Invest Smartly, Save Tax

An Overview of Section 80D of Income Tax Act Section 80D of Income Tax Act provides tax deduction from the total taxable income of the individual or HUF for any medical insurance premium paid. Amount of Deduction The amount of deduction that can be claimed under Section 80D is the total of the following: When the medical insurance premium is paid by the assesse for himself, spouse or dependent children, the amount of allowed deduction is Rs. 25000. In case of senior citizen, the deduction allowed is Rs. 30000. When the payment of medical insurance premium is paid by assesse for parents, the amount of deduction allowed is Rs. 25000. In cases where the parents of assessee are senior citizens, the deduction allowed is Rs. 50000. Maximum Deductions Allowed under Section 80D are: Medical Insurance Exemption limit Total Deduction For self and family Rs. 25000 Rs. 25000 For self and family includi...

Equity Linked Savings Scheme Equity linked savings scheme is popularly known as ELSS and come with lock-in period of three years. It is a type of equity mutual fund where at least 80% of its total assets are invested in equity and equity-related instruments. ELSS qualifies for tax exemption under Section 80C of Income Tax Act which allows maximum tax exemption of Rs. 150000. Benefits of ELSS Tax Benefits The most useful benefit of investing in ELSS is availing tax benefits of up to Rs. 150000. Investors get exemption under Section 80C. Reinvestment You can reinvest capital in ELSS on completion of three-year maturity period to avail additional tax benefits. The returns generated from investment in ELSS are partially taxable and the long-term capital gains of up to Rs. 1lakh are exempt from tax. Less Lock-in Period As compared to tax saver fixed deposits or Public Provident Fund or National Savings Certificate, ELSS comes with lesser lock-in period. ...

Pradhan Mantri Jeevan Jyoti Bima Yojana or PMJJBY is a life insurance scheme that has been launched by Government of India. It is a pure term insurance plan and is available for people between the age group of 18-50 years. The scheme is advantageous for those who have a low income. It aims to secure the financial future of the individual and provides a backup in case of any misfortune. To help you understand better about the policy, we have discussed some of the key features of PMJJBY. Features: Coverage for one year It gets renewed every year Insured can walk out of the scheme and rejoin it any time Maximum sum assured is Rs. 200000 Claim settlement process is simple and straightforward. Cases where death benefit offered is terminated: When the insured is above 55 years of age The policy holder is insured through different bank accounts The insufficient balance is bank account could not keep the policy in force. Eligibilit...

Pradhan Mantry Suraksha Bima Yojana or PMSBY is aimed at ensuring the financial security to the family in case of any unfortunate accident. It is an accident insurance scheme and offers one-year accidental death and disability cover. It is renewed on annual basis. Age Eligibility for PMSBY Age should be between 18 years to 70 years Period of Insurance Ist June to 31st May The annual premium is auto-debited from your bank account. The customers need to ensure that they maintain sufficient balance in their accounts on 31st May to avoid discontinuation of insurance coverage. Risk Coverage The risk coverage under PMSBY is Rs. 2lakh for accident death and full disability. The amount is Rs. 1lakh for partial disability. Risk coverage Sum insured Death Rs. 2lakh Total and irrecoverable loss of both eyes or loss of use of both hands or feet or loss of sight of one eye and loss of use of one hand or one foot Rs. 2lakh Total ...

Mandatory Filing of Returns Where the gross total income before allowing any deductions under Section 80C to 80U exceeds Rs. 2.5lakhs in the previous Financial Year. This limit is Rs. 3lakhs for senior citizens and Rs. 5lakhs for super senior citizens. You are a firm or company. You have exempt long-term capital gains from sale of equity shares of company or sale of business trust or sale of equity oriented mutual funds of over Rs. 2.5lakhs in financial year. You are required to file return when you receive income from property held under charitable or religious purposes or research association or medical institution. Foreign companies taking treaty benefit on transactions in India. In cases where person needs to claim adjustment against past losses, return is mandatory. While applying loans, the eligibility for loan depends on one’s income which is established through ITRs. These returns are accepted easily for l...

