Tax Planning
If you are one of those individuals who invest in tax saving schemes at the eleventh hour to avoid paying taxes, then trust us you are setting a very wrong example for yourself only. As this will become a habit in the long run and your fear about taxation will never go away. Tax Planning is an area that is best done along with the advice of those professionals who deal in this matter.
At Nostra Wealth, our team of experts will provide you with advice and opinion that will not only make your taxation fears go away but the entire process will be a smooth and convenient one so that your long term financial planning is not effected in any manner.
Insurance as tax saving instruments:
Insurances are one of the top tax saving schemes. Now these Insurance Schemes are of many types so that you can pick and choose as per your requirements and convenience.
- Life insurance: Under Section 80C of the Income Tax Act (I-T Act) premiums for life insurance covering you, your spouse and children are eligible for deductions up to 1.5 Lakh.
- Health insurance: This is another vital area where you can easily invest. Health insurance is not only a tax saving mechanism but also helps you out in your time of a medical emergency. Section 80D, premiums for insuring the health of self, spouse and children are eligible for up to Rs 15,000 deduction in a financial year. Paying for parents' cover makes you eligible for an additional deduction of up to Rs 15,000. If at least of one the insured is above 60 (a senior citizen for tax provisions), the deduction limit in that case is Rs 20,000.
Tax saving schemes boosts your wealth as well:
- RGESS: Rajiv Gandhi Equity Savings Scheme is ideal for the small scale investor. RGESS deduction u/s 80 CCG is available on 50% of the amount invested. The investors who invest up to Rs 50,000/- is eligible for claiming benefit and it comes with a lock-in period of 3 years.
- ELSS: You can make claims under Section 80C benefits for investments in Equity linked savings scheme (ELSS). It again comes with a lock-in period 3 years. These investments do not attract capital gains tax.
- ULIPS: Unit-linked insurance plans, or Ulips, is another popular choice and can be used to get insurance as well as equity exposure. ULIPs investments are eligible for Rs 1.5 lakh deduction under Section 80C. The maturity proceeds are tax-free.
Retirement Planning - another tax saving instrument:
Don't even think for a single minute that your retirement planning has got nothing to do with your tax saving plans. In fact it is one of the vital planning's that can save your money from getting taxed. Some of the popular measures offered are:
- The employees' provident fund (EPF): Here both the employer and the employee need to contribute. However it is applicable only if you fall within the Rs 1 lakh Section 80C limit.
- Savings certificates: Five-year and 10-year National Savings Certificates (NSCs) are offering 8.6 per cent and 8.9 per cent a year, respectively. But keep in mind that the interests are taxable.
- Senior citizens' savings: Senior citizens (60 and above) will get 9.3 per cent return in 2012-13 under the Senior Citizens' Savings Scheme. The maturity period is five years.
- National pension system: You have to contribute at least Rs 6,000 a year in the NPS account, which is eligible for deduction under Section 80CCD (the total deduction under Section 80C, 80CCC and 80CCD is Rs 1 lakh).
INCOME TAX SLAB
Income Tax Slabs and Rates for AY 2019-20
Income Tax Slabs / Income Tax Rates for AY 2019-20 (applicable on income earned during 01.04.2018 to 31.03.2019) for various categories of Indian Income Tax payers.
Individual resident < 60 yearsSenior Citizen
Very Senior Citizen
Any NRI / HUF / AOP / BOI / AJP
Co-operative Society
Firm
Local Authority
Dom. Co. - Turnover upto ₹ 250 Cr.
Dom. Co. - Turnover above ₹ 250 Cr. Other Company
Individual resident aged below 60 years (i.e. born on or after 1st April 1959)
Income Tax :| Taxable Income | Income Tax |
|---|---|
| Upto ₹ 2,50,000/-. | NIL |
| Above ₹ 2,50,000/- and upto ₹ 5,00,000/-. | 5% of (taxable income - 2,50,000)
Tax Relief u/s 87A : In case taxable income is upto ₹ 3,50,000/-, income tax chargeable or ₹ 2,500/-, whichever is less.
|
| Above ₹ 5,00,000/- and upto ₹ 10,00,000/-. | ₹ 12,500/- + 20% of (taxable income - 5,00,000) |
| Above ₹ 10,00,000/-. | ₹ 112,500/- + 30% of (taxable income - 10,00,000). |
- 10% of the Income Tax, where taxable income is more than ₹ 50 lacs and upto ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 50 lacs by more than the amount of increase in taxable income.
