FINtastic Women Your Pathway To Be The Household CFO
FINtastic Women Program International College of Financial Planning
• The New Tax Regime, you will have to forgo some exemptions such as • Leave Travel Allowance (LTA), • House Rent Allowance (HRA), and deductions available under chapter VI A • Section 80 [such as 80C, 80CCC, 80CCD, 80D, 80, 80E,80G, 80TTA etc]. • So we would suggest to keep this things to be in mind while opting the regime. FINtastic Women Program International College of Financial Planning
FINtastic Women Program International College of Financial Planning
FINtastic Women Program International College of Financial Planning
FINtastic Women Program International College of Financial Planning
FINtastic Women Program International College of Financial Planning
Surcharge applicable to the individuals covered in Part I, II and III: Income limit Surcharge Rate on the amount of income tax Net income exceeds Rs.50 Lakhs but 10% doesn’t exceed Rs. 1 Crore 15% Net income exceeds Rs.1 Crore but doesn’t exceed Rs 2 crore 25% 37% Net income exceeds Rs.2 Crore but doesn’t exceed Rs 5 crore Net income exceeds Rs.5 Crore FINtastic Women Program International College of Financial Planning
• Computation of Income: (Section 15 – 17) • Income from salary (Section 22 – 27) • Income from House Property (Section 28 – 44) • Income from Business / Profession (Section 45 – 55) • Income from Capital Gain (Section 56 – 59) • Income from Other Sources (Section 60 – 66) • Clubbing of Income (Section 70 – 79) • Set off & Carry Forward of Losses • Results in the Gross Total Income (GTI) International College of Financial Planning • Less Deduction u/s 80C to 80U • Gives the Total Income (TI) FINtastic Women Program
Allowances • Employees are given various allowances during the year. Some of them are given for the official work and some for personal purposes. These are given in cash. These Allowances are either • Fully exempt • Fully taxable, • or partially taxable depending upon the nature of allowance. FINtastic Women Program International College of Financial Planning
Perquisites • Employees are provided with various facilities during the year. • Some of them are given for the official work and some for the personal purposes. • For all such facilities, a money value of such facilities has to be calculated which shall be known as perquisite value (PV). These perquisites are either • fully exempt or • fully taxable or • partially taxable depending upon the nature of perquisites. FINtastic Women Program International College of Financial Planning
ALLOWANCES • Fixed monetary payments for a specific purpose is known as allowance. • Employer provides to employee a fixed sum of money and also specifies the purpose for which it has to be used. • The amount of allowances paid forms part of pay package of the employee. • As a general rule, all allowances are to be included in the total income unless specifically exempted. • Example: House Rent Allowance, Children Education Allowance, Hostel Expenditure Allowance FINtastic Women Program International College of Financial Planning
Fully Taxable Partly Taxable (i) Entertainment Allowance (i) House Rent Allowance [u/s (ii) Dearness Allowance 10(13A)] (iii)Overtime Allowance (ii)Special Allowances [u/s 10(14)] (iv)Fixed Medical Allowance (v) City Compensatory Allowance (vi)Interim Allowance (to meet increased cost of living in cities) (vii)Servant Allowance (viii)Project Allowance (ix)Tiffin/Lunch/Dinner Allowance (x) Any other cash allowance (xi)Warden Allowance FINtastic Women Program International College of Financial Planning
HOUSE RENT ALLOWANCE • HRA granted to an employee is exempt to the extent of least of the following: Metro Cities (i.e. Delhi, Other Cities Kolkata, Mumbai, Chennai) 1) HRA actually received. 1) HRA actually received 2) Rent paid - 10% of salary for 2) Rent paid - 10% of salary for the relevant period the relevant period 3) 50% of salary for the 3) 40% of salary for the relevant relevant period period FINtastic Women Program International College of Financial Planning
(a) Children Education Allowance Rs.100pm/child up to a maximum of 2 children. b. Hostel Expenditure Allowance Rs.300pm/child up to a maximum of 2 children. FINtastic Women Program International College of Financial Planning
RETIREMENT BENEFITS • Pension – Section 10(10A) • Uncommuted Pension: Uncommuted pension refers to pension received periodically. • It is fully taxable in the hands of both government and non-government employees. • Commuted Pension: Commuted pension means lump sum amount taken by commuting the whole or part of the pension. FINtastic Women Program International College of Financial Planning
Its treatment: • Government Employees - Fully exempt. • Non-Government Employee: Following shall be exempt • If the employee is in receipt of gratuity, • Exemption=1/3 of the amount of pension which he would have received had he commuted the whole of the pension. FINtastic Women Program International College of Financial Planning
• If the employee does not receive any gratuity • Exemption=1/2 of the amount of pension which he would have received had he commuted the whole of the pension. FINtastic Women Program International College of Financial Planning
