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Govt. imposes tax on Individual/HUF/ companies/ firms the earnings from taxable sources. This tax is called Income tax. Earning is some sources are tax-free. Sources like agriculture, Tax Saving Bonds, Tax Saver Mutual Funds etc. Income tax deduction depends upon the earning. Less earning less or no income tax, much Income tax means much Income tax.
Income Tax Slabs / Rates for Financial Year (2010-11)For General Citizens
| Slab (Rs.) | Tax (Rs.) |
| less than 1,60,000 | Nil |
| 1,60,000 to 5,00,000 | (TI – 1,60,000) * 10% |
| 5,00,000 to 8,00,000 | 34,000 + (TI – 5,00,000) * 20% |
| Greater than 8,00,000 | 94,000 + (TI – 8,00,000) * 30% |
For Women aged 65 years or less
| Slab (Rs.) | Tax (Rs.) |
| less than 1,90,000 | Nil |
| 1,90,000 to 5,00,000 | (TI – 1,90,000) * 10% |
| 5,00,000 to 8,00,000 | 31,000 + (TI – 5,00,000) * 20% |
| Greater than 8,00,000 | 91,000 + (TI – 8,00,000) * 30% |
For Senior Citizens (Individuals age above 65 years)
| Slab (Rs.) | Tax (Rs.) |
| less than 2,40,000 | Nil |
| 2,40,000 to 5,00,000 | (TI – 2,40,000) * 10% |
| 5,00,000 to 8,00,000 | 26,000 + (TI – 5,00,000) * 20% |
| Greater than 8,00,000 | 86,000 + (TI – 8,00,000) * 30% |
The Tax collected by Government is utilized in various development schemes, payment of employees etc. So it’s our duty to pay tax, because it is returned back to us in other forms.
Tax planning is a very key issue for everyone. Generally everyone think about saving tax when they are asked about deduction of tax on their income. So it’s good to plan your tax saving on the start of a financial year. Calculate your estimates income during the year & your expected tax saving during the year.
At the end of financial year if you see that your tax deduction is beyond your tax limit, then you can claim Tax refund from Income tax office by filling up relevant claim form.
Key points of Tax Saving Plan: -
1. Keep the records of your Tax saving Investment.
2. Save the Receipts of each investment like LIC/ Insurance premium receipt, Mutual fund investment records.
3. Get statement from your bank, of your loan a/c on time to keep watch on the interest, which you have paid on you loan.
4. As per section 80 G of the Income Tax Amendment Act of 1961, 100% of the donations are non-taxable. So it is good potion to donate & save tax and also gain the wishes.
5. Tuition fee paid on your children’s education is also tax-free. So claim tax rebate on it also.
6. Provident Fund account (PPF) and also the National Savings Certificate (NSC) which is a saving scheme of the Post Office Invest in non-taxable schemes and investments. So better to invest in PPF’s & NSC. All these options come under 80C.
7. According to Section 80 DD, Medical insurance. Rs 50,000 of the primary amount are non-taxable, but it can go up to Rs 75,000 if the disability is severe. In your Income tax submission form show this is an expense. Main thing is that preserve all medical bills so that you can show it when required.
8. In last but not least, file your Income Tax Return on time, because late filing attracts penalty. Also you will get refund on time, if any.
8. In this financial year (2010-11), you can save Rs 20000 more above 1 Lac limit. This saving should be in Long Term Infrastructure Bonds.
While investing in tax saving options, one should also ensure that his portfolio should be diversified. Invest in different options of tax saving. It will definitely give you tax relief as well as Income gain.
