the Constitution of India, which allocates
the power to levy taxes to the Central and State governments. All taxes levied within India need
to be backed by an accompanying law passed by the Parliament or the State Legislature.

Types of Taxes:
Taxes are of two distinct types, direct and indirect taxes. The difference comes in the way these
taxes are implemented. Some are paid directly by you, such as the dreaded income tax, wealth tax,
corporate tax etc. while others are indirect taxes, such as the value added tax, service tax, sales tax,
etc.
1. Direct Taxes
2. Indirect Taxes
But, besides these two conventional taxes, there are also other taxes that have been brought into
effect by the Central Government to serve a particular agenda. ‘Other taxes’ are levied on both
direct and indirect taxes such as the recently introduced Swachh Bharat Cess tax, Krishi Kalyan
Cess tax, and infrastructure Cess tax among others.

INCOME TAX RETURN (ITR): Meaning

Section 139(1) requires that every person –

i. Being a company or a firm; or

ii. Being a local authority, if its total income during the previous year exceeds the maximum
amount which is not chargeable to income tax; or
iii. Being a person other than a company or a firm or a local authority, if – (a) his total income
or (b) the total income of any other person in respect of which he is assessable under the
Income tax Act 1961, during the previous year (without giving effect to provisions of
Chapter VI-A i.e. sections 80C to 80U), exceeds the maximum amount which is not
chargeable to income tax

Shall, furnish a return of his income or the income of such other person.

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 IMPORTANT CONCEPTS
Person [section 2(31)]: Person includes:
i. An Individual – means a natural person i.e. a human being. It includes male, female, minor
child.
ii. A Hindu Undivided Family (HUF) – means a family which consists of all persons lineally
descended from a common ancestor including their wives and daughters.
iii. A Company – means a juristic person having an independent and separate legal entity from
its shareholders.
iv. A Firm – it shall have the meaning assigned in the Indian Partnership Act, 1932 and shall
include a limited liability partnership as defined in the Limited Liability Partnership Act,
2008.
v. An Association of Persons (AOP) or a Body of Individuals (BOI), whether incorporated or
not.
vi. A Local authority – means Panchayat or Municipality etc.
vii. Every artificial juridical person not falling within any of the preceding sub clauses -
Artificial juridical person are entities which are not natural persons but are separate entities
in the eyes of law like God, idols, deities, universities etc.

Assessment Year [section 2(9)]: Assessment year means the period of 12 months
commencing on the first day of April every year. The tax is levied, in each assessment year,
with respect to or on the total income earned by the assessee in the previous year.

Previous Year [section 3]: Previous year means the financial year immediately
preceding the assessment year. Financial year means a year which starts on 1st April and
ends on 31st March.
 Income tax is payable on the income earned during the previous year and it is assessed in
the immediately succeeding financial year which is called the assessment year. For
example, the income earned during the previous year 1.4.2015 to 31.3.2016 will be
assessed or charged to tax in the assessment year 2016 – 2017.

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  Cases where income of previous year is assessed in the same year: there are certain
circumstances where income is taxed in the same year in which it is earned i.e. the
assessment year and previous year will be same.
i. Shipping business of non – resident [section 172]
ii. Assessment of persons leaving India [section 174]
iii. Assessment of association of persons or body of individuals or artificial juridical person
formed for a particular event or purpose [section174A]
iv. Assessment of persons likely to transfer property to avoid tax [section175]
v. Discontinued business [section176]

Assessee [section 2(7)]: Assessee means a person by whom any tax or any other sum
of money is payable under this Act and includes the following:
i. Every person in respect of whom any proceeding under the Income tax Act 1961 has been
taken:
a. For the assessment of his income or the income of any other person in respect of which he
is assessable; or
b. To determine the loss sustained by him or by such other person; or
c. To determine the amount of refund due to him or to such other person.
ii. A person who is deemed to be an assessee under any provisions of this Act i.e. a person
who is treated as an assessee. This would include the legal representative of a deceased
person or the legal guardian of minor if minor is taxable separately.
iii. Every person who is deemed to be an assessee in default under any provisions of this Act.
A person is said to be an assessee in default if he fails to comply with the duties imposed
upon him under the Income tax Act.

Meaning of Tax Deducted Source (TDS): For quick and efficient collection of
taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of
generation of income. This system is called as “Tax Deducted at Source”, commonly
known as TDS. Under this system tax is deducted at the origin of the income. Tax is
deducted by the payer (deductor) and is remitted to the Government by the payer on behalf
of the payee (deductee). The provisions of deduction of tax at source are applicable to

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several payments such as salary, interest, commission, brokerage, professional fees,
royalty, contract payments, etc. In respect of payments to which the TDS provisions apply,
the payer has to deduct tax at source on the payments made by him and he has to deposit
the tax deducted by him to the credit of the Government.
The deductee from whose income tax has been deducted at source would be entitled to get
credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by
the deductor. The provisions related to TDS are governed by the Income Tax Act 1961.
The recipient of income receives the net amount (i.e. gross income minus tax deducted at
source).

Form 26AS: An annual consolidated tax statement, which is provided to assessee, is

called Tax Credit Statement (Form 26AS). This statement has details of Tax Deducted at
Source (TDS), Tax Collected at Source (TCS), Advance Tax/ Self Assessment Tax
deposited in the bank by tax payers, and Refund details for an Assessment Year.

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5
 Why to file Income tax Return (ITR)????
i. It is compulsory under income tax Act for an individual whose total income of the previous
year exceeds the maximum amount exempted to file an ITR.
ii. For seeking refund, if the tax deducted at source (TDS) is more than actual tax payable.
iii. Not only for refund, you also need to file your income return if you are claiming carry
forward of loss (say, from long term capital asset or from any other source of income). In
such cases, filing returns within the due date is a must.
iv. For claiming deductions under Chapter VIA.
v. To apply for loan or visa.

Residential Status of an Assessee

Residential status is always determined for the previous year because we have to determine the
total income of the previous year only.

An individual may either be a:

i. Resident in India
ii. Non – resident in India

An individual cannot simply be called a resident in India. If he is a resident in India, we have to

further determine whether he is:

a. Resident and ordinarily resident in India

b. Resident but not ordinarily resident in India.
Resident in India: An individual is said to be resident in India if he satisfies any one
of the following two conditions:
1) He is in India for a period or periods amounting in all to 182 days or more in the relevant
previous year; or
2) He is in India for 60 days or more during the relevant previous year and has been in India
for 365 days or more during 4 previous years immediately preceding the relevant previous
year.

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 Resident and ordinarily resident in India: An individual who is resident in India,
shall be resident and ordinary in India if he satisfies both the following conditions:
1) He has been resident in India for at least 2 out of 10 previous years immediately preceding
the relevant previous year. And
2) He has been in India for 730 days or more during seven previous years immediately
preceding the relevant previous year.
Resident but not ordinarily resident in India: An individual who is resident in
India is said to be not ordinary resident in India if does not satisfy any or both of the
conditions mentioned in paragraph 1.4.2 above.
Non – resident in India: An individual is said to be a non – resident, if he is not a
resident in India i.e. none of the conditions mentioned in paragraph 1.4.1 is satisfied.

