HOW TO SAVE

YOUR
INCOME TAX?
 Increased Income Tax Due to
6 CPC Arrears
 The Gross taxable salary has increased
Considerably in current F.Y. due to
payment of 60% arrears of 6 CPC.
 This has resulted into increase in
Income Tax when entire amount of 60%
arrears is added to current year’s
income.

TAX PLANNING 2010-11

LALIT KHANDELWAL
 Re-assessment of Income Tax for
F.Y. 2009-10 by submitting form
10-E
As per Rule 21A of Income Tax Rules
1962, we can submit Form 10E to get relief
under sec 89(1) as we have received pay
commission arrears pertaining to the
years 2005-06, 2006-07, 2007-08 and 2008-
2009. (January 2006 to August 2008).

TAX PLANNING 2010-11

LALIT KHANDELWAL
IT PAYABLE IF FORM 10-E IS NOT SUBMITTED
(TABLE A)

Sl No Details Amount
Income chargeable under "Salaries" (including
1. Rs 714360
60% of 6th Pay Commission arrears of Rs 120683)
Deductions under savings (Section 80C, 80CCC,
2. Rs 100000
80CCD, 80D etc)
3. Net Taxable income (rounded to nearest Rs 10) Rs 614360
4. Tax Payable on Sl 3 Rs 88308
4 (a) Education Cess Rs 2649
5. Total Tax Payable Rs 90960

TAX PLANNING 2010-11

LALIT KHANDELWAL
Year wise accrual of 60% arrears
YEAR AMOUNT (Rs)

2005-06 6509

2006-07 41603

2007-08 46420

2008-09 26151
TOTAL 120683
TAX PLANNING 2010-11

LALIT KHANDELWAL
Previous Total income Salary received Total income as Tax on total Tax on Total Diff. in Tax
Years of the Relevent in arrears or increased by salary income as income as Amount under
Previous year advance relating to received in arrears or per col 2 per col 4 col 6 minus
the relevent previous advance of of the amount under
years as mentioned relevent previous year col 5
in col (1) mentioned in col 1
Rs Rs (Add col (2)& (3) -Rs Rs Rs Rs
1 2 3 4 5 6 7

2005-06 204670 6509 211179 16253 17,580 1,330

2006-07 221960 41603 263563 19780 29,650 9,870
2007-08 249040 46420 295460 24522 38,770 14,250
2008-09 427330 26151 453481 41680 47,070 5,390
Net Tax 30,840

TAX PLANNING 2010-11

LALIT KHANDELWAL
IT PAYABLE AFTER SUBMITTING FORM 10-E
(TABLE B)

Sl No Details Amount
Rs
1. Income chargeable under "Salaries" excluding the 60% arrears
593680
Rs
2. Deductions under savings (Section 80C, 80CCC, 80CCD, 80D etc)
100000
Rs
3. Net Taxable income
493680
Rs
4. Tax Payble on Sl 3
52736
4(a) Education cess Rs 1582
Rs
5 Total Tax Payable
54320
Tax Payable for previous year (After revising income of previous Rs
6
year - as per Form 10E) 30480
Rs
7 Total tax Payable (Sl 5 and 6)
TAX PLANNING 2010-11 84800
8 Relief eligible (Sl 5 of Table A - Sl 7
LALIT KHANDELWAL Rs 6160
TAX PLANNING
(FOR F.Y. 2010-11)

TAX PLANNING 2010-11

Presentation By: LALIT KHANDELWAL
LALIT KHANDELWAL
 MONEYWISE , BE WISE

Saving a rupee in TAX means You have a rupee more

to save, spend or invest.
INCOME TAX AND ITS
PLANNING
At the end of this
SESSION you will know:
● Basics of taxability of salary income
• Tax slabs and rates of tax
• Some avenues of tax planning
• How to File Income Tax Return

TAX PLANNING 2010-11

LALIT KHANDELWAL
 HELP TO
SAVE
TAX!

