INTEREST PANALTY OF INCOME TAX

INTEREST PANALTY

Interest panalty is charged Under Section
234 A
234 B
234 C

A) Panalty interest U/s 234 A is attached when you fail to file  your income tax Return (ITR)
on Due Date

B) Penalty interest u/s 234 B is attached when you fail to pay 90% of advance tax installment on or
before 15th March as stated below :

Due Date                        Tax Ratio
15th September                   30%
15th December                   30%
15th March                          30%

C) Penalty Interest U/s 234 C is attacted when advance tax paid by is less then actual
advance tax payable

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INTEREST PANALTY  234 A

=====================================

Calculation of interest

A) Section 234 A
Under this section 1% interest is charged per month on your tax Liability. when you fail to file
your return on or before due date i.e.

31st July or
30th September
whichever applicable

For Example Mr.A an individual is liable to pay Rs. 8000/- Tax and also to file his ITR on or
before 31st July but Mr A files his return on 10th September , here Mr. A is liable to pay Rs. 160 as
penalty interest which is 1% per of his tax liability calculated as under :

= Tax X 1% X months
8000 x 1% X 2 Total Months
= Rs. 160 Interest U/s 234 A

*********PLEASE NOTE*********

1) In the above case the delay in filing ITR is only one month and ten days only still while
calculating interest we have to consider two months.

Even if ITR delay is only ten days still interest will be calculated on entire one month and not ten days.

2) if your tax liability is ZERO then section 234 A/B/C is not applicable

ADVANCE TAX

ADVANCE TAX

You are expected to pay advance tax when your (Estimated) tax Liability for assessment
year exceeds rs. 10000/- These are two options available to confirm whether your client
is required to pay advance tax or not

A)  you can ask your client to provide last income tax return filed by him if the last income tax paid by
your client is less then Rs. 10000/- then Advance tax is not applicable to him


OR


B) Estimate your clients Gross Total income (GTI) by prepairing Estimated Profit and Loss
account and Balance sheet

From GTI reduce all deductions applicable under chapter VI A you will get net Taxable income
now calculate tax on the same. if tax is less then Rs.10000/- then Advance Tax is not payable
by your  client

However, if tax is more then Rs. 10000/- then advance tax is payable by your client in the ratio
Started Below

(PLEASE NOTE that advance tax provision is not applicable to salary income as already TDS
is calculated and deducted from salary)

For Corporate Assessee

i.e for public and Private Co.

Due Date                        Tax Ratio
15thJune                            15%
15th September                 30%
15th December                  30%
15th March                         25%

For Non Corporate Assessee

i.e Excluding public and Private Co.

Due Date                        Tax Ratio
15th September                  30%
15th December                   30%
15th March                          30%

*********PLEASE NOTE*********

ADVANCE TAX paid figure is very important for SHARE INVESTORS, as the shares price
increases as and when advance tax is paid by company increases.

(The logic is very simple, when your company profit increases thus, share price also
increases on the due dates of advance tax

TDS with PAN

TDS with PAN

TDS Payment on salary & wages

TDS is deducted only if the estimated income of the employee is taxable. Emloyer must not
deduct tax on non taxable allowance like conveyance allowance, rent allowances, medical
allowance and deductible investiments under section like 80C, 80CC, 80D, 80DD, 80DDB, 80E
, 80GG & 80U. No tax is requaired to be deducted at source if the estimated total income of the
employee is less then the minimum taxable income as per slab rate.

TDS Calculation

Gross salary Package
(-) Allowances u/s 10
(-) Deduction u/s 80
--------------------------
Estimated Taxable salary
-------------------------
Tax (as per slab rate)
add : 3% cess

-------------------------
Estimated Taxable Payable
-------------------------
Divided By 12 Months
= TDS Payable per month on salary

For Example, if your salary Package is Rs. 400000/-
Per annum which include Rs. 60000/- as allowance u/s 10 (such as medical, Travel allowance etc.
PLUS you have made Rs. 50000/- investiment which are eligible for deduction u/s 80C to 80U

