15G Exempts TDS on Taxable Income below a threshold limit!

15G Exempts TDS on Taxable Income below a threshold limit!

Form 15G can be filed with the prescribed financial institution if the individual’s total income is less than the basic exemption amount.

Where interest income from time deposits with prescribed financial institutions for a financial year (FY) exceeds the required maximum (currently 40,000), TDS at the applicable rate is deducted, according to the rules of the Income Tax Act.

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When an individual’s total income is less than the basic exemption limit, he or she can file Form 15G with a prescribed financial institution (such as a bank) to request that no taxes be withheld from the interest income made on the deposits.

Furthermore, if the tax rate at which the total income is subject to tax is NIL or lower than the rate at which the TDS is deducted (regardless of any advance tax paid by the recipient of income), the recipient of income may apply to the jurisdictional tax officer in the prescribed form for a lower or NIL deduction certificate (LDC). Following an examination of the appropriate papers, the tax officer may issue an LDC indicating a lower rate of TDS deduction at his or her discretion. TDS will be deducted at the rate provided in the LDC in this circumstance.

7 ways in which taxpayers can reduce their tax liability

Separately, take notice of the following from the perspective of the timing of taxation of such income. The interest income you receive from recurring deposits is taxed under the heading “income from other sources” (IFOS) according to the accounting system you use on a regular basis (i.e. mercantile/cash basis).

As a result, if you have previously offered interest income or revenue from other sources on an accrual/receipt basis, you might use the same approach for income from these RDs. The interest income will be taxed at the slab rates that apply to you for the fiscal year in which it is received. Any TDS already deducted by the bank on these deposits during the relevant FY will be credited against the income tax you owe for that year. If the amount of taxes deducted at source is less than the appropriate tax rate, you must pay the difference in advance tax in the specified instalments.

7 ways in which taxpayers can reduce their tax liability

7 ways in which taxpayers can reduce their tax liability

Nobody enjoys paying taxes in this world. There is no way to avoid paying taxes if you have taxable income. However, effective planning from the start of the fiscal year might help you lower your tax liability.

Income tax rules in India have exempted certain expenses and investments from taxation, or if you make certain investments or incur certain expenses, you may be entitled to tax deductions and exemptions. As a result, such investments and expenses can help you minimise your tax liability.

Income tax rules in India have exempted certain expenses and investments from taxation, or if you make certain investments or incur certain expenses, you may be entitled to tax deductions and exemptions.

Here are seven strategies for lowering your tax bill:
1. Premium payments for life insurance, pension plans, and provident funds

Individuals can deduct up to Rs 1.50 lakh in payments for life insurance premiums, provident fund, PPF, investment in ELSS schemes, tuition fees paid for up to two children, National Savings Certificate, home loan principal repayment, and so on under Section 80C of the Income Tax Act 1961.

Section 80CCC allows you to deduct premiums paid for annuity and pension plans offered by insurance firms. Similarly, deductions can be claimed on investments made in the Central Government’s pension system under Section 80 CCD (1).

However, the total deduction for all three components combined cannot exceed Rs 1.50 lakh.

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2. Contribution to the National Pension System (NPS)

An extra deduction of up to Rs 50,000 can be claimed on NPS contributions made by employees under Section 80 CCD (1B). This is in addition to the investment made according to Section 80CCD (1).

A deduction for an employer’s NPS contribution can be claimed under Section 80 CCD2. However, the size of the tax benefit will be determined by the type of employer.

-The deduction limit is 10% of the basic wage plus dearness allowance if the employer is a PSU, state government, or any other private sector enterprise (DA).

If your employer is the federal government, you can deduct up to 14% of your basic salary plus DA.

GST exemption items: Govt sets up ministerial panels to review tax slabs 

3. Rental property income

An individual can claim a tax deduction of up to Rs 2 lakh on interest payments on a house loan or home improvement loan on a self-occupied property under Section 24(b). However, payments made toward the principal of a house loan can be claimed under Section 80C up to a maximum of Rs 1.50 lakh.

You cannot, however, claim this tax benefit if you have chosen the new tax regime.

4. Premium payment for health insurance

A deduction can be claimed under Section 80 D for premiums paid for health insurance for self and dependent family members, as well as for preventative health check-ups. However, there are certain limitations:

Section 80D allows a deduction of Rs 25,000 for self/spouse, dependent children, or patents. This deduction might be up to Rs 50,000 if the claimant or any family members are senior people. Only a Rs 5000 deduction is allowed under Section 80D for preventive health examinations.