Gross Total Income: As per section 14, all income shall, for the purpose of income
tax and computation of total income, be classified under the following five heads of
income:
i. Income from Salaries
ii. Income from house property
iii. Profit and Gains of Business and Profession
iv. Capital Gains
v. Income from Other Sources

Total Income: The total income of an assessee is computed by deducting from the
gross total income, all the deductions permissible under Chapter VIA of the Income-tax
Act i.e. deductions under section 80C to 80U.
 The Total income, as computed, shall be rounded off to the nearest multiple of 10 rupees.
 Tax is charged on the total income, computed in accordance with the provisions of Act.
 Total income of the person is determined on the basis of his residential status in India.

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 Computing tax Liability on Total Income: On the total income, tax is
calculated according to the rates prescribed under the relevant Finance act. The total
amount of tax shall be increased by education cess calculated @2% and SHEC @1% of
tax.

Exemptions: Income that does not form part of total income is called income exempt
from tax. Certain incomes are either totally exempt from tax or exempt up to a certain
amount. Therefore, these incomes, to the extent these are exempt, are not included in the
total income of an assessee for computation of his total income.

Some important allowances that are exempt from tax include:

1. House Rent Allowance (HRA): HRA received by an employee is partly taxable and
partly exempt from tax and only taxable portion of the allowance is included in the gross
salary. HRA is exempt under section 10(13A) to the extent of the minimum of the
following three amounts:
i. Actual HRA received by employee in respect of relevant period.
ii. Excess of rent paid for the accommodation occupied by him over 10% of the salary.
iii. 50% of the salary where residential house is situated at Mumbai, Calcutta, Delhi or Chennai
and 40% of the salary where house is situated at any other place.
2. Children Education Allowance: Exempt up to actual amount received per child or
Rs. 100 p.m. per child up to a maximum of 2 children, whichever is less.
3. Transport allowance: It is given to employee to commute from home to office and
back to home. It is exempt from tax to the extent of Rs.1600 p.m. (Rs. 3200 in case of
physically handicapped employee).

Section 24: Income tax benefit on interest home loan - Tax Benefit
on Home Loan for payment of Interest is allowed as a deduction under Section 24 of the
Income Tax Act.

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As per Section 24, the Income from House Property shall be reduced by the amount of Interest
paid on Home Loan where the loan has been taken for the purpose of Purchase/ Construction/
Repair/ Renewal/ Reconstruction of a Residential House Property.

i. The maximum tax deduction allowed under Section 24 of a self-occupied property is

subject to a maximum limit of Rs. 2 Lakhs
ii. In case the property for which the Home Loan has been taken is not self-occupied (let
out), no maximum limit has been prescribed in this case and the taxpayer can take tax
deduction of the whole interest amount.

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 Computation of total income and tax liability for the year

Particulars Amount

Income from salary XXXXX

Income from house property XXXXX

Profits and gains of business or profession XXXXX

Capital gains XXXXX

Income from other sources XXXXX

Gross Total Income XXXXX

Less : Deductions under Chapter VI-A (i.e., under section 80C to 80U) (XXXXX)

Total Income (i.e., taxable income) XXXXX

Tax on total income to be computed at the applicable rates XXXXX

Less : Rebate under section 87A (XXXXX)

Tax Liability After Rebate XXXXX

Add: Surcharge (applicable if total income exceeds Rs.1 crore) XXXXX

Tax Liability After Surcharge XXXXX

Add: Education cess @ 2% on tax liability after surcharge XXXXX

Add: Secondary and higher education cess @ 1% on tax liability after surcharge XXXXX

Tax liability for the year before pre-paid taxes XXXXX

Less: Prepaid taxes (XXXXX)

 Tax Deducted at Source or Tax Collected at Source
 Advance tax
 Self Assessment tax

Tax payable/Refundable

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 Tax Rates Applicable
In case of an Individual (resident or non-resident) or HUF or Association of Person or
Body of Individual or any other artificial juridical person

Assessment Year 2017-2018 and Assessment Year 2018-2019

Taxable Income Tax Rate

Up to Rs. 2,50,000 Nil

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

Rs. 5,00,000 to Rs. 10,00,000 20%

Above Rs. 10,00,000 30%

Less: Rebate under section 87A

Add: Surcharge and education cess

In case of a resident senior citizen (who is 60 years or more at any time during the previous
year but less than 80 years on the last day of the previous year)

Assessment Year 2017-2018 and Assessment Year 2018-2019

Taxable Income Tax Rate

Up to Rs. 3,00,000 Nil

Rs. 3,00,000 to Rs. 5,00,000 5%

Rs. 5,00,000 to Rs. 10,00,000 20%

Above Rs. 10,00,000 30%

Less: Rebate under section 87A

Add: Surcharge and education cess

In case of a resident super senior citizen (who is 80 years or more at any time during the
previous year)

Assessment Year 2017-2018 and Assessment Year 2018-2019

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 Taxable Income Tax Rate
Up to Rs. 5,00,000 Nil
Rs. 5,00,000 - Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
Add: Surcharge and education cess

Note:
For assessment year 2017-2018

 Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12%
of such tax, where total income exceeds one crore rupees. However, the surcharge shall be
subject to marginal relief (where income exceeds one crore rupees, the total amount
payable as income-tax and surcharge shall not exceed total amount payable as income-tax
on total income of one crore rupees by more than the amount of income that exceeds one
crore rupees)

 Rebate under Section 87A: The rebate is available to a resident individual if his total
income does not exceed Rs. 5, 00,000. The amount of rebate shall be 100% of income-tax
or Rs. 2,500, whichever is less

For assessment year 2018-2019

 Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of

15% of such tax, where total income exceeds one crore rupees. However, the surcharge
shall be subject to marginal relief (where income exceeds one crore rupees, the total
amount payable as income-tax and surcharge shall not exceed total amount payable as
income-tax on total income of one crore rupees by more than the amount of income
that exceeds one crore rupees).

 Rebate under Section 87A: The rebate is available to a resident individual if his total
income does not exceed Rs. 5, 00,000. The amount of rebate shall be 100% of income-
tax or Rs. 5,000, whichever is less.

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FORM 16 – One of the most important income tax forms is Form 16. It contains most
of the information you need to prepare your income tax return in India. Form 16 has two
parts Part A and Part B

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 Form 16 Part A has
1 TDS Deducted by Employer
2 TAN of Employer
3 PAN of Employer
4 Name and Address of Employer
5 Current Assessment Year
6 Your (Taxpayer's) Name and Address
7 Your PAN
It also contains: Assessment Year, Period of employment with the employer, Form 16 Part A must
be generated and downloaded through Traces portal

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 Form 16 Part B has
Part B is prepared by the employer manually and issued along with Part A. It has detailed breakup
of salary paid, Deductions allowed under the income tax act (under chapter VIA), Relief under
section 89etc. If you have held more than one job during the year, you’ll have more than one
Form 16
1 Taxable Salary
2 Breakup of Section 80C Deductions
3 Aggregate of Section 80C Deductions (Gross & Deductible Amount)
4 TDS (Tax Deducted at Source)
5 Tax Payable or Refund Due

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 Challan 280
To deposit Advance Tax, Self Assessment tax and Regular Assessment Tax an individual has to
use challan ITNS-280. It can be paid both through internet (online or e-payment) and at designated
branches of banks empanelled with the Income Tax Department (offline)

Types of e-Filing
 Use Digital Signature Certificate (DSC) to e-file. It is mandatory to file IT forms using Digital
Signature Certificate (DSC) by a chartered accountant.

