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The common conception is that the Budget 2021-2022 did little to change the income tax regulations. This conception, however, is wrong, although the same people can be forgiven since truly the changes in income tax have been less than the previous years. The changes forwarded in this year’s budget include higher tax deduction at source, unit-linked insurance policies, exemption of dividend payment to REITs and InvITs and pre-filled ITRs, amongst others.

In this article, we shall go through these changes.&nbsp;

<ol class="homeloan_Faqs_ul_1">
	<li>
	Income tax filing for senior citizens, that is those above 75 years of age, is no longer a requirement. The Finance Minister said that people above 75 year of age whose source of income is only interest and pension are from now onwards exempted from filing their ITR, or income tax returns. They still have to pay their tax though, but there is no longer the need to file ITR. Note that this shall be the case only if the interest earned is from the same bank where one has pension deposited.
	</li>
	<li>
	Some banks shall be notified by the central government in regards to senior citizen account holders being eligible for the above exemption. Such holders shall have to give a declaration to the concerned bank. The banks shall then compute income of senior citizens after taking into account deductions allowable under Chapter VI-A as well as allowable rebates under 87A.&nbsp;
	</li>
	<li>
	ITR Forms shall from now on have pre-filled information of interest, dividend and capital gains so that individual taxpayers have more ease. Details of capital gains shall be given, such as dividend income, listed securities, post office, and interest from banks, and etc. Also included shall be tax payments, salary income, TDS and others.&nbsp;
	</li>
	<li>
	Interest of employees’ share of EPF contribution on or later than 1st April 2021 shall be taxable, but only if it is more than Rs. 2.5 lakhs in a year. This shall result in more liability, even more so for High Net Worth Individuals who make higher contributions and don’t favor voluntary provident fund contributions. Apart from this, tax on employer’s aggregate contributions of more than Rs. 7.5 lakhs to NPS, EPF and superannuation fund and interest can make EPF less attractive. 
	<img alt="The government has done away with dividend distribution tax to make investment more attractive." src="https://mmk-s3-cms.s3.amazonaws.com/1616130014851.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">
	</li>
	<li>
	The government has taken the decision to make dividend payments to REITs or Real Estate Investment Trusts as well as to infrastructure funds, exempt from TDS. Advance Tax liability for dividend income shall take place only after the payment or declaration of dividend since this amount cannot be estimated accurately for the payment of advance tax. The government has done away with dividend distribution tax to make investment more attractive.&nbsp;
	</li>
	<li>
	There shall be higher TDS for those who don’t file their income tax returns. There will be a new section named 206AB in the IT act. This section shall provide a higher TDS rate for ITR non-filers.&nbsp;
	</li>
	<li>
	&nbsp;ULIPS or Unit Linked Insurance Plans are now bought under the tax bracket. Right now, if one redeeming of a ULIP is tax exempted as long as the policy’s total premium payable is not more than 10%. Under the new proposal, redemption of ULIPs issued on or later than 1st February 2021 when premium payable is more than Rs. 25 lakh shall now be subjected to Capital Gains Tax, which shall be on par as equity-oriented mutual funds.
	</li>
	<li>
	There is a change regarding the LTC scheme notified. Employees shall continue to get exemptions for Leave Travel Concessions of 1/3rd of the concerned expenses or Rs. 36000, whichever is less for the period of 2018-2021. This shall be only if the expense of the purchase of goods or services which are liable to GST at the rate of 12% or more, as long as the payment is made by non-cash means, and is incurred between 12th October 2020 and 31st March, 2021. This amendment is just for the financial year of 2020-2021.
	</li>
	<li>
	The government has increased tax holidays on affordable housing. This change has extended the additional deduction of tax of Rs. 1.5 lakh on interest paid on a housing loan for buying of affordable homes by one additional year.&nbsp;
	</li>
	<li>
	Lastly, the government has reduced the time limit for filing of delayed ITR. The final date of filing a revised ITR or a late ITR voluntarily shall now be 31st December 2022.&nbsp;
	</li>
</ol>

&nbsp;

The Union Budget did not bring about much changes to the existing tax regime, but some changes were made nonetheless. What are these changes? Find out at mymoneykarma.

Income Tax Changes - Income Tax Changes in Budget 2021

When it comes to personal finance, some numbers matter more than others. Your income is important, for example, but also important is your financial health.

&nbsp;There are certain numbers which can aid you in understanding how well you are converting your income into wealth. These also tell you about the effect of spending and taxes on your personal finance.

So, without further ado, here are the several calculations or numbers which can aid you in making better decisions. 
Let’s start with…

<h3 class="credit_i_h3">Wealth Ratio</h3>

This is the ratio of your income against your wealth. In other words, this ratio tells how well (or how not so well) you have succeeded in converting your income into wealth over your lifetime.&nbsp;

When it comes to your personal finance, the wealth ratio is important. That is because in the long term, it matters little how much you have earned over the years, but how much of that you have converted into wealth. This wealth can be in the form of investments, savings, and the like.

To get started, add up your life’s annual earnings, old tax returns and untaxed money.

Next, find out your Net Worth. This is found out by deducting the value of your liabilities from the value of your assets.

But how to find out your wealth ratio? Easy! Just divide your Net Worth by your Lifetime Income. This is in the form of a percentage.

<img alt="Just divide your Net Worth by your Lifetime Income to find out you Wealth Ratio" src="https://mmk-s3-cms.s3.us-west-2.amazonaws.com/1605878486727.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">

There is no pass or fail here. Everyone will get a ratio, but you’ll often see that younger people have lower net worth than older people. This is because the latter have been investing and saving for decades. However, even for your younger people, knowing where you stand in terms of your Wealth Ratio can be enough to motivate them.

Now, we turn to….

<h3 class="credit_i_h3">Overhead Ratio</h3>

Your overhead ratio is your Net Income divided by your Needs, or things you absolutely need. If the ratio is high, it means you have problems making ends meet. If that is the case with you, this ratio also shows you the reason. Overhead ratio is useful when you are determining whether or not you afford a new loan repayment, or how much you should be saving for an emergency fund.

Needs are those expenses like food, shelter and clothing which cannot be ignored, delayed or postponed. At least, not without having to deal with serious consequences. We recommend that you keep 50% of your monthly income post-tax aside to deal with your Needs.

You may find that saving 50% is too much, but doing this gives you a ton of benefits. For instance, it frees up money that would have otherwise gone behind impulse purchases.

It is also advised that you follow the 50/30/20 budget; your personal financial shall be balanced between needs, wants and savings/debt repayments.&nbsp;

And lastly, we come to…

<h3 class="credit_i_h3">Tax Rates</h3>

You pay taxes, right?

Just kidding.&nbsp;

Of course you do! But did you know that your tax bracket does not show you the total amount paid in tax from your total income. Tax brackets show instead how much of your money the government taxes as tax. The tax bracket you have determines the real value of your deductions and investments. This means that a person in a low tax bracket won’t get a lot of value from write-offs.&nbsp;

Your future tax bracket matters too. If you think that your bracket shall drop after you retire, it is a good idea to make deductible contributions to your individual retirement accounts since tax breaks from these contributions shall outweigh any taxes you’ll pay for future withdrawals of your retirement funds. But what if you expect your tax bracket to jump after retirement? It is better to park your money in non-deductible and tax-free contributions to your Employee Provident Fund.&nbsp;

To stay in control of your financial life, keep a tab on these numbers.

&nbsp;

It is quite essential to keep track of all the numbers in your financial life. So how do you prioritise which ones come first. mymoneykarma lists the 3 most important money numbers.

Top 3 Money Numbers to Keep Track Of

There have been several important developments and improvements on the 2020-2021 Union Budget. In this blog, you’ll see some the highlights and the main points of the budget. 
 
Now, we know that you want to see the new income tax slabs, but wait for it my friend. We’ll tell you all about it, but let's get started with the basics…

<h2 class="credit_i_h2">Prominent Themes of the Budget</h2>

The main theme of the 2020-2021 Union budget is Ease of Living, supported by governance and the financial sector.

Ease of Living branches into:

<ol class="homeloan_Faqs_ul_1">
	<li>
	Inspirational India: 
	This includes 
	i) Agriculture, Irrigation and Rural Development 
	ii) Wellness, Water and Sanitation 
	iii) Education and Skills.
	</li>
	<li>
	Economic Development: 
	This includes 
	i) Industry, commerce and investment 
	ii) Infrastructure 
	iii) New Economy.
	</li>
	<li>
	Caring Society: 
	This includes 
	i) Women &amp; Child, Social Welfare 
	ii) Culture and Tourism 
	iii) Environment and Climate Change.
	</li>
</ol>

<img alt="The main theme of the 2020-2021 Union budget is Ease of Living, supported by governance and the financial sector. Ease of Living branches into: Inspirational India: This includes i) Agriculture, Irrigation and Rural Development ii) Wellness, Water and Sanitation iii) Education and Skills. Economic Development: This includes i) Industry, commerce and investment ii) Infrastructure iii) New Economy. Caring Society: This includes i) Women &amp; Child, Social Welfare ii) Culture and Tourism iii) Environment and Climate Change. budget 2020, budget 2020 India, union budget 2020, budget 2020 highlights, budgeting, 2020 budget" src="https://mmk-s3-cms.s3.amazonaws.com/1580800136930.jpeg" class="img-responsive credit_i_img">Now, let us come to the main points of the 2020 Annual Budget pertaining to <a href="https://www.mymoneykarma.com/buying-a-home/index.html/index.html/" target="_blank">personal finance</a>.

Here are the key highlights of Union Budget 2020-21

<h3 class="credit_i_h3">On the Tax Front</h3>

The Finance Minister in the budget speech said that the new tax regime is “lowest, simplest, and smoothest.” 
It boasts 100% tax exemption on Sovereign Wealth Funds' Infra Investment, and concession of 5% on withholding tax extended to municipal bonds.

On DDT or Dividend Distribution Tax

There is good news for companies. From now on, they do not need to pay the DDT or Dividend Distribution Tax. However, the dividend shall only be taxed on the dividend recipients.

Good news for taxpayers- <a href="https://www.mymoneykarma.com/info-tax/income-tax.html" target="_blank">Income tax slabs 2020</a> 
 
<img alt="0 to 2.5 lakh - exempted Rs. 2.5 lakh to Rs. 5 lakh - 5% Rs. 5 lakh to Rs. 7.5 lakh - 10% (20% earlier) Rs. 7.5 lakh to Rs. 10 lakh - 15% (20% earlier) Rs. 10 lakh to Rs. 12.5 lakh - 20% (30% earlier) Rs. 12.5 lakh to Rs. 15 lakh - 25% (30% earlier) There is no change in tax rates above incomes of Rs. 15 lakh. It is still at 30%. income tax slabs 2020, budget 2020, budget 2020 India, union budget 2020, budget 2020 highlights, budgeting, 2020 budget" src="https://mmk-s3-cms.s3.amazonaws.com/1580800216483.jpeg" class="img-responsive credit_i_img">

The Indian Finance Minister Nirmala Sitharaman says that the personal income tax is at an all-time low.&nbsp;

Income tax rates shall be reduced significantly for those who do not take relief measures and tax exemptions.

<h2 class="credit_i_h2">Budget 2020 - Price Increase and Decrease</h2>

Thanks to changes in customs and excise duties, the price of some items have gone up, while the price of others have gone down.

Let’s take a look at what they are:

Price goes Up

<ol class="homeloan_Faqs_ul_1">
	<li>
	Cigarettes, hookah, and other tobacco products
	</li>
	<li>
	Food items like cooking oil, ghee, butter, cheese, and chewing gum
	</li>
	<li>
	Tableware, kitchenware
	</li>
	<li>
	Imported footwear
	</li>
	<li>
	Footwear parts
	</li>
	<li>
	Furniture goods
	</li>
	<li>
	Household electrical appliances
	</li>
	<li>
	Water filters, padlocks, brooms, hand sieves, combs
	</li>
	<li>
	Imported toys
	</li>
	<li>
	Mobile phone chargers, power adaptors, fingerprint displays, earphones and headphones
	</li>
	<li>
	Portable medical devices
	</li>
</ol>

 
Price goes Down

<ol class="homeloan_Faqs_ul_1">
	<li>
	Multiple food products
	</li>
	<li>
	Some electronic items
	</li>
	<li>
	Electric vehicles
	</li>
	<li>
	Sports goods
	</li>
	<li>
	Newsprint
	</li>
</ol>

<h2 class="credit_i_h2">Welcome News for the Fintech Industry</h2>

The growing Fintech industry in India sees the new budget in a positive light, as it gives a holistic growth projection for this industry, which is an extension of the scheme for doubling infra boost, farmer’s income, and more.

The government has also proposed Rs. 27,300 crores for the development of the country’s commerce and industry.

Hon'ble&nbsp;FM Nirmala Sitharaman added that public institutions at the Gram Panchayat level shall be provided with Fibre digital connectivity. This way, more than 1,00,000 gram panchayats will be linked by Fibre through BharatNet. Rs. 6000 crore is already allocated for this task. Additionally, a fund of Rs. 8000 crore is allocated to the National Mission on Quantum Computing and Technology for various projects, like setting up Data Centre Parks.

“Technology that has now a greater significance in almost all the sectors was also a pivotal part of Union Budget announcements. The Union Budget 2020 has shown a ray of light for the Fintech sector, with FM Nirmala Sitharaman stating that India will embrace a shared economy with aggregators displacing regular business.” 
-&nbsp;commented the owner of a well-known Fintech firm in India on the the Indian Budget - 
“The importance of Analytics, IoT, and AI has been recognized in this budget, as they are set to change the world. A policy has been announced to set-up data centre parks all through the country.”

To see the highlights of the 2020 Union budget in infographics, click <a href="https://www.indiabudget.gov.in/doc/bh1.pdf" target="_blank">here</a>.

For all the related documents, click <a href="https://www.indiabudget.gov.in/" target="_blank">here</a>.

&nbsp;

Union Budget 2020 has brought in several changes and reforms to the finances of India, especially in taxes (new tax slabs) and business. mymoneykarma gives a brief overview.

Income Tax Slabs 2020 - Budget 2020 Highlights

Buying a new home is enough to get anyone excited. Whether that&rsquo;s because of the monetary scale of the transaction, or due to the size of the property brought, or due to the fact that it is the <a href="https://www.mymoneykarma.com/buying-a-home/tips-for-first-time-home-buyers.html" target="_blank">very first property</a> one is buying is tough to tell. It could well be a culmination of all these factors. Buying a home costs money. In most cases, people need to take loans for making such a purchase. Therefore, this means paying interest in addition to the principal amount. For the common man, making such a purchase through a <a href="https://www.mymoneykarma.com/home-loan.html" target="_blank">home loan</a> is a huge investment. Fortunately for the common man, the Government of India is actively interested in making this dream come true for all. To that end, it encourages people to purchase homes by giving them a host of benefits like home loan <a href="https://www.mymoneykarma.com/investing/fixed-income-investments.html" target="_blank">tax deductions under section 80C</a>, and various tax benefits under central government schemes like the Pradhan Mantri Jan Dhan Yojana. These solve the problems of property accessibility and affordability. In this article, we are going to show you top 6 home loan benefits. These are: &nbsp;
<ul class="banklogin_ul">
<li>
Deduction for the interest paid on housing loan
</li>
<li>
Deduction of interest paid on home loan during a property&rsquo;s pre-construction
</li>
<li>
Deduction in the payment of the principal amount
</li>
<li>
Deduction for registration charges and stamp duty
</li>
<li>
Addition deduction under the section 80EE
</li>
<li>
Addition deduction under the section 80EEA
</li>
</ul>
&nbsp;
Let us now see each of these, one by one.
<h3 class="credit_i_h3">Deduction on interest paid on home loan</h3>
There are some prerequisites and conditions before you can get any deduction under this heading. Firstly, and this is a very basic one, you have to use the home loan only for <a href="https://www.mymoneykarma.com/home-loan.html" target="_blank">buying a home</a>, and for nothing else. Secondly, the property&rsquo;s construction needs to be finished 5 years from the end of the year on which the home loan was taken. Thirdly, EMIs that you pay every month is not just the interest but both the principal and the interest. You can apply for a tax deduction on the interest part of the EMIs paid over the course of the year. This deduction can be to a maximum amount of Rs. 2,00,000 per year, according to Section 24. When it comes to self occupied and let-out properties, the maximum amount of tax deductible interest is Rs. 2,00,000. However, in this case, you can only claim the deductible amount if the construction is complete.
<h3 class="credit_i_h3">Deduction of interest paid on home loan during a property&rsquo;s pre-construction</h3>
So, you get deduction on interest paid for home loan taken for a fully constructed property. However, what happens when you have already taken the home loan for an under-construction property, and are paying EMIs every month? Does this mean that you can&rsquo;t get any deduction or tax benefits as the property is under-construction?&nbsp;
Not at all! Here&rsquo;s why. According to the rules and regulations of income tax, you are eligible for claiming tax benefits for EMI interest on under-construction properties as well. This is called the Pre-Construction interest and is made as deductions of 5 equal installments from the year in which the property was bought or constructed.
This is above the tax deduction that you are eligible for the property&rsquo;s income. However, remember you can only apply for a tax deduction under this heading to a maximum of Rs. 2,00,000.
<h3 class="credit_i_h3">Tax deduction on principal repayment</h3>
More good news! You get tax deduction on not just the interest paid, but also on the principal repayment under Section 80C. However, the maximum amount that you can claim is Rs. 1.5 lakhs.&nbsp;
There are a few conditions as well: You cannot sell off the property within 5 years of buying it. If you do, deductions already made shall be added back to you at the time of property sale.
<h3 class="credit_i_h3">Tax deductions for registration charges and stamp duty</h3>
Did you know that even the amount you spend on the home loan stamp duty and registration charges are tax deductible? It&rsquo;s true. Under Section 80C, these are tax deductible, but to the limit of Rs. 1.5 lakhs. The catch? You can only do so on the year in which these have occured.&nbsp;
<h3 class="credit_i_h3">Tax deductible amounts under Section 80EE</h3>
It seems that the Indian Government is bent on helping home buyers.&nbsp;
Under Section 80EE, you get an additional deduction. However, just like with all other things, this comes with a few conditions as well. For instance, the loan amount cannot be more than Rs. 35 lakhs. Secondly, the total value of the property cannot be more than Rs. 50 lakhs. Thirdly, such a home loan needs to have been sanctioned between 1st April 2016 and 31st March 2017. Fourthly, on the day this loan is sanctioned, the candidate should not own any other homes. The money deductible is to a maximum of Rs. 50,000.
<h3 class="credit_i_h3">Tax deductible amounts under Section 80EEA</h3>
This allows you to have upto Rs. 1,50,000 deductible. However, to claim this, the property&rsquo;s stamp value should not be more than Rs. 45 lakhs. Secondly, the loan needs to have been sanctioned between April 2019 and March 2020. Thirdly, on the day of the loan sanction, the candidate should not own any other home. The fourth condition is that the candidate should not have availed the benefits under Section 80EE.
<h2 class="credit_i_h2">FAQs</h2>
How can I get a loan for a house?
To get a home loan, you need a <a href="https://www.mymoneykarma.com/credit-score.html" target="_blank">credit score</a> of 580 or higher. This gives you a chance at an FHA-insured mortgage that comes with a downpayment requirement of just 3.5%. However, you&rsquo;ll need to give a downpayment of 10% if your credit score is in the 500-579 range.
Can I take 2 home loans?
There are two main conditions. The first condition is that the property in question should be completely free from legal problems. Secondly, the borrower needs to be capable of repaying both loans.
What is the tax benefit on second home loan?
You can get deduction for interest payable on loan for construction, repair and renovation under the Section 24B of the Income Tax Act.
<h2 class="credit_i_h2">To Sum Up</h2>
As you have seen, you can save a fair amount when purchasing a new home with a home loan. Thanks to the section 80E and its subheadings, you can save money through sizeable tax deductions.
Why wait? <a href="https://www.mymoneykarma.com/credit-score/home-loan-credit-score.html?utmsrc=homeloan_enquiry" target="_blank">Apply for a home loan</a> right away with <a href="https://www.mymoneykarma.com/">mymoneykarma</a>. We offer the best interest rates from across banks, not to mention a smooth and hassle-free process.

