Ce diaporama a bien été signalé.
Nous utilisons votre profil LinkedIn et vos données d’activité pour vous proposer des publicités personnalisées et pertinentes. Vous pouvez changer vos préférences de publicités à tout moment.

Tax plannig for an employee

1 504 vues

Publié le

Taxation of a salaried employee and planning for tax saving,
Tax saving options, how to minimize tax...

Publié dans : Droit
  • Soyez le premier à commenter

Tax plannig for an employee

  1. 1. LOGO R Venkatakrishnan &Associates Chartered Accountants Offices at Chennai Bangalore Hyderabad Salem Devanahalli http://www.rvkassociates.com Tax Planning for Employee
  2. 2. R Venkatakrishnan & Associates, Chartered Accountants Topics Introduction1 Salary Income2 Special Exemptions in Salary Income3 Deductions from Taxable Income4 Other Information5
  3. 3. Confusions in Jan to Mar R Venkatakrishnan & Associates, Chartered Accountants How do I learn about my investment and taxes? Can I use both HRA and Home loan to save taxes? What is the max I can save on Taxes? How much tax I Need to pay this year? PPF,FD or Insurance for Tax saving? What is the mystery of 80’s in tax planning? Why did I buy that insurance thing which I never require? How much benefit I can get for my home and education loan?
  4. 4. R Venkatakrishnan & Associates, Chartered Accountants 1. Introduction  Income tax:- Tax on the income earned. Income tax is an important source of revenue for government in all the countries today.  Income :- Income means some monetary returns periodically received from some definite source.  Who is supposed to pay income tax :- - An individual - A company - A firm - A HUF - A local authority - A BOI or AOP - AJP
  5. 5. R Venkatakrishnan & Associates, Chartered Accountants Total Income of an Individual Assessee Particulars Amount Income from Salary 7,50,000 Income from House Property (1,50,000) Profits/Gains from Business or Profession 50,000 Income from Capital Gains 35,000 Income from other source 15,000 Gross Total Income 7,00,000 Less : Deductions under Chapter VI-A (1,20,000) Total Income 5,80,000 * The above figures are illustrative
  6. 6. R Venkatakrishnan & Associates, Chartered Accountants 2. SALARY INCOME (SECTION 15,16 & 17) What is salary?  Every payment made  By employer to employee  For services rendered  Includes both monetary and non monetary facilities  Foregoing salary is salary income  Tax free salary should include the tax paid by the employer Basis of Charge  Salary is chargeable to tax when it is due to be paid whether it is paid or not  Salary is chargeable to tax when any amount is paid whether it is due or not  Arrears of salary paid to employee is chargeable to tax (in the year of receipt)
  7. 7. R Venkatakrishnan & Associates, Chartered Accountants 2. SALARY INCOME contd.. Salary includes…
  8. 8. R Venkatakrishnan & Associates, Chartered Accountants 2. SALARY INCOME contd.. Income from “Salary” includes Salary Allowances Fully Taxable Fully Exempted Partially Exempted Special Exemptions Perquisites Taxable Perquisites Non Taxable Perquisites Profit in lieu of salary
  9. 9. R Venkatakrishnan & Associates, Chartered Accountants 2. SALARY INCOME contd.. Salary includes:  Basic salary and allowances  DA  Advance salary  Arrear Salary  Leave salary Fully Taxable Salary:  Family Allowance  Overtime, servant, warden Allowance.  Lunch or Tiffin allowance  Leave encashment during service  Monthly or uncommuted pension  Bonus  Commission  Profit in lieu of salary
  10. 10. R Venkatakrishnan & Associates, Chartered Accountants 2. SALARY INCOME contd..  Travelling Allowance  Daily Allowance  Conveyance Allowance  Helper Allowance  Academic Allowance  Uniform Allowance Fully Exempted Allowances: Note: Allowances received should be expensed towards official performance of duties only. Partially Exempted Allowances: Type of Allowance Amount of Exemption (in Rs.) Children Education Allowance `100 p.m. per child (restricted to 2 children) Children Hostel Expenditure Allowance `300 p.m. per child (restricted to 2 children) Transport Allowance `800 p.m. (`1600 p.m. if the employee is blind/handicapped) Note: Partially exempted allowances mentioned above are not complete and includes other allowances mentioned in section 10(14) of the Act.
  11. 11. R Venkatakrishnan & Associates, Chartered Accountants 2. SALARY INCOME contd..  Perquisites includes any amount due to or received in lump sum or otherwise, by an assessee, from an employer. Perquisites are usually attached to a position, by an organization. Perquisites Meaning:  Value of Rent free accommodation given by the Employer.  Value of Accommodation given at concessional rate.  Value of benefit given free of cost or at concessional rate.  Sum paid by employer on behalf of the employees for any obligation payable by the employee.  Value of any specified securities or sweat equity shares allocated to employee at free of cost or at a concessional rate.  Amount contributed by employer to an approved superannuation fund in excess of Rs.1,00,000/-.  Sum paid/payable by the employer towards insurance on the life of the Individual. Perquisites includes