 If you e-file without DSC, ITR V form is generated, which should then be printed, signed and
submitted to Income Tax Department - CPC, Bangalore by ordinary post or speed post within
120 days from the date of e-filing.

 You can file e-file IT returns through an E-return Intermediary (ERI) with or without DSC.

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 E-File Income Tax Return Online: Process
Prepare and Submit ITR Online
To Prepare and Submit ITR Online, please follow the below steps:
1. Login to e-Filing website with User ID, Password, Date of Birth /Date of Incorporation
and Captcha.
2. Go to e-File and click on "Prepare and Submit ITR Online".
Only ITRs 1 and 4S can be filled online
3. Select the Income Tax Return Form ITR 1/ITR 4S and the Assessment Year.
4. Fill in the details and click the "Submit" button.
5. Upload Digital Signature Certificate (DSC), if applicable.
 Please ensure the DSC is registered with e-Filing.
6. Click on "Submit" button.
7. On successful submission, ITR-V would be displayed (if DSC is not used). Click on the
link and download the ITR-V. ITR-V will also be sent to the registered email. If ITR is
uploaded with DSC, the Return Filing process is complete.
OR
The return is not uploaded with DSC, the ITR-V Form should be printed, signed and
submitted to CPC within 120 days from the date of e-Filing. The return will be processed
only upon receipt of signed ITR-V. Please check your emails/SMS for reminders on non-
receipt of ITR-V.
This ends the process of preparing & submitting ITR Online by Taxpayer.

Upload Income Tax Return (Another way and also used for other ITRs)
To Upload ITR, please follow the below steps:
1. Download the ITR preparation software for the relevant assessment year to your PC /
Laptop from the "Downloads" page.
2. Prepare the Return using the downloaded Software.
 Gather all the information regarding your income, tax payments, deductions etc.
 Pre-populate the personal details and tax payments/TDS by clicking on the 'Pre-fill' button.
Compare with the information you have to ensure that nothing is left out

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  Enter all data and click on 'Calculate' to compute the tax and interest liability and final
figure of Refund or Tax payable
 If Tax is payable- remember to pay immediately and enter the details in appropriate
schedule. Repeat above step so that tax payable becomes zero
 Generate and save the Income Tax Return data in XML format in the desired path/place on
your PC/Laptop.
3. Login to e-Filing website with User ID, Password, Date of Birth /Date of Incorporation
and enter the Captcha code.
4. Go to e-File and click on "Upload Return".
5. Select the appropriate ITR, Assessment Year and XML file previously saved in Step 2
(using browse button).
6. Upload Digital Signature Certificate (DSC), if applicable.
7. Click on "Submit" button.
8. On successful submission, ITR-V would be displayed (if DSC is not used). Click on the
link and download the ITR-V. ITR-V will also be sent to the registered email. If ITR is
uploaded with DSC, the Return Filing process is complete.
OR
The return is not uploaded with DSC, the ITR-V Form should be printed, signed and
submitted to CPC within 120 days from the date of e-Filing. The return will be processed
only upon receipt of signed ITR-V. Please check your emails/SMS for reminders on .non-
receipt of ITR-V
Upload Income Tax Return process is complete now.

Note:
 You can upload the returns after you have registered in e-Filing.

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Tax Planning

1. Difference Between Take Home Salary and CTC

Your job may entitle you to some benefits in the form of food coupons or a cab service apart
from your salary. The total cost to the company is the sum of all the benefits offered plus your
salary. Below is an example of components of your CTC that is on your offer letter.

CTC

Components Amount

Basic salary Rs 3,00,000

Special allowance Rs 1,00,000

HRA Rs 80,000

Medical insurance Rs 5,000

PF (12% of basic) Rs 36,000

Performance bonus Rs 75,000

Total CTC Rs 5,96,000

Whereas this is how pay slip will look for the CTC mentioned above.
Taxable Salary

Components Amount

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 Basic salary Rs 3,00,000

Special allowance Rs 1,00,000

HRA Rs 80,000

Bonus received Rs 75,000

Total salary Rs 5,55,000

Less: 12% PF Rs 36,000

Less: Tax payable* Rs 14,976

Take home salary Rs 5,04,024

Broadly CTC will include:

a. Salary received each month.
b. Retirement benefits such as PF and gratuity.
c. Non-monetary benefits such as an office cab service, medical insurance paid for by the company,
or free meals at the office, a phone provided to you and bills reimbursed by your company.
Your take-home salary will include:
a. Gross salary received each month.
b. Minus allowable exemptions such as HRA, LTA, etc.
c. Minus income taxes payable (calculated after considering Section 80 deductions). Retirement
Benefits

1. Exemption of Leave Encashment

Some employers allow employees to carry forward some amount of leave days and allow him/her
to encash them while others prefer to finish using them in the same year itself. The amount received
as compensation for leave days accumulated is referred to as leave encashment and it is taxable as

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salary. Exemption of leave encashment from tax: It is fully exempt for Central and State
government employees. For non-government employees, the least of the following three is exempt.

a. 10 months average salary preceding retirement or resignation (where average salary includes
basic and DA and excludes perquisites and allowances)
b. Leave encashment actually received. (this is further subject to a limit of Rs 3,00,000 for
retirements after 02.04.1998)
c. Amount equal to salary for the leave earned (where leave earned should not exceed 30 days for
every year of service)
The amount chargeable to tax shall be the total leave encashment received minus exemption
calculated as above. This is added to income from salary.

2. Relief Under Section 89(1)

tax relief allowed under Section 89(1), when a person have received a portion of his/her salary in
arrears or in advance, or have received a family pension in arrears. Calculate the Tax Relief is
done as-

a. Calculate the tax payable on the total income, including additional salary in the year it is
received.
b. Calculate the tax payable on the total income, excluding additional salary in the year it is
received
c. Calculate the difference between Step 1 and Step 2
d. Calculate the tax payable on the total income of the year to which the arrears relate, excluding
arrears
e. Calculate the tax payable on the total income of the year to which the arrears relate, including
arrears
f. Calculate the difference between Step 4 and Step 5
g. The excess amount at Step 3 over Step 6 is the tax relief that shall be allowed.
Note that if the amount at Step 6 is more than the amount at Step 3, no relief shall be allowed.

