Tax season is on! And so every individual (salaried or businessman), needs to do proper tax planning to ensure that excessive money is not lost or wasted. Tax planning sometimes can be tricky, especially if you don’t know how to file it properly.
Here are some basic queries most Indians do have while filing their tax
- What are the major sections under which I can file tax?
Very basic, but very pertinent question while Income tax Planning, lets understand the various sections under which you can basically file your tax:
- Section 80C: The most prima facie section to do a proper tax filing. Section 80C deals with a total limit of Rs. 1.50 lakh from the financial year 2014-2015(assessment year 2015-2016). Under this section you can file for your tax returns if you have schemes like NSC, PPF, pension plans, life insurance plans and government bonds. Also under section 80C the principal amount paid for your home loan is also eligible for a tax deduction.
- Section 80D: This section deals with the health insurance premium paid with an increase of limit up to Rs.30, 000 p.a for someone who is paying premium for senior citizens.
- Section 80E: Payment of educational loans can be filed via this section.
- Section 80CCG: This section allows you to file for Rs. 25,000 if you have a Rajiv Gandhi Equity Savings scheme up to Rs.50, 000 on certain conditions.
- Section 80DDB: Under this section, you can file for tax deduction on the expenses made on a dependent’s treatment for specified diseased. Maximum deduction is Rs. 40,000 (on Senior citizens, its Rs. 60,000).
- Section 54EC: If you have sold any property and have capital gains up to Rs.50 lakhs, you can invest to save tax on capital gains.
- How much usually it takes to get my previous year returns :
Income Tax Department usually is a streamlined process so the refunds are usually processed within 120 days if not more. However remember to file your ITR on time and provide proper bank details.
- When can you be audited?
If you have a turnover of more than Rs. 1 crore as a business person or you have a turnover less than 1 crore but your profit is less than 8% of turnover you will be audited u/s 44 AD. You will also be audited, if you are CA/Doctor/Lawyer and you have receipts more than Rs. 25 lakhs.
- What are the tax implications in the early stages if you purchase a home loan :
You can get deductions in your home loan under section 80C only up to the extent of your principle amount paid but that also in your early stages of your home loan cycle is hard to receive full. Let’s say amount deducted for PF and insurances are Rs. 80,000. You can only receive tax deductions up to Rs. 70,000 only (Upper cap being Rs. 1, 50,000 U/s 80C), no matter how much more you pay.
- Difference between New and Old ITR forms:
In new ITR forms, introduction of Electronic Verification Code, easy filing for super senior citizens, detail listing of all bank accounts in FY with details of both domestic and foreign travels, domestic and foreign assets etc. will be the new provisions which will be added for making the process more transparent for both users and the authority.