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FINANCIAL PLANNING &

WEALTH MANAGEMENT

ASSIGNMENT-1
TAX PLANNING

SUBMITTED TO, SUBMITTED BY,

ABISHEK DUTTA JAYASHREE.M
FACULTY OF FP&WM PGDBRM BATCH -II
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TAX PLANNING ASSIGNMENT

Introduction:

A tax return is a form or forms filed with a tax authority that reports income, expenses, and
other pertinent tax information. Tax returns allow taxpayers to calculate their tax liability,
schedule tax payments, or request refunds for the overpayment of taxes. In most countries,
tax returns must be filed annually for an individual or business with reportable income,
including wages, interest, dividends, capital gains, or other profits.

ITR - Income Tax Return or IT Return:

Income Tax Returns or ITR is a form used to declare the net tax liability, claiming of tax
deductions, and to report the gross taxable income. It is mandatory for individuals who earn
a certain amount of money have to File IT Returns. Firms or companies, Hindu Undivided
Families (HUFs), and self-employed or salaried individuals must file ITR to the Income Tax
Department of India.

Income Tax Return (ITR) is a form which a person is supposed to submit to the Income Tax
Department of India. It contains information about the person’s income and the taxes to be
paid on it during the year. Information filed in ITR should pertain to a particular financial
year, i.e. starting on 1st April and ending on 31st March of the next year.

Income can be of various forms such as :

 Income from salary

 Profits and gains from business and profession
 Income from house property
 Income from capital gains
 Income from other sources such as dividend, interest on deposits, royalty income,
winning on lottery, etc.
The Income Tax Department has prescribed 7 types of ITR forms - ITR-1, ITR-2, ITR-3, ITR-4,
ITR-5, ITR-6, ITR-7 and applicability of the form will depend on the nature and amount of
income and the type of taxpayer.
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Reasons to file an income tax return:

  
1.  It makes loan processing easier:
Suppose you want to apply for a home loan or any other loan (other than mortgage). In
most cases, a lender will ask for income proof before sanctioning a loan. The process will
include submitting your income tax returns for the last two or three financial years.
 
2.  It helps you claim any carried forward losses:
If you have incurred losses under the heads “Capital Gains” or “Profits and Gains from
Business or Profession” and want such losses to be carried forward to the next financial
year, you can do so only by filing your income tax return.
 
3. It allows you to claim TDS refunds:
If your employee deducts tax at source or you have a contractual agreement that invites
TDS, you can claim a deduction for the same by filing your income tax return for the year
within the deadline (July 31 or as declared of the succeeding year). In such cases, the
income tax department calculates your net tax liability after adjusting the TDS paid. If you
are not required to pay tax, you can claim a refund by filing your ITR. You can track your
refund by checking your income tax return status.
 
4. It contributes to nation-building:
Any amount you pay as tax helps in building your nation. It is one of the major contributors
to the government’s cash inflow. For FY19, the government collected ₹ 9.45 lakh crore as
direct taxes. The government can use the amount for building infrastructure or for other
developmental activities.
 
5. It will help you with visa or credit card applications: 
If we are applying for a visa for an international trip or a credit card, the issuer will demand
income proof from you. In most cases, you are required to submit your income tax returns
for the last three years. It will help the other party ascertain if you are eligible for a visa or a
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credit card. If you intend to visit countries like the USA, Canada, or any part of Europe, you
must submit your ITRs during the verification process.

Benefits of ITR Filing:

1. Easy Loan Approval
2. Claim Tax Refund
3. Income & Address Proof
4. Quick Visa Processing
5. Carry Forward Your Losses
6. Avoid Penalty

Different Types of ITR:

ITR Forms Class of Taxpayer

ITR-1 (also called To be filed by resident individuals having total income upto 50 lacs from
as Sahaj) following sources :
1. Salary
2. One house property
3. Other sources excluding winning from lotteries and income from horse
races
4. Agricultural income upto Rs. 5,000
ITR- 2 To be filed by Individuals and HUFs who are not eligible to file form
ITR-1 and don’t have income from profits and gains from business
ITR -3 To be filed by Individuals and HUFs having income from profits and
gains from business or profession
ITR -4 To be filed by resident individuals, HUFs and firms (other than LLP)
who are residents having total income upto 50 lacs and having income
from business or profession computed under section 44AD, 44ADA or
44AE
ITR -4S A special taxation scheme for HUFs u/s 44AD/AE