Tax Payable by you is rs. 7210/- and tds payable is 600 P.M
calculated as under :
Gross salary Package = 400000
(-) Allowances u/s 10   = 60000
(-) Deduction u/s 80    = 50000
---------------------------------------
Estimated Taxable salary = 290000
---------------------------------------
(-) Tax (as per Slab rate = 9000

(-) Rabate u/s 87A = 2000
Add : 3% Cess = 210
=========================
Estimated Taxable Payable = 7210/-
=========================

Divided by 12 Months
= Rs. 601/- TDS Payable per month

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TDS UNDER SECTION 193

========================

Under this section TDS is Payable on interest received on debentures

Exemption Amount = Rs. 5000/-
TDS on individual / HUF = 10%
TDS on Others = 10%

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TDS UNDER SECTION 194

========================

 Under this section TDS is Payable on interest other then Securities

Exemption = Rs. 10000/- in case of Bank and Rs. 5000/- in case of others
TDS on individual / HUF = 10%
TDS on Others = 10%

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TDS UNDER SECTION 194B

========================

Under this section Tds us payable on winning from Horse Races

Exemption = Rs. 5000/-
TDS on individual / HUF = 50%
TDS on Others = 30%

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TDS UNDER SECTION 194C

========================

Under this Section TDS is Payable on Payment to Contractor or Sub Contractor.

Exemption = Rs. 30000/-(Single Transection) Per Contract or
Rs. 75000/- per Annum (More Then One Transection)

TDS on individual / HUF = 1%
TDS on Others = 2%

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TDS UNDER SECTION 194D

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Under this Section TDS is payable on insurance Commission

Exemption = Rs. 20000/-

TDS on individual / HUF = 10/-
TDS on Others = 10%

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TDS UNDER SECTION 194E

========================

Under this Section TDS is payable on Payments made to Non Resident Sportsmen
or Sports Associations.


TDS = 20%

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TDS UNDER SECTION 194EE

========================

Under this Section TDS is payable on Payment for National Saving Scheme

Exemption = Rs. 2500/-

TDS on individual / HUF = 20/-
TDS on Others = 20%

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TDS UNDER SECTION 194F

========================

Under this Section TDS is payable on Commission payable Repurchase of Units

Exemption = Rs. 1500/-
TDS on individual / HUF = 20/-
TDS on Others = 20%

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TDS UNDER SECTION 194G

========================

Under this Section TDS is payable on Commission payable on sale of Lottery

Exemption = Rs. 1500/-
TDS on individual / HUF = 10/-
TDS on Others = 10%

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TDS UNDER SECTION 194H

========================

Under this Section TDS is payable on Commission

Exemption = Rs. 5000/-
TDS on individual / HUF = 10/-
TDS on Others = 10%

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TDS UNDER SECTION 194I

========================

Under this Section TDS is payable on Rent of Land & Building

Exemption = Rs. 180000/-
TDS on individual / HUF = 10/-
TDS on Others = 10%

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TDS UNDER SECTION 194I

========================

Under this Section TDS is payable on Rent of Rent of Machinery

Exemption = Rs. 180000/-
TDS on individual / HUF = 2/-
TDS on Others = 2%

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TDS UNDER SECTION 194IA

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Under this Section TDS is payable on Transfer of Immovable Property

Exemption = Rs. 5000000/-
TDS on individual / HUF = 1/-
TDS on Others = 1%

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TDS UNDER SECTION 194J

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Under this Section TDS is payable on Commission or Remuneration paid to Director

TDS on individual / HUF = 10/-
TDS on Others = 10%

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TDS UNDER SECTION 194LB

========================

Under this Section TDS is payable on interest from infrastructure Debt Fund

TDS on individual / HUF = 5/-
TDS on Others = 5%

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TDS UNDER SECTION 194LC

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Under this Section TDS is payable on interest from specified indian Company

TDS on individual / HUF = 5/-
TDS on Others = 5%

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TDS UNDER SECTION 195

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Under this Section TDS is payable on LTCG (Long term Capital Gain) to non Resident