Everyone loves to save money. But did you know you can save tax on home loans too? Here are top 6 home loan tax benefits from mymoneykarma.

Home Loan Tax Benefits | Claim Tax Deduction on Home Loan

<a href="https://www.mymoneykarma.com/info-tax/income-tax.html" target="_blank">Income tax</a>, sales tax, property tax, goods and services tax, road tax - there seems to be a tax for almost every aspect of life!

While most of us have a basic idea of what these taxes are and what they entail, we barely understand the nitty-gritty of all of these taxes. Well, taxes are involuntary fees that governments impose on individuals as well as corporations in order to finance government activities. Whether you like it or not, you've got to pay them to qualify as a law-abiding citizen. Then isn't it necessary to delve a little deeper and understand taxes a little better?&nbsp;

mymoneykarma is here with a list of interesting articles that can make it easy for you to understand your tax liabilities. Please note that these articles are purely educational and should not be considered as tax advice. mymoneykarma does not provide tax advice. For tax counsel, please reach out to a tax advisor.

Taxes are involuntary fees that governments impose on individuals as well as corporations in order to finance government activities. They are mandatory for every Indian; hence, mymoneykarma is here to help you understand taxes better.

Taxes | mymoneykarma

As the time comes for declaring your investments and filing your <a href="https://www.mymoneykarma.com/info-tax/income-tax-returns.html" target="_blank">income tax returns</a>, you might be in a state of confusion about where to invest so that you get the maximum rebate. There is no shortage of advice on things like fixed deposits, tax deductions, and insurance policies from friends, family, and colleagues. But that advice might be generic and may not give you the maximum benefits. You might be wondering how to juggle different modes of investment, which options are risky, and which are safe.

mymoneykarma is your friend in need. After carefully assessing several tax saving options for 2019 by their returns, risks involved, costs, transparency, and taxability of income, we’ve come up with a list of the top ten tax-saving opportunities designed to cater to your financial needs. You can invest in a combination of different options to get maximum benefits.

<img src="https://lh4.googleusercontent.com/ieyLXER4_aqGILHlPRB0UkAl4S_YPrllGct7o0kzIJVrQ7kEIMuIYZHI1ox0pYadLSxpFIess5MkokNgLubjf0E1hfL3nFtLoJIrqYr0mFTNnXxy34pkMku4yY1CUKjil9YKXXbI" class="img-responsive credit_i_img">

<h3 class="credit_i_h3">ELSS funds</h3>

Equity-linked savings schemes are excellent ways of saving your taxes under Section 80C. You can invest as much as you want, but any excess amount over Rs.1.5 lakh will not let you avail of the tax benefits under Section 80C. ELSS funds are of two main types: growth funds and dividend funds. Growth funds are suitable for investors who are looking to invest for an extended period and receive the full value of their funds only at the time of redemption. Under dividend fund, investors receive tax-free payouts that they can reinvest as fresh investments.

Contrary to a popular myth, all ELSS funds aren’t necessarily risky. While some funds dedicate more to small- and mid-cap stocks, some others stick with stable large-cap stocks. &nbsp;You must choose the one that best suits your risk appetite.

<h3 class="credit_i_h3">National Pension Scheme</h3>

The National Pension Scheme or NPS is a government-sponsored pension scheme launched in 2004. A subscriber can regularly contribute in a pension account during his/her professional life, withdraw some amount from a lump sum and use the remaining corpus to buy an annuity to secure a regular income after retirement.

NPS can help save tax under different sections. You can claim contributions of up to Rs 1.5 lakh as deductions under Section 80C. There is a provision of an additional deduction of up to Rs 50,000 under Section 80CCD(1b). If the employer contributes up to 10% of one’s basic salary in the NPS, the amount cannot be taxable.

<h3 class="credit_i_h3">Public Provident Fund</h3>

Public Provident Fund (PPF) scheme is a popular long-term investment option offered by the Government of India. It provides a stable investment option with attractive rates of interest and other facilities such as loan, withdrawal, and extension of account.

PPF is an excellent option for the cautious investor because the interest is tax-free, giving the scheme a significant advantage over fixed deposits. PPF performs exceedingly well on safety, flexibility, and ease of investment.

<h3 class="credit_i_h3">Senior Citizens’ Saving Scheme</h3>

Investing in Senior Citizen's saving scheme is extremely beneficial for senior citizens in getting the most out of their tax deductions. It is an effective and long-term saving option that offers security and features of any government-sponsored investment scheme. These schemes are available at certified banks and post offices across India. Last year’s Budget has made the Senior Citizens’ Savings Scheme (SCSS) more attractive by offering senior citizens an additional Rs. 50,000 exemption on interest income. The total tax exemption for senior citizens is Rs. 3.5 lakhs.

<h3 class="credit_i_h3">Sukanya Samriddhi Yojana</h3>

For parents with daughters below 10 years of age, the Sukanya Samriddhi Yojana can be an excellent way to invest for their daughters. The interest rate of 8.5% is linked to the yield of government bonds and is subject to change every quarter. The Sukanya scheme offers a higher interest rate than PPF. There is an annual cap of Rs. 1.5 lakh on the investment. A parent can open accounts at any post office or designated banks with a minimum investment amount of Rs. 250. Any parent can open an account for their daughter. The account can be opened for at the most two girls, but the combined investment in the two accounts cannot exceed Rs. 1.5 lakh in a year, and the maturity proceeds have to be used for her education and marriage.

<h3 class="credit_i_h3">ULIPs</h3>

ULIP stands for unit-linked insurance plans. A ULIP contains both the elements of insurance and investment. The policyholder can either pay a monthly or annual premium. A small percentage of the premium goes toward life insurance, and the residue amount is invested just like a mutual fund. The policyholder goes on investing throughout the term of the policy years and collects the units later. These plans offer investors the option to invest in equity and debt.

<h3 class="credit_i_h3">Pension Plans</h3>

Also known as company pension plans, pension plans are set up by employers and can provide benefits including a tax-free lump sum (within certain limits), and pension income in retirement.

These benefits are based on the following parameters:

1. your final earnings

2. your average earnings throughout your career, or

3. the value of your pension fund at retirement.

Apart from benefits on retirement, pension schemes can provide benefits to dependants on the death of the account holder during service or after retirement. Pension benefits are also portable and need not be "frozen" when your employment status changes.

You should check if your employer has such a scheme and whether you are eligible to join. Or you may have been a member of such a pension scheme in the past and still have benefit entitlements under the plan.

<h3 class="credit_i_h3">NSCs</h3>

The best thing about the National Savings Certificates (NSC) is that unlike an insurance policy or a pension plan, they don't require a multi-year commitment. NSCs is perfect for those who don’t have time to browse through the features of an investment plan. At an interest rate of 8%, it is a good option for those who just want to invest in a hurry and forget about it. NSCs promise better returns than bank FDs. The interest earned on the NSC is eligible for deduction under Section 80C in the subsequent years. NSCs are suitable for senior citizens who want to invest safely but have exhausted the Rs 1.5 lakh limit of SCSS. Since there are no such restrictions in NSCs, they can use this instrument to save <a href="https://www.mymoneykarma.com/info-tax/income-tax.html" target="_blank">income tax</a>.

<h3 class="credit_i_h3">Bank FDs</h3>

Tax-saving bank fixed deposit is an excellent choice for people who leave their tax planning for the last minute and then search for the best option. Although the interest rates are not as high as other savings instruments, FDs offer the convenience of online banking. If you have to show proof of investment this week, all you have to do is log on to your netbanking account, make the investment, download the proof and print it. However, this convenience comes at a high price. The interest earned on FDs is fully taxable, which reduces the post-tax return for people in the higher income bracket.

<h3 class="credit_i_h3">Life Insurance</h3>

Life insurance policies are essential for the safety and security of you and your family, but they are the least effective instruments to save income tax. They give fewer returns, have reduced rates of interest, and the interest collected is not even tax-free. However, it is a highly preferred mode of investment among the Indian populace; and if you wish to channelize your hard-earned money into insurance, then you must do a careful homework before taking a call.

<h2 class="credit_i_h2">Choosing the Right Option</h2>

Section 80C allows you to save up to Rs. 1.5 lakhs across different tax-saving investment instruments; so you might as well maximize your tax deductions. Investing in more than one option and taking calculated risks can pay off in the form of very high dividends that can be used to fund your dreams.

 
 
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Making investments to save your income tax can often be confusing and frustrating. Mymoneykarma brings you a list of the top ten tax-saving instruments for this financial year.

Tax Saving Options - Tax Saving Investment Options

Are you someone whose income doesn't come under the taxable income slabs? If you are, and if you confidently assume that <a href="https://www.mymoneykarma.com/info-tax/e-filing-income-tax.html" target="_blank">e-filing ITR</a> isn’t meant for you, then, my dear friend, you are mistaken! Many of us might not be using much of our academic knowledge from our school and college days in the jobs that we do. However, does it mean that education is not necessary for accomplishing life goals? Similarly, whether your salary is taxable or not - filing income tax returns is crucial.

<h3 class="credit_i_h3">What is Income Tax Return or ITR?</h3>

An <a href="https://www.mymoneykarma.com/info-tax/income-tax-returns.html" target="_blank">income tax return</a> is a form through which taxpayers declare their income, deductions, and tax payments. The total income tax that you have to pay to the government is calculated during the ITR filing. If you have paid more income tax than required in a particular financial year, the IT department will refund the extra amount to your bank account. In case you have paid a lesser amount of tax, then you should pay the remaining amount before filing your income tax returns for that year. The income tax return form ranges from ITR 1 to ITR 7 for different slabs of income.

<h3 class="credit_i_h3">How to e-file ITR?</h3>

<ul class="banklogin_ul">
	<li>
	Filing an income tax return is mandatory for Indians if one’s total income exceeds Rs 2.5 lakh. Even if you don't fall under the taxable income range, it's beneficial to file an income tax return. Wondering why? We will discuss that in the next section.
	</li>
	<li>
	You can submit your income tax returns online, either through the income tax portal or through our mmk e-filing tool. <a href="https://www.mymoneykarma.com/info-tax/e-filing.html" target="_blank">E-filing</a> has made the ITR process exceptionally fast and immensely convenient.
	</li>
	<li>
	After filing your tax return online, a 15-digit acknowledgment number will be displayed on the portal's screen, confirming your submission. At this stage, you must verify your tax return, which you can do through your net banking account.
	</li>
	<li>
	Please note that the due date to e-file your income tax returns is on or before July 31 every year, until the government decides otherwise.
	</li>
</ul>

<h3 class="credit_i_h3">Benefits of Filing ITR</h3>

Filing ITR entails a plethora of benefits. Here are a few of them:

Processing of Visa – If you are planning to <a href="https://www.mymoneykarma.com/travel-lifestyle/index.htmlindex.html/credit-card-tips-while-travelling.html" target="_blank">travel abroad</a> in the future, then take this heads-up – the issuing authorities will ask you to submit your income tax filing proof for at least two to three years to the embassy/consulate of the respective country.

Processing of Loan – Irrespective of the loan type, the bank will ask you to provide records of tax returns for the past few years to determine your financial stance. Submitting of your tax returns can get you <a href="https://www.mymoneykarma.com/personal-loan.html" target="_blank">quick loan approval</a>.

Carry Forward Your Losses – According to the laws of the income tax department, you can carry forward previous losses (depreciation in house property, loss in the share market, etc.) to offset any future revenue for up to eight years consecutively. &nbsp;So, even if the revenue that you have earned in the next financial year has fallen into the taxable income bracket, you can adjust your previous losses against that income by filing an ITR on time.

Refund of Taxes – Employers deduct TDS on the income of employees. If you, as an employee, has made investments that are tax-deductible, it inevitably reduces your tax liability. If your employer has deducted more TDS than you owe, you can file an income tax return and easily retrieve the amount deducted in excess. This refund can also be claimed for TDS deducted through any other sources. In case you don’t come under the income tax bracket, filing ITR will lead you to pay zero tax. However, it will help you in generating an ITR record that is instrumental in <a href="https://www.mymoneykarma.com/credit-score/personal-loan-credit-score.html?utmsrc=personalloan_enquiry" target="_blank">availing loans</a>, certain insurances, and a few types of visas.

Save Penalties – Being in the tax bracket, if you fail to file your returns on time, then you might be penalized with a massive amount and also pay interest on the pending dues under section 234A.

<h3 class="credit_i_h3">In a Nutshell</h3>

Now that you’ve understood the benefits of e-filing ITR, we are sure that even if you haven't filed an ITR in the past, you will take the initiative this year. If you are wondering which website can assist you the best with the e-filing procedure, mymoneykarma is here for you. Use our services for e-filing your ITR - it’s free, and it’s super helpful! Happy Returns!

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<big>This article is purely educational and should not be considered as tax advice. mymoneykarma does not provide tax advice. For tax counsel, please reach out to a tax advisor.</big>

What are the various reasons to file ITR? How can it benefit you? Here mymoneykarma has listed 5 essential benefits to motivate you to file your ITR every year.

Income tax Return Filing 2021 | 5 reasons to file ITR

It always pinches us when our hard-earned money is deducted as taxes. Our taxable income gets reduced quite a bit because of the various taxes imposed on us. Hence, it makes sense for us to make investments that we can claim as tax deductions.

Most of you are aware of Section 80C and the investments you can make under the section. mymoneykarma now gives you eight tax-saving investments above 80C. This will free up your hard earned money for fulfilling your wishes.

<h2 class="credit_i_h2">What is Section 80C?</h2>

Section 80C is the most renowned section of the Indian Income Tax Act. There are numerous <a href="https://www.mymoneykarma.com/investing/fixed-income-investments.html" target="_blank">tax saving options under 80C</a>, such as ELSS and PPF. While investing under 80C is very popular, we bring you tax-hacks other than Section 80C.

<h3 class="credit_i_h3">NPS</h3>

The National Pension System was launched by the Indian government in 2009. The NPS offers a tax deduction for investments made up to Rs. 50,000, in addition to the deduction of 1.5 lakh rupees available under Section 80C. Your returns, however, depend on the asset class you have chosen. Usually, it is advisable to select a high-risk instrument like government debt.

<h3 class="credit_i_h3">Rajiv Gandhi Equity Savings Scheme (Section 80CG)</h3>

This is another <a href="https://www.mymoneykarma.com/investing/index.html/guide-to-save-tax-2019.html" target="_blank">scheme available for tax-saving</a>. Under this, you can invest up to Rs 50,000 in approved stocks.&nbsp; But this scheme is available for you&nbsp;only if you are a first-time investor. This scheme was introduced under the UPA regime and has not been promoted aggressively. A supposed overhaul of the project hasn't come through yet.