TAX PLANNING 2010-11

LALIT KHANDELWAL
 TERMINOLOGY
INCOME TAX: The direct tax paid by
individual ,whose income ( from all source) is
more than the maximum limit of prescribed
amount, to the Central Government of India.
INCOME TAX RETURN: Annual Statement of
income and taxes paid in previous financial
year. ●●●

TAX PLANNING 2010-11

LALIT KHANDELWAL
 TERMINOLOGY
●●●
Permanent Account Number (PAN) : A
number which is used by Income Tax
Department as an identification of a person. It
is a 10 digit alphanumeric number.
FINANCIAL YEAR: Year commencing from
FIRST DAY OF APRIL to LAST DAY of MARCH in
which income is earned.
ASSESSMENT YEAR: Year following
financial year in which assessment of income
and tax paid/due TAX
is PLANNING
made.2010-11
LALIT KHANDELWAL
 TAXABLE INCOME
There are 3 things you need to keep in mind
before arriving at Taxable Income.
Income

Fully
Fully
exempt Partly
Taxable
from tax Taxable

TAX PLANNING 2010-11

LALIT KHANDELWAL
 Fully Taxable Partly Taxable

• Band Pay • Medical Allowance beyond Rs

• Grade Pay 15,000 a year.
• Personal Pay • Transport Allowance beyond
• Bonus Rs.9600 p.a.
• Dearness Pay
• Running Allowance(30%)
• Dearness
Allowance Medical reimbursement beyond Rs
• Over Time 50000

• Arrears Fully Non Taxable

• Income from other •T.A./ D.A.
sources TAX PLANNING 2010-11

LALIT KHANDELWAL
TAX PLANNING 2010-11

LALIT KHANDELWAL
 Tax Slabs for INDIVIDUALS
( Less than 65 Years Age)

Rate: 30%
ABOVE
Rate: 20% Rs 8,00,000
Rs.5,00,001
Rate: 10% -
Rs.1,60,001 8,00,000
-
5,00,000
Rate: 0%
Up to
Rs. • Education cess is levied at 3% of the tax payable.
1,60,000

TAX PLANNING 2010-11

LALIT KHANDELWAL
 Tax Slabs for WOMEN
( Less than 65 Years Age)

Rate: 30%
Above
Rate: 20% Rs
Rs.5,00,001 8,00,000
Rate: 10% to
Rs.1,90,001 8,00,000
to
5,00,000
Rate: 0%
Up to
Rs. • Education cess is levied at 3% of the tax payable.
1,90,000

TAX PLANNING 2010-11

LALIT KHANDELWAL
 Tax Slabs for Sr. CITIZENS
( 65 Years Age & above)

Rate: 30%
Abov
Rate: 20% Rs.
Rs.5,00,001 8,00,000
Rate: 10% to
Rs.2,40,001 8,00,000
to
Rate: 0% 5,00,000
Up to
Rs. • Education cess is levied at 3% of the tax payable.
2,40,000

TAX PLANNING 2010-11

LALIT KHANDELWAL
TAX PLANNING 2010-11

LALIT KHANDELWAL
Tax Planning: The smart way

Factors to be considered for

Tax Planning investment :

 Risk appetite
 Investment Objective
 Tenure of investment

TAX PLANNING 2010-11

LALIT KHANDELWAL
Instruments eligible for tax deductions

c
( Under Section 80 C)

8 Plan your
Savings
From The
Beginning
Of Financial
Year TAX PLANNING 2010-11

LALIT KHANDELWAL
ELIGIBLE AVENUES TO SAVE TAX
INSTRUMENT INVESTMENT MATURITY
LIMIT ( Rs.) PERIOD
PUBLIC PROVIDENT FUND(PPF) 70,000 15 Years
PROS: Assured Tax free return@ 8% a year.
CONS: Very long lock-in period, partial withdrawl after sixth year.
EQUITY-LINKED SAVINGS SCHEMES(ELSS) 1,00,000 3 Years
PROS: Very high returns in bullish market, returns are tax free.
CONS: Returns are not assured (After 3 years there may be loss of capital).
TAX SAVING BANK FIXED DEPOSITS 1,00,000 5 Years
PROS: Assured returns .
CONS: Relatively low Returns and same are Taxable.
TAX SAVING POST OFFICE TERM DEPOSITS 1,00,000 5 Years
PROS: Assured returns .
CONS: Relatively low Returns and same are Taxable.
SENIOR CITIZEN SAVINGS SCHEME 1,00,000 5 Years
PROS: Assured returns @ 9 %.
CONS: Applicable to Sr. Citizens only and interest income is Taxable.
NOTE: TUITION FEES , LIC PREMIA , REPAYMENT OF HOUSING LOAN,
PF,VPF and NSC are also eligible for deduction under sec 80 C.