  12. 12. R Venkatakrishnan & Associates, Chartered Accountants 3.Special Salary Exemptions House Rent Allowance • The HRA exemption, that can be claimed for the Tax Exemption is minimum of the following: • Actual HRA received. • Rent paid less 10% of the Salary. • 40%/50% of Salary. • If the rent paid during the year exceeds 1 lakh, you need to submit the PAN of the landlord or declaration from landlord(if PAN not available) to employer.
  13. 13. R Venkatakrishnan & Associates, Chartered Accountants 3.Special Salary Exemptions contd.. Leave Travel Assistance (LTA) • Meaning: Leave Travel Assistance may be provided by the employer to the employee and his family - • In connection with his proceeding on leave to any place in India, while in service. • Proceeding to any place in India after the retirement or termination from service. • Family of an Individual means: • Spouse and children of the Individual, and • Parents, Brothers and Sisters of the individual or any of them, wholly or mainly dependent on him. • Conditions for Benefit: • The Individual can avail the benefit of LTA offered by his employer twice in block of four years, • This exemption is available only for two children of an Individual born on or after 01.10.1998. But there is no limit in case of children born before 01.10.1998. • Amount of Exemption for LTA: • The maximum amount of exemption is the cost of travel on the shortest route. The Exemption amounts for various travelling modes are calculated in the following manner: Mode of Travel Class of Travel Amount Exempt Airways Economy Class Travel Charges on the Shortest Route collected by National Airways Train I class AC Travel Charges on the Shortest Route Recognized Transport Deluxe Class Travel Charges on the Shortest Route Other Transport - I Class AC fare as per Railways, equivalent for the distance for Shortest Route.
  14. 14. R Venkatakrishnan & Associates, Chartered Accountants 3.Special Salary Exemptions contd.. Unfurnished accommodation Owned by Employer Population > 25L – 15% of Salary Population > 10L – 10% of Salary Other places – 7.5% of Salary Not owned by employer Rent paid by employer or 15% of salary, whichever is lower Accommodation in the hotel 24% of salary or actual charges, whichever is lower Furnished Accommodation Furniture owned by Employer Value of Unfurnished Accommodation + 10% p.a. of Cost of furniture Hired from Third Party Value Unfurnished Accommodation + Actual Charges Taxability of Rent Free Accommodation
  15. 15. R Venkatakrishnan & Associates, Chartered Accountants 3.Special Salary Exemptions contd.. Private purpose Official Purpose Private and official purpose Car owned by the employee and expenses met by him Not a perquisite Not a perquisite Not a perquisite Car owned by the employee and expenses are reimbursed by the employer Actual Expense Less : Amount recovered Not a perquisite Actual Expense Less: Up to 1.6Ltrs 1800+900 for chauffer Above 1.6Ltrs 2400+900 for chauffer Car is owned/ hired by the employer and expenses met by the employer Actual Expense Add: Depreciation @10% / hire charges Less : Amount recovered Not a perquisite Taxable Value Up to 1.6Ltrs 1800+900 for chauffer Above 1.6Ltrs 2400+900 for chauffer Car is owned/ hired by the employer and expenses met by the employee Depreciation @10% / hire charges Less : Amount recovered Not a perquisite Taxable Value Up to 1.6Ltrs 600+900 for chauffer Above 1.6Ltrs 900+900 for chauffer Taxability of Motor Car Benefits
  16. 16. R Venkatakrishnan & Associates, Chartered Accountants 4.Deductions from Taxable Income  Tax Saving Sections: Section 80C (Lots of Options discussed in detailed later) Section 80CCC (Pension Products) Section 80CCD (Approved Pension Scheme) Maximum Deduction of Rs.1,00,000/- Investment& Expenditure
  17. 17. R Venkatakrishnan & Associates, Chartered Accountants Section 80C,80CCC,80CCD  The Maximum deduction available combining all the following investments/expenditures is Rs 1 Lakh.  All the investments in 80C,80CCC,80CCD can be categorized as follows: Investment Options (I) Provident Fund Public Provident Fund National Savings Certificate(NSC) Senior Citizens Savings Scheme Tax Savings Fixed Deposits Investment Options (II) Life Insurance Premium Pension plans from insurance companies New pension Scheme Tax Savings Mutual Funds Central Govt Employees Pension Scheme Expenditures Principal payment on Home loan Stamp duty and registration cost of the house Tuition Fee for 2 children