<h3 class="credit_i_h3">Interest on Education Loan (Section 80E)</h3>

You can claim the interests you pay on the active education loans you possess, if you have any. The deduction can be only on the interest repayment part, not on the principal of the education loan. That means only the interest repayment is available for a tax deduction while filing an income tax return.

This deduction is available for saving above Rs. 1,50,000, and there is no maximum limit on claiming deduction under 80E.&nbsp;Parents can take up this tax-saving option on behalf of their children, as children are not taxed. It is not a popular scheme, and not many are aware of it.

<h3 class="credit_i_h3">House Rent Allowance (Section 80GG)</h3>

If you are staying in a rented apartment or house and paying rent, you can claim the amount as a tax deduction under Sec 80GG of the Income Tax Act. The amount of the deduction is based on the city that you are residing in. In case you have queries, it is best to talk to the HR department on the exact tax benefits that you would get. This is a significant tax hack that you should take note of.

<h3 class="credit_i_h3">Home Loans (Section 80EEE)</h3>

An additional deduction of Rs 50,000 on <a href="https://www.mymoneykarma.com/refinance-and-home-loan-deals-in-India.html" target="_blank">home loan interest</a> can be claimed under Sec 80EE of the Income Tax Act. This option is however not a very popular one.

<h3 class="credit_i_h3">Health Insurance (Section 80D)</h3>

You should take a health insurance policy, which would not only take care of your medical expenses but also enable you to save tax. The current IT norms allow a deduction of up to Rs 25,000 in the case of ordinary citizens and Rs 30,000 <a href="https://www.mymoneykarma.com/insurance/index.html/best-health-insurance-for-parents.html" target="_blank">in case of senior citizens</a>. So, you can go ahead and take a good health insurance policy.

This is a tax hack that you can utilize apart from the usual 80C benefits. The Sec 80D benefits also include the gains on expenses incurred towards preventive health check-ups.

<h3 class="credit_i_h3">Donations (Section 80G)</h3>

Section 80G of the income tax law provides tax benefits on the amount donated to NGOs. So, you can be generous to the causes you believe in, to your heart's content. However, the deductions can be made if you are donating by cash or draft only. The limit of the deduction can be either 50% or 100%.

You have to claim this deduction when you file your tax returns and quote your PAN to the institution you donated. If you are unsure about the cause you want to support, there is an exhaustive list of institutions and establishments that you can donate to.

<h3 class="credit_i_h3">Medical Treatment (Section 80DDB)</h3>

For certain specific diseases, Income Tax Act offers tax benefits to you under section 80DDB from expenses incurred by you for the treatment of said diseases or ailments. This tax-saving option is not only for the people filing tax returns but <a href="https://www.mymoneykarma.com/insurance/index.html/benefits-of-family-health-insurance.html" target="_blank">also for dependents of such people</a>. However, this tax benefit is not available for Non-Resident Indians.

<h2 class="credit_i_h2">To Sum Up</h2>

As law-abiding taxpayers, you have every right to look for ways to save your hard-earned money. When the government offers such great options to optimize your savings, why shouldn’t you utilize them?

Knowing about <a href="https://www.mymoneykarma.com/investing/index.html/guide-to-save-tax-2019.html" target="_blank">various tax-saving options</a> can be advantageous for you; now that you do, go ahead and save more!&nbsp;

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80C investment options are a goldmine if used properly. But are there more sections like it? mymoneykarma tells you about the different ways you can save on tax over and above Section 80C of the Income Tax Act.

80C - 80C Investment Options - Savings Under 80C

Fixed income investments are specialized for risk-averse investors who want the safety of their money with assured returns. Along with these two aspects, schemes such as Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY), also offer tax-saving benefits under section 80C of the Income Tax Act since the returns from these schemes are entirely tax-exempt. Fixed-income instruments should be an integral part of every investor's portfolio to ensure security, mainly during times of economic volatility. So, let's take a look at some of the best fixed-income investments under the ambit of section 80C, where you can safely park your money.

<h3 class="credit_i_h3">Public Provident Fund (PPF)</h3>

PPF is a favorite mode of investment among the Indian middle-class. It’s considered to be a safe investment that offers an interest rate of 8%.&nbsp;

You may choose to invest a lump sum or make periodic contributions to your PPF account. You can claim a tax deduction for investments of up to Rs 1.5 lakh in a fiscal year under section 80C of the Income Tax Act. PPF is a safe investment avenue as the government reviews it. Currently, the investment, interest and maturity proceeds in PPF are entirely tax-free. New investors can buy this scheme either at a post office or any designated branch of a public sector bank that provides this facility. Also, there are a few private banks that offer the facility to invest in PPF.&nbsp;

<h3 class="credit_i_h3">Sukanya Samriddhi Yojana (SSY)</h3>

The current interest rate offered in SSY is 8.5 percent. You can make a contribution of up to Rs 1.5 lakh per account in a financial year under section 80C. However, there’s a catch. Sukanya Samriddhi Yojana is applicable only to the parents of a girl child. This scheme can be availed for a maximum of two daughters who are not more than ten years of age during the time of opening the account. In this scheme, you can claim a deduction for investments up to Rs 1.5 lakh only in a fiscal year according to section 80C of the Income Tax Act. There are no restrictions on the number of deposits that you can make either in a month or a financial year. The interest rate of SSY is linked with government bond yield and is subject to change every quarter as per the discretion of the government. You can utilize the maturity proceeds of this program for the education and wedding expenses of your daughter.

<img src="https://lh5.googleusercontent.com/D8pvtkFJyWwz37BoiHnw8M6L-E-MtYe00VhSNeIqX9PsTPQFuZLb6KdTdzB_z8GVjo8lMYoHazGs6wVKtNJWdlnsbnhWXvjxx2cKpvbPJaHGzlbjM8bp0QVCgOokEf-Iv8vuIpPH" style="height:417px; width:624px" class="img-responsive credit_i_img">

<h3 class="credit_i_h3">Voluntary Provident Fund (VPF)</h3>

The current interest rate offered by VPF schemes is 8.65%. You can contribute your entire basic salary and DA (dearness allowance) to this fund. However, you can only claim a standard tax deduction for investments up to Rs 1.5 lakh in a fiscal year under section 80C of the Income Tax Act. Hence, if you have already crossed your 80C limit through other investments or expenditures, such as <a href="https://www.mymoneykarma.com/epf-forms.html" target="_blank">EPF</a>, PPF, ELSS, FDs, etc., then you won't be able to use the additional VPF contribution to save more tax amount.&nbsp;

If you’re wondering how VPF and EPF are different, then let’s help you understand. Unlike EPF, VPF facilitates the employees to voluntarily deposit beyond a fixed contribution limit in their PF accounts. However, in VPF, it is not necessary for the employer to make a matching contribution as it is mandatory in EPF. VPF also has lock-in conditions until retirement or resignation, whichever is earlier.&nbsp;

VPF is an excellent investment tool for saving tax under <a href="https://www.mymoneykarma.com/info-tax/sections-80c.html" target="_blank">section 80C</a> as it gives a tax-free return. Further, the gains are risk-free since the government guarantees them. VPF offers you the dual benefit of a tax saving scheme and a retirement planning scheme, and salaried employees should allocate a higher proportion of their salary to VPF for substantial tax-saving.

<h3 class="credit_i_h3">Senior Citizens' Saving Scheme (SCSS)</h3>

The current interest rate offered by SCSS is 8.7%. A maximum contribution of Rs 15 lakh is allowed in this scheme. As a&nbsp; senior citizen, you can claim a deduction for investments up to Rs 1.5 lakh in a fiscal year under section 80C. SCSS is a tax-saving instrument for people who are above the age of 60. However, if you have opted for voluntary retirement, you can start investing in SCSS even at the age of 58. On October 3, 2017, the Ministry of Finance announced that the minimum age limit for retired defense personnel is reduced to 50 years for investing in SCSS. This scheme has a lock-in period of five years. And, if you want to extend the tenure further, you can continue it for another three years. No partial withdrawal is allowed before the expiry of the lock-in period. However, in case of an emergency, you can prematurely close the account with a penalty levied on the withdrawal.

<h3 class="credit_i_h3">Tax-Saving Bank Fixed Deposits</h3>

The current interest rate offered in tax-saving bank Fixed Deposits (FD) is around 7-8.25%. The maximum amount that you can invest in this scheme is Rs 1.5 lakh, for which you can claim a deduction in a fiscal year under section 80C. The tax saving bank fixed deposits have a lock-in period of 5 years. This scheme is highly preferred for investments due to the assurance of capital preservation and returns as compared to equity investments in terms of tax-saving. It is convenient for the last minute tax savers, and the interest rates on this scheme are reviewed and changed periodically by the banks.

<h3 class="credit_i_h3">National Saving Certificate (NSC)</h3>

The current interest rate offered in NSC is 8%. There is no cap on the amount of investment that you can make in NSCs. However, you can only claim a deduction of Rs 1.5 lakh during investment declaration. Currently, National Savings Certificate is available for five-year subscriptions only. The interest rate is reviewed every quarter by the government and modified accordingly. Although interest earned from National Saving Certificate is taxable, the interest amount is considered re-invested (except in the last year of tenure) as it is not paid back to the investor until the maturity of the instrument. Hence, the re-invested interest component also qualifies for deduction under Section 80C of the income tax act. The interest earned in the final year of the tenure is not considered re-invested and is paid back to the investor for that year along with the principal and accrued interest in the previous years.

<h2 class="credit_i_h2">To Sum Up</h2>

The interest rates on PPF and SSY are reviewed and changed quarterly as per the discretion of the government, and the change in rates applies to existing accounts along with the newly opened ones. However, in NSC and Senior Citizen Savings Scheme, new interest rates are applicable only for newly opened accounts, i.e., the interest rate for existing deposits remains the same. Hence, before choosing any of the fixed income schemes mentioned above, indulge in in-depth research and compare the plans in terms of return on investment, interest rate, income tax saving, and lock-in tenures. Finalize the one that suits your requirements. Happy Savings!

 
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Save your taxes by investing in these 6 fixed income investments schemes that we have listed for you on mymoneykarma website.


Section 80C: 6 Tax-saving Fixed Income Investments for 2021

Did you know that e-filing your taxes brings back money!

Curious, aren’t you? Read more to know more.

If you’ve had a <a href="https://www.mymoneykarma.com/taxes/index.html/what-is-tds.html">TDS deduction</a> that you aren’t bound to pay, or if your TDS amount has somehow exceeded <a href="https://www.mymoneykarma.com/taxes/index.html/why-do-we-pay-income-tax.html" target="_blank">your total income tax liability</a>, then <a href="https://www.mymoneykarma.com/taxes/index.html/5-reasons-to-file-itr.html" target="_blank">filing an ITR</a> can get you back some money. However, that’s not all; e-filing is also your duty as an income-earning citizen of India.

<img alt="Sitting Man Wearing Formal Suit Using Laptop Computer" src="https://images.pexels.com/photos/2254124/pexels-photo-2254124.jpeg?auto=format%2Ccompress&amp;cs=tinysrgb&amp;h=750&amp;w=1260" class="img-responsive credit_i_img">

E-filing or electronic filing of taxes is the procedure of submitting income tax returns online. The income tax department has launched an independent portal for e-filing tax returns. The portal opens during a certain period every year when you, as a taxpayer, should file your taxes. The due date for filing tax returns is usually July 31st; however, the government has been known to offer a grace period of 15-30 days at times.

<h3 class="credit_i_h3">What is Manual Filing?</h3>

Manual filing is the conventional method of filing taxes. Earlier, taxpayers would typically file their tax returns either directly at the income tax office or through intermediaries such as chartered accountants or income tax agents. The procedure is still quite long and tedious.

<h3 class="credit_i_h3">How is e-filing Better?</h3>

Well, there’s nothing more convenient than smoothly brushing through serpentine government procedures from the comfort of your home! Most taxpayers prefer e-filing to manual filing of taxes. Yet those who aren’t tech-savvy are apprehensive of exposing their financial scoops on an online platform that they tend not to trust. Therefore, mymoneykarma is here to nudge you towards e-filing by telling you about the amazing benefits of e-filing.

<h2 class="credit_i_h2">Manual Filing Vs. e-filing</h2>

Simple Documentation

E-filing immensely reduces the hassles of paperwork as, unlike manual filing, you don’t need to gather documents from different sources physically. If you file your taxes manually, you would have to fill out an enormous pile of forms manually every year. In e-filing, once you file your returns, the online portal saves your record. Thus, e-filing becomes simplified henceforth as you get ready access to the previously stored information which is auto-filled into the fresh form.

Tracking e-filing Status

Filing ITR manually entails several rounds to the income tax office. The status of manual filing of returns can't be tracked online. You would have to bear the brunt of an extremely slow process across various departments and beat your head against the wall trying to find out the status of document submission and initiation of refund. E-filing is different. It lets you track the status of ITR through a couple of clicks at your convenience without having to visit the Income Tax office. The online tracking facility saves your valuable time and money.

No Calculation Errors

Manual filing, as the name suggests, requires you to make complicated calculations manually. You’d have to enter accurate details by calculating your income and tax deductions yourself. A teeny-tiny error may lead to massive tax liability. The online portal has an in-built data validation and tax calculation program that eradicates the chances of errors. Moreover, all the data entered by you is verified and saved in your e-filing account. The data is automatically retrieved when you file your taxes online in the next year, thus eliminating the risk of entering incorrect information.

Easy Refund

The essential aspect of e-filing is a quick refund process. The income tax department levies TDS (Tax Deducted at Source) from the salaries of employees, contractors, consultants, etc. that can be claimed for a refund by filing an income tax return. When you file your taxes online, the refund is disbursed within a few days of the submission. However, in manual filing, when the tax filing process itself takes much longer, how can you expect a quick refund disbursal?

Ease of Access to Documents

The e-filing portal saves all your relevant documents, such as income proof, home loan receipts, FD certificates, etc. These are stashed at one place when you upload them on the portal, which ensures their safety and accessibility. If you ever have an urgent need for any of these documents, you can immediately access them by logging in to your account on the income tax portal anytime. On the contrary, in case of manual filing, accessing the documents is a cumbersome job and there are higher chances of the authorities misplacing your records.

Time and Cost Saving Procedure

You might be wondering that apart from saving logistics cost, where else can e-filing save your money. Well, while filing for ITR manually, there are chances that you may fall in a trench of mistakes. As many taxpayers do, you might want to hire an expert. Expert advice comes at a cost. You can easily save that cost by e-filing your ITR online. The income tax portal will assist you in the process through instructions mentioned on their website and their help desk. e-Filing also reduces the time consumption in the tax filing process as you don't need to stand in long queues at the income tax office, especially when the deadline is knocking at your door.

Revising Errors

In manual filing, where you have to fill myriad forms, it becomes quite tedious to review each form, and rectifying a mistake that you have already committed is even more difficult. In e-filing, you can quickly review a form, correct it and upload it once you are done.

Grievance Redressal

If filing of tax returns manually is such a herculean task, then can you imagine what the manual grievance redressal system would be like? Consider a situation where you have to keep visiting the income tax office, stand in long queues each time and face the tantrums of the income tax department; yet there isn’t a guarantee that your problem will be resolved. Alternatively, e-filing lets you quickly contact the concerned department through the grievance redressal section of the website while sitting at home.

E-Verification of Income Tax Return

E-Verification of ITR-V form is another convenient online service that you can avail through e-filing, which eliminates the need to send the form through post.

<h2 class="credit_i_h2">In a Nutshell</h2>

E-filing is a bliss for taxpayers. You can avail it at your convenience from anywhere and at any time. However, a little professional help is always required, and that's where mymoneykarma come into the picture. Our e-filing services makes your ITR filing as easy as it can get - we do all the hard work while you just provide the basic information and then sit back and relax. Check out our e-filing tool and file your income tax returns with us before the deadline knocks at your door. Happy e-filing!

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Wondering why should you use e-filing over manual filing of taxes? Here mymoneykarma has listed some of the benefits for you to consider.

Advantages Of e Filing - Benefits Of e Filing

Many Indians stay abroad these days. These people have their roots in India and might have gone to other countries either to visit, study or settle down. Such Indians are called Non-Residents of India or simply NRIs.&nbsp;

<h3 class="credit_i_h3">Do You Qualify as an NRI?</h3>

Answer these quick questions:

<ul class="banklogin_ul">
	<li>
	Have you been in India for at least six months (182 days precisely) in a financial year?
	</li>
	<li>
	Have you been in India for two months or 60 days to be exact in the previous year?
	</li>
	<li>
	Have you lived in India for at least 365 days in the past four years?
	</li>
</ul>

If you answered ‘yes’ to any one of these questions, then you are a Resident of India. If you’ve answered ‘No’ to all three, then you are an NRI or Non-Resident Indian.

NRI or not, you must file your Income Tax Returns in India. In order to do so, you must be aware of the taxation rules. Being an NRI, you must file taxes in both countries - in India and in the country where you’re currently residing. So, let’s get you started on NRI taxation.

<img src="https://lh4.googleusercontent.com/0eZvUagEVE1l--F_GLlLAT-3wkguF6clXuu1IxsXIJ_UOUDv97NJHPY76V8KyiqZqmt46yZMK37YM1qwfCn8U_evwR7KwDfGuaJIhT4Qz8nifZZrUZtDdZF2JZU8h9VLR35LCbg6" style="height:376px; width:624px" class="img-responsive credit_i_img">

<h3 class="credit_i_h3">Factors Determining NRI Taxation</h3>

Many factors determine the taxation of NRI. Here is the list of them:

Resident Indian on a Temporary Foreign Assignment

A highly skilled analyst, Priya was sent to Singapore for 5 months on a temporary assignment.&nbsp; She earned a good amount in Singaporean Dollars during that time, which got credited to her bank account in India. She returned to India. How is Priya supposed to file her taxes now?