GRATUITY • UPTO 20 LACS EXEMPT FINtastic Women Program International College of Financial Planning
LEAVE ENCASHMENT • Upto 3 lacs are exempt FINtastic Women Program International College of Financial Planning
PROVIDENT FUND • Fully Exempt FINtastic Women Program International College of Financial Planning
PROVIDENT FUND Particulars Recognized PF Unrecognized Statutory PF Public PF PF Employer’s Amount in excess Not taxable yearly Fully exempt N.A. Contribution of 12% of salary Employee’s is taxable Not eligible for Eligible for Eligible for Eligible for Contribution deduction u/s 80C deduction deduction u/s 80C deduction u/s 80C Interest Credited Amount in excess Not taxable yearly Fully exempt Fully exempt of 9.5% p.a. is taxable u/h salaries Amount received See Note (1) See Note (2) Fully exempt u/s Fully exempt u/s on retirement, 10(11) 10(11) etc. FINtastic Women Program International College of Financial Planning
ENTERTAINMENT ALLOWANCE • Entertainment allowance received is fully taxable for all employees and is first to be included in the salary. • However deduction in respect of entertainment allowance is available in case of Government employees. The amount of deduction will be lower of: 1. One-fifth of his basic salary or 2. Rs.5,000 or 3. Entertainment allowance received. FINtastic Women Program International College of Financial Planning
DEDUCTION • Income Tax Deductions can be claimed on the gross total income. • Certain specified investments and expenditure are considered to claim deductions. FINtastic Women Program International College of Financial Planning
SECTION 80C • It’s the most popular income tax deduction. Deduction under this section is allowed to individual and HUF. • The maximum amount that can be claimed under 80C is Rs.1,50,000. • Various options of investments and payments that qualify for deduction under this section are: FINtastic Women Program International College of Financial Planning
• Life insurance premium payment International College of Financial Planning • Annuity plans • Unit Linked Insurance Plan • PPF contribution • SRF/RPF contribution • Tuition fees payment • Repayment of principal of housing loan • Superannuation Fund contribution • Senior Citizen Scheme investment • 5 year FD investment • Sukanya Samridhi Yojna investment FINtastic Women Program
• Mutual Funds (Equity Linked Saving Scheme) investment • Stamp duty, registration fee incurred for the purpose of transfer of such house property to the assesse. FINtastic Women Program International College of Financial Planning
SECTION 80CCD (1B) • Moreover, an additional deduction of INR 50,000, over and above INR 1.5 lakhs can be claimed under Section 80CCD (1B). FINtastic Women Program International College of Financial Planning
SEC 80D • Sec 80D was introduced with an aim to promote health planning among individuals and HUF. Sec 80D provides deduction of expenditure on the : • Medical insurance premium • Contribution to CGHS(Central Govt Health Scheme)/notified scheme • Preventive health check-up and • Medical expenditure (in case of senior citizens). FINtastic Women Program International College of Financial Planning
FINtastic Women Program International College of Financial Planning
FINtastic Women Program International College of Financial Planning
SECTION 80DD • 80DD is the deduction for the medical treatment of a handicapped dependent, who is a person with disability. • This section provides fixed deduction, it does not depend on the age and the amount of expenditure. In case of • Normal Disability ( i.e. at least 40%) the deduction allowed from gross total income is Rs. 75,000. • Severe Disability (i.e. 80% or more) the deduction allowed from gross total income is Rs.1,25,000. •. FINtastic Women Program International College of Financial Planning
SECTION 80DDB • “Income Tax Deduction for Specified Diseases • The income tax deduction under section 80DDB serves as financial help for those who are suffering from a severe disease or are taking care of such dependent family members. • Income tax deduction of Rs 1,00,000 in case of senior citizens (aged 60 years or above) and • Rs 40,000 in other cases are available under this section. •. FINtastic Women Program International College of Financial Planning
SECTION 80CCD (1B) • Moreover, an additional deduction of INR 50,000, over and above INR 1.5 lakhs can be claimed under Section 80CCD (1B). . FINtastic Women Program International College of Financial Planning
SECTION 80 CCD (2) • “This Section is applicable for salaried employees where their employer is also contributing to the National Pension Scheme. • The employer can make contributions towards National Pension Scheme besides contribution to EPF. • Amount Contributed • or 14% of Basic Salary + Dearness Allowance • (in case the employer is Central Government) 10% of Basic Salary+ Dearness Allowance(in case of any other employer) - Whichever is lower . FINtastic Women Program International College of Financial Planning
SECTION 80E “interest component” paid on higher education loan FOR self, spouse, or children. • There is no maximum or minimum deduction limit specified under section 80E. • The deduction under section 80E can be claimed for a maximum of 8 Assessment Years. FINtastic Women Program International College of Financial Planning