Save TDS When your total income is not taxable, you can choose to submit Form 15G or 15H and avoid TDS on the interest income you earn. The rental income or interest earned from bank deposits is eligible for TDS but if your total income is below the taxable limit, you can submit Form 15G or 15H to the relevant institution or person. What is TDS? TDS is the process of collecting tax when income is generated. TDS is deducted at prescribed rate by tax department when PAN is furnished by the person or at 20% in absence of PAN, whichever is higher. You can also check out complete details about TDS here . Form 15G and Form 15H These forms are self-declaration by the applicant where they give an undertaking that the income is below the threshold limit of income tax and thus, is exempt from any tax deduction. Form 15G is for those who are below the age of 60 years and Form 15H is filled by senior citizens. When you submit these forms to bank or tenant, they will not deduct TDS fr...

PAN Card or Form 60? PAN Card is a mandatory requirement for transactions involving purchase or sale of assets above a specified limit. PAN Card is primarily used for the purpose of tracking financial transactions so as to prevent tax frauds. There may be some situations where applicants may not have PAN card due to some circumstances. For those cases based on necessity, Form 60 may be submitted along with supported documents. Form 60 is a declaration filed by an individual or any person to carry out financial transactions that require quoting of PAN when the concerned person does not have PAN or has applied for PAN but allotment is pending. When is Form 60 Required? Form 60 is required to be produced by an individual who does not have a PAN C ard but wants to get involved in these types of transactions: Purchase or Sale of immovable property valuing Rs. 500000 or above. Any fixed deposit in bank of value more than Rs. 50000 Any deposit in Post Office ...

a)       Advance Tax Vs Self-Assessment Tax Self-Assessment Tax When you calculate your tax liability and you realize that tax is due even after TDS and advance tax, then you pay self assessment tax. Self-assessment tax is paid is the assessment year before you file your income tax returns. Advance tax Advance tax is payable in case of salaried taxpayer. It is the income tax that should be paid in advance instead of lump sum payment at the end of year. b)       Assessment Year Vs Financial Year Many taxpayers often confuse between Financial Year and Assessment Year. Let’s understand it. Financial Year Financial Year is the period of April 1 to March 31 in which you earn the income. Assessment Year Assessment Year always come after Financial Year. It is the year when income earned during financial Year is assessed and taxed. For example, if financial year is 2018-19 then, AY is 2019-20. It also starts on April 1...

An Overview of National Savings Certificate When it comes to savings, there are a number of choices available to the investors. Their features include attractive interest rates, income tax benefits, safety of investment and more. One of the safest and guaranteed offerings is National Savings Certificates or popularly called as NSC. This investment option help you reap amazing interest rates on your investments in addition to benefits in taxable incomes. Where to Open NSC? You can open the account in any of your nearest post office. Rate of Interest The present rate of interest on NSC is 8% per annum compounded yearly and is payable on maturity. What is the Eligibility for NSC? A resident Indian can open account in his name but NRIs are not eligible for its purchase. What are the documents required? Application form Proof of identity Address proof Features of National Savings Certificate These certificates can be held as individual inv...

Contributions Required to get Guaranteed Pension: The monthly pension under Atal Pension Yojana varies from Rs. 1000 per month to Rs. 5000 per month, and it depends upon the age of joining, contribution levels and return of corpus. Here, we offer you the details about the indicative monthly contribution that you need to make to enjoy pension benefits on completion of 60 years of age.

About APY Atal Pension Yojana is one of the popular Social Security Schemes launched by Govt. of India. You will get guaranteed pensions of Rs.1000- Rs. 5000 . APY is a guaranteed pension scheme and is administered by Pension Fund Regulatory and Development Authority (PFRDA).