The first thing that Priya needs to do is determine her residential status. She was in Singapore for five months, which clearly states that she wasn't away from India for 182 days. Hence, she is not an NRI. Being a Resident Indian, Priya must file her income tax here in India. Income earned in Singapore was credited to her Indian bank account, and hence, this income is taxable.

If the assignment tenure is for more than 182 days, then Priya would be an NRI. Now, she can pay the tax only on the Indian income. But, there is something you must keep in mind. If your salary is credited to your Indian bank account, that income is taxable. So, if you are staying away from India for a minimum of six months, it would be better to have a bank account in the country of residence.&nbsp;

Resident Indian Recently Moved Abroad

Sharath was given an opportunity to move to the US for a new assignment. He earns his income in dollars now, which gets credited to his NRE account in India. He has some money in savings and continues to invest in FDs.&nbsp; He received Form 16 from his employer who’s based out of India. Now, should he file his ITR this year in India?

Every individual must file their ITR if his/her income exceeds Rs 2,50,000. However, NRIs are only taxed for income earned in India. So, Sharath will have to pay taxes on income earned while he was in India, and income accrued from the savings account and FDs.

Living in a Foreign Country

Varun moved to the US 4 years ago and started earning in dollars. He had his money invested in FDs and savings account in India. He owns a flat and gave it on rent for Rs. 35,000 per month. He earns an interest of Rs 30,000 from FDs and savings account. He gifted his parents a car and looked after their household expenses by depositing Rs. 10,000 per month to their account during the year. Also, he transfers Rs. 20,000 to his father's account to pay the insurance premium he purchased for his parents. How would Varun pay income tax?

A standard rate of 30% is deducted from the rental income which is INR 4,20,000 annually. 30% deduction would amount to INR 1,26,000. So, the income from house property is 2,94,000. Varun's gift to his father of Rs 10,000 is exempted from tax as the income is earned in the US. Regarding the insurance expenses on his parents, Varun is allowed to claim a deduction of Rs 20,000 under Section 80D since his father is over 65 years of age. So, the gross income amounts to Rs. 3,02,000. He will be required to file an ITR in India as his gross income exceeds Rs 2,50,000.

NRI Recently Moved Back to India

If you’re a returning NRI, you would assume ‘Resident, Non-Ordinary Resident’ (RNOR) status under the following circumstances:

<ul class="banklogin_ul">
	<li>
	You must be an NRI in 9 out of 10 financial years prior to the year of your return.
	</li>
	<li>
	You must have lived in India for less than or equal to 2 years (less than or equal to 729 days) in the last seven financial years.
	</li>
</ul>

The IT Department allows RNORs to enjoy the exemptions available to NRIs for a period of two years after their return. So, deposits held in foreign currency that are exempt for an NRI shall be exempted to returning NRIs for two years. After these two years, returning NRIs are treated as resident individuals.

A Resident with Global Income

If you are a resident Indian with global income, it is taxable in India. You may earn your income within or outside India, and this income is taxable. In case this income is also taxable in another country, you can take the benefit of Double Tax Avoidance Agreement (DTAA).

<h3 class="credit_i_h3">Tax Filing for NRIs</h3>

You have to face the tax brunt for sure, but that doesn’t merit e-filing income tax returns unless your income is more than the threshold limit. If your earnings from all sources put together – rent, dividends, investment income, capital gains, etc. is beyond Rs. 2.5 Lacs (Rs. 3 Lacs for people who are between 60 – 80, Rs. 5 Lacs for those above 80 years) for the financial year, only then you would have to file a tax return.

If your income exceeds the limit, you must check whether you can skip filing tax returns through provisions given under Chapter (XII-A). Here, if all taxes have been deducted at source for specified income, then there is an option where an NRI need not file a tax return.

Also, if the income earned is due to sale/transfer/regular income from any foreign exchange asset, then there is no need for the NRI to file tax returns.

<h2 class="credit_i_h2">To Sum Up</h2>

Though one cannot escape tax completely, he/she can save tax by investing in various investment avenues that are eligible for 80C deductions. However, being an NRI, you aren’t permitted to invest in any of the National Saving Certificates (NSC), Post Office Time Deposits, Senior Citizens Savings Scheme, and even open new PPF accounts or extend them.

Other taxation benefits under life insurance, home loan, pension plan, equity-linked savings schemes of mutual funds are allowed. Tuition fee used for spouse or children in India can also be claimed for deduction. Health check-ups or health insurance policies paid for parents/dependants in India are also allowed for deduction under section 80D. So, invest well and save tax!

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Do NRIs have to pay income tax in India? It's not as simple as you might guess! mymoneykarma tells you about several taxation scenarios for NRIs.

NRI Income Tax: Do NRIs Pay Income Tax in India

Maya is an Indian Citizen, presently working and living in the US. When she checked her Form 26AS, she found a TDS deduction of Rs. 20,000 from her Income. Does she really have to pay Tax in India if she is presently residing in the US? Confusing, right?&nbsp;

It is clearly evident to every citizen of India that the Indian Economy depends on the taxes collected from them. Apart from the people living in India, the Income Tax Department collects <a href="https://www.mymoneykarma.com/taxes/index.html/do-nris-pay-income-tax.html" target="_blank">tax from&nbsp;NRIs</a> too. If you are an NRI, you really need to be aware of these taxation rules in order to know if the tax deducted from your income is exact, else you may end up paying unnecessary tax.

The NRI Taxation section of the Indian Income Tax Act of 1961 is applicable to those who are earning outside the country. This article drives you through the taxation rules for Non-Resident Indians.

So, before getting into the details of the Income Tax rules, let’s help you understand your residential status.

<h3 class="credit_i_h3">Determine Your Residential Status</h3>

Income tax structure largely depends upon your residential status. The tax calculation for a resident Indian differs from that of an NRI. As we all know that Income Tax must be paid on a yearly basis, your residential status would be considered accordingly for the financial year. You qualify as an Indian resident for a financial year if you come under these categories:

<ol class="homeloan_Faqs_ul_1">
	<li>
	If you have lived in India for at least six months (182 days to be precise) in a financial year.
	</li>
	<li>
	If you are in India for two months (60 days to be precise) in the previous year and had lived for 365 days spread over the last four years.
	</li>
</ol>

If you do not fall under any of the categories mentioned above, then you are a Non-Resident Indian (NRI).

Now that you have got a clear idea of your residential status and have determined whether you are an NRI, the next thing you need to know is your taxable income.&nbsp;

<h3 class="credit_i_h3">Determine Taxable Income of an NRI</h3>

There are a lot of factors on which you are taxed. Here is the list of those:

Income from Salary

<a href="https://www.mymoneykarma.com/taxes/index.html/salary-structure.html" target="_blank">The salary</a> received by you or someone on your behalf in India is taxable. So, it is quite simple to understand that if you receive salary directly to your Indian account, that amount is subject to the Indian Tax laws. Also, your income is taxable if you utilize it to render services outside India. The income of Diplomats or Ambassadors is exempted from tax.

Income from Property

a. House property

<ul class="banklogin_ul">
	<li>
	Income earned from a property that is located in India is taxable for an NRI. It is applicable even if the property is rented out or vacant. The tax deduction, in this case, is similar to that of an Indian citizen. Income acquired from the house property is taxed at slab rates.
	</li>
	<li>
	A standard deduction of 30% is levied on an NRI, and he/she can take the tax benefit if there is a home loan.
	</li>
	<li>
	Under <a href="https://www.mymoneykarma.com/investing/index.html/fixed-income-investments.html" target="_blank">Section 80C</a>, an NRI is allowed to have a deduction for principal repayment. Also, registration charges and stamp duty paid at the time of property purchase can be claimed.
	</li>
</ul>

b. Rental Payments

<ul class="banklogin_ul">
	<li>
	The income received as rent of an Indian property to an NRI's Indian or the foreign account is taxable. A <a href="https://www.mymoneykarma.com/taxes/what-is-tds.html" target="_blank">TDS deduction</a> of 30% from the rental payments is applicable.
	</li>
	<li>
	In this case, the tenant making a remittance/payment to an NRI must submit Form 15CA online. In some cases, you must also submit Form 15CB (a certification from CA regarding the payments, TDS rate and deduction as per section 195 of the Income Tax Act) before uploading Form 15CA.&nbsp;
	</li>
	<li>
	Form 15CB need not be furnished by the tenant in the following instances:

	<ul class="banklogin_ul">
		<li>
		If the remittance does not exceed a total of Rs 5,00,000 in a financial year.&nbsp;
		</li>
		<li>
		Both the forms are not required if the transaction falls under Rule 37BB of the Income Tax Act.
		</li>
	</ul>
	</li>
</ul>

Income from Other Sources

The interest you acquire from any savings accounts or fixed deposits in Indian bank accounts is taxable. Interest on NRO accounts is taxable, while interest on NRE and FCNR accounts is tax-free.

Income from Business and Profession

An NRI is bound to pay the concerned tax if he/she has a business set up in India.

Income Acquired from Capital Gains

Capital gains on transfer of capital asset and investment in shares in India are taxable.&nbsp;

So, if you are planning to sell your house that qualifies as a capital gain, the buyer deducts a TDS of 20%. However, you can claim capital gains exemption if you either invest in a house property under Section 54 or invest in capital gain bonds under Section 54EC.

Income from Investments

If an NRI invests in certain Indian assets, 20% tax is applicable.

<h3 class="credit_i_h3">Tax Deductions for NRIs</h3>

<ul class="banklogin_ul">
	<li>
	NRIs can claim tax deduction benefits under Section 80C. <a href="https://www.mymoneykarma.com/investing/index.html/" target="_blank">Investments</a>/expenses for premium payments such as <a href="https://www.mymoneykarma.com/investing/index.html/life-insurance-vs-mutual-funds.html" target="_blank">life insurance</a>, ELSS and ULIPs, term deposits, pension schemes and so on come under this category.
	</li>
	<li>
	NRIs cannot claim tax benefits on investments such as Public Provident Fund (PPF), National Saving Certificate (NSC), senior citizen saving schemes, etc. as they are not allowed to invest in these options.
	</li>
	<li>
	NRIs can also claim the other deductions available to resident Indians under the Income Tax Act, 1961 under section 54, 80D, 80G, 80E, and 80U.
	</li>
</ul>

<h3 class="credit_i_h3">Tax Exemptions for NRIs</h3>

<ul class="banklogin_ul">
	<li>
	Income tax is exempted for NRIs if the interest is either earned from Foreign Currency Non-Resident (FCNR) accounts or Non-Resident External (NRE) accounts.
	</li>
	<li>
	Dividend income received by the shares of Indian companies is exempted from income tax in India.
	</li>
	<li>
	NRIs are allowed to claim tax exemption under section 54, 54EC and 54F on long-term capital gains.
	</li>
</ul>

<h3 class="credit_i_h3">Taxation</h3>

It is mandatory for any resident or Non-Resident Indian to <a href="https://www.mymoneykarma.com/taxes/index.html/why-do-we-pay-income-tax.html" target="_blank">pay income tax</a> as per the slab rate if he/she has a net taxable income of Rs. 2.5 lakh and file an Income Tax Return (ITR) as well. However, for an NRI, only the income earned or accrued in India will be considered as taxable income while the income earned outside India is not taxable here.

<h3 class="credit_i_h3">Avoid Double Taxation</h3>

Double taxation occurs when you are taxed twice for the same income source. It is quite common for NRIs to have several sources of income in different countries. NRIs need to pay tax in the countries where they have income sources. In order to make it easy for NRIs, India signed the Double Tax Avoidance Agreement (DTAA) with various countries. However, to avail this benefit, you must gather the necessary documents of tax paid in India as proof. Under DTAA, there are two different methods to avoid double taxation.&nbsp;

<ul class="banklogin_ul">
	<li>
	Exemption method: NRIs are taxed in only one country and exempt in the other country.
	</li>
	<li>
	Tax credit method: NRIs’ income is taxed in both countries, but he/she can claim tax relief in the country of residence.
	</li>
</ul>

<h2 class="credit_i_h2">To Sum Up</h2>

Hope you have a clear understanding of the taxes paid by NRIs. The taxation rules are slightly different as compared to that of resident Indians.

Ignorance may lead you to pay double tax. Try and understand the tax rules and make the most of the <a href="https://www.mymoneykarma.com/investing/index.html/how-to-save-income-tax.html" target="_blank">tax benefits</a> that are available to you.

&nbsp;

Income Tax rules For NRIs are quite different from income tax rules for other residents. mymoneykarma tells you what defines an NRI and the various tax-related rules applicable to them.

Income Tax Rules For NRI - Income Tax India NRI Tax Rules

Do you get to hear a lot about <a href="https://www.mymoneykarma.com/taxes/index.html/5-reasons-to-file-itr.html" target="_blank">filing ITR</a> and <a href="https://www.mymoneykarma.com/aadhaar-card/pan-card-link-aadhar-card.html" target="_blank">linking Aadhaar and PAN</a> these days? Most of us tend to assume that filing ITR is not mandatory and is burdensome; and hence, we often end up not doing it. Did you know that many people get back a substantial amount of money by filing ITR? Sounds interesting? Well, did you also know that it was earlier&nbsp;compulsory to link your PAN with your Aadhaar in order to file your ITR? Before we get into the need for linking PAN and Aadhar for ITR, let us first briefly understand what ITR is, how to file it and the why to file it.

<h2 class="credit_i_h2">PAN-Aadhar Link Final Deadline Update</h2>

31st March 2021 has been set as the deadline for linking PAN and Aadhar,&nbsp; by the Income Tax Department. On failing to link Aadhar and PAN before the last date, the PAN card will turn inoperative from 1 April. If someone tries to use a PAN card that has turned inoperative, they may also be fined ₹10,000. The declaration came from&nbsp; CBDT (Central Board of Direct Taxes) in a notification on February 13, 2020.

PAN is an essential element in many financial transactions, such as property sale, banking transactions, investing in stocks/mutual funds, etc.

<h3 class="credit_i_h3">What is ITR?</h3>

ITR or <a href="https://www.mymoneykarma.com/info-tax/income-tax-returns.html" target="_blank">Income Tax Return</a> is the procedure through which a taxpayer files the information about his/her income, the source of such income, and the income tax paid or payable to the <a href="https://www.mymoneykarma.com/info-tax/income-tax-department.html" target="_blank">Income Tax Department</a>. The core revenue of government is generated by levying taxes, which is utilized for the welfare of the economy, to improve educational facilities, hospitals, defense, etc. There are income-tax laws in place to help the government in proper implementation and collection of taxes. According to the Income Tax Act of 1961 and the Income Tax Rules of 1962 citizens are required to file returns with the Income Tax Department on a yearly basis.

<h3 class="credit_i_h3">Why Do You Need to File ITR?</h3>

<a href="https://www.mymoneykarma.com/info-tax/e-filing-income-tax.html" target="_blank">Filing income tax returns</a> is a way to inform the government about the income you have earned during a financial year. As it is a yearly affair, it should be completed before the specified deadline. Most of us think that filing ITR is not mandatory and end up dismissing it. This isn’t a healthy perspective. Even though ITR filing is not mandatory for some individuals, there are certain benefits that one can avail through it. Here are a few of those:

Claiming refund: If you have had TDS (Tax Deducted at Source) deducted from your salary, you can claim the same, and it would be refunded to your bank account.

Avoid Penalty: You may be charged a huge penalty of Rs. 5000 if you are liable to pay tax but haven't paid it and haven’t filed ITR. Filing returns is a voluntary activity, but there are times when you may be facing legal complications.

<h3 class="credit_i_h3">How to File ITR?</h3>

Filing ITR can be done in two ways – first comes the conventional offline method, where you visit the Income Tax Department office and manually do it; the second way is to file the returns online. <a href="https://www.mymoneykarma.com/info-tax/e-filing.html" target="_blank">E-filing </a>has become increasingly popular in of late. It is relatively easier when compared to the traditional offline filing as it doesn’t involve tedious paperwork. One more added advantage is that it can be done from anywhere. It’s a simple, easy and extremely convenient process.

<h3 class="credit_i_h3">Is It Necessary to Link PAN and Aadhaar?</h3>

The Supreme Court of India had earlier&nbsp;announced that linking PAN and Aadhaar is mandatory in order to file Income Tax Returns.&nbsp;However, <a href="https://www.mymoneykarma.com/blog/union-budget-2019-income-tax-provisions/" target="_blank">Budget-2019</a> offered a huge relief to <a href="https://www.mymoneykarma.com/taxes/index.html/unable-to-link-aadhaar-with-pan.html" target="_blank">those who hadn't or weren't able to link their PAN and Aadhaar</a> by making these two crucial identity documents interoperable. Although it's not mandatory anymore, there's no harm in streamlining your identity documents, right?

<h3 class="credit_i_h3">What If You Don't Link PAN and Aadhaar?</h3>

Earlier, if you hadn't linked your PAN and Aadhaar card, you would not be able to file your Income Tax Returns. Moreover, there was a fair chance of your PAN card being cancelled! Now, after Budget-2019, filing ITR won't be a problem anymore if you haven't linked the two.