ITR -5 AOPs, artificial judiciary entities, Firms, LLPs, and local authorities
ITR - 6 Companies which do not claim exemptions u/s 11 of the IT Act.
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ITR -7 Individuals falling u/s 139(4D), 139(4B), 139(4C)

Documents Required to filing an ITR:

To file an income tax return, apart from the salary slips, bank savings account passbook,
Aadhaar(UIDAI) card and PAN card, there are a few other documents require to submit
during the ITR filing.
1) Form 16: It is provided by your employer and contains details of the salary paid by
them to you and the tax deducted at source (TDS) on it.
2) Form 16A: It contains details on TDS deducted on interest received from deposits
such as fixed or recurring bank deposit.
3) Form 16B: If you sell a property, TDS applies on the amount received from you by
the buyer, the details of which are present in this form.
4) Form 16C: TDS details of the rent paid by your tenant to you are recorded here.
5) Form 26AS: This form represents your comprehensive statement of taxes against the
PAN number. It includes TDS by your employer, bank or any other organization that
has made a payment to you. Advances taxes or self-assessment taxes paid, proof of
tax saving investments such as deductions as prescribed from Section 80C to 80U
including life insurance policy or a term plan are also listed.

Steps to Login and Register on the E-filing portal:

 Step 1: Visit the e-filing website https://www.incometax.gov.in/iec/foportal

 Step 2: Register or Login to e-file your returns. In case you have registered yourself
on the portal earlier, click on the ‘Login’ Here’ button. In case you have not
registered yourself on the portal, click on the ‘Register’ Yourself’ button.
 Step 3: Click on ‘Taxpayer’ and then enter the details of your PAN and click on
‘validate’. Next, click on ‘Continue’.
 Step 4: Provide details such as your name, address, gender, residential status, date
of birth, etc.
 Step 5: Provide your Email ID and registered mobile number.
 Step 6: Once the form has been filled up, click on ‘Continue’.
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 Step 7: You will have to verify the details following which a 6-digit One Time
Password (OTP) will be sent to your registered mobile number and Email address.
 Step 8: Enter the OTP follow the instructions given to complete the registration
process successfully.
 Step 9: Once the OTP has been verified, a new window will open where you will have
to verify the details provided by you. In case any detail given is incorrect, you can
change it, following which another OTP will be sent to validate the change.
 Step 10: The final step will be set up a password and secure login message.

Income Tax Return for Mr. Jayavel Lakshmanan for the AY 2021-22
Salary and Investment Details:

Salary Details of Mr. Jayavel for the AY 2021-2022

Gross Salary Rs.18,81,072

Allowance(Traveling, DA and Medical) Rs.20,784

Net Salary Rs.18,60,288 Rs.18,60,288

Rs.66,000
Life Insurance-Term 5500 PM
Rs.65,750
School Fees Paid(for one kid) 65750 PA
Rs.60,000
Mutual Fund -ELSS fund Mirae asset tax safer fund 5000 PM
Rs.90,000
Health Insurance(Including parents) 90000 PA
Rs.52,000
Donation to Covid Relief fund Rs.52,000

Rs.27,000
Interest from Savings Account Rs.27,000

1. This is the salary and investment details of Mr. Jayavel for filing ITR and his
Allowances of are excluded with gross salary and I have taken Net salary for
his taxable portion of salary.
2. Out of his salary a net salary of Rs. 18,60,288 is salary for before deductions
of his investments.
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ITR Deduction Table Split up for the AY 2021-2022:

ITR Deduction Table Split up for the AY 2021-2022

Net Salary Rs. 18,60,288

Under Sec 80C Spent Amount Max Deduction
Life Insurance-Term premium Rs. 66,000
School Fees Paid(for one kid) Rs. 65,750

Mutual Fund -ELSS fund Mirae asset tax safer fund Rs. 60,000
Total Rs. 1,91,750 Rs. 1,50,000