3. Exemption on Receipts at the Time of Voluntary Retirement

Any compensation received on voluntary retirement or separation is exempt from tax as per the
Section 10(10C). However, the following conditions must be fulfilled

a. Compensation received is towards voluntary retirement or separation

b. Maximum compensation received does not exceed Rs 5,00,000.
c. The recipient is an employee of an authority established under the Central or State Act, local
authority, university, IIT, state government or central government, notified institute of

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management, or notified institute of importance throughout India or any state, PSU, company or a
cooperative society.
d. The receipts are in compliance with Rule 2BA.
No exemption can be claimed under this section for the same AY or any other if relief under
Section 89 has been taken by an employee for compensation of voluntary retirement or separation
or termination of services. Note: Exemption can only be claimed in the assessment year the
compensation is received.

4. Pension
Pension is taxable under the head salaries in the income tax return. Pension is paid out periodically
on a monthly basis usually. One may also choose to take pension as a lump sum (also called
commuted pension) instead of a periodical payment. At the time of retirement, may choose to
receive a certain percentage of your pension in advance.
Such pension received in advance is called commuted pension. For e.g.- At the age of 60, you
decide to receive in advance 10% of your monthly pension of the next 10 years of Rs 10,000. This
will be paid to you as a lump sum. Therefore, Rs.10% of 10000x12x10 = 1,20,000 is your
commuted pension. You will continue to receive Rs 9,000 (your uncommuted pension) for the
next 10 years until you are 70 and post 70 years of age, you will be paid your full pension of Rs
10,000.
Uncommuted pension or any periodical payment of pension is fully taxable as salary. In the above
case, Rs 9,000 received by you is fully taxable. Rs 10,000 starting the age of 70 years are fully
taxable as well.
Commuted and Uncommuted Pension Commuted pension or lump sum received may be exempt
in certain cases. For a government employee, commuted pension is fully exempt. Uncommuted
pension or any periodical payment of pension is fully taxable as salary.
In the above case Rs 9,000 received by you is fully taxable. Rs 10,000 starting the age of 70 yrs
are fully taxable as well. For a non-government employee, it is partially exempt. If gratuity is also
received with a pension – 1/3rd of the amount of pension that would have been received if 100%
of the pension was commuted is exempt from commuted pension and remaining is taxed as salary.
If only the pension is received, gratuity is not received ½ of the amount of pension that would have
been received if 100% of the pension was commuted is exempt.
Pension received by a family member though is taxed under income from other sources in the
income tax return. If this pension is commuted or is a lump sum payment it is not taxable.
Uncommuted pension received by a family member is exempt to a certain extent. Rs 15,000 or
1/3rd of the uncommuted pension received – whichever is less is exempt from tax. Pension that is
received from UNO by its employees or their family is exempt from tax. Pension received by
family members of Armed Forces is also exempt.

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5. Gratuity
Gratuity is a retirement benefit that employers provide for their employees. The employee is
entitled to receive gratuity when he completes five years of service at that company. It is, however,
only paid on retirement or resignation. Gratuity received on retirement or death by a central, state
or local government employee is fully exempt from tax for the employee or his family. The tax
treatment of your gratuity is different, depending on whether your employer is covered by the
Payment of Gratuity Act. Check with your company about its status, and then proceed to calculate.
If your employer is covered by the Payment of Gratuity Act, then the least of the following three
is tax-exempt.

1. 15 days salary based on the salary last drawn for every completed year of service or part
thereof in excess of 6 months. For simplicity sake, this is calculated as last drawn salary x
number of years in employment x 15/26 (where last drawn salary is Basic salary and DA
and number of years in service is rounded off to the nearest full year)
2. Rs 20,00,000
3. Gratuity actually received

If your employer is not covered under the Payment of Gratuity Act, the least of the following
three is tax-exempt.

1. Half month’s salary for each completed year of service. While calculating completed years,
any fraction of a year shall be ignored.

For example – if you have worked in an organization for 14 years and 9 months, the number of
years of employment shall be considered to be 14 years. Here salary is taken as the average salary
of the 10 months immediately before the month in which the person retires.
1. Rs 20,00,000
2. Gratuity actually received

Basics of Income Tax

1. Income Chargeable to Tax

Your income is not equal to your salary. You could earn income from several other sources other
than your salary income. Your total income, according to the Income Tax Department, could be
from house property, profit or loss from selling stocks or from interest on a savings account or on
fixed deposits. All these numbers get added up to become your gross income.

Income from Salary All the money you receive while rendering your job as a result
of an employment contract

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 Income from house Income from house property you own; property can be self-
property occupied or rented out.

Income from other Income accrued from fixed deposits and savings account come
sources under this head.

Income from capital Income earned from the sale of a capital asset (mutual funds or
gains house property).

Income from business Income/loss arising as a result of carrying on a business or

and profession profession. Freelancers income come under this head.

2. Tax Rates Add up all your income from the heads listed above. This is your gross total income.
From your gross total income, deductions under Section 80 are allowed to be claimed. The
resulting number is the income on which you have to pay tax. Your tax is calculated as per the
slabs mentioned below. Income Tax Rates for taxpayers under 60 years of age in FY 2018-19,
FY 2017-18 and FY 2016-17.

Tax Slab FY 2018-19 FY 2017- Tax Slab FY 2016-

18Tax Rate 17 Tax Rate

Up to Rs 2,50,000 No tax Up to Rs 2,50,000 No tax

Rs 2,50,000 – Rs 5% Rs 2,50,000 – Rs 10%

5,00,000 5,00,000

Rs 5,00,000 – Rs 20% Rs 5,00,000 – Rs 20%

10,00,000 10,00,000

Rs 10,00,000 and 30% Rs 10,00,000 and 30%

beyond beyond

Cess:

24
  For FY 2018-19 – Health and education cess is 4% on the sum of total income tax and
surcharge.
 For FY 2017-18 and 2016-17 Higher education and secondary cess is 3% on the sum of
total income tax and surcharge.

Exemption for senior citizens (age of 60 years or more but up to 80 years)

 For FY 2018-19 2017-18 and 2016-17 is Rs. 3,00,000

Exemption for super senior citizens (age of 80 years or more)

 For FY 2018-19 2017-18 is Rs. 5,00,000

Rohit’s total taxable income for FY 2018-19 is Rs 8,00,000. How will the tax slabs be applied
to him?
Income up to Rs 2,50,000 Nil

Income between Rs 5,00,000 – Rs 2,50,000 5% of (Rs 5,00,000 – Rs 2,50,000) = Rs

12,500

Income between Rs 10,00,000 – Rs 5,00,000 20% of (Rs 8,00,000 – Rs 5,00,000) = Rs

60,000

Total Rs 72,500

Education Cess (4% on the sum of total Rs 2,900

income tax)

Tax payable Rs 75,400

3. TDS on Salary
TDS is tax deducted at source. Your employer deducts a portion of your salary every month and
pays it to the Income Tax Department on your behalf. Based on your total salary for the whole
year and your investments in tax-saving products, your employer determines how much TDS has
to be deducted from your salary each month. For a salaried employee, TDS forms a major portion
of an employee’s income tax payment. Your employer will provide you with a TDS certificate

25
called Form 16 typically around June or July showing you how much tax was deducted each
month. . Your bank may also deduct tax at source when you earn interest from a fixed deposit. The
bank deducts TDS at 10% on FDs usually. A 20% TDS is deducted when the bank does not have
your PAN information.

