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Tax Planning & Tax Filing FAQs

Confused about income tax planning? Get all your tax queries answered here with Angel Wealth's FAQ exclusively on tax planning.

A. Tax is a fee that you as an individual or an organisation has to pay to the country they are based in. There are commonly two types of taxes, direct tax and indirect tax. In India, direct tax is payable on your primary income. According to the Income Tax Act of India, income tax is payable for income from the following sources:

  • 1. Income from house property
  • 2. Income from business and profession
  • 3. Income from salary
  • 4. Income from capital gains
  • 5. Income from other sources

A. The tax you pay depends on your income and age. For people under the age of 60, following is the tax you pay as per your income:

  • 1. Upto 2.5 lakhs - Nil
  • 2. 2.5 lakhs to 5 lakhs - 5% of (total income - 2.5 lakhs)
  • 3. 5 lakhs to 10 lakhs - 12,500 + 20% of (total income - 5 lakhs)
  • 4. Above 10 lakhs - 1,12,500 + 30% of (total income - 10 lakhs)

A. The Indian Income Tax Act allows you to save tax under several C19:N37 Here a comprehensive list of options for you

Section Deduction On Comments
80C Investment in PPF Rs. 1,50,000
Employee’s share of PF contribution
NSCs
Life Insurance Premium payment
Children’s Tuition Fee
Principal Repayment of home loan
Investment in Sukanya Samridhi Account
ULIPS
ELSS
Five year deposit scheme
80CCD(2) Employer’s contribution to NPS account Maximum up to 10% of salary
80CCD(1B) Additional contribution to NPS Maximum up to 10,000
80TTA(1) Interest Income from Savings account Maximum up to 10,000
80E Interest on Education Loan Interest paid for 8 years
80D Medical Insurance – Self, spouse, children Rs. 25,000
Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old Rs. 30,000

A. Following are the avenues to save tax without investing:

  • 1. Tuition fees paid to any educational institute for full time education of children is not taxable till a limit of INR 1.5 lakhs
  • 2. The repayment of your home loan is eligible for tax deduction upto a maximum limit of INR 1.5 lakhs
  • 3. LIC Insurance premium paid annually is an eligible tax-saving payment with the limit of maximum deduction being INR 1.5 lakhs
  • 4. For salaried individuals, Employe Provident Fund is automatically deducted from their salary and this deduction is tax free within the limit of INR 1.5 lakhs
  • 5. The interest component paid on education loan is tax exempted, however there is no tax benefit on the principal component of EMI.

A. Following are the tax saving intsruments wherein you can invest to save your income tax:

Plans Interest (%) Tax Benefit
Life Insurance 0-6% Offer tax exemption under section 80C and 10(10D) of Income Tax Act
Health Insurance - Tax benefit under section 80D of Income Tax Act
PPF 8%p.a. Up to Rs. 1.5 lakhs investment is tax free under Section 80C of the Income Tax Act
ELSS Interest rate is not fixed Investment towards ELSS is Tax Free under Section 80C
Bank FD 5.5%-7.5% Offers tax deduction under Section 80C
Senior Citizen Saving Scheme 8.5% Tax deduction under Section 80C
National Pension Scheme 4-10% Tax Deduction under Section 80C
Public Provident Fund(EPF) 8.5% Tax Deduction under Section 80C

A. Filing of income tax returns is a requirement under the tax laws. But in addition to that, filing tax returns have the following benefits:

  • 1. To clain your tax refunds from the Income Tax Department, filing of tax returns is a must
  • 2. It is a document required to be submitted in tha bank when you are applying for loans
  • 3. Visa embassies may also ask for this document
  • 4. While buying a high life cover (INR 50 lakhs and above), ITR serves as a document to verify your annual income
  • 5. For businessmen and partners of firms who do not get Form 16, ITR becomes an evn more important document

A. Deadlines for tax filing is April 1st of every FY to July 31st, although dates may get extended.

 

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