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.

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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.

Govt’s net tax collection rises 86% to Rs 5.57 lakh crore in Quarter1

Govt’s net tax collection rises 86% to Rs 5.57 lakh crore in Quarter1

Parliament was informed on Monday that the government’s total tax collection increased by almost 86 percent in the April-June quarter to more than Rs 5.57 lakh crore. Net direct tax collection totaled Rs 2.46 lakh crore, while indirect tax collection totaled Rs 3.11 lakh crore.

Minister of State for Finance Pankaj Chaudhary said, “The net direct tax collection in the first quarter of FY 2021-2022 is Rs 2,46,519.82 crore as against Rs 1,17,783.87 crore during the same period of previous FY 2020-21, representing a growth of 109.3 percent.”

In the first quarter of FY 2021-2022, net indirect tax collection was Rs 3,11,398 crore, up from Rs 1,82,862 crore in the same time the previous year, a 70.3 percent increase.

In response to another query, Chaudhary stated that the Income Tax Department takes appropriate action against tax evaders in accordance with applicable legislation.

Searches, surveys, inquiries, income assessments, tax levy, interest, penalties, and the filing of prosecution cases in criminal courts, if applicable, are examples of actions taken under direct tax laws.

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Furthermore, under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act of 2015, more than 107 criminal complaints have been submitted.
Assessment orders under the Act had been issued in 166 cases as of May 31, 2021, with a total demand of Rs 8,216 crore.

In the HSBC cases, concealed income of around Rs 8,465 crore was brought to tax, and a penalty of Rs 1,294 crore was imposed. In ICIJ (International Consortium of Investigative Journalists) cases, the undisclosed income of almost Rs 11,010 crore has been discovered.

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Undisclosed credits totaling Rs 20,078 crore and Rs 246 crore have been discovered in the Panama Papers and Paradise Papers disclosures, respectively.