TDS on individual / HUF = 20/-
TDS on Others = 20%

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TDS UNDER SECTION 195

========================

Under this Section TDS is payable on Rent to Non Resident

TDS on individual / HUF = 30%
TDS on Others = 30%

========================

TDS UNDER SECTION 195

========================

Under this Section TDS is payable on Royality to Non Resident

TDS on individual / HUF = 50%
TDS on Others = 50%

========================

TDS UNDER SECTION 195

========================

Under this Section TDS is payable on winning from Lottery / Horse Race to Non Resident

TDS on individual / HUF = 30%
TDS on Others = 30%

Due Dates Of Return

Due Dates Of Return

A) Due Date of filing income tax return is 31st July if,

Any individual or HUF Earning

a) Salary
b) Income from other Source
c) House property Income
d) Income from capital gain and
e) Business income with turnover less then 1 crore

B) Due date of Filing income tax return is 30th september

a) Salary
b) Income from other Source
c) House property Income
d) Income from capital gain and
e) Business income with turnover MORE then 1 crore , since 44AB (Tax Audit) is applicable however.

C) For Filing Return of any Company, the Due date is 30th September

**********PLEASE NOTE************

44AB (Tax audit) is applicable if any individual or HUF earning Business income more then 1
crore however, in case of professionals like CA or Doctor etc is applicable if their bussiness/
professional income is more then  25 lac hence, Due date filing return is 30th September

**********NOTE END************

It is pertinant to note that the tax consultant should always insist his client to file tax audit
(44AB) Return on or before 30th September prior to anyother return so as to save him from
maximum penalty of rs. 150000/-or 1% of one crore, other return could be delayed as the penalty
portion is very less as compare to Tax Audit Return

INCOME TAX SUPER SENIOR CITIZEN

TAX ON SUPER SENIOR CITIZEN

C. Super Senior citizen (above 80 age)
Zero to 5.0 lac      = NIL
5.0 Lac to 10 Lac = 20%
10 Lac to Above   = 30%

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Example No. 1
-----------------------------------------------------

Calculate Tax of Mr.A Whose Total Taxable income earned is Rs. 300000/- Per annum ??

Solution : Tax Liability is Nil. since any income earned upto Rs. 500000/- by Individual is EXEMPTED from TAX.


-----------------------------------------------------
Example No. 2
-----------------------------------------------------
Calculate Tax of Mr.B Whose Total Taxable income earned is Rs. 500000/- Per annum ??

Solution : Tax Liability is Nil. since any income earned upto Rs. 500000/- by Individual is EXEMPTED from TAX.

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Example No. 4
-----------------------------------------------------
Calculate Tax of Mr.E Whose Total Taxable income earned is Rs. 600000/- Per annum ??
Solution : Tax Liability is 20600/-. As income above Rs. 500000/- is Taxed at 20% = Rs. 20000/-
 (600000-500000)= 100000/-
Plus 20000/-
Plus 3% Cess and E. Cess = Rs. 600/-
Thus, Rs. 20600/- is Tax Payable by Mr. E

Taxable Income = 600000
 Income = (100000*20%)= 20000/-
at 12% Rate = 20000/-
PLUS 3% Cess and E. Cess = 600
Thus, Rs. 20600/- is Tax Payable by Mr. E



**********PLEASE NOTE************
Where the taxable income of an individual exceeds rs. 1000000/- the calculation is simle and started as under :
Taxable income above Rs. 1000000/- is taxed at 30% Rate Plus 125000/-
(1000000-500000)= 500000/-
(500000*20% Rs. 100000/-)
Plus 3% cess and E.cess

************ NOTE END*************
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Example No. 4
-----------------------------------------------------
Calculate Tax of Mr J Whose Total Taxable income earned is Rs. 1100000/- Per annum ??

