TAX EVASION

OR
TAX PLANNING
 TAX EVASION
 Tax evasion is the method by which
a person illegally reduces his tax
burden by either deflating their
income or inflating their expenses
 It involves breaking the law, not
paying one’s taxes where the law
clearly states that they must be paid
 TAX PLANNING
 Tax planning is an arrangement of
financial activities in such a way that
maximum tax benefits, as provided in
the Income tax act are availed of.
 It envisages use of certain exemptions,
deductions, rebates and reliefs
provided in the act.
 Income Tax Slab for Individual Tax Payers

Income Slab Tax Rate

Income up to No tax
Rs.2,50,000/3,00,000/5,00,000

Income from 5%
Rs 2,50,000 – Rs 5,00,000

Income from 20%

Rs 5,00,000 – 10,00,000

Income more than Rs 10,00,000 30%

Eg:
i)If the income is Rs.3,50,000 then the tax will be
For First 2,50,000 - NIL
For next 1,00,000 @5% - 5,000/-
(2,50,000 – 3,50,000)
ii)If the income is Rs.7,00,000 then the tax will be
For First 2,50,000 - NIL
For next 2,50,000 @5% - 12,500/-
(2,50,000 – 5,00,000)
For next 2,00,000 @20% - 40,000/-
(5,00,000 – 7,00,000)
Total tax 52,500
 80C deductions
 Tax Saving Fixed Deposits
 Life Insurance Premium
 Public Provident Fund
 National Savings Certificate
 Sukanya Samridhi A/c
 Equity linked savings scheme
 Tuition fees to an Indian institution for full
time education
 HOUSE PROPERTY AND TAXES

 Repayment of Principal amount –

Deduction U/s 80C

 Payment of interest on housing loan –

Deduction u/s 24

 Claim property tax paid for every year as

deduction
REMEMBER TO CLAIM DEDUCTIONS FOR RENT PAID

 Salaried persons can claim HRA exemption upto a

certain limit which is lower of the following

• Actual HRA received

• 50%/40% of salary
• Rent paid in excess of 10% of salary

 Others can claim deduction for lower of the following

• Rent paid in excess of 10% of Total Income

• 25% of Total Income
• Rs.5,000 per month
(should not own any accommodation or receive any rent
Also int and principal rpmt of housing loan cannot be claimed)
 Capital gains
 Invest your long term capital gain in specified
assets to get exemption from capital gains tax.
 Hold your equity oriented mutual funds or
shares for more than 12 months to get capital
gain exemption.
 LAST MINUTE CHECK LIST
 Claim deduction on
• Interest from SB accounts upto Rs.10,000
• Preventive health checkup up to Rs.5,000 even if it is paid in
cash.
• Interest on educational loan
 Split your income to your family members
 HUF for secondary income
 Gifts received on marriage are totally exempt
 Claim rebate u/s 87A
 Plan your advance tax for the subsequent year
If you are an early bird, then you can do the
following:
 Ignore eleventh-hour hasty decisions
 Make payment of life and health insurance
premiums on monthly or quarterly basis
 Distribute your investments over 12 months
and reduce your burden in the last months.