4. Deductions
The lower your taxable income, the lower taxes you ought to pay. So be sure to claim all the tax
deductions and benefits that apply to you. Section 80C of the Income Tax Act can reduce your
gross income by Rs 1.5 lakhs. There are a bunch of other deductions under Section 80 such as
80D, 80E, 80GG, 80U etc. that reduce your tax liability.

Deductions

Some of the important deductions allowed include:

1. Section 80c

Under Section 80C, the maximum tax exemption limit is Rs 1.5 Lakhs per annum. The various
investments that can be claimed as tax deductions under section 80c are listed below;

 PPF (Public Provident Fund)

 EPF (Employees’ Provident Fund)

 5 years Bank or Post office Tax saving Deposits

 National Savings Certificates (NSC)

 ELSS Mutual Funds (Equity Linked Saving Schemes)

 Children’s Tuition Fees

 Life Insurance Premium

 Sukanya Samriddhi Account Deposit Scheme

 SCSS (Post office Senior Citizen Savings Scheme)

 Repayment of Home Loan (Principal only)

26
  National Pension System

 NABARD rural Bonds

 Stamp duty charges for purchase of a new house

2. Section 80CCC

Contributions made towards Annuity plans available with any of the Life Insurance Companies
for receiving pension from the fund can be considered for tax benefit. The maximum Tax deduction
allowed under this section is Rs 1.5 Lakhs.

3. Section 80CCD

Employees can contribute to National Pension Scheme (NPS). The maximum contributions can be
up to 10% of the salary (Basic + DA) for salaried or gross income in case of self-employed. From
2016-17 and additional tax deduction of up to Rs 50,000 u/s 80CCD (1b) is allowed for excess
employee contributions and this is over and above the limit of Rs 1.5 Lakhs.

The definition of Salary is ‘Basic + Dearness Allowance + any other bonus’. If the employer also
contributes to Pension Scheme, the entire employer contribution (maximum 10% of the salary)
can be claimed as a tax deduction under Section 80CCD (2). This is over and above the limit of
Rs.1.5 Lakhs.

It is to be kindly noted that the total deductions under sections 80C, 80CCD (1) and 80CCC put
together cannot exceed Rs 1,50,000 for the financial year 2017-18.

27
 4. Section 80D

Upto Rs. 30,000 can be deducted towards the medical insurance premium for senior citizens
(above 60 years) and upto Rs. 25,000 can be deducted towards medical insurance of self and
dependents (spouse & children).

Additionally, a deduction of up to Rs. 25,000 towards medical insurance premium of parents

(father/mother/both) is available. If both the parents (Father & Mother) are senior citizens, then
the deduction allowed is up to Rs. 30, 000.

5. Section 80DD

Up to Rs 75,000 can be claimed for spending on medical treatments of your dependents (spouse,
parents, children or siblings) who have 40% disability. The upto Rs 1.25 lakhs can be deducted in
case of severe disability (80%).

6. Section 80DDB

Any individual below the age of 60 years can claim upto Rs 40,000 for the treatment of certain
specified critical diseases. This can also be claimed for his/her dependents.

Senior Citizens (above 60 years) can claim upto Rs 60,000 and very Senior Citizens (above 80
years) can claim Rs 80,000 under this section.

It is mandatory for an individual to obtain a Medical Certificate from a specialist doctor in a

Hospital, to claim Tax deductions under Section 80DDB

7. Section 80U

This section is similar to Section 80DD but here the Tax deduction is permitted for the employee
himself who is physically or mentally challenged.

28
 8. Section 24: Income Tax Benefit for Interest paid on Home Loan

Income tax benefit on payment of Interest paid on home loan is allowed for deduction under
Section 24. The maximum deduction allowed under this Section for a self-occupied house property
is upto Rs. 2 Lakhs.

In case, the home Loan has been taken for the property which is not self-occupied, there is no
maximum limit prescribed and the entire interest paid is fully exempted.

If the taxpayer has availed a home loan for repair works or reconstruction, a maximum deduction
of upto Rs 30,000 per financial year is permitted.

9. Section 80EE

In Budget 2016-2017, a new proposal has been made in which, first time home buyers are eligible
for an additional tax deduction of up to Rs 50,000 on home loan interest payments under section
80EE. For claiming tax deductions under this new section 80EE, the following criteria have to be
met

 The home loan should have been availed or sanctioned in FY 2016-2017.

 The Loan amount should be less than Rs 35 Lakhs.

 The value of the home should not be more than Rs 50 Lakhs

 The buyer should not possess any other residential house under his/her name.

10. Section 80 TTA

Under this section 80TTA, upto Rs. 10,000 from the total gross income can be claimed towards
income generated from interest on savings account deposits with a bank or post office or co-
operative society. This deduction cannot be claimed on income generated from interest on fixed
deposits.

29
 11. Section 80GG

As per the budget 2016, the permissible tax deduction under 80GG has been raised from Rs 24,000
to Rs 60,000 p.a. 80GG is applicable only for those individuals who do not receive HRA
from employer and do not possess a residential property.

The maximum tax deduction will be limited to the least of the following criteria;

 Rent paid minus 10 percent of the total income.

 Rs 5000 per month.

 25 % of the total income

12. Section 80G

Contributions made to charitable institutions and certain relief funds are claimed as a deduction
under Section 80G. This deduction can be claimed only when the contribution is made through
cheque or draft. In case of cash contribution, a maximum of Rs 10,000 is allowed as deduction.
Contributions such as clothes, food material, medicines, etc are not eligible for deduction under
section 80G.

13. Section 87A Rebate

From 2017-2018, if the taxable income of a Taxpayer after various permissible income tax
deductions, is below Rs 3.50 lakhs, he/she is eligible for upto Rs 2,500 on Tax payable as tax
rebate under this section. In case, if the tax payable is less than Rs 2,500 for FY 2017-18, the rebate
will be restricted to actual income tax payable only.

14. Section 80E

Interest paid towards your education loan can be claimed under Section 80E as a tax deduction.
This loan should have been ideally availed by you, your spouse or children or by a student whom

30
you are the legal guardian, for higher education purposes. Only interest paid can be claimed and
not the principal.

Under section 80E, there is no specific limit on the amount of interest claimed as deduction. The
deduction can be claimed for a maximum of 8 years or until the interest is fully repaid, whichever
is earlier.

15. Section 80GGC

A taxpayer can claim deduction for the amount that he/she has contributed to a political party or
an electoral trust formed to oversee the election process. The contributions made in cash are not
allowed for deductions. (Political party refers to any political party registered under the section
29A of the Representation of the People Act, 1951)

16. Section 80RRB

Income received through Patent royalty (registered on/after 01.04.2003), under the Patents Act
1970 can be claimed upto Rs. 3 lakhs or the income actually received, whichever is less. The
taxpayer must be a resident of India who holds the patent.

31
 COMPANY PROFILE

Raisin Online Services Pvt. Ltd.