<h3 class="credit_i_h3">Different Ways to Link PAN and Aadhaar</h3>

If you're up for linking your PAN and Aadhaar, let's help you with&nbsp;three different methods to get it done

Through Online Portals

Linking Aadhaar card and PAN card can be done through the Income Tax Department, NSDL and UTIITSL websites.

<ul class="banklogin_ul">
	<li>
	Visit the <a href="https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/LinkAadhaarHome.html?lang=eng" target="_blank">Income Tax e-Filing website</a>.
	</li>
	<li>
	Enter your PAN and Aadhaar details.
	</li>
	<li>
	Enter your name as per your Aadhaar card.
	</li>
	<li>
	If you have only your birth year mentioned in Aadhaar, check the box.
	</li>
	<li>
	Now enter the captcha code and click on the Link Aadhaar button.
	</li>
	<li>
	You will receive a pop-up message that your Aadhaar will be successfully linked with your PAN.
	</li>
</ul>

Through SMS

On June 29, 2017, Central Board of Direct Taxes (CBDT) released a notification regarding the different methods to link Aadhaar and PAN other than using the web portal. One of those methods is by sending a simple SMS to UTI Infrastructure Technology and Services Limited (UTIITSL) or NSDL e-Governance Infrastructure Limited. You can send an SMS in the format mentioned below to the either 56161 or 567678&gt;

FORMAT: UIDPAN&lt;SPACE&gt;&lt;12 digit Aadhaar&gt;&lt;SPACE&gt;&lt;10 digit PAN&gt;

Manual Linking 

Central Board of Direct Taxes (CBDT) also released the traditional or the manual method of linking PAN and Aadhaar to ease the problems of taxpayers who aren’t very tech-savvy.

Just visit a service center of PAN service provider, UTIITSL or NSDL. Fill the form called 'Annexure-I' and submit it along with the photocopies of your Aadhaar and PAN cards. You must know that the manual method is not free of cost, and you would have to pay a nominal amount for linking PAN and Aadhaar.

<h3 class="credit_i_h3">What If There Is a Mismatch of Name in Aadhaar and PAN?</h3>

In case you have any mismatch of your name on your Aadhaar and PAN, you can easily get it rectified. For a minor mismatch such as the spelling of your name, you need to go to the e-filing website of the Income Tax department and click on the 'Link Aadhaar' button located on the left pane. Enter your details like your name (as per Aadhaar card), PAN, Aadhaar number and then click on ‘submit’. Make sure that you use the exact case of alphabets and avoid spelling mistakes.

If there is a major mismatch, where the name on Aadhaar doesn’t match with the one on the PAN card, then you will not be able to link PAN and Aadhaar. You must change your name either in Aadhaar or in PAN by visiting UTIITSL for Biometric Aadhaar authentication or NSDL e-Gov for PAN. You can find the list of PAN centers on the websites of UTIITSL and NSDL.

&nbsp;

Linking PAN and aadhaar was mandatory for filing ITR earlier. Wondering why? Do you want to know how to do it? Don't worry, mymoneykarma is here to tell you all about it.

Link Your PAN and Aadhaar to File ITR

One of the perks of a new year is that it marks a fresh start for everything, including how we manage our finances. For a large portion of working professionals who actively make investments, how to save tax still remains a mystery. As an investor, all the salaried and non-salaried taxpayers look for tax-saving options to reach an optimum level of income.

If you're a workaholic or have problems understanding the sophisticated language used by the <a href="https://www.mymoneykarma.com/taxes/index.html/why-do-we-pay-income-tax.html" target="_blank">income tax</a> department to explain exemptions and deductions, you've got some help! By the end of this article you'll understand how you can save up on that hefty tax amount.

<img alt="An Investors Guide for Saving Tax in 2019" src="../../images/new/personal-finance/an-investors-guide-for-saving-tax-in-2019.jpg" class="img-responsive credit_i_img">

<h3 class="credit_i_h3">The ultimate tool for saving tax;&nbsp;Section 80C</h3>

The importance of <a href="https://www.mymoneykarma.com/investing/index.html/fixed-income-investments.html" target="_blank">Section 80C of the Income Tax Act</a> for saving tax is nonpareil. Investments under ELSS, tax-saver FDs, PPF, EPFs, etc. offer high returns with minimal tax-burden. Let's discuss the various types of investments which fall under Section 80C.

Under Section 80C, ELSS investments are considered to be the best tax saving option mainly because they offer the dual benefit of high returns and <a href="https://www.mymoneykarma.com/investing/index.html/how-to-save-income-tax.html" target="_blank">high tax savings</a>. ELSS or Equity Linked Savings Scheme is an equity-cum-tax saving plan which bears the returns of equity and offers high tax savings simultaneously.

You can save up to INR 46,000 through this channel by serving the lowest lock-in period of three years. Historically, ELSS is known to have generated higher returns as compared to traditional financial instruments like NPS, FDs and PPFs. The interest earned through investment in ELSS is partially taxable.

Tax Saver Fixed Deposit is a variant of Fixed Deposit that helps the investor in saving more tax as compared to a conventional fixed deposit. You can invest in a <a href="https://www.mymoneykarma.com/investing/index.html/how-to-save-income-tax.html" target="_blank">tax saver fixed deposit</a> to avail the tax deductions applicable under Section 80C. Tax-saver FDs are just like regular FDs, but they come with a lock-in period of 5 years. You can claim a maximum tax break of 1,50,000 through this channel.

PPF (Public Provident Fund) is one of the most commonly known types of investments. These are long-term investments backed by the Indian Government, usually with a lock-in period of 15 years. One of the major benefits of investing in PPFs is that the interest earned through PPF is not taxable. So, you can bag all the interest earned from your PPF and head for a long vacation to the moneyland;&nbsp;cha-ching!

EPF or Employee Provident Fund is a retirement benefits scheme which can be availed by all <a href="https://www.mymoneykarma.com/taxes/index.html/salary-structure.html" target="_blank">salaried employees</a>. EPF amounts to 12% of basic salary + Dearness Allowance, which is deducted by an employer and deposited in EPF. The interest earned on EPF is entirely tax-free. However, the amount can be withdrawn after five years of continuous service.

The Indian Government introduced NPS or National Pension Scheme for assisting the unorganized sector and self-employed working professionals in getting pension post-retirement. Investments made by the employer are tax-free.

ULIPs are a great blend of <a href="https://www.mymoneykarma.com/investing/index.html/life-insurance-vs-mutual-funds.html" target="_blank">investment and insurance</a>. A share of the invested amount in ULIPs is used to offer insurance coverage and the remainder is invested in the stock market. If you invest up to 1,50,000 INR under ULIPs, you'll be eligible for a tax break under Section 80C.

The Indian Government has also introduced the&nbsp;Sukanya Samriddhi Yojana. This scheme aims at helping women in the country. Since the program was spearheaded by the Indian Government, interest earned on investments, withdrawals and maturity amount are tax-free.

Other Tax Deductions applicable under Section 80C are:

<ul class="banklogin_ul">
	<li>
	Life Insurance Premium paid by an individual, spouse or their dependent children
	</li>
	<li>
	Senior Citizen Savings Scheme
	</li>
	<li>
	Bank Deposits or Post Office Deposits that are more than 5-Years old
	</li>
	<li>
	Payment made towards the tuition fees of kids
	</li>
	<li>
	Principal payment made towards <a href="https://www.mymoneykarma.com/home-loan.html" target="_blank">home loan</a>.
	</li>
	<li>
	Payment made towards the Stamp duty and registration of a house
	</li>
</ul>

<h2 class="credit_i_h2">Other Sections Which Can Help You in Saving Tax</h2>

<h3 class="credit_i_h3">Section 80D</h3>

This section mainly deals with the tax deductions on the <a href="https://www.mymoneykarma.com/insurance/index.html/benefits-of-family-health-insurance.html" target="_blank">medical insurance</a> premiums paid. There's an additional exemption of up to INR 5,000. The Budget declared in 2018 proposed to raise the deduction <a href="https://www.mymoneykarma.com/insurance/best-health-insurance-for-parents.html" target="_blank">for senior citizens</a> from INR 30,000 to 50,000. Directions for availing deduction under Section 80D:

<ul class="banklogin_ul">
	<li>
	The payment should be made from the taxable income
	</li>
	<li>
	The payment should not be made in cash
	</li>
</ul>

<h3 class="credit_i_h3">Section 80E</h3>

Student loans are one of the primary ways of financing education abroad. If you're someone planning on taking a student loan for studying in India or abroad, you can claim deduction under Section 80E. Interest on student loan can be claimed for deduction.

This deduction can be availed for an education loan taken for yourself or any of your relatives. The whole interest amount is deductible in the year in which the individual starts paying interest on the loan. However, the interest must be paid from the taxable income.

<h3 class="credit_i_h3">Section 80EE</h3>

Under this section, <a href="https://www.mymoneykarma.com/buying-a-home/index.html/tips-for-first-time-home-buyers.html" target="_blank">home buyers</a> who have taken a loan can claim an additional tax deduction of up to 50,000 on the home loan interest payments. However, the borrower must satisfy the following conditions for availing deductions under section 80EE

<ul class="banklogin_ul">
	<li>
	The home loan must be taken for the acquisition of a property
	</li>
	<li>
	The loan should be sanctioned after 2016-17
	</li>
	<li>
	The total amount of loan taken shouldn't exceed 35 lakhs
	</li>
</ul>

<h3 class="credit_i_h3">Section 80G</h3>

This section covers the donations to some approved funds and trusts, charitable institutions. Such deductions can be claimed only when the contribution is made through cheque or Demand Draft. Contributions such as clothing, food material, medicines, etc. don't qualify for deduction under this section. Under Section 80GGC, you can claim for the donations made to any political parties.

<h3 class="credit_i_h3">Section 80GG</h3>

This section applies to employees who don't avail the benefits of HRA or any other form of deductions under any other section on their rent. You can make a claim for tax deduction if you haven't claimed allowance under HRA or any other section of the Income Tax Act.

Do you wish to save more tax in this financial year? mymoneykarma is here to help you with a list of investment options for you.

An Investor's Guide for Saving Tax in 2021 | mymoneykarma

India is bubbling with millennials who work for MNCs or private corporations and draw a monthly salary. Sadly, many do not clearly understand the components of their net wage or take-home salary. Are you one of those who come across terms such as CTC, LTA, and PF on your salary slip but barely know what they mean? &nbsp;It is essential for you to know your salary breakup so that you can make sound investments and create reasonable monthly budgets.

mymoneykarma gives you the ins and outs of your salary breakup and provides information on the 11 most important components of salary structure. This article is a guide to understanding your salary slip better.

Basic Salary

This part of your income is the base salary that your employer gives you, based on your experience and designation in the organization. This part of the salary is fixed and is paid to you irrespective of any other factors.

<h3 class="credit_i_h3">CTC</h3>

Your total salary or popularly known as Cost-To-Company (CTC) is the total amount that the company ends up spending on you. The CTC includes your perks, allowances, reimbursements, and other annual components such as gratuity, bonus, and variable pay. It also consists of gratuity and provident fund contribution. This rough equation sums up your CTC:

CTC = gross salary + PF + gratuity

<h3 class="credit_i_h3">Gross Salary</h3>

<a href="https://www.mymoneykarma.com/info-tax/gross-salary.html" target="_blank">Gross salary</a> is your basic salary coupled with all other allowances that you get before the deduction of any taxes. The contributions include your annual bonus, house rent allowance, overtime pay, and your dearness allowance. You can calculate the gross salary with the following equation.

Gross salary = basic salary + HRA + other allowances.

<h3 class="credit_i_h3">Net Salary</h3>

Your take-home salary is your net salary. You get net salary when you subtract all deductions and applicable taxes &nbsp;from your gross salary as per the company policy. You can calculate the net pay as per the equation given below:

Net salary = (basic salary + HRA + other allowances) - (income tax + employer's provident fund + professional tax + health/life insurance).

<h3 class="credit_i_h3">Allowances</h3>

Allowances are perks given by the company to you for meeting various service requirements. The amount and number of these contributions in your salary vary from organization to organization. Here are the most common types of allowances.

<ol class="homeloan_Faqs_ul_1">
	<li>
	House rent allowance or HRA: This consists of an amount of money designed to cover expenses involving rent or accommodation.
	</li>
	<li>
	Leave travel allowance or LTA: This consists of an amount of money designed to cover expenses related to your travel within the country for business purposes. LTA only includes various travel fares; food and accommodation expenses aren’t covered by this allowance.
	</li>
	<li>
	Conveyance allowance: This consists of an amount of money designed to cover your office commute expenses.
	</li>
	<li>
	Dearness allowance or DA: This consists of an amount of money designed to help you tackle the effects of inflation. DA is given only to government employees, public sector employees, and pensioners.
	</li>
	<li>
	Medical allowance: This consists of an amount of money designed to cover the cost of your medical treatments or procedures subject to the company's policies.
	</li>
</ol>

<h3 class="credit_i_h3">EPF</h3>

Employer Provident Fund or EPF is a mandatory contribution in India and consists of an amount from both your employer and you, which collate to become a lump sum for your retirement benefits. Your employer contributes typically 12% of your basic salary and deducts the same amount from your gross salary as your contribution. The amount is deposited in your PF account and is also mentioned in your salary slip.

<h3 class="credit_i_h3">Gratuity</h3>

Gratuity is a component of your CTC that you receive from your employer when you leave the job. This amount is deducted monthly or annually and is given to you as a lump sum on your resignation. However, you are eligible to receive gratuity only if you have completed five years with a particular employer.

<h3 class="credit_i_h3">Health Insurance</h3>

Many organizations provide the facility of health insurance or life insurance in the CTC and deduct the premiums from the gross salary of the employees. This amount is not mentioned in your salary slip. However, many companies do not offer health insurance.

<h3 class="credit_i_h3">ESI</h3>

The Employees State Insurance Scheme or ESI is a type of social insurance covering expenses pertaining to maternity, sickness, disablement, or death due to employment. Your employer contributes typically 3% of your basic salary and deducts 1% of your basic salary from your gross salary as your contribution for the first three months. Subsequently, the employer’s contribution increases to 4% of your basic salary.

<h3 class="credit_i_h3">Professional Tax</h3>

Professional tax or PT is the tax levied by the state government to allow you to practice your profession. The fee differs for different occupations, different states, and different CTC amount. The minimum PT amount is Rs 100, and the maximum amount is Rs 2,500 per month. This component is deducted from your gross salary and is mentioned in your wage slip. Since PT is levied by the state government, many Indian states do not deduct it.

<h3 class="credit_i_h3">TDS</h3>

TDS is the contraction of Tax Deducted at Source and indicates the amount deducted by your employer from your CTC as an amalgam of all the taxes due on the CTC amount.

<h2 class="credit_i_h2">To Sum It Up</h2>

In addition to these components, there may also be other components of your salary as salary structure often vary from organization to organization. You should have a comprehensive knowledge of all the terms mentioned in your offer letter and salary slips. In case you have queries, you can contact the payroll division of your company to get them resolved.

This article is purely educational and should not be considered as tax advice. mymoneykarma does not provide tax advice. For tax counsel, please reach out to a tax advisor.

Your salary structure comprises several terms that you might need to be familiar with so that you understand your salary and deductions better. mymoneykarma explains 11 important terms in your salary structure.

Salary Structure | 11 Important Terms in Your Salary Structure

Have you just started earning and don't have any idea how to file your taxes? Do you rely on an agent to file your taxes for you? Have you just heard a discussion on Form 16 and want to know what that is?

It is always handy to know more about Form 16 and how to use the form to file your tax returns. mymoneykarma saves you the hassle of searching and tells you all you need to know about Form 16.

<h3 class="credit_i_h3">What is Form 16?</h3>

<a href="https://www.mymoneykarma.com/info-tax/form-16.html" target="_blank">Form 16 </a>is an agglomerate certificate issued by your employer, describing the TDS that has been deducted from your salary along with other information required to file your income tax return. Form 16 is released once a year before June 15th. It has two components - Part A and Part B. In case you misplace or lose your form, you can obtain a duplicate form from your employer. Your company can either issue you a hard copy of the form, or you can download Form 16 from the company website using your login credentials.

Form 16 A

Form 16 A consists of crucial financial identification of the employee and the employer. The information given in Form 16 A includes:

<ul class="banklogin_ul">
	<li>
	TAN &amp; PAN of your employer
	</li>
	<li>
	Name and address of your employer
	</li>
	<li>
	PAN of the employee
	</li>
	<li>
	Summary of tax deducted from the employee's salary and deposited quarterly, which is certified by the employer.
	</li>
</ul>

Your employer issues you a Form 16 by downloading it through the <a href="https://www.tdscpc.gov.in/app/login.xhtml" target="_blank">TRACES website</a>. If you have changed jobs more than once in a financial year, each employer will issue their own Form 16. You would need to collate that information when you file your taxes.

Form 16 B

Form 16 B is an annexure to Part A, which specifies the various deductions under the Income Tax Act. It &nbsp;includes the following information:

<ul class="banklogin_ul">
	<li>
	Detailed breakup of your salary
	</li>
	<li>
	Deductions allowed under the ITA
	</li>
	<li>
	Relief under section 89
	</li>
</ul>

If you change your job in a financial year, then you need to decide if you want Part B of the Form from both of your employers or just from the previous employer.