Solution : Tax Liability is 159650/-. As income above Rs. 1000000/- is Taxed at 30% = Rs. 125000/-
 (500000-250000)= 250000
  250000*10% =. 25000/-
  500000*20% = 100000/-
  100000*30% = 30000/-

Plus 155000/-
Plus 3% Cess and E. Cess = Rs. 1350/-
Thus, Rs. 46350/- is Tax Payable by Mr. E

Taxable Income = 600000
 Income = (250000*10%)= 25000/-
Tax is payable on Rs. 100000*20%=20000/-
at 10% Rate = 25000/-
PLUS 3% Cess and E. Cess = 4650
Thus, Rs.159650/- is Tax Payable by Mr. J

INCOME TAX ON SENIOR CITIZEN

TAX ON SENIOR CITIZEN

Income tax exemption limit raised by Rs. 50000/- that is from Rs. 2.5 lakh to Rs. 3.0 lakh in the case of Senior Citizen

B. Senior Citizen (above 60 age)
Zero to 3.0 lac      = NIL
3.0 Lac to 5 Lac   = 10%
5.0 Lac to 10 Lac = 20%
10 Lac to Above   = 30%

Rabate under section 87A is applicable to you only if your Net Taxable Income is below Rs. 500000/-

However, Rebate is restricted to Rs. 2000/-

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Example No. 1
-----------------------------------------------------
Calculate Tax of Mr.A Whose Total Taxable income earned is Rs. 180000/- Per annum ??

Solution : Tax Liability is Nil. since any income earned upto Rs. 300000/- by Individual is EXEMPTED from TAX.

It is Pertinent to note that Rabate u/s 87A is not applicable when total tax payable is below Rs. 2000/-
In that given case tax payable is NIL thus, Rabate u/s 87 is not Appilicable.
-----------------------------------------------------
Example No. 2
-----------------------------------------------------
Calculate Tax of Mr.B Whose Total Taxable income earned is Rs. 300000/- Per annum ??

Solution : Tax Liability is Nil. since any income earned upto Rs. 300000/- by Individual is EXEMPTED from TAX.

It is Pertinent to note that Rabate u/s 87A is not applicable when total tax payable is below Rs. 2000/-

In that given case tax payable is NIL thus, Rabate u/s 87 is not Applicable.

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Example No. 3
-----------------------------------------------------
Calculate Tax of Mr.C Whose Total Taxable income earned is Rs. 400000/- Per annum ??

Solution : Tax Liability is 8240/-. since any income earned upto Rs. 300000/- is EXEMPTED from TAX. hence,

Taxable Income = 400000
Exempted Income = (400000 - 300000)
Tax is payable on Rs. 100000/-
at 10% Rate = 10000/-
(10000-2000(87A)=8000*3% =240/-)
LESS Rabate 87A = 2000 (Income <=5 lac)
PLUS 3% Cess and E. Cess
Thus, Rs. 8240/- is Tax Payable by Mr. C

**********PLEASE NOTE************
Where the taxable income of an individual exceeds rs. 500000/- the calculation is simle and started as under :
Taxable income above Rs. 500000/- is taxed at 20% Rate Plus 20000/- (200000*20%)
Plus 3% cess and E.cess

************ NOTE END*************
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Example No. 4
-----------------------------------------------------
Calculate Tax of Mr.E Whose Total Taxable income earned is Rs. 1100000/- Per annum ??

Solution : Tax Liability is 154500/-. As income above Rs. 1000000/- is Taxed at 30% = Rs. 30000/-
(500000-300000)= 200000*10% =20000/-
(1000000-500000) = 500000*20% = 100000/-
100000*30% = 30000/-
150000*3% = 4500/-
Plus 154000/-
Plus 3% Cess and E. Cess = Rs. 4500/-
Thus, Rs. 154000/- is Tax Payable by Mr. E

TAX ON INDIVIDUAL

TAX ON INDIVIDUAL

Income Tax exemption limit raised by Rs. 50000/- That is , from Rs. 2 Lakh To 5 Lakh in the case of Individual Taxpayers.

A Male/Famale (Individual)
Zero To 2.5 Lac   = Nil
2.5 Lac To 5 Lac = 10 %
5 Lac To 10 Lac  = 20%
10 Lac to Above =  30%

Rabate Under Section 87A is Applicable to you only if your net taxable income is below Rs. 500000/-
However, Rebate is restricted to Rs. 2000/-

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Example No. 1
-----------------------------------------------------

Calculate Tax of Mr.A Whose Total Taxable Income earned is Rs. 180000/- Per Annum ??