FINtastic Women Program International College of Financial Planning
SECTION 80TTA • Section 80TTA of the Income Tax Act 1961 provides deduction on the interest earned on your savings account with a bank, cooperative society or post office, up to Rs.10,000/- • Individuals or Hindu United Families (HUF) • Like resident Indians, NRIs are also eligible for deduction u/s 80TTA. FINtastic Women Program International College of Financial Planning
SECTION 80TTB • Section 80TTB allows a deduction upto • Rs. 50,000/- in respect of interest income from deposits held by resident senior citizens • Section 80TTA is not available to senior citizens anymore FINtastic Women Program International College of Financial Planning
INCOME U/H HOUSE PROPERTY Particulars Rs. Rs. Gross Annual Value (GAV) xxx Less: Municipal taxes paid during the year by xxx xxx the assessee xxx xxx Net Annual Value (NAV) Less: Deductions u/s 24 xxx (a)Standard deduction @ 30% of NAV xxx (a)Interest on borrowed capital Income from House Property FINtastic Women Program International College of Financial Planning
DEDUCTIONS FROM INCOME FROM HOUSE PROPERTY – SECTION 24 • 24(a) > 30% of NAV is Allowed as Deduction • This is a flat deduction and is allowed irrespective of the actual expenditure incurred. • In case annual value is nil or negative, the assessee will not be entitled to deduction of 30%. FINtastic Women Program International College of Financial Planning
u/s 24(b) • Interest payable on loans borrowed for the purpose of acquisition, construction, repairs, renewal or reconstruction can be claimed as deduction. • Interest payable on a fresh loan taken to repay the original loan raised earlier for the aforesaid purposes is also admissible as a deduction. FINtastic Women Program International College of Financial Planning
• Deduction u/s 24(b) for Self occupied property whose Net annual value is NIL • Deduction u/s 24(b) shall be allowed upto maximum limit of 2,00,000 FINtastic Women Program International College of Financial Planning
CAPITAL GAIN FINtastic Women Program International College of Financial Planning
TYPES OF CAPITAL GAINS THERE ARE 2 TYPES OF CAPITAL GAINS 1. SHORT TERM CAPITAL GAIN (STCG): IT ARISES ON TRANSFER OF SHORT TERM CAPITAL ASSETS. SEC 2(42A). 2. LONG TERM CAPITAL GAIN (LTCG) : IT ARISES ON TRANSFER OF LONG TERM CAPITAL ASSETS. SEC 2(29A). FINtastic Women Program International College of Financial Planning
a. Equity or preference shares in a company listed Unlisted shares or Other Capital on a recognized stock exchange in India An immovable property, Asset b. Securities (like debentures, bonds, govt being land or building or securities etc.) listed on a recognized stock both exchange in India c. Units of UTI, d. Units of equity oriented mutual fund, e. Zero coupon bonds Held for a Held for period Held for a Held for a Held for a Held for a period more than 12 period Upto 24 period more period Upto period Upto 12 months preceding 36 months months date of transfer months than 24 preceding more than preceding months 36 months preceding date of transfer preceding date of preceding date date of date of transfer of transfer transfer transfer Short Term Long term Capital Short Term Long term Short Term LONG Term CapitalAsset Asset Capital Asset Capital Capital Capital Asset Asset Asset FINtastic Women Program International College of Financial Planning
SHORT-TERM CAPITAL GAINS PROPERTY BOUGHT ON 10TH AUG 2018, RS.20 LAKHS, SOLD ON 7TH AUG 2020 RS.30 LACS BROKERAGE PAID RS.1 LAC, Particulars ₹₹ Full Value of Consideration (i.e. Sale Consideration) xxx Less: Expenditure incurred in connection with such transfer xxx Net Consideration (or Net Sale Consideration) xxxx Less: Cost of Acquisition (i.e. CoA) xxx xxx xxxx Cost of Improvement (i.e. CoI) Short-term capital gains/loss xxxx FINtastic Women Program International College of Financial Planning
LONG-TERM CAPITAL GAINS PROPERTY BOUGHT ON 10TH AUG 2015, RS.20 LAKHS, SOLD ON 7TH AUG 2020 RS.40 LACS BROKERAGE PAID RS.1 LAC, Particulars ₹ ₹ Full Value of Consideration (i.e. Sale Consideration) xxx xxx Less: Expenditure incurred in connection with such xxx xxxx transfer xxx Net Consideration (or Net Sale Consideration) xxxx xxxx Less: Indexed Cost of Acquisition (i.e. ICoA) Indexed Cost of Improvement (i.e. ICoI) Long-term capital gains/loss FINtastic Women Program International College of Financial Planning
Financial Year CII Number 2020-21 301 2019-20 289 2018-19 280 2017-18 272 2016-17 264 2015-16 254 2014-15 240 2013-14 220 2012-13 200 2011-12 184 2010-11 167 2009-10 148 2008-09 137 2007-08 129 2006-07 122 2005-06 117 2004-05 113 2003-04 109 2002-03 105 2001-02 100 FINtastic Women Program International College of Financial Planning
INDEXED COST OF ACQUISITION COST INFLATION INDEX (OF FINANCIAL YEAR IN WHICH ASSET TRANSFERRED) COST OF ACQUISITION OF CAPITAL ASSET X -------------------------------------------------------------- COST INFLATION INDEX (OF THE FINANCIAL YEAR IN WHICH ASSET HELD BY ASSESSEE) OR (OF FINANCIAL YEAR 2001- 2002), WHICHEVER IS LATER FINtastic Women Program International College of Financial Planning
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