Income Tax Some Important Heads

1. The official website of Income Tax department is www.incometaxindia.gov.in

they give complete information on income tax

For FY 2015-16, Basic Exemption Limit for individuals is Rs.2.5 Lac

For FY 2015-16, Basic Exemption Limit for Senior Citizen i.e. above 60 years age is Rs. 3 Lac.

2. As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and income from other Sources.

3. For a Salaried Employee, Form 16 from his Employer is a must.

4. A Salaried Employee can file Income Tax Return by using Form 16 and adding other Income. Here i am assuming that there is no other source of income

5. From FY 2015-16, Transport Allowance is exempted up to Rs. 1,600 per month.

6. A Standard deduction of 30% is available on Income from House Property.

7. For self-occupied house property, maximum deduction of Interest on Home Loan is Rs. 2 Lac. For let out property, actual Home Loan Interest is allowed as a deduction.

8. Repayment of Home Loan Principal amount u/s 80C is up to Rs. 1.5 Lac. You may check my post, Home Loan Tax Benefit Deductions for more details

9. In case of a Business, Tax Audit is compulsory if sales turnover exceeds Rs.1 Cr.

10. In case of self-employed professionals, Tax Audit is compulsory if the Gross Receipts exceeds Rs.25 lac.

11. Maximum Cash payment to any individual in a single day should not exceed Rs.20,000

12. For Loans, deposits and Properties transactions, maximum cash limit is Rs.20,000 for the transaction. In property transaction, this limit is for paying token money.

13. Any loss from Business can be carried forward for next 8 financial years.

14. TDS is due at the time of making Payment.

15.TDS payment should be made on or before the 7th day of next month in which it is deducted

Late filing of TDS return attracts late filing fees of Rs.200 per day u/s 234(E).

16. Long Term Capital Gain will arise if the holding period of an Asset is more than 3 years. In case of Equity, if the holding period is more than 1 year then there is no tax on the capital gains.

In most of the cases, Long Term Capital Gains is taxable @ 20%

17. Agricultural Income is 100% exempted from Tax.

18. Gifts received from the non-blood relatives which exceed Rs.50,000 is taxable in the hands of recipient.

19.Gifts received at the time of Marriage, inherited through Will or Succession and from blood relatives are tax free

20.Maximum deduction allowed u/s 80C, 80CCC and 80 CCD is Rs.1,50,000

21. Tax deduction on Health Insurance Premium is available up to Rs. 25,000.

22. Deduction limit of Interest earned on Savings Account is up to Rs.10, 000.

23.Form 26AS provides the Information regarding the TDS deducted, Advance Tax paid and Refund details

24.Advance Tax should be paid if the Tax Liability during the financial year exceeds Rs. 10,000

A Surcharge of 12% is applicable if the Income Exceeds Rs. 1 Crore

25.It is mandatory to provide details of all the Bank Accounts in Income Tax return

26. It is mandatory to provide Passport number in the Income Tax return.

27. It is mandatory to provide detail of Fixed Assets held abroad in the Income Tax return.

28. If the taxable income of Individual is less than Rs. 5 Lacs then rebate of Rs.2,000/- is available on Tax.

29. Aadhar No. should not  be mentioned in the Income Tax return.

30. If the income exceeds Rs. 5 lacs then e-filing is mandatory.

31. You can e-file income tax return only for Previous 2 Years.

32. PAN Card is essential for Taxpayers and it should not be mentioned in return.

33. TDS u/s 194IA is deducted from Seller’s contribution. A buyer cannot claim a refund of TDS deducted.

34. Tax Benefit of Rs 5,000/- is available u/s 80D for preventive health check-up.