TAX PLANNING
MAXIMUM LIMIT UNDER SEC2010-11
80C= Rs 1,00,000
Additional Rs. 20,000
LALIT for Infrastructor Bond
KHANDELWAL
*Investment made for the Purpose
of tax planning can have a
significant impact on your
finances over the long term
horizon.
*Invest Rs 1,00,000 in a manner
that saves Taxes as well as
achieve your long term financial
objectives.
*Draw up a plan that suits you
best and then be disciplined
TAX PLANNING 2010-11
in
executing the same.LALIT KHANDELWAL
 SMART WAYS TO SAVE TAX
( Beyond 80C’s Rs 1 lakh limit)

PAYMENT OF RENT: SEC 10(13A):An employee availing HRA can claim

exemption which is least of 50% of basic pay (40% in non metros) or
the actual HRA, or rent paid in excess of 10% of basic pay.

INTEREST ON HOUSING LOAN: SEC 24(B) The interest paid (up to Rs

1.5 lakh) on a home loan can be deducted from taxable income. In
joint ownership, both can claim deduction up to Rs 1.5 lakh each.

INTEREST ON EDUCATION LOAN: SEC 80E: Interest paid on a loan taken

for higher studies is exempt from tax for a maximum of eight
successive years. There is no limit on the amount eligible for
TAX PLANNING 2010-11
exemption.
LALIT KHANDELWAL
SECTION 80U: When an individual himself is certified by medical authority
to be suffering with Autism, Cerebrel Palsy, Mental Retardation etc. a
deduction up to Rs 1,00,000 can be claimed as deduction from Taxable
Income.

SECTION 80DD : Expenditure incurred for Treatment of Dependent spouse,

children,parents,brothers or sisters suffering from Autism,Celebral
Palsy,Mental retardation etc. a deduction up to Rs 50,000( Rs1,00,000for
severe disability)
SOME MORE DEDUCTIONS

Sec 80 G - Donations to certain funds/charitable

institutes.

Sec 80GGA- Donations for Scientific Research work.

TAX PLANNING 2010-11

LALIT KHANDELWAL
HEALTH COVER: SEC 80D: Deductions For premium for health cover
• Rs 15000 for self , spouse and kids U/S 80D(2A)
• Rs 15000 for parents ( whether dependent or not) U/S 80D(2B)
• Rs 20000 for parents , if senior citizen.

CAPITAL GAIN BONDS: SEC 54EC: For capital gains from a long term
asset ,one can save up to Rs.50 lakh by parking the profits in bonds
of NHAI or REC if the investment is made within 6 months of sale.

MEDICAL TREATMENT: SEC 80DDB Expenditure incurred on treatment

of the individual or his dependents for diseases such as cancer,
AIDS, renal failure, Neurological Diseases etc. qualifies for
TAX PLANNING 2010-11
deduction up to Rs 40,000.(Rs 60,000 for Sr Citizens)
LALIT KHANDELWAL
TAX PLANNING 2010-11

LALIT KHANDELWAL
 Impac t of New P ropos ed c hang e in T ax rate
E nter G ros s Inc ome R s . 900,000
S aving s under S ec 80C 100,000
Net T axable Inc ome R s . 800,000 E nter inc ome in yellow area, without c ommas

E x is ting T ax S truc ture P ropos ed T ax s truc ture

S lab T ax amt T ax rate S lab T ax amt T ax rate
1 160,000 - Nil 160,000 - Nil
2 140,000 14,000 10% 340,000 34,000 10%
3 200,000 40,000 20% 300,000 60,000 20%
4 300,000 90,000 30% - - 30%
Total 800,000 144,000 800,000 94,000

S a ving in ta x R s. 50,000
T a x sa ving pe r
m onth R s. 4,167

TAX PLANNING 2010-11

LALIT KHANDELWAL
 Q. Will a policy taken on wife’s name be
eligible for tax benefits?
• YES. a premium paid towards Insurance policy taken
in the name of self, spouse and children only is
allowable as deduction.
• If you pay a premium towards your parent’s policy,
then the premium paid does not qualify for deduction.
• Insurance premium will qualify for deduction only up
to 20% of Sum Assured.