Under Sec 80G

Donation to Covid Releif fund Rs. 52,000 Rs. 50,000

Under Sec 80TTA

Interest from Savings Account Rs. 27,000 Rs. 10,000

Under Sec 80D

Health Insurance- Individual Rs. 35,000 Rs. 25,000
Health Insurance- For Parents Rs. 42,000 Rs. 50,000
Total Rs. 77,000 Rs. 75,000

Standard deduction U16A

Standard deduction U16A Rs. 50,000
Rs. 50,000

Total Deduction Amount for AY 2021-2022 Rs. 3,35,000

Total Taxable Income for Old and New regime
Annual Salary Rs. 18,60,288
+Interest Income after deduction Rs. 17,000
-Total Deduction Amount for AY 2021-22 Rs. 3,35,000
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Total Taxable Income for old regime Rs. 15,42,288

Total Taxable Income for New regime Rs. 18,77,288

In the above table Total taxable income for old regime is Rs.15,42,288 and for New Regime
is Rs.1877288. This tax person having investments and deductions applicable for the
sections of 80C,80G,80D,80TTA and Standard deduction Under section 16A. Now we can see
the Old and New regime calculation part for his taxable portion.

Tax Calculation for Old and New Regime for AY 2021-2022

Total Taxable Income (Old) Rs.1542288 Total Taxable Income (New) Rs.1877288

2,50,000 2,50,000 0% - 2,50,000 2,50,000 0% -

5,00,000 2,50,000 5% 12,500 5,00,000 2,50,000 5% 12,500

7,50,000 2,50,000 20% 50,000 7,50,000 2,50,000 10% 25,000

10,00,000 2,50,000 20% 50,000 10,00,000 2,50,000 15% 37,500

12,50,000 2,50,000 30% 75,000 12,50,000 2,50,000 20% 50,000

15,00,000 2,50,000 30% 75,000 15,00,000 2,50,000 25% 62,500

15,42,288 42,288 30% 12,686 17,50,000 2,50,000 30% 75,000

18,77,288 1,27,288 30% 38,186

Total 2,75,186 Total 3,00,686

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Cess @4% 11,007 Cess @4% 12,027

Rs.
Tax amount Rs. 2,86,194 Tax amount 3,12,714

1. In this differentiation table showing the calculation of new and old regime tax
amount which is Mr.Jayavel to pay while filing the Income tax return.
2. Based on this calculation part I will suggest Old regime to Mr.Jayavel for filing the
ITR. Because it is giving around 80,000 to 1,00,000 difference for taxable income.
3. Old Tax Regime can be suggestible for Mr.Jayavel.

Some Suggestions or Recommendation for his Tax plan for next year:

1. In the tax plan of Mr.Jayavel I will suggest him to invest in NPS Plan to get additional
deduction on 80CCD (1b) Rs.50000. so he will get up to Rs.2,00,000 under the
section of 80C. So he will save almost 56% of Taxable income with this portion of
Investment. (NPS plan with minimum 5000 Rs investment monthly)
2. Under the section 80DDB person can claim additional medical charges up to 100000
with 80D deductions.
3. If he invest more in life insurance policies means he will get additional 10% benefit in
80C so he may get less 80C because he is not having any EPF or home loan to claim
in upcoming years so I will suggest one more ELSS mutual fund policy or Endowment
insurance policy.
4. When he having proper plan of investing technique means he can avail more
benefits in tax deductions and also he is not having 80 E category also. As his kid is
now Higher secondary he should avail up to 50,000 he can claim with the Education
loan.
5. With thus suggestions he can avail more benefits and deductions with ITR so It will
benefit for tax payer.

REFERENCE:
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1. What is Income Tax Return (ITR) in India? | ICICI Prulife. (2018). Icici Prulife.

Retrieved 2021, from

https://www.iciciprulife.com/insurance-library/income-tax/what-is-itr.html

2. 5 Reasons to File Income Tax* Returns (ITR). (2014). TATA AIA. Retrieved 2017, from

https://www.tataaia.com/blogs/life-insurance/5-reasons-why-filling-income-tax-

returns-is-important.html

3. Tax Return. (2020, December 10). Investopedia.

https://www.investopedia.com/terms/t/taxreturn.asp

4. https://www.incometaxindia.gov.in/pages/acts/income-tax-act.aspx
5. https://www.paisabazaar.com/tax/section-139-of-income-tax-act/