Medical expenses incurred by a senior citizen can also be deducted up to Rs 50,000 under Section 80D.

5. Expenses for the care and treatment of a dependent who is impaired

Expenses for the maintenance or medical care of a disabled dependent can be deducted up to Rs 75,000. However, if you have a severe disability (80% or more), you may be eligible for a reduction of up to Rs 1.25 lakh.

6. Medical treatment reimbursement

A deduction of up to Rs 40,000 can be claimed under Section 80 DD (1B) for medical expenditures incurred by self and dependent family members for specified diseases. If one of the family members is a senior citizen, the deduction limit would be increased to Rs 1 lakh.

7. The amount of interest paid on a student loan

An individual can deduct interest paid on an education loan taken for the higher education of a dependent child or spouse under Section 80E. It’s worth noting that there’s no maximum limit to this deduction.

Despite 74% more direct tax collections, the government borrows 58% of its target.

Despite 74% more direct tax collections, the government borrows 58% of its target.

Despite the fact that the Centre has collected 74% higher direct taxes on an annualised basis this fiscal year, at Rs 5.70 lakh crore, it has also borrowed a staggering 58 per cent of the budgeted amount by selling Rs 7.02 lakh crore worth of debt instruments in the market during the same period.

While it mopped up Rs 31,000 crore in long-term and short-term debt at an average price of 6.15 per cent at the weekly auction of government securities earlier in the day on Friday, the revenue department said later in the day that net personal income tax and corporate tax collection jumped a full 74% to Rs 5.70 lakh crore so far this fiscal, driven primarily by advance tax and TDS payments.

The Central Board of Direct Taxes stated in a statement that the mop-up of net direct tax (after deducting refunds from gross collection) between April 1 and September 22 was Rs 5,70,568 crore, up 74.4 per cent from Rs 3.27 lakh crore collected in the same time last year.

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Furthermore, the net collection is 27% higher than the Rs 4.48 lakh crore it received in FY20, which was prior to the pandemic.

Furthermore, it has been collecting record amounts of indirect taxes in the form of GST (which has been exceeding Rs 1 lakh crore almost every month) and record duties on petroleum products, totaling Rs 94,181 crore in the first quarter on the back of a record tax on fuel that generated an 88 percent increase in revenue over the previous financial year.

According to Care Ratings, the government borrowed Rs 31,000 crore in today’s weekly auction by selling 5, 13, 14, and 30-year securities.

With this, the overall market borrowings so far this fiscal are Rs 7.02 lakh crore, down 8% from previous fiscal’s total of Rs 7.66 lakh crore at this time, and Rs 12,652 crore less than the auctions’ total disclosed amount.

To put it another way, the debt raised so far in FY22 accounts for 58% of the overall projected borrowing limit of Rs 12.05 lakh crore for the fiscal year, and 52% if the GST compensation to states of Rs 1.58 lakh crore is added to the borrowing limit for the year, according to the study.

According to the agency’s chief economist Madan Sabnavis, the weighted average yield across tenures fell 4 basis points to 6.15 per cent last week and is now 31 basis points lower than the peak reached in early August when it soared to 6.46 per cent on August 6.

The Finance Ministry will begin the budgetary process on October 12th.

It should be noted that the government has been collecting Rs 32.90 in excise duty on every litre of petrol (which has been selling for over Rs 100 a litre for months) and Rs 31.80 on a litre of diesel since April last year and had collected a whopping Rs 3.35 lakh crore in FY21 when the total excise mop-up was only Rs 3.89 lakh crore, up from Rs 1.78 lakh crore in FY20. Excise duty on fuel and gasoline was Rs 2.13 lakh crore in FY19.

The CBDT reported that gross direct tax collection so far this fiscal year has surpassed Rs 6.45 lakh crore, up 47 per cent from Rs 4.39 lakh crore in the same period last year and 16.75 per cent more than Rs 5.53 lakh crore in FY20.

Advance tax and tax deducted at source account for Rs 2.53 lakh crore of the entire mop-up. The mop-up was 74% higher than previous year’s levels, with self-assessment tax worth Rs 41,739 crore, regular assessment tax worth Rs 25,558 crore, dividend distribution tax worth Rs 4,406 crore, and tax under other minor areas around Rs 1,383 crore.

This fiscal’s advance tax collection is Rs 2,53,353 crore, up 56% from Rs 1,62,037 crore a year before. Corporation tax of Rs 1.96 lakh crore and personal income tax of Rs 56,389 crore have been collected in advance.