  18. 18. R Venkatakrishnan & Associates, Chartered Accountants Tax Saving Sections contd..Donations Section 80G Donations to charitable funds and charitable institutions 10% on Adjusted GTI 50% or 100% of donation Section 80GGA Donations for scientific research or rural development No limit Section 80GGC Donations to political parties No limit HealthandWell being Section 80D Medical Insurance for Family and parents Deduction up to Rs.15,000/- or Rs.20,000/- Section 80DD Maintenance and medical treatment of Disabled dependent Deduction up to Rs.50,000/- or Rs.1,00,000/- Section 80DDB Treatment of Certain disease/ailment Deduction up to Rs.40,000/-or Rs.60,000/- Section 80U Physically disabled Assessee Deduction of Rs.50,000/- or Rs.1,00,000/-
  19. 19. R Venkatakrishnan & Associates, Chartered Accountants Tax Saving Sections contd..Others Section 80GG Payment of rent in the place of HRA Deduction up to Rs.24,000/- Section 80CCG Rajiv Gandhi Equity Savings Scheme Deduction up to Rs.25,000/-(50% of amount invested) Section 80TTA Interest received in Savings Account Deduction up to Rs.10000/- Loans Section 80E Interest payable on education loan No limit for deduction Section 24 Interest payable on Housing loan Deduction up to Rs.1,50,000/- on housing loan Section 80EE (w.e.f. AY 2014-15) Interest payable on Housing Loan Deduction up to Rs.1,00,000/-
  20. 20. R Venkatakrishnan & Associates, Chartered Accountants Rajiv Gandhi Equity Savings Scheme(RGESS)  RGESS is a new tax saving scheme which was announced in 2012 to encourage first time investors in stock market  Under RGESS, you are eligible for a tax deduction on 50% of the amount invested  The maximum amount eligible for investment in a year is 50000. So limit on max deduction is 50% of 50000=25000  You can invest in BSE-100 and CNX-100 and public sector enterprises ( Navaratna, Maharatna, Miniratna)  Mutual funds which invests only in these companies are also eligible for deduction Who can Invest in RGESS:  This scheme is for new investors to come into stock market. Encourage them to invest in stock markets.  Who didn’t have a Demat A/c on Nov 23, 2011(i.e the date on which the scheme notified.  Have not transacted in equity or derivative before the above date.  Had a demat account but as second joint holder.  Your Gross Total Income Should be less than 12L Open a Demat Account Designate the A/c as RGESS account Buy Eligible Stocks Submit Demat statement as proof to claim tax benefit Steps to claim Tax Benefit in RGESS
  21. 21. R Venkatakrishnan & Associates, Chartered Accountants 5.Other Important Information Home Loan: Interest and Principal  Buying a house is one of the top most priority for most  The Good news is you get tax deduction on both principal and interest payment on your Housing Loan Home Loan Principal Deduction u/s 80C up to Rs.1 lakh Interest Deduction u/s 24 up to Rs.1.5 lakh Addl Deduction u/s 80EE up to Rs.1 lakh Deduction on Principal payment on Home Loan Deduction up to Rs 1 Lakh is allowed on the principal repayment of the housing loan if the house is self occupied or vacant. The house should be registered in the name of the assessee. (Can be Joint owner as well) The loan should be from Banks, NBFCS or respective employers. Loans taken from friends/relatives does not qualify for this deduction. The deduction is available also for people with multiple properties.
  22. 22. R Venkatakrishnan & Associates, Chartered Accountants Home Loan: Interest and Principal Deduction on Interest payment on Home Loan  Deduction up to Rs.1.5Lakh is allowed on the Interest payment of the housing loan in case of single non-rented house.  Incase of rented or multiple houses there is no limit on amount of deduction.  All the rent you received will be your taxable income(Income)  Interest paid will be taken as expense(Expense)  Net amount will be considered as your Income/Loss from House Property. Additional Deduction on Interest Payment on Housing Loan A new section 80EE has been inserted w.e.f FY 2013-14, which gives additional deduction of Rs.1lakh on payment of interest on housing loan subject to following conditions: The Loan needs to be taken in the financial year 2013-14 Loan should be taken from banks or housing finance companies Loan < 25L Value of House <40L No other property at the time of loan sanction. The additional deduction on Interest payment of home loans can be claimed in FY 2013-14, in case you are not able exhaust the limit in FY 2013-14, The balance can be claimed in FY 2014-15
  23. 23. R Venkatakrishnan & Associates, Chartered Accountants When?
  24. 24. R Venkatakrishnan & Associates, Chartered Accountants Any Questions Prepared By: Korada Devi Vara Prasad Audit Executive –CA Final , CWA Final R Venkatakrishnan & Associates Email us at: assurance@rvkassociates.com Visit us at : http://www.rvkassociates.com
  25. 25. LOGO

×