Solution : Tax Liability is Nil. since any Income earned upto Rs. 250000/- by Individual is EXEMPTED from TAX.

It is Pertinent to note that Rabate u/s 87A is not applicable when total tax payable is below Rs. 2000/-
In that given case Tax Payable is NIL thus, Rabate u/s 87 is not Applicable.


-----------------------------------------------------
Example No. 2
-----------------------------------------------------
Calculate Tax of Mr.B Whose Total Taxable Income earned is Rs. 300000/- Per annum ??

Solution : Tax Liability is 3090/-. since any Income earned upto Rs. 250000/- is EXEMPTED from TAX.

Taxable Income = 300000
Exempted Income = (250000)
Tax is payable on Rs. 50000/-
at 10% Rate = 5000/-
(5000-2000(87A) = 3000*3% = 90/-)
LESS Rabate 87A = 2000 (Income <=5 lac)
PLUS 3% Cess and E. Cess
Thus, Rs. 3090/- is Tax Payable by Mr. B

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Example No. 3
-----------------------------------------------------
Calculate Tax of Mr.C Whose Total Taxable income earned is Rs. 400000/- Per annum ??

Solution : Tax Liability is 13390/-. since any income earned upto Rs. 250000/- is EXEMPTED from TAX. hence,

Taxable Income = 400000
Exempted Income = (250000)
Tax is payable on Rs. 150000/-
at 10% Rate = 15000/-
LESS Rabate 87A = 2000 (Income <=5 lac)
PLUS 3% Cess and E. Cess
Thus, Rs. 13390/- is Tax Payable by Mr. C

**********PLEASE NOTE************
Where the taxable income of an individual exceeds rs. 500000/- the calculation is simle and started as under :
Taxable income above Rs. 500000/- is taxed at 20% Rate Plus 25000/- (250000*10%)
Plus 3% cess and E.cess

************ NOTE END*************
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Example No. 4
-----------------------------------------------------
Calculate Tax of Mr.E Whose Total Taxable income earned is Rs. 600000/- Per annum ??

Solution : Tax Liability is 46350/-. As income above Rs. 500000/- is Taxed at 10% = Rs. 25000/-
 (500000-250000)= 250000/-
Plus 25000/-
Plus 3% Cess and E. Cess = Rs. 1350/-
Thus, Rs. 46350/- is Tax Payable by Mr. E

Taxable Income = 600000
 Income = (250000*10%)= 25000/-
Tax is payable on Rs. 100000*20%=20000/-
at 10% Rate = 25000/-
PLUS 3% Cess and E. Cess = 1350
Thus, Rs. 46350/- is Tax Payable by Mr. E



**********PLEASE NOTE************
Where the taxable income of an Individual exceeds rs. 1000000/- the calculation is simple and started as under :
Taxable Income above Rs. 1000000/- is taxed at 30% Rate Plus 125000/-
(250000*10% Rs. 25000/-
500000*20% Rs. 100000/-)
Plus 3% Cess and E.cess

************ NOTE END*************
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Example No. 5
-----------------------------------------------------

Calculate Tax of Mr J Whose Total Taxable income earned is Rs. 1100000/- Per annum ??

Solution : Tax Liability is 159650/-. As income above Rs. 1000000/- is Taxed at 30% = Rs. 125000/-
 (500000-250000)= 250000
  250000*10% =. 25000/-
  500000*20% = 100000/-
  100000*30% = 30000/-

Plus 155000/-
Plus 3% Cess and E. Cess = Rs. 1350/-
Thus, Rs. 46350/- is Tax Payable by Mr. E

Taxable Income = 600000
 Income = (250000*10%)= 25000/-
Tax is payable on Rs. 100000*20%=20000/-
at 10% Rate = 25000/-
PLUS 3% Cess and E. Cess = 4650
Thus, Rs.159650/- is Tax Payable by Mr. J