Raisin Online Services is an e-commerce company which is built with the

vision to create value for the common man of India. Raisin will be dealing in all kind of services
which can be cost effective for the common man to survive in this rapidly fast-growing economy.
Our vision is to reduce cost of living by giving cost effective services in each area Raisin enters.

Raisin Online Services Private Limited is a Company incorporated on 31 March, 2015. It is

classified as Non-government Company and is registered at Registrar of Companies, Delhi.

Raisin Online Services Private Limited

Raisin Online Services Pvt. Ltd. is a company which is built with a vision to provide best services
to all its customers & clients. Company’s first & foremost motive is to provide cost effective
services to common people of India. Raisin is a people’s company and it works with people, by
people & for people.

Raisin’s works on 2 values: Customer Satisfaction & Employee Satisfaction.

Vision Statement

Blind trust on the company by the clients

Mission Statement

Free financial services to all.

Goals & Objectives

Acquire majority share & leading providers of financial services.

Value Statement

Customer Satisfaction & Employee Satisfaction

32
Freeturn is a first step towards our goal. Freeturn is an APP and website based services designed
to provide financial needs of a common man. Freeturn is an APP based services where common
man does not need to spend anything extra on financial services like ITR filing, financial advisory
and so on. Freeturn APP started its operations with ITR filing of salaried class people and slowly
and gradually will move to all domains of financial services.

Freeturn is a trusted brand for IT Return filing in India. Freeturn provides absolute free services
for IT Return filing. Freeturn was built with a view to provide hassle free, cost free services to
common man who does not want to bear additional expenses for IT Return filing. We are known
for maintaining high quality standards through our certified professionals.

Our question arises as to why one should pay to accountants even when we have already paid the
taxes? Why there is an additional cost to file the return? Freeturn motive is to eradicate this
additional cost.

We want you to regain control of time by making you hassle free and tension free from all financial
and legal government imposed obligations.

After a thorough analysis of the current market trend on filing the ITR and their relevant fees, we
found that by incorporating our plans, we can help the salaried class people in achieving better
hassle free services at almost negligible cost consequently having freedom in financial matters.
We have PAN India reach. The main aim of this app is to improvise the traditional ways of filing
ITR with the digital methods. There are various benefits of Freeturn like it provides history of the
ITRs filed with us in previous years, it has various deals and offers for its registered members, it
offers free financial services to its clients, etc.

33
Problem Analysis
What are the problems which are currently in market which our company is resolving?

Currently,

 Every year, we need to look up for persons/professionals who can file the return.
 NO History or records are easily available of previous years when required.
 Higher Fees charged by the professionals.
 End up filing ITR by Non-professionals.
 Professionals focus on filing the return, not giving you valuable advices.
 NO tax saving advice.
 Last minute ITR filing chaos.

Solution Analysis

 Need a longer contract, so we can relive our self from every year ITR filing stress.
 A defined place for history/records for previous years which are easily traceable.
 Lower or Zero fees.
 ITR filing by professionals only.
 Free Advice on case to case basis.
 Advice on Tax Saving.
 ITR filing prior to last date.

Why Freeturn?

Benefits with Freeturn:

 Longer Relationship with Clients.

 History is available on click of a button.

34
  Negligible fees with add on Deals & Offers available to all the clients.
 Only trained professionals file return at Freeturn.
 No Charge for Advices.
 Tax saving of clients is our main priority.
 ITR filing before due date.

Few interesting Facts about FREETURN -

 FREETURN is a Mobile based APP.

 Started their operations in January, 2018.
 It’s an e-commerce product.
 PAN INDIA reach.
 Deals in Financial/Tax Consulting.
 100% Free Services.
 B2C Business model.
 You can find us on Google Play or iOS Store.

Members Access

FREETURN is a membership based services. Our Free services are available for members only.
Clients need to become members with FREETURN by choosing our unique membership Plans.

35
Membership Plans

36
2.1 LITERATURE REVIEW
Tax planning is the essential part of our financial planning. Efficient tax planning enables us to
reduce our tax liability to the minimum. This is done by taking advantage of all the tax exemptions,
deductions, rebates, allowances while ensuring that your investments are in line with their long-
term goals. The purpose of the study is to find out the most suitable and popular tax saving
instrument used to save tax. It is the arrangement of one’s affairs in such a manner that the tax
planner may either reduce the tax fully or to the maximum extent possible as may be permissible
within the framework of the taxation land.

(Kumat,2014) in his research paper on Taxation laws of India- overview and fiscal analysis focuses
on the overview of Indian tax system and challenges ahead. He thinks that there should be a
coordinated consumption tax system. He also states that improving the productivity of Indian tax
system continues to be a major challenge in India.

(Jha,2013) in his research paper on Tax structure in India& its effect on corporate and individual
in India suggests that high dependence on indirect taxes should be reduced and direct taxes should
be in increased on super rich to compensate the losses. He also states that corporate tax evasion
techniques like transfer pricing should be checked.

(Rao,2005) in his research paper on Tax system reforms in India: achievement and challenges
ahead focuses on the union and state level reforms. He state that the reforms are just the beginning
and considerable distance in reforming the tax system is yet to be covered.

Chitale (1978) reviewed the tax incentives for savings available under the Income Tax Act and
evaluated different alternatives to make tax structure more savings oriented. The author
recommended the extension in scope of Sec. 80C to cover 10-15 years fixed deposits in banks and
removal of Rs. 20000 ceiling of qualified amount. It was highlighted that tax benefit from qualified
savings did not depend on amount saved, but it depended upon one‟s taxable income. It implied
that cost benefit principle was ignored under section 80 C. It was suggested that the rate of tax
benefit should be made progressive as in the case of tax rates. The study also suggested that instead
of an individual, the family consisting of father, mother and minor children should be recognised
as basic unit of assessment as that could curb the problem of inequality of consumption by
checking the splitting of income.

Acharya, Shankar and Associates (1985) made an analysis of various aspects pertaining to
unaccounted income in Indian economy. The study noted that demonetization and voluntary
disclosure schemes failed to check the generation of black money. The researchers suggested for
reduction in tax rates, simplification of tax structure, strict enforcement of law and punishment to
tax evaders for reining the generation of black income.

37
Raj (1990) in his research work examined Indian tax structure, growth of personal income tax,
income tax rates and administration during the period 1951-52 to 1988-89. The study exhibited
that share of direct taxes in Central Government revenue declined from 31.4 per cent in 1951-52
to 18.3 per cent during 1988-89 indicating higher dependence on indirect taxes. Income tax arrears
which were Rs. 267.7 crore in 1951-52 increased to Rs. 1968.40 crore at the end of sixth five years
plan, which showed the inefficiency of tax administration. Effective rate of tax in each slab was
less as compared to nominal rate because of various exemptions and deductions available under
the Income Tax Act. National savings and investments were not affected negatively by the tax
rates as tax incentives were available to tax payers. The elasticity of personal income tax was
greater than unity during the period of study. The researcher opined that it would not be beneficial
for the Government to bring small taxpayers under the tax net as it would increase the
administrative cost disproportionately. While concluding, he pointed out that rationalization of tax
structure, certainty in tax administration and minimization of litigation were the main areas to be
considered.