TAX PLANNING 2010-11

LALIT KHANDELWAL
TAX PLANNING 2010-11

LALIT KHANDELWAL
 OTHER INCOME
There can be income from sources other than salary as well.

Bank Interest

House Other
Property OTHER Sources
INCOME

Business Capital Gains

& Profession

TAX PLANNING 2010-11

LALIT KHANDELWAL
Q. My life insurance policy has matured
and I have received Rs. 5,00,000. I have
also received a bank interest of Rs. 1 lac .

Will I have to pay tax on all these

Rs 6,00,000 ?

TAX PLANNING 2010-11

LALIT KHANDELWAL
Proceeds from an insurance policy is completely
tax-free under Sec 10(10)D provided that Sum
Assured is at least
5 times of premium.

In case this condition is violated, then the entire

proceeds of Rs 5,00,000 becomes taxable as
income from other sources.

Income from Bank Interest is to be added as

income from other sources to Gross Income for
Tax purpose

INCOME FROM RETIREMENT PROCEEDINGS ARE FULLY

EXEMPTED FROM INCOME TAX2010-11
TAX PLANNING FOR GOVT.EMPLOYEES
under Sec 10. LALIT KHANDELWAL
 Filing of the RETURN
Filing of Income Tax Return
is compulsory for everyone
whose gross total income -
the income under the five
heads (salary, business,
capital gains, house
property or other sources)
before allowing for any
deductions exceeds the
basic exemption limit. ●●●
TAX PLANNING 2010-11

LALIT KHANDELWAL
 ●●● Filing of the RETURN
There are two income tax return
forms, ITR-1 and ITR-2, for
salaried individuals. Your
sources of income (they will fall
under one or more of the five
sources mentioned earlier) will
decide your form. You will have
to submit the filled form to the
tax authorities and get an
acknowledgementTAX from them.
PLANNING 2010-11

LALIT KHANDELWAL
 INCOME SOURCE DECIDES RETURN FORM
ITR-1 - Income from salary, pension or interest
earned in a financial Year.

ITR-2 - Income or loss from house property, Capital

Gains , income from any other source.

Submit the filled form to the tax authorities and get

an acknowledgement from them.
TAX PLANNING 2010-11

LALIT KHANDELWAL
 Checklist
•Keep ITR-1, ITR-2 forms handy
* Enter all the details in CAPITAL letters
* Ensure that name, address and other
personal details are entered correctly
* Double-check PAN number, bank account
details and the MICR code you write
* Store the acknowledgement safely.
• Ensure disclosure of all income from other
TAX PLANNING 2010-11
sources, if any. LALIT KHANDELWAL
Before you start filing the return, check
if you would be getting a refund from
the IT Department or have to pay tax. In
case of the latter, even before starting
the filing process, you should first get
hold of Form 280, fill it up and deposit it
in any bank along with the tax payable
in cash or cheque. You can also pay tax
through Inter net banking. In both
cases, you will get a receipt number
which has to be quoted in the ITR form.
TAX PLANNING 2010-11

LALIT KHANDELWAL
TAX PLANNING 2010-11

LALIT KHANDELWAL
 WEB SITES

Site for Downloading IT FORMS :

www.incometaxindia.gov.in
Major sites offering e-filing facilities are :
Taxspanner, Taxsmile and Taxshax .

All the three sites are secure and easy to navigate

WebSite for SALARY & INCOME TAX CALCULATIONS:

irtsa.net.in
TAX PLANNING 2010-11

LALIT KHANDELWAL
 Stick to the deadline
Whether you are going offline or online,
make sure you are on the right side of 31st
July. If tax is due and return is not filed till
31st March of the following year, a penalty
of Rs 5,000 is levied.
ALL THIS INFORMATION WILL ENABLE YOU TO FILE YOUR
INCOME TAX RETURN YOURSELF
TAX PLANNING 2010-11

LALIT KHANDELWAL
 DISCLAIMER
 This presentation is for information only.
 Please Refer latest IT rules before filing
your Income Tax Return.

TAX PLANNING 2010-11

LALIT KHANDELWAL
TAX PLANNING 2010-11

LALIT KHANDELWAL
THE END
TAX PLANNING 2010-11

LALIT KHANDELWAL