- 15% of the Income Tax, where taxable income is more than ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
| Taxable Income | Income Tax |
|---|---|
| Upto ₹ 3,00,000/- | NIL |
| Above ₹ 3,00,000/- and upto ₹ 5,00,000/- | 5% of (taxable income - 3,00,000)
Tax Relief u/s 87A : In case taxable income is upto ₹ 3,50,000/-, income tax chargeable or ₹ 2,500/-, whichever is less.
|
| Above ₹ 5,00,000/- and upto ₹ 10,00,000/- | ₹ 10,000/- + 20% of (taxable income - 5,00,000). |
| Above ₹ 10,00,000/- | ₹ 110,000/- + 30% of (taxable income - 10,00,000) |
- 10% of the Income Tax, where taxable income is more than ₹ 50 lacs and upto ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 50 lacs by more than the amount of increase in taxable income.
- 15% of the Income Tax, where taxable income is more than ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
| Taxable Income | Income Tax |
|---|---|
| Upto ₹ 5,00,000/-. | NIL |
| Above ₹ 5,00,000/- and upto ₹ 10,00,000/- | 20% of (taxable income - 5,00,000). |
| Above ₹ 10,00,000/- | ₹ 100,000/- + 30% of (taxable income - 10,00,000) |
- 10% of the Income Tax, where taxable income is more than ₹ 50 lacs and upto ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 50 lacs by more than the amount of increase in taxable income.
- 15% of the Income Tax, where taxable income is more than ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
Any NRI or HUF or AOP or BOI or AJP
Income Tax :| Taxable Income | Income Tax |
|---|---|
| Upto ₹ 2,50,000/-. | NIL |
| Above ₹ 2,50,000/- and upto ₹ 5,00,000/-. | 5% of (taxable income - 2,50,000). |
| Above ₹ 5,00,000/- and upto ₹ 10,00,000/-. | ₹ 12,500/- + 20% of (taxable income - 5,00,000). |
| Above ₹ 10,00,000/-. | ₹ 112,500/- + 30% (taxable income - 10,00,000) |
- 10% of the Income Tax, where taxable income is more than ₹ 50 lacs and upto ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 50 lacs by more than the amount of increase in taxable income.
- 15% of the Income Tax, where taxable income is more than ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
* Abbreviations used : NRI - Non Resident Individual; HUF - Hindu Undivided Family; AOP - Association of Persons; BOI - Body of Individuals; AJP - Artificial Judicial Person
Co-operative Society
Income Tax :| Taxable Income | Income Tax |
|---|---|
| Upto ₹ 10,000/-. | 10% of the income. |
| Above ₹ 10,000/- and upto ₹ 20,000/-. | ₹ 1,000/- + 20% of (taxable income - 10,000) |
| Above ₹ 20,000/- | ₹ 3,000/- + 30% of (taxable income - 20,000) |
Surcharge : 12% of the Income Tax, where taxable income is more than ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
Health & Education Cess : 4% of the total of Income Tax and Surcharge.Firm
Income Tax : 30% of taxable income.
Surcharge : 12% of the Income Tax, where taxable income is more than ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
Health & Education Cess : 4% of the total of Income Tax and Surcharge.
Local Authority
Income Tax : 30% of taxable income.
Surcharge : 12% of the Income Tax, where taxable income is more than ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
Health & Education Cess : 4% of the total of Income Tax and Surcharge.
Domestic Company - Turnover upto ₹ 250 crores
Income Tax : 25% of taxable income.Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge
At the rate of 7% of such income tax, provided that the taxable income exceeds ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
At the rate of 12% of such income tax, provided that the taxable income exceeds ₹ 10 crores. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 10 crores by more than the amount of increase in taxable income.
Health & Education Cess : 4% of the total of Income Tax and Surcharge.Domestic Company - Turnover exceeding ₹ 250 crores
Income Tax : 30% of taxable income.Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge
At the rate of 7% of such income tax, provided that the taxable income exceeds ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
At the rate of 12% of such income tax, provided that the taxable income exceeds ₹ 10 crores. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 10 crores by more than the amount of increase in taxable income.
Health & Education Cess : 4% of the total of Income Tax and Surcharge.Company other than a Domestic Company
Income Tax :| Nature of Income | Tax Rate |
|---|---|
| Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government | 50% |
| Any other income | 40% |
The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge as under
At the rate of 2% of such income tax, provided that the taxable income exceeds ₹ 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.
At the rate of 5% of such income tax, provided that the taxable income exceeds ₹ 10 crores. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 10 crore by more than the amount of increase in taxable income.
Health & Education Cess : 4% of the total of Income Tax and Surcharge. Disclaimer :All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.