38
 OBJECTIVES OF THE STUDY
1. To study about various tax planning instruments.
2. To study the general awareness about the various tax schemes among the clients.
3. To study the services offered by Raisin Online Services Pvt. Ltd.

RESEARCH METHODOLOGY

A research method is a systematic plan for conducting research.

Research Methodology is a way to find out the result of a given problem on a specific matter or
problem that is also referred as research problem. Research methodology refers to the various
sequential steps to be adopted by a researcher in studying a problem with certain objective in view.

Research Methodology is the process used to collect information and data for the purpose of
making decisions. The methodology may include publication research, interviews, surveys and
other research techniques and could be both present and historical information. In Methodology,
researcher uses different criteria for solving/searching the given research problem. Different
sources use different type of methods for solving the problem. “Methodology” is the way of
searching or solving the research problem.

This includes the overall research design, sources of data, method and tool used to collect data,
sampling technique used, determination of sample size, tools used for analyzing data etc

Research Design: Research design is a framework or blueprint for conducting the research
project. It lays down the foundation for conducting the project.

This project report is combination of descriptive and qualitative research.

Descriptive research is the research done only to describe the situation (Ex post facto research).
Descriptive research is used to describe characteristics of a population or phenomenon being
studied. The main goal of this type of research is to describe the data and characteristics about
what is being studied. Descriptive research is mainly done when a researcher wants to gain a better
understanding of a topic.

39
Qualitative research provides insights and understanding of problem setting. Qualitative
research often has the aim of description. The data collected is unstructured.

Sources of data: There are 2 sources of collecting data

1. Primary sources: Primary data are originated by a researcher for the specific purpose of
addressing the problem at hand. In primary method of data collection personal interview
and questionnaire was used.

2. Secondary sources: Secondary data are the data that have already been obtained or
collected by someone else. In secondary method of data collection books and internet was
used.

Method: Survey method was used.

A survey is a research method in which subjects respond to a series of statements or questions in

a questionnaire or an interview. Surveys target some population, which are the people who are
the focus of research. Because populations are usually quite large, the researcher will target a
sample, which is a part of a population that represents the whole.

The most common types of surveys are questionnaires and interviews.

Tool: Questionnaire

A questionnaire is series of written statements or questions. With an interview, the researcher

personally asks subjects a series of questions and gives participants the freedom to respond as they
wish. Both questionnaires and interviews can include open-ended questions (allowing the
subjects to respond freely), or close-ended questions (including a selection of fixed responses).

Close ended questionnaire was used which consisted of questions.

40
Sampling technique: Non-probability sampling method (convenient sampling technique) was
used

A convenience sample is one of the main types of non-probability sampling methods.

A convenience sample is made up of people who are easy to reach. Subjects are selected because
of their convenient accessibility and proximity to the researcher.

Sample selected was as per the convenience of the researcher. The sample includes the
customers of the company i.e Raisin Online Services Pvt. Ltd.

Sample size: 70 clients

Time period of the study: 2 months

Scope: This research is limited to the customers of the company.

Scope is also limited to preparing ITR – 1.

Tools used for analysis:

 Pie charts
 Histogram

41
 LIMITATIONS OF THE PROJECT
1. Time period – The topic covered in research has wider scope than covered in project report
which was not possible to cover in a short span of 2 months

2. Reliability and accuracy– Since much of the data is based on secondary sources,
reliability and accuracy of the project tends to reduce

3. Limited Scope – Scope of the project is limited in two ways. Firstly, limited to filing of
ITR – 1 only. Secondly, limited to the clients of Raisin Online Services Pvt. Ltd.

4. Mostly people comfortable with CA’ s: As people prefer trading from their respective CA,
they are quite comfortable to them.

5. Lack of Techno Savvy people and poor Internet penetration: Since most people are quite
unexperienced and also, they are not techno savvy. Also, Internet penetration is poor in India.

6. Some respondents are unwilling to talk: Some respondents either do not have time or
willing does not respond, as they are quite annoyed with the phone call.

42
4.1 DATA ANALYSIS AND INTERPRETATION

Q1.

ARE YOU A REGULAR TAX PAYER? YES NO

NO. OF RESPONDENTS 55 15

Interpretation

According to the analysis, when asked that if the respondents are regular tax payers or not, 78.6%
of the respondents responded with yes and the remaining 21.4% responded with no.

43
Q2.

INCOME RANGE LESS THAN 2.5 -5 5- 10 LAKHS 10 LAKHS

2.5 LAKHS LAKHS AND ABOVE

NO. OF 12 19 29 10
RESPONDENTS

Interpretation

According to the analysis of income of respondents, four categories are taken into consideration,
i.e. less than 2.5 lakhs, 2.5-5 lakhs, 5-10 lakhs and more than 10 lakhs. Maximum no. of
respondents have between 5-10 lakhs of income (42%). 27% of respondents have income
between 2.5-5 lakhs of income and least no. of respondents have above 10 lakhs of income
(14%).

44
Q3.

REASONS FOR FILING RETURN NO. OF RESPONDENTS

REGULAR PROVISION 42
REFUND CLAIM 23
CARRY FORWARD OF LOSS 1
NOTICE FROM THE IT DEPARTMENT 4

Interpretation

According to the analysis, when asked about the reason to file their returns, maximum no. of
respondents quoted their reason as ‘regular provision’ (60%). 32.9% said they do it for
‘refund claim’, 5.7% said they file their returns because they get notice from the IT
department and the least no. of respondents said they do it to carry forward their losses
(1.4%).

45
Q4.

TIMING OF FILING RETURNS NO. OF RESPONDENTS

BEFORE DUE DATE 69
AFTER THE DUE DATE 1

Interpretation

According to analysis, maximum no. of the respondents file their returns before due date
(99%).

46
Q5.

SERVICES PROVIDED BY THE TAX NO. OF RESPONDENTS

CONSULTANT

TAX PLANNING 41

BOOK KEEPING AND ACCOUNTANCY 28

COST ACCOUNTING 3

AUDIT 8

Interpretation

According to the analysis, when the respondents were asked which services are given by their tax
consultants, maximum no. of respondents said ‘tax planning’(59% ), followed by respondents
who said ‘book keeping and accountancy’ (26%), ‘audit’ (11%) and ‘cost accounting’
purpose (4%).

47
Q6.

SOURCE OF INFORMATION ABOUT TAXATION NO. OF RESPONDENTS

THROUGH TAX CONSULTANT 35
THROUGH FRIENDS AND RELATIVES 27
THROUGH MEDIA 8

Interpretation

According to the analysis about the source of information about taxation, the foremost source was
through tax consultant (50%), followed by the source ‘through friends and relatives (38.6%)
and the least source being ‘through media (journals, magazines, books, televisions etc.)’
(11.4%).

48
Q7.

DOES YOUR CONSULTANT TIMELY NOTIFY YOU THE YES NO

VARIOUS PROVISIONS AND SUBMISSION OF TAX?
NO. OF RESPONDENTS 61 9

Interpretation

According to the analysis, 87.1% respondents agree that their tax consultant timely notifies
them about the various provisions and submissions of all the taxes and the remaining 12.9%
disagree with the same.