<h3 class="credit_i_h3">Why Do You Need Form 16?</h3>

Form 16 is necessary documentation that you need in every walk of life. It is proof of the fact that you diligently pay your income tax regularly. &nbsp;Apart from this, it is also essential for the following purposes.

<ul class="banklogin_ul">
	<li>
	Loans: Most loans, such as home loans and two-wheeler loans, require Form 16 receipts as a part of their documentation.
	</li>
	<li>
	Visa processing
	</li>
	<li>
	Insurance cover: Many high-end medical and life insurance covers need a copy of your Form 16 for processing your request.
	</li>
</ul>

<h3 class="credit_i_h3">How to Get Form 16?</h3>

Every employer provides Form 16 to their employees. You can get yours from your employer. Even if you quit your job, your employer is bound to provide it to you. Unfortunately, this income tax Form 16, cannot be downloaded from anywhere.

<h3 class="credit_i_h3">Frequently Asked Questions</h3>

1. If there is no TDS, is my employer required to issue me Form 16?

The TDS certificate in Form 16 is issued when your employer has deducted TDS. Even if they haven't deducted TDS from your salary, &nbsp;you can still ask for a Form 16.

2. My TDS has not been deducted from my salary this month. Is it okay?

Any employer is required to deduct TDS before making payment. The Income Tax Act states that every person who deducts TDS from a salary or payment must produce a certificate with all the details of the TDS deducted &amp; deposited.

3. If I did not receive my Form 16, does it mean that I don't have to file my income tax?

While the responsibility of deducting tax on salaries and providing Form 16 is on your employer, filing your income tax return is your responsibility. If your income from all sources combined exceeds the minimum tax slab, you have to pay tax, irrespective of whether your employer has deducted TDS or not. Even if your employer fails to issue you a Form 16, you have to file an income tax return and pay the due taxes.

<h3 class="credit_i_h3">To Sum Up</h3>

Form 16 is necessary for you to file your income tax returns and be a responsible citizen. Fortunately, there are several easy tools online to help you file your taxes. The income tax filing tool from mymoneykarma is one such tool that makes tax-filing easy and hassle-free. You can utilize the tool to save your time and efforts.

This article is purely educational and should not be considered as tax advice. mymoneykarma does not provide tax advice. For tax counsel, please reach out to a tax advisor.

Form 16 is one of the most utilized yet misunderstood forms of tax documentation in India. mymoneykarma gives you all that you need to know about Form 16.

Form 16 - What to do with form 16

Have you been contemplating why you need to pay income tax even though you are already contributing by paying <a href="https://www.mymoneykarma.com/info-tax/service-tax.html" target="_blank">service taxes</a>, excise duty, VAT, toll, entertainment tax, and other forms of tax whenever you buy goods, fuel, food or even use public facilities such as transport and roads? Do you feel frustrated with the amount of money that you pay as an income tax? Your frustrations might be unjustified.

<a href="https://www.mymoneykarma.com/tax.html" target="_blank">Taxes</a>, especially income tax, are essential tools of revenue generation for the country. mymoneykarma explains in detail the intricacies of income tax and its importance.

<h3 class="credit_i_h3">What are Taxes?</h3>

Any tax is a financial obligation for individuals or property owners in order to support a government or legislative authority. In simple words, a tax is the money that people have to pay to the government, which, in turn, is used to provide public services.

There are two broad categories of taxes.

<ul class="banklogin_ul">
	<li>
	Direct Taxes
	</li>
	<li>
	Indirect taxes
	</li>
</ul>

<h3 class="credit_i_h3">What are Direct Taxes?</h3>

A direct tax is a kind of fee that is imposed directly on the taxpayer and paid directly to the government. A direct tax is a tax that cannot be passed on by the taxpayer to someone else, i.e., each person must pay whatever tax he/she owes. A significant direct tax imposed in India is income tax. Wealth tax and property tax also fall in the purview of this category.

<h3 class="credit_i_h3">What are Indirect Taxes?</h3>

These taxes are transferable from one person to another. The entire burden of the tax is on the ultimate consumer, but the immediate liability to pay tax is on the supplier of goods or services.

Indirect taxes are levied on goods or services but not on income or property. Service tax and GST are indirect taxes.

<h3 class="credit_i_h3">What Is&nbsp;Income Tax?</h3>

An <a href="https://www.mymoneykarma.com/info-tax/income-tax.html" target="_blank">income tax</a> is a tax imposed by the governments on income generated by businesses and individuals within the government’s jurisdiction. Taxpayers are legally mandated to file an income tax return annually to determine their tax obligations. Income taxes are sources of revenue generation for governments across the world. The government uses income taxes to generate revenue for public services, finance government obligations, and provide for the country’s citizens.

<h3 class="credit_i_h3">Why Do We Pay Income Taxes?</h3>

1. To avoid a penalty: Paying your taxes is considered a civic duty, although doing so is also a requirement of the law. The <a href="https://www.mymoneykarma.com/info-tax/income-tax-department.html" target="_blank">income tax department</a> requires you to pay your taxes. If you do not pay your taxes, you would have to face penalties such as fines or even imprisonment.

2. To avoid paying back taxes: The governments keep track of your income tax submissions each year. The amount of unpaid taxes accumulate over the years into a substantial sum that can get very difficult to pay at once. Hence, it's better to avoid any due tax.

3. Social welfare packages: The income tax collected from you is to fund social welfare packages that are essential for the needy. The government has used proceeds from income taxes to build health services and other institutions over the years. Social welfare packages are a must for the social development of a country, and without taxes, it wouldn’t be possible to render such services.

<h3 class="credit_i_h3">Importance of Tax-Filing</h3>

File your <a href="https://www.mymoneykarma.com/info-tax/income-tax-returns.html" target="_blank">income tax returns</a> is as crucial as it is to pay your income tax. Income tax returns are necessary documentation that you need in every walk of life. They are proof of the fact that you pay your income tax regularly. &nbsp;Apart from this, it is also essential for the following purposes:

<ul class="banklogin_ul">
	<li>
	Income proof: You can use your income tax return receipts as your income proof if you don't have your salary slips handy. For self-employed people, it is the only form of income proof available.
	</li>
	<li>
	Loans: Most loans such as home loans and two-wheeler loans require Form 16 receipts as a part of their documentation.
	</li>
	<li>
	Visa processing: Most embassies require copies of income-tax returns as your income proof when you apply for a visa to go abroad for various reasons.
	</li>
	<li>
	Insurance cover: Many high-end medical and life insurance covers need a copy of your Form 16 for processing your request.
	</li>
</ul>

<h2 class="credit_i_h2">To Sum Up</h2>

Whenever we feel disgruntled with the rising rates of income taxes, it is essential to understand that paying our taxes makes us better citizens. We are indirectly contributing to building a stronger nation for its citizens and for the future generation that will follow. Taxes are the life source of a nation. We should be sensitive to this life source and keep the nation functioning.

 
This article is purely educational and should not be considered as tax advice. mymoneykarma does not provide tax advice. For tax counsel, please reach out to a tax advisor.

Paying income tax regularly is one of our most important civic duties as citizens of this country. Mymoneykarma tells you all about why we need to pay income tax regularly.



Income tax | Why do we pay income tax

To all bread-earners out there...

Do you notice a chunk of money gone missing from <a href="https://www.mymoneykarma.com/taxes/index.html/important-terms-in-your-salary-structure.html" target="_blank">your salary on your payslips</a>? Are you wondering where it went? It could be your TDS, and we are here to tell you all about it. Read on to know all about it.

<h3 class="credit_i_h3">What is TDS?</h3>

TDS stands for ‘Tax Deducted at Source’. You’re surely <a href="https://www.mymoneykarma.com/taxes/index.html/why-do-we-pay-income-tax.html" target="_blank">aware of income tax,</a> aren’t you? Well, if your total income in a financial year falls under the income tax bracket, then you are bound to pay an amount every year as your income tax. <a href="https://www.mymoneykarma.com/info-tax/income-tax.html" target="_blank">Income tax </a>is applicable not only on your salary but also on all other types of income you may have from various sources. These ‘sources’ often deduct a certain percentage of the payment as tax. That amount is your tax deducted at source or TDS. The deducted amount is deposited with the government and qualifies as your share of income tax for that particular income. Once deposited, the amount reflects the <a href="https://www.mymoneykarma.com/info-tax/form-26as.html" target="_blank">Form 26AS</a>&nbsp;of the deductee. TDS applies to earnings from several financial instruments and business transactions.

The types of payments that TDS deduction is applicable for are:

<ul class="banklogin_ul">
	<li>
	Salaries
	</li>
	<li>
	Commission payments
	</li>
	<li>
	Interest payments by banks
	</li>
	<li>
	Rent payments
	</li>
	<li>
	Professional fees
	</li>
	<li>
	Consultation Fees
	</li>
</ul>

<h3 class="credit_i_h3">How Does it Work?</h3>

The Indian tax structure is broadly divided into a two-dimensional approach, wherein the first method allows for the taxes to be paid voluntarily after careful evaluation of income during the financial year. And, in the second method, TDS deduction is the spot deduction of tax at the very source of income itself. This method aims to simplify the taxation procedure and ensures that every individual/company is adhering to the same.

An organization or person that makes the payment after deducting TDS is called a ‘deductor’, and the organization or person receiving that payment is called the ‘deductee’. It is the deductor's responsibility to deduct the payment and submit it with the government. There is no standard rate for TDS deduction, and it can range from 1% to 30% depending on the source of the concerned income. If the deductee isn’t liable to pay the deducted amount as tax, the amount can be claimed in the form of a tax refund after they file their ITR.

<h3 class="credit_i_h3">A Brief Example</h3>

To understand the concept of TDS, let's observe an example: Jasper Ltd. makes a payment of 50,000 INR towards professional fees to Mr. AC. Jasper Ltd. deducts a tax of 5,000 INR and makes a net payment of 45,000 INR to Mr. AC. Then Jasper Ltd. directly deposits the deducted amount with the government. If Mr. AC’s total income in the concerned financial year doesn’t require him to pay that 5000 INR as income tax, then Mr. AC can file an ITR and get back the amount.

<h3 class="credit_i_h3">TDS on Salary</h3>

How Much TDS Should be Deducted from Salary?

Organizations that are responsible for paying salary are liable to deduct tax on estimated salary at a prescribed rate of 15%. But that is also subject to the following:

<ol class="homeloan_Faqs_ul_1">
	<li>
	Exemption Limit: No deduction of tax at source unless the estimated salary exceeds the exemption limit.
	</li>
	<li>
	Free allowances: Allowances like HRA, LTC, conveyance, etc. as per prescribed limits and other perquisites that do not qualify as taxable salary should be deducted from the total salary during tax computation.
	</li>
	<li>
	Other deductions: Other deductions under <a href="https://www.mymoneykarma.com/info-tax/sections-80c.html" target="_blank">section 80C</a>, 80CCC, 80CCD, 80CCG, 80D, 80DD, 80DDB, 80E, 80EE, etc. should be taken into consideration before the calculation of tax on salary.
	</li>
</ol>

When is TDS Deducted?

The concept of TDS is solely based on the principle of deducting the tax at the time of payment. Employers deduct it while disbursing salaries. Banks deduct it while crediting interests.

What is the minimum salary for TDS on salaries to be deducted by the employer?

If the income from salary exceeds a sum of basic exemption limit even after comprehensive calculation of allowances, taxable perquisites, and deductions under chapter VI-A, then 15% tax has to be deducted by the employer.

<h3 class="credit_i_h3">Rates of TDS Deduction</h3>

There are more than 20-25 sections that prescribe different types of payments on which TDS is applicable. Here is a list of some of the most commonly encountered types&nbsp;of payments on which tax is deducted at source.

<table class="table table-bordered credit_i_table">
	<tbody>
		<tr>
			<td>
			Section
			</td>
			<td>
			Nature of payment
			</td>
			<td>
			Rate of TDS
			</td>
		</tr>
		<tr>
			<td>
			192
			</td>
			<td>
			Salary
			</td>
			<td>
			15%

			(Education and higher education cess @ 2% &amp; 1% respectively in cases where salary exceeds INR&nbsp;1 crore)
			</td>
		</tr>
		<tr>
			<td>
			194
			</td>
			<td>
			Deemed Dividend u/s 2(22)(e)
			</td>
			<td>
			10%
			</td>
		</tr>
		<tr>
			<td>
			194A
			</td>
			<td>
			Interest other than interest on securities
			</td>
			<td>
			10%
			</td>
		</tr>
		<tr>
			<td>
			194C
			</td>
			<td>
			Payment or credit to a resident contractor/sub-contractor
			</td>
			<td>
			1% (in cases of individuals and HUF)

			2% (in case of a person other than individual or HUF)
			</td>
		</tr>
		<tr>
			<td>
			194D
			</td>
			<td>
			Insurance Commission
			</td>
			<td>
			5% (in cases of individuals and HUF)

			10% (in case of a person other than individual or HUF)
			</td>
		</tr>
		<tr>
			<td>
			194G
			</td>
			<td>
			Commission on the sale of lottery tickets
			</td>
			<td>
			10%
			</td>
		</tr>
		<tr>
			<td>
			194H
			</td>
			<td>
			Commission or Brokerage
			</td>
			<td>
			10%
			</td>
		</tr>
		<tr>
			<td>
			194-I
			</td>
			<td>
			Rent
			</td>
			<td>
			2% (rent of plant &amp; machinery)

			10% (rent of land or building or furniture or fixtures)
			</td>
		</tr>
		<tr>
			<td>
			194-IA
			</td>
			<td>
			Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land)
			</td>
			<td>
			1%
			</td>
		</tr>
		<tr>
			<td>
			194J
			</td>
			<td>
			Professional fees, technical fees, royalty or remuneration to a director
			</td>
			<td>
			10%
			</td>
		</tr>
		<tr>
			<td>
			194LA
			</td>
			<td>
			Payment of compensation on acquisition of certain immovable property
			</td>
			<td>
			10%
			</td>
		</tr>
	</tbody>
</table>

<h3 class="credit_i_h3">How to Calculate TDS?</h3>

As numerous transactions are covered under the purview of TDS sections, the calculations can get a little tricky. Though the basic salary is fully taxable according to respective tax brackets, there are some exemptions available as allowances and perks. Let's look at the way to calculate TDS:

<ol class="homeloan_Faqs_ul_1">
	<li>
	Firstly, calculate the gross monthly income as the sum of basic income, allowances, and perquisites.
	</li>
	<li>
	Then, calculate the available exemptions like medical, HRA, travel, etc. that fall under the purview of Section 10 of the Income Tax Act (abbreviated as ITA).
	</li>
	<li>
	Next, reduce exemptions according to step 2 from the gross monthly income calculated in step 1.
	</li>
	<li>
	TDS is calculated on yearly income, hence, multiply the corresponding figure by 12 to get your annual taxable income from salary.
	</li>
	<li>
	If you have any other income sources - such as freelancing, income from house rent or housing loan interests - then you would have to add/subtract this amount from the figure in step (4).
	</li>
	<li>
	Calculate your investments under Chapter VI-A of ITA; deduct this amount from the gross income calculated in step (5). You must know that each individual is entitled to an investment of up to INR 1.5 lakhs in specific investment instruments.
	</li>
	<li>
	Next, deduct the maximum allowable income tax exemptions from your salary.
	</li>
	<li>
	Now that you have calculated your total taxable income, check which tax slab it falls under and calculate how much tax you owe. If your taxable income is below INR 2.5 lakhs, then you aren’t required to pay income tax.
	</li>
</ol>

Do note that:

<ul class="banklogin_ul">
	<li>
	The tax bracket has changed after the Union Budget in 2019; so you should check it before calculating your taxes.
	</li>
	<li>
	Senior citizens have different tax slabs and receive higher exemptions than those discussed above.
	</li>
</ul>

<h3 class="credit_i_h3">How to Check TDS Online?</h3>

TDS is deducted when employees receive salary. You can check it yourself without anyone’s help, and it’s free of cost! It takes only a few minutes to review the credit of TDS deducted. Here are the steps to check TDS credit on Form 26AS:

<ol class="homeloan_Faqs_ul_1">
	<li>
	Go to the <a href="https://www.incometaxindiaefiling.gov.in/home" target="_blank">Income Tax portal</a>.
	</li>
	<li>
	Next, register (if you haven't already) and login to the portal.
	</li>
	<li>
	Then, go to ‘My Account’ and click on "View" to view Form 26AS.
	</li>
	<li>
	Next, select the financial year and download the PDF file and to proceed further.
	</li>
	<li>
	Open the downloaded file. The password to this file&nbsp;is your date of birth as mentioned on your PAN card.
	</li>
	<li>
	After opening the form, you will get information regarding your total income on which TDS is deducted and the TDS credited to your account.
	</li>
	<li>
	If you have internet banking facility that is linked with your PAN, then use your bank’s net banking portal to check TDS.
	</li>
</ol>

<h3 class="credit_i_h3">How to Avoid TDS?</h3>

If your total income in a financial year is below the exemption limit, you can ask the deductor not to deduct TDS by submitting Form 15G/15H. Also, while receiving payment that is subject to TDS, the deductee is required to provide his/her PAN details to avoid tax deduction at the higher rates.

<h3 class="credit_i_h3">Final Thoughts</h3>

Managing tax compliance becomes a difficult task without help. That's why mymoneykarma's ITR tool will help you manage your taxes better and live stress-free when income tax comes knocking. It can also help you avoid penalties arising due to non-compliance. In case your TDS deduction has gone a but over the top, don't you worry - you can get it back easily by e-filing yout&nbsp;<a href="https://www.mymoneykarma.com/info-tax/income-tax-returns.html" target="_blank">Income Tax Returns</a>&nbsp;(ITR).