49
Q8.

IMPRESSION ABOUT THE HIGHER LOWEST REASONABLE

FEES CHARGED
NO. OF RESPONDENTS 12 21 37

Interpretation

According to the analysis, when asked about the impression about the fees charged by the
respondents’ tax consultant, 52.9% of them think that it is reasonable, 30% respondents have
an impression of the fees being lowest and 17.1% respondents think that their tax consultants
charge higher fees.

50
Q9.

ARE YOU AWARE ABOUT THE VARIOUS YES NO

DEDUCTIONS FOR TAX PLANNING?
NO. OF RESPONDENTS 57 13

Interpretation

According to the analysis, 81.4% of the respondents are aware about various deductions
available for tax planning and the remaining 18.6% of the respondents are not aware about
various deductions which are available for tax planning.

51
Q10.

DOES FREETURN APP HELP YOU TO UNDERSTAND YES NO

THE IMPACT OF BUDGET PROVISIONS ON YOUR
TAX LIABILITY AND PLANNING TAX
ACCORDINGLY?
NO. OF RESPONDENTS 55 15

Interpretation

According to the analysis, 78.6% of the respondents agree that FREETURN app helps in
understanding the impact of budget provisions on tax liability and planning tax
accordingly and the remaining 21.4% of the respondents disagree that FREETURN app helps
in understanding the impact of budget provisions on tax liability and planning tax accordingly.

52
Q11.

DEDUCTIONS USED NO. OF RESPONDENTS

80 C 70
80 D 7
80 GG 4
80 TTA 3
OTHER 2

Interpretation

According to the analysis, 80c is used by every respondent. In addition to it 80D, 80GG,
80TTA and other deductions are also used.

53
Q12.

INVESTMENT USED IN DEDUCTION 80C NO. OF RESPONDENTS

FIXED DEPOSITS 27
MUTUAL FUNDS 20
LIC 23

Interpretation

According to the analysis, mostly used investment under 80c is fixed deposits (38.6%), then
LIC (32.8%), the least used investment being mutual funds (28.6%).

54
Q13.

IS TAX PLANNING BENEFICIAL FOR YOU? YES NO

NO. OF RESPONDENTS 65 5

Interpretation

According to the analysis, 92.9% of the respondents agree that tax planning is beneficial for
them and the remaining 7.1% respondents do not agree with the fact that tax planning is
beneficial for them.

55
Q14.

BENEFITS OF TAX PLANNING BY THE APP NO. OF RESPONDENTS

SYNC TAX INVESTMENT BETTER WITH YOUR INCOME 18
FLOW
REDUCE INCOME TAX INCIDENCE 24
MAXIMISE INVESTMENT RETURNS 7
REBATE ON TAX 21

Interpretation

According to the analysis, 34.3% of the respondents think that the app is beneficial for tax
planning in reducing income tax incidence, followed by the benefit of rebate on tax (30%),
sync tax investment better with their income flow (25.7%), the least quoted benefit being
maximize investment returns (10%).

56
Q15.

ARE YOU SATISFIED BY THEIR FULLY PARTLY NOT

SERVICES? SATISFIED SATISFIED SATISFIED
NO. OF RESPONDENTS 38 29 3

Interpretation

According to the analysis, 54.3% of the respondents are fully satisfied with the services
provided by Raisin Online Services pvt. Ltd., 41.4% of the respondents are partly satisfied
with the services provided by Raisin Online Services pvt. Ltd. and remaining 4.3% of the
respondents are not satisfied with the services provided by Raisin Online Services pvt. Ltd.

57
 FINDINGS

The findings of the survey conducted via Questionnaire are: -

 Out of all 78.6% respondents are regular tax payers.

 60% respondents file ITR as a regular provision, 32.9% for the refund claim,
5.7% said they file their returns because they get notice from the IT
department and least no. of respondents said they do it to carry forward
their losses (1.4%).
 Maximum no. of respondents has between 5-10 lakhs of income (42%).
27% of respondents have income between 2.5-5 lakhs of income and least
no. of respondents have above 10 lakhs of income (14%).
 Maximum no. of the respondents files their returns before due date (99%).
 Maximum no. of respondents said ‘tax planning’ (59%), followed by
respondents who said ‘book keeping and accountancy’ (26%), ‘audit’
(11%) and ‘cost accounting’ purpose (4%) are the services provided by
their tax consultant.
 50% respondents have source of information through Tax Consultant,
38.6% through Friends and Relatives and least source being through Media
(11.4%).
 87.1% respondents agree that their tax consultant timely notifies them about
the various provisions and submissions of all the taxes and the remaining
12.9% respondents disagree with the same.
 80% respondents agree that their tax consultant reminds them regarding the

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 52.9% respondents think fees charged by the Tax Consultant was
reasonable, 30% respondents have an impression of the fees being lowest
and 17.1% respondents think that their tax consultants charge higher fees.
 81.4% of the respondents are aware about various deductions available for
tax planning and the remaining 18.6% of the respondents are not aware about
various deductions which are available for tax planning.
 78.6% of the respondents agree that FREETURN app helps in understanding
the impact of budget provisions on tax liability and planning tax accordingly
and the remaining 21.4% of the respondents disagree with the same.
 92.9% of the respondents agree that tax planning is beneficial for them and
the remaining 7.1% respondents do not agree with the fact that tax planning
is beneficial for them.
 34.3% of the respondents think that the app is beneficial for tax planning in
reducing income tax incidence, followed by the benefit of rebate on tax (30%),
sync tax investment better with their income flow (25.7%), the least quoted
benefit being maximize investment returns (10%).
 54.3% of the respondents are fully satisfied with the services provided by
Raisin Online Services Pvt. Ltd, 41.4% of the respondents are partly
satisfied with the services provided by Raisin Online Services Pvt. Ltd and
remaining 4.3% of the respondents are not satisfied with the services
provided by Raisin Online Services Pvt. Ltd.

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 SUGGESTIONS

1. Briefing and educating clients/people regarding ITR and also the products in which
company deals by setting up more canopies, engaging agents etc so that they develop better
understanding of it.

2. Company should also try to increase their customer base using different platforms of
marketing and social media.

3. The last date for filing ITR should be fixed and should not be changed as it leads to chaos
as it exceeded to 31st august 2018.

4. The company has customer centric approach but still many people are not satisfied with its
services. So, the company should identify the area where it lacks and should try to improve
customer satisfaction.

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 CONCLUSIONS

This project report is based on electronic filing of ITR as the work of Raisin Online
Services Pvt. Ltd. The conclusions that have been drawn from this project are as
follows:

 Raisin Online Services Pvt. Ltd acts as an ERI (e-return intermediary) to

e-file the ITR.

 There are various legal ways to save tax via Section 80C, 80D, 80E, 24B etc.

 Majority of the people are still not aware about filing of ITR. Thus, company
needs to brief and educate people regarding filing ITR. It also try to find the
area where it lacks as still there are number of people who are not satisfied
with its services and try to increase their customer base.

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