This article is purely educational and should not be considered as tax advice. mymoneykarma does not provide tax advice. For tax counsel, please reach out to a tax advisor.

TDS or Tax deducted at source is the spot deduction of tax at the very source of income itself. It aims to simplify the taxation procedure and ensures that every individual/company is adhering to the same.

TDS | What is TDS | Tax Deducted at Source

As July knocks on your door every year, so does the need to file your tax returns. Pull up your sleeves and file your ITR asap! The stress doesn't end with filing for tax returns but extensively involves you to find means to reduce income tax. So while you’re at it, why don’t you figure out some better ways to save income tax?

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That's why mymoneykarma is here for you. Whether you’re a veteran taxpayer or a newbie - you need to plan your investments correctly to reduce income tax. The income tax laws may appear intimidating but behold and read more to unveil 25 amazing ways to save more.

Little efforts and voila! Let's look at the ways to reduce income tax that can help you save a chunk of your salary to tick off the next thing from your checklist.

1. Tuition Fees

Income Tax laws provide the opportunity to compensate for the expenses you incur on your kid's tuition fees by including them while filing ITR. You can claim this deduction through section 80C of the Income Tax Act and reduce income tax.

2. Deduction on Rent Paid (apart from HRA)

As per the provisions mentioned in section 80GG of the IT Act, you can still get a tax benefit and need not be flustered if you don’t get HRA in your salary. You can claim a deduction of up to Rs.5000 a month under this clause.

3. Repayment of Home Loan

Did you know that your home loan can help you save income tax?

Fascinating, right? You can get tax benefits on both principal and interest components of your home loan installments. You can claim these deductions under section 80C, section 24, and section 80EE of the IT Act.

4. Repayment of Education Loan

Most youngsters resort to education loan to curb the rising costs of educational courses. Such deductions are also available on your education loan EMIs and can help you save a lot. All these deductions are available under section 80E to provide you a tax benefit for interest paid on education loan.

5. Pension Funds

Did you know that your retirement plan can also save you from the burden of income tax?

One of the best ways to secure your life after retirement is to start investing in pension funds. And investing in pension funds helps you to reduce income taxes. You can enjoy such tax benefits under section 80C / 80CCC / 80CCD(1) / 80CCD(1B) / 80CCD(2).

6. Health Check-up &amp; Medical Insurance

Health is wealth!

It is genuinely applicable when you are hunting for means to save income tax. Jokes apart - according to the income tax laws, these expenses can help you get a deduction of up to Rs 60,000 under section 80D of the Income Tax Act if the necessary documents are provided.

Now let’s move on to some lesser known tax -saving hacks.

7. Medical Expenses of Disabled Dependent

If you have a dependent person in your family who is suffering from a disability, then the IT laws let you avail tax benefit under section 80DD. This deduction is meant to help you take care of your disabled family member who is dependent on you, and it can also help you save up to Rs 1,25,000 from your taxable income.

8. Medical Expenses of a Disabled Individual

Similar to deductions under section 80DD, individuals who are suffering from a disability also get to avail tax benefit under section 80U. These provisions help you save up to Rs 1,25,000 from your taxable income and reduce income tax.

9. Treatment for Specified Diseases

Specific diseases or ailments, like HIV-AIDS or cancer, also let you avail tax benefit under section 80DDB based on expenses incurred.

10. Charitable Donations

If you willingly want to help the people in need, then there is another reason to rejoice. While donating, you not only get to achieve your inner peace but also get to save income tax. Several types of donations are entirely exempted under Sec 80G of the Income Tax Act. However, there is an upper limit on cash donations and capped at 10% of the gross total income.

11. Donations for Scientific Research or Rural Development

Any contribution that you make for any scientific research or rural development is also eligible for deduction under section 80GGA.

Now, let's delve into some of the best and most popular tax-saving investments under 80C.

12. EPF

Most employers open an EPF account for you, which means that you are already contributing to your provident fund. Hence, the contribution that you make to your EPF can be claimed as a deduction under section 80C to save income tax.

Those who do not have EPF deductions or those who wish to invest more than the customary EPF deductions may choose to open a voluntary provident fund account (VPF). You can voluntarily invest more (up to 100% of your basic salary + DA). VPF earns you a tax-free interest at 8.4%, and this can help you save a significant amount.

13. PPF

Other than PF, another option is to invest in public provident fund or PPF. Just like PF, you can get a tax deduction on your contributions while the resulting interest income &amp; maturity amount stay exempted from tax.

14. Sukanya Samriddhi Scheme

This scheme is only available for parents or guardians of a girl child and is one of the best tax saving investment options and that help you to save considerably.

15. NPS

NPS or National Pension Scheme is a saving scheme offered by the postal department. It is considered to be a saving scheme with zero risks and is also eligible for 80C deduction.

16. FDs and ELSS

Bank FDs that have a lock-in period of 5 years and certain Mutual Fund SIPs that have a 3-years lock-in period are eligible for income tax deduction under section 80C.

17. Post Office Deposit Account

You can also open five years fixed deposits with any branch of Indian Post Office, and it would work like any other fixed deposit account. But, there's a catch - this deposit account will have a lock-in period of five years, and it offers double the benefit of return on investment. A sure shot way to save income tax and grow your money.

Salaried individuals get access to these additional tax benefits:

18. HRA Deduction for Rent Paid

You can claim the HRA allowance in your salary as a tax deduction if you live in a rented apartment.

19. LTA Deduction for Travel Expenses

LTA can fetch you additional tax benefits. The LTA concession can be claimed for two journeys in a tenure of 4 years, and this can be claimed as a deduction.

20. Tax Benefit on Gratuity

Gratuity received on retirement or termination or on becoming incapacitated or any amount received by the widow of the deceased employee, children or dependents is tax-exempt up to Rs 10,00,000. But, this is subject to various clauses.

21. Meal Coupons

Various employers provide meal coupons like Sodexo or Food cards to their employees. &nbsp;These aren’t taxable up to Rs 2,600 a month, which helps you save income tax.

22. Medical Bills and Daily Travel Allowance

A Standard Deduction of Rs 40,000 has replaced the erstwhile conveyance allowance &amp; medical reimbursement, and the change in the law has been applicable since FY 2018-19.

23. Car Leased by Employer

Several employers offer car purchase or services to their employees, which can help them save tax and money on several fronts. &nbsp;However, those who avail of this facility cannot take the benefit of daily travel allowance.

24. Internet or Phone Expenses

Expenses incurred in using the phone and internet devices provided by the employer can be included while filing ITR and can be claimed to reduce income tax.

25. Salary Restructuring

While switching jobs, it is always a great idea to restructure your salary to maximize the take-home pay and minimize the tax outgo. &nbsp;

<h3 class="credit_i_h3">How Can mymoneykarma Help You?</h3>

Filing taxes and looking for optimum tax-saving options can get on to your nerves. mymoneykarma helps you with both. Save your time and be relieved from all the stress with mymoneykarma. Our tax filing tool makes your life a lot easier and let you optimize your tax life. &nbsp;Our financial ‘gyaan’ helps you optimize your savings. &nbsp;&nbsp;&nbsp;

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Looking for the best and easy ways to reduce income tax? There are several options for you. mymoneykarma brings before you an array of different tax-saving instruments!

Ways To Reduce Income Tax India - How To Reduce Income Tax 

Mr. Rangaranjan from Bangalore rants, “This has been a major pain for me! My name on my Aadhaar card and passport has my first name abbreviated; however, my PAN card contains my full name. This is a source of tremendous headache. Every time I try to link my PAN and Aadhaar, it pops up an error message saying that it cannot be linked because there's a mismatch in the name. This is affecting my entire family, and it is a problem that needs to be addressed.”

<h3 class="credit_i_h3">Problems, Problems, and Problems!</h3>

This experience is just not one person's experience; it is becoming a rising concern for many people since the government bombarded us with the news of mandatorily linking PAN and Aadhaar. So, let's dive into understanding how to link PAN card with Aadhaar.

You are required to link PAN card with Aadhaar card to enjoy seamless Income Tax services. However, there’s always been a ‘last date’ to link PAN with Aadhaar looming around every quarter of the year, warning that people who fail to link their Aadhaar with PAN will not be able to file their income tax return (ITR). Every other year, the Government of India would extend&nbsp;the timeline of linking PAN with Aadhaar.&nbsp;

<h2 class="credit_i_h2">PAN-Aadhar Link Final Deadline Update</h2>

31st March 2021 has been set as the deadline for linking PAN and Aadhar,&nbsp; by the Income Tax Department. On failing to link Aadhar and PAN before the last date, the PAN card will turn inoperative from 1 April. If someone tries to use a PAN card that has turned inoperative, they may also be fined ₹10,000. The declaration came from&nbsp; CBDT (Central Board of Direct Taxes) in a notification on February 13, 2020.

PAN is an essential element in many financial transactions, such as property sale, banking transactions, investing in stocks/mutual funds, etc.

<h3 class="credit_i_h3">What’s the Problem?</h3>

Apart from the annoying and scary deadlines, the process of linking PAN card with Aadhaar is relatively simple. However, many people fail to link the two government ID cards successfully. There can be many reasons why sometimes it can get difficult to link PAN card with Aadhaar. For instance, Aadhaar allows the use of initials in the name, while PAN does not. &nbsp;Therefore, in such cases where the name in Aadhaar contains initials, the linking process often fails as the name differs from that in the PAN database.

<h3 class="credit_i_h3">Why this Problem?</h3>

The underlying problem lies in the technology associated with PAN, which is almost 30 years old. This problem is not encountered when the Aadhaar and passport are linked. While linking a passport with the Aadhaar, a person’s identity is tied to their biometrics, so their name on the document can have initials. However, the PAN software does not accept initials, and it is the result of using two separate software systems. Thousands of Indians, especially South Indians, face this problem in linking PAN card with Aadhaar. People residing in the Southern part of India generally have long names that are often abbreviated, and this poses a significant problem while linking PAN card with Aadhaar.

<h3 class="credit_i_h3">What’s the Solution?</h3>

The only possible solution to this mess is to change the name either in Aadhaar or in PAN database to avoid confusion. One can visit an Aadhaar Enrollment Center or a designated PAN application center of NSDL e-Gov or UTIITSL to get such errors rectified.

Since changes in PAN take a long time to fall through, people with this problem prefer to change their names in their Aadhaar cards and then link it with their PAN cards. While this might sound tedious, it is a better solution at the moment. However, these changes can lead to a mismatch in the name in other critical identity documents. To sum it up, it’s a convoluted mess that takes lots of time and patience to sort out.

<h3 class="credit_i_h3">How to Link PAN and Aadhaar?</h3>

There are many ways to link PAN card with Aadhaar. Let's take a quick look:

Through Website: Visit the income tax e-filing website lets you link your PAN card to Aadhaar card in a jiffy.

Through SMS: You can also use the SMS facility to link PAN card with Aadhaar. To link Aadhaar with PAN using the SMS facility, UIDPAN &lt;SPACE&gt; &lt;your 12-digit Aadhaar number&gt; &lt;SPACE&gt; &lt;10 digit PAN&gt; and send it to 567678. For example:

If your Aadhaar UID is 121122223333, and your PAN is AAAPA9999Q, then type:

UIDPAN 121122223333 AAAPA9999Q

Send it to 567678. You will receive a confirmation SMS.

The Supreme Court of India had earlier&nbsp;announced that linking PAN and Aadhaar is mandatory in order to file Income Tax Returns.&nbsp;However, <a href="https://www.mymoneykarma.com/blog/union-budget-2019-income-tax-provisions/" target="_blank">Budget-2019</a> offered a huge relief to <a href="https://www.mymoneykarma.com/taxes/index.html/unable-to-link-aadhaar-with-pan.html" target="_blank">those who hadn't or weren't able to link their PAN and Aadhaar</a> by making these two crucial identity documents interoperable. Although it's not mandatory anymore, there's no harm in streamlining your identity documents, right?&nbsp;

Some people might not be able to link their PAN and Aadhaar due to details mismatch in the two identity documents. mymoneykarma tells you how to deal with this problem.

Unable to Link Aadhaar with PAN - PAN Aadhaar Link

E-filing ITR is a duty for all wage-earners in India, and it is mandatory for those whose gross income has crossed the threshold of income tax slab (above 2.5 lakh). As per the national budget passed in 2019, individuals with a net taxable income of up to Rs 5 lakhs can claim a tax rebate under section 87A of the IT Act, which implies zero tax paid.

Even if you don't come under the taxable income range, <a href="https://www.mymoneykarma.com/taxes/index.html/5-reasons-to-file-itr.html" target="_blank">filing ITR has a plethora of benefits</a> that you can enjoy only after going through the process. However, for e-filing ITR, there are certain documents that you need to collect and keep handy.

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So, let's delve into the intricacies of the documents that are necessary for filing your income tax return:

<h3 class="credit_i_h3">Form-16</h3>

<a href="https://www.mymoneykarma.com/taxes/index.html/what-is-form-16.html" target="_blank">Form-16 </a>is one of the essential documents to e-file ITR for a salaried person. The employer issues Form-16 to provide a break-up of the salary paid to you and the amount of <a href="https://www.mymoneykarma.com/taxes/what-is-tds.html" target="_blank">TDS deducted</a> on it. It is mandatory for your employer to give your Form-16 to you if he/she has deducted TDS from your salary.

Form-16 consists of Part-A and Part-B:

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	Part-A includes the details of the tax deducted by your employer during a financial year along with your PAN information and the TAN of your employer.
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	Part-B shows the <a href="https://www.mymoneykarma.com/taxes/index.html/important-terms-in-your-salary-structure.html" target="_blank">break-up of your salary structure</a>, listing your allowances, perquisites, and profits.
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</ul>

<h3 class="credit_i_h3">Three variants of Form-16: A, B, and C</h3>

Form 16A: While Form 16 is for salaried individuals and is applicable only to the salary drawn from a full-time employment, Form 16A applies to other sources of income. If TDS has been deducted on the interest received from fixed deposits and recurring deposits during a financial year, then you can ask your bank to issue Form-16A to you. Similarly, if you have earned from freelance projects that have been subjected to TDS deductions, you would have to get Form 16A from the remitter.

Form 16B: Form 16B is applicable to income from the sale of property. In case you have sold your property, then ask the buyer to issue you Form-16B specifying the TDS deducted on the paid amount.

Form 16C: Income from rent is associated with Form 16C. If you are a landlord earning rental income, then ask your tenant to provide Form-16C containing the details of TDS deducted on the rent received by you.

<h3 class="credit_i_h3">Salary Slips</h3>

Your salary slip is contains your salary structure, and it plays a crucial role in determining the components of your salary that are taxable. The union budget in 2018-19 made several changes to the tax rules, including the standard deduction being raised to Rs 40,000 for salaried employees in place of the deductions for medical reimbursements and travel allowance.

<h3 class="credit_i_h3">Tax-saving Investment Proof</h3>

All your <a href="https://www.mymoneykarma.com/taxes/index.html/top-10-tax-saving-options-in-2019.html" target="_blank">tax-saving investments</a> - such as Employee Provident Fund, PPF, Mutual funds, premium paid for life insurance, National Pension Scheme, etc. - and expenditures - such as home loan principal repayment, child's tuition fee, etc. - that you have made under section 80C, 80CCC and 80CCD(1) in a financial year can help in reducing your tax liability. &nbsp;However, the maximum amount to claim under these three sections cannot exceed Rs 1.5 lakh. You’d be needing document proof for all such investments that you wish to claim.

<h3 class="credit_i_h3">Form 26AS</h3>

It is a consolidated tax passbook that encompasses the information of all the taxes that have been deducted in a financial year such as TDS deducted by the employer, banks, financial institutions, and other organizations, for the payments that you have received.

<h3 class="credit_i_h3">Deductions under Section 80D - 80U</h3>

There are expenses on which you can claim deductions under <a href="https://www.mymoneykarma.com/buying-a-home/index.html/index.html/tax-saving-investments-after-80c.html" target="_blank">numerous sections</a> of the Income Tax Act. For instance - health insurance premium paid in a financial year is eligible for a maximum deduction of Rs.25,000 under section 80D of the income tax act. Receipts for all such deductions are required for filing ITR.

<h3 class="credit_i_h3">Home Loan Statements from Bank or NBFC</h3>

If you have an active <a href="https://www.mymoneykarma.com/home-loan.html" target="_blank">home loan</a> from a bank or any other financial institution, then don't forget to ask for the loan statement containing the break-up of principal and interest that you are paying. The interest repaid on the home loan can reduce your tax liability to a maximum of Rs.2 lakhs under section 24.

<h3 class="credit_i_h3">Capital Gains</h3>

If you have earned capital gains from property sale or <a href="https://www.mymoneykarma.com/investing/index.html/stock-market-vs-mutual-funds.html" target="_blank">mutual funds</a> or elsewhere, then you should report these gains in your Income Tax Return file attaching the sale deed or statements.

<h3 class="credit_i_h3">Aadhaar card</h3>

As per section 139AA of the Income-tax Act, it is mandatory to provide your <a href="https://www.mymoneykarma.com/taxes/index.html/link-your-pan-and-aadhaar-to-file-itr.html" target="_blank">aadhaar card</a> details to successfully file your ITR.

<h3 class="credit_i_h3">Interest Certificates Received from Savings</h3>

The interest that you receive on a savings bank account, post office savings account, <a href="https://www.mymoneykarma.com/investing/index.html/fixed-maturity-vs-fixed-deposit.html" target="_blank">fixed deposits</a>, and recurring deposits are taxable. Hence, you need the interest certificates from the bank or post office to file your ITR.

<h2 class="credit_i_h2">In a Nutshell...</h2>

Now that you have a comprehensive list of documents that you need to e-file ITR, then don't wait for the deadline. File your ITR smoothly with us.

Check out our e-filing tool and file your income tax returns with us before the deadline knocks at your door. Happy Tax Filing!

 
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Documents required for filing ITR is essential knowledge needed to complete the process. Wondering what the documents required for filing ITR are? Here's mymoneykarma to help e-filing.

Documents Required for Filing ITR - ITR Filing Documents Required

Presented by the Union Minister for Finance, Mr. Piyush Goyal, on February 1, 2019, the interim Union Budget for 2019 is a much-needed tax relief for the salaried middle class. Income tax concessions for salaried class and lowered peak tax rates for corporates seem to be the mantra for 2019. The alternative focus remained on the farmers and senior citizens.

The Union Home Minister, Mr. Arun Jaitley, has called the Union Budget “historic and for the development of the common man.” The budget has undoubtedly focused on the common man this time over, but it remains to be seen whether the Budget measures are implemented successfully.

mymoneykarma brings you the major highlights of the Union Budget 2019, and what they entail for all of us.

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<h3 class="credit_i_h3">The Middle-class Dream</h3>

The 2019 budget is a transparent attempt to woo the salaried middle-class with tax sops, and it seems to be working for now. According to the budget;

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	Individuals earning up to Rs. 5 lakhs per annum will be granted full tax rebate after all deductions. This covers a large portion of young working professionals.
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	The TDS threshold on interests on bank and post office deposits have been raised from Rs. 10,000 to Rs. 40,000. The TDS threshold on rental income has been increased to Rs. 2.4 lakhs from Rs. 1.8 lakhs.
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	The standard tax deduction has been raised from Rs 40,000 in 2018 to Rs. 50,000 in this year.
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	Individuals occupying their second self-owned house are exempt from paying property tax for that property.
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	The workers who are earning up to Rs. 21,000 per month will be eligible for bonuses.
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</ol>

<h3 class="credit_i_h3">Focus on Farmers</h3>

The Union Government has continued the trend of creating farmer-centric budgets in 2019. Much like last year, there are several incentives designed for farmer welfare.

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	The Budget proposes a pension of Rs. 6,000 per annum to be given in 3 installments to farmers with up to 2 hectares of cultivable land. This measure is being hailed as a life-saver for farmers in drought-ridden or flooded areas and targeted to reduce farmer suicides.
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	The Budget also provides for a 2% interest subvention for farmers affected by natural disasters and an additional 3% interest subvention for timely payment.
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	The Budget has proposed to create a separate department for fisheries and provide a 2% interest subvention for farmers pursuing animal husbandry.
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</ol>

<h3 class="credit_i_h3">Other Miscellaneous Freebies</h3>

The Union Budget has several other attractive measures that are highlighted below.

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	Young mothers have a reason to breathe easy as the maternity leave has been extended to 26 weeks instead of 24 weeks.
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	The fiscal deficit for the year has been brought down to 3.4% from an earlier 3.5%.
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	The Central Government has proposed to share 14% of the revenue from GST to the state governments.
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	The Budget has also done away with customs duties from 36 capital goods – gold, precious gems and several products imported from the US to name a few. This move is stated to reduce the prices of several items in the country.
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	A monthly pension scheme, named the Pradhan Mantri Shram Yogi Mandhan, will be introduced to provide monthly pension of Rs. 3,000 for workers of and beyond 60 years of age in the unorganized sector.
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</ol>

<h3 class="credit_i_h3">Cons of the Budget</h3>

Not all parts of the budget are shiny and beautiful. In fact, there are several dents in the budget’s armor as discussed below.

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	No substantial tax cuts are announced for the large corporate companies. This gives them fewer incentives to create new jobs.
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	No substantial sops have been given to the urban poor or industrial workers. 
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</ol>

<h2 class="credit_i_h2">Summing it up</h2>

The 2019 Interim Budget has been made to attract the farmers and the salaried classes of the vote bank. We need to wait and watch what kind of results this budget brings in the financial landscape of this country. But you need not wait to see how the Union Budget affects you.<a href="https://www.mymoneykarma.com/" target="_blank"> mymoneykarma</a> can help you in achieving financial success.

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Budget 2019 presented by the Government of India focused on revising tax rates and easing debt repayment for farmers. Learn more at mymoneykarma.

Budget 2019 - the Middle Class Dream

As the Indian Government announced the Budget for the FY, many changes have been proposed that can alter the budget of a common man’s household. However, most law-abiding, income-earning, and tax-paying citizens are more interested in the new changes made to the income tax provisions. Let’s begin with a quick recap of the income tax-related announcements in the Interim Budget 2019.

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	The taxable income slab was proposed to be raised from 2.5 lakhs to 5 lakhs.
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	The TDS threshold on interests on bank and post office deposits was proposed to be raised from Rs. 10,000 to Rs. 40,000.
	</li>
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	The TDS threshold on rental income was to increase to Rs. 2.4 lakhs from Rs. 1.8 lakhs.
	</li>
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	The standard tax deduction was proposed to be raised from Rs 40,000 in 2018 to Rs. 50,000 this year.
	</li>
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	Individuals occupying their second self-owned house were to be exempt from paying property tax for that property.
	</li>
	<li>
	The workers earning up to Rs. 21,000 per month were proposed to be considered for bonuses.
	</li>
</ul>

<img alt="Union Budget 2019" src="https://lh5.googleusercontent.com/Hw2youZOPwyr57deOCibFkSYq5gbyiZZVNZlypG2bheUdp7htc-wtwSm_WdPdVHfZh9pcwzKAS1Uk6Drt7vjKej-DPoKalaD2813Ht3W_P150M5trNzyp42MvUsv1EB2zcSb_9ph" style="height:375px; width:375px" class="img-responsive credit_i_img">

The Interim Budget 2019, announced in February 2019, had given high hopes to the Indian populace with a proposal of granting full tax rebate after all deductions to individuals earning up to Rs. 5 lakhs per annum. A large portion of young working professionals fall within this income bracket, and many had heaved a huge sigh of relief. Union Minister for Finance, Smt. Nirmala Sitharaman, in her maiden budget, confirmed that the income tax slab rates proposed by Mr. Piyush Goyal in February would be kept unchanged. While the common man rejoices, there’s some bad news for the affluent section of the Indian population. The Hon’ble Finance Minister announced a bunch of new income tax proposals that could impact many taxpayers.

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	PAN and Aadhaar would be made interchangeable for tax-filing purposes, which means that if you can file your ITR using your Aadhaar, even without a PAN card.
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	Having ruled out the<a href="https://www.mymoneykarma.com/taxes/index.html/unable-to-link-aadhaar-with-pan.html" target="_blank"> confusion of PAN-Aadhaar linking</a>, the new Budget has made it compulsory for all income-earning citizens to<a href="https://www.mymoneykarma.com/taxes/index.html/5-reasons-to-file-itr.html" target="_blank"> file their tax returns</a>.
	</li>
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	An additional income tax deduction of ?1.5 lakh would be applicable on home loans for affordable houses that are priced below ?45 lakh. This benefit would be available for home loans taken until March 2020.
	</li>
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	Another ?1.5 lakh income tax deduction would be applicable on interest paid on loans for the purchase of electric vehicles.
	</li>
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	2%<a href="https://www.mymoneykarma.com/taxes/index.html/what-is-tds.html" target="_blank"> TDS</a> would be deducted on all cash withdrawals on amounts exceeding ?1 crore in a year.
	</li>
	<li>
	Retail investments in Central Public Sector Enterprises (CPSE) ETFs could get income tax benefits similar to that of ELSS. A divestment target of ?1.05 lakh crore has been set for this year. Currently, investments made in ELSS mutual funds that come with a lock-in period of three years are eligible for a deduction of up to ?1.50 lakh under Section 80C of the Income Tax Act. A similar facility could be available to retail investors in CPSE ETFs.
	</li>
</ul>

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	<li>
	The income tax surcharge has been modified for High Net-worth Individuals (HNI) earning more than ?2 crore a year. HNIs with an earning between ?2-5 crore would now have to shell out more, with the surcharge rate increased from 15% to 25%. Earnings above ?5 crore would attract a surcharge of 37% from the current 15%.
	</li>
</ul>

Apart from the changes in the income tax provisions, some other announcements have become the talk of the town since this morning. While changes in customs duties of a handful of goods have created a buzz in the media, several incentives have also been introduced that would reduce the prices of a handful of items. Let’s check out what will become more affordable and what would cost a bomb.

<h3 class="credit_i_h3">What Will Become More Expensive?</h3>

<ul class="banklogin_ul">
	<li>
	Petrol &amp; diesel
	</li>
	<li>
	Metal fittings
	</li>
	<li>
	Marble Slabs
	</li>
	<li>
	Imported gold and precious metals
	</li>
	<li>
	Imported paper and paper products (including printed books)
	</li>
	<li>
	Imported electronics like loud-speakers, plugs, sockets, switches
	</li>
	<li>
	Imported Vinyl flooring, tiles,
	</li>
	<li>
	The indoor &amp; outdoor units of split AC
	</li>
	<li>
	Imported cashew kernels
	</li>
	<li>
	Imported auto parts
	</li>
	<li>
	Cigarettes
	</li>
	<li>
	CCTV cameras/ IP cameras
	</li>
	<li>
	Polyvinyl chloride (PVC) pipes
	</li>
</ul>

<h3 class="credit_i_h3">What Will Become Cheaper?</h3>

<ul class="banklogin_ul">
	<li>
	Houses
	</li>
	<li>
	Electric vehicles
	</li>
	<li>
	Imported defense equipment
	</li>
	<li>
	Imported parts of electric vehicles
	</li>
	<li>
	Imported raw material for the manufacture of artificial kidneys
	</li>
</ul>

While some of these announcements brought tears to the eyes of a few, several other announcements in Budget 2019 has rekindled a joyous smile on the faces of many. Click here for the general highlights of the Budget.

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mymoneykarma brings you the latest news about Union Budget. Learn about the Union Budget 2019, general highlights of the Budget, and get Union Budget updates.

Union Budget 2019 – The Common Man’s Concern

Generation of e-way bills was made compulsory by the government from 1st of April, 2018. But, what exactly is an e-way bill, and how will it affect the taxpayers? To understand the effects of the e-way bill, we need to learn what it means for traders and the logistics sector.

<h2 class="credit_i_h2">What is e-way Bill?</h2>

<a href="https://www.mymoneykarma.com/info-tax/eway-bill.html" target="_blank">E-Way Bil</a>l or Electronic Way Bill is a unique document generated electronically for the consignment of goods to a different place. e-way bill was proposed to curb tax evasion in the country. Sadly, apart from the first optimistic cry around the idea, the logistics and technical glitches have turned the e-way bill into a nightmare for the taxpayers.

The major repercussions of the e-way bill are experienced by the logistics industry, FMCG sector and e-commerce operators.

<h2 class="credit_i_h2">Updates</h2>

<h3 class="credit_i_h3">E-Way Bill Blocking</h3>

Rules 138E (a) and (b) of the 2017 CGST Rules dictate that if the taxpayer does not file Form GSTR-3B returns/Form GST CMP-08 statement for two or more tax periods, EWB (e-way bill) generation will be restricted for the taxpayer. EWB generation blocking will be applicable to all taxpayers, irrespective of AATO (Aggregate Annual Turnover), and will be allowed to generate EWB only on filing the pending forms and statements.

<h3 class="credit_i_h3">VAHAN-e-Way Bill Integration</h3>

The e-way bill portal will get the vehicle registration number validated now, as it has been linked to the VAHAN system.

<h2 class="credit_i_h2">Why Is It Important to Generate an E-Way Bill?</h2>

One of the main reasons in favor of Goods &amp; Services Tax is its ability to unify the market and avoid the inter-state taxation system that was confusing and riddled with multiple clauses and sub-clauses. A report released by the Ministry of Road Transport and Highways suggests that a conventional truck in India spends 20% of its commuting time in the inter-state checkpoints. In states such as Rajasthan and Maharashtra, the average waiting time is usually 20-30 minutes, and it rises up to two hours in states like Bihar and Jharkhand. GST and e-way bills were both introduced by the government to avoid the transit delays and rampant tax evasion caused under the VAT regime.

The GST regime required each e-pay bill generated by a buyer of goods to be updated automatically in the Outward Sales Return (GSTR 1) of the supplier, which leaves a negligible scope for tax evasions under this system. In the former tax regime, tax officials had to cross-check the tax returns filed by the suppliers manually for verifying whether the consignments fall under the tax net or not.

Also, a single e-way document for the movement of goods throughout the country could save tons of paperwork and sidestep various inter-state clearances for buyers, sellers and transporters. In the previous tax regime, each state framed its own rules for the movement of goods from and to it.

<h3 class="credit_i_h3">When Can Someone File an e-way bill?</h3>

The primary requirements for generating an e-way bill under the current GST regime is that the consignment must be getting transferred through an interstate or intrastate channel, and it must have a value of more than INR 50,000. The e-way bill has replaced the way bill, which existed during the VAT regime and was used for the consignment of commodities.

<h3 class="credit_i_h3">Who Can Generate an e-way Bill?</h3>

Three kinds of individuals can generate an e-way bill: a GST-registered person, a non-registered person and a transporter of goods.

A registered person can generate an e-way bill when he/she is moving goods that have a value greater than INR 50,000. It is applicable only when the products are being transferred to or from the possession of a GST registered person. The registered person has the choice to not generate the e-way bill if the value of the goods being transported is less than INR 50,000. Similarly, an unregistered person is also required to generate an e-way bill when the value of goods transported exceeds INR 50,000. When a GST-registered person is receiving goods from an unregistered person, then they’re responsible for ensuring that the supplier meets all the compliances. Apart from GST-registered and unregistered taxpayers, transporters who carry goods through any form of transportation, including planes, road, rails, etc., are required to generate an e-way bill.

<h3 class="credit_i_h3">Which Sectors Will Be Affected by the GST E-Way Bill?</h3>

Logistics Sector

One of the main accomplishments of the implementation of the e-way bill is the effective dissolution of state borders. The time wasted by the transporters at the state borders for validating the documents while transporting goods from one state to another is minimized through this process.

Reduced Documentation

A substantial reduction in documentation can benefit the logistics industry immensely. Earlier, the transporters had to furnish documents in each state while transporting goods from point A to point B. Under the GST e-way bill, a single document is adequate for carrying a consignment through multiple states.

For instance, while moving goods from Delhi to Tamil Nadu, the taxpayers need to generate a single e-way bill that could help them in moving through several states that they need to cross before reaching the destination – Delhi.

Faster Movement

Adopting the e-way bill would result in a smoother flow of goods since the halts (such as interstate and national checkpoints) are eliminated from the route. Transport vehicles can be detained once in a state only if the authorities suspect tax evasion. When a vehicle is held for more than half an hour, it must be reported to the authorities.

Reduced Costs of Transportation

Due to smoother movement of vehicles through the country, the logistics industry will experience a substantial reduction in fuel and other transportation-linked costs.

Consolidated Warehouses

Before the advent of the GST regime,&nbsp; companies had warehouses in each state to avoid paying additional tax after their goods crossed the state borders. GST e-way enabled the flow of goods more freely, which means that the companies can build warehouses in strategic areas, which will ultimately reduce the overall cost.

IT Infrastructure

Since the e-way bill system is driven by technology, small and medium scale transporters might not have the IT infrastructure to generate the e-way bills. There could be challenges in implementing the GST e-way bill in rural areas and tier three cities.

FMCG Sector

For the GST e-way bill to be appropriately executed in the FMCG sector, the performance of the supply chain is very critical. Indian FMCG sector is characterized by a sophisticated distribution network and extremely high competition, which requires the businesses to work on improving and innovating the supply chain continually.

<ul class="banklogin_ul">
	<li>
	With the introduction of GST and e-way bill, the complicated networks involved in the supply chains have been harmonized. The businesses will be experiencing an improvement in the management of these supply chains.
	</li>
	<li>
	Rolling out of the e-way bill could also bring transparency and efficiency to the movement of contingencies across the states
	</li>
	<li>
	Organized sectors like FMCG, pharmaceutical industry and manufacturing sector would achieve a technological upgrade after gaining access to the fast and easy e-way bill generation facility
	</li>
</ul>

E-Commerce Operators

After the introduction of e-way bills, several e-commerce companies have partnered with the logistic service providers for meeting their business needs; some of the companies have even developed in-house logistics capabilities. The in-house logistics players drive almost half of the logistics market, and the remaining half is managed by third-party logistics service providers that include India Post, e-commerce-centric logistics providers and traditional logistics service providing companies.

<h2 class="credit_i_h2">To Sum Up</h2>

e-way bill of the GST regime is an excellent way to mitigate the logistic costs, and it gives a solution to the complicated documentation requirements in the previous tax regime. However, for the businesses to benefit from this new tax rule, it has to be executed congruously by the state and central government.

&nbsp;

In this era of GST regime, there is a new development: the GST E-Way Bill. Why is it important for tax-payers? mymoneykarma lets you know.

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