Income Tax Rates and calulation A.Y 10-11

ASSESSMENT YEAR 2010-2011
RELEVANT TO FINANCIAL YEAR 2009-2010
I TAX RATES FOR INDIVIDUALS OTHER THAN II & III
Up to 1,60,000 - Nil
1,60,000 to 3,00,000 - 10% of the amount exceeding 1,60,000
3,00,000 to 5,00,000 - Rs.14,000 + 20% of the amount exceeding
3,00,000
5,00,000 & above - Rs.54,000 + 30% of the amount exceeding
5,00,000
II TAX RATES FOR RESIDENT WOMAN BELOW 65 YEARS
Up to 1,90,000 - Nil
1,90,000 to 3,00,000 - 10% of the amount exceeding 1,90,000
3,00,000 to 5,00,000 - Rs.11,000 + 20% of the amount exceeding
3,00,000
5,00,000 & above - Rs.51,000 + 30% of the amount exceeding
5,00,000
III TAX RATES FOR INDIVIDUAL RESIDENTS AGED 65 YRS AND
ABOVE
Up to 2,40,000 - Nil
2,40,000 to 3,00,000 - 10% of the amount exceeding 2,40,000
3,00,000 to 5,00,000 - Rs.6,000 + 20% of the amount exceeding
3,00,000
5,00,000 & above - Rs.46,000 + 30% of the amount exceeding
5,00,000
There is no surcharge in the case of every individual, Hindu undivided
family, Association of persons and body of individuals.
EDUCATION CESS
The amount of Income-tax shall be further increased by Education Cess
of 3% on Income-tax.
EXEMPTIONS/DEDUCTIONS FROM SALARY
1. VOLUNTARY RETIREMENT – 10(10C)
Amount received or receivable (ie.,in installments) by an employee on
his voluntary retirement in accordance with any scheme of Voluntary
Retirement is exempt to the extent of Rs.5,00,000, provided the VRS is
in accordance with Rule 2BA of IT Rules. However no 89(1) relief can be
claimed.
2. HOUSE RENT ALLOWANCE EXEMPT U/S.10(13A) – Read with Rule 2A
of IT Rules 1962
a) Actual HRA received : Rs.xxxx
b) Rent paid in excess of 10% of Salary : Rs.xxxx
c) 50% of Salary in Metro Cities or
40% of Salary in other cities : Rs.xxxx
Least of a), b), c) is exempt.
NOTE: Here Salary means Basic Salary as well as DA if the terms of
employment so provide.
3. CONVEYANCE ALLOWANCE:
Any allowance granted to meet the expenditure incurred wholly,
necessarily and exclusively on conveyance in performance of the duties
of office and so certified by the employer is exempt u/s.10(14).
4. TRANSPORT ALLOWANCE:
2/8/2010
Any allowance granted to an employee to meet the expenditure for the
purpose of commuting between the place of his residence and the place
of his duty to the extent up to Rs.800/- per month is exempt u/s.10(14).
5. MEDICAL REIMBURSEMENT:
An amount of Rs.15,000 or the actual amount reimbursed by the
employer whichever is less is exempt u/s.17(2).
6. PROFESSION TAX :
Profession Tax levied by the State Government is allowable as a
deduction from Gross Salary provided it has been paid.
DEDUCTIONS FROM HOUSE PROPERTY
1. DEDUCTION U/S.23(1) : For let out property, amount paid by
the owner towards taxes levied by any local authority in respect of the
property is deductible from Annual value(taxes pertaining to any
previous years).
2. DEDUCTION U/S.24(a) : For let out property, deduction of 30% of
the Net Annual Value is allowed. No separate deduction for Repairs,
Collection Charges, Insurance Premium, Annual Charge and Ground
Rent.
3. INTEREST ON BORROWED LOAN(U/S.24(b)):
FOR SELF OCCUPIED PROPERTY
a. If Property is acquired or constructed with loan taken after 01/04/99
and construction is completed within 3 years from the end of the
financial year in which the capital was borrowed – Rs.1,50,000 or actual
interest paid/payable whichever is less is deductible.
b. If new housing loan is taken for repayment of old loan (old loan
taken after 1/4/99) – Rs.1,50,000 or actual interest paid/payable
whichever is less is allowed as deduction.
c. If Property is acquired or constructed with loan taken before
01/04/99, Rs.30,000 or actual interest paid/payable whichever is less is
allowed as deduction.
d. If loan taken for Repairs, renewal, reconstruction of property,
Rs.30,000 or actual interest paid/payable which ever is less is allowed as
deduction.
FOR LET OUT PROPERTY, actual interest paid/payable can be claimed
as deduction.
ONLY OWNER OF THE HOUSE PROPERTY CAN AVAIL THE ABOVE
DEDUCTIONS.
CAPITAL GAINS:
With effect from 01/10/2004, Long Term Capital Gains arising on sale of
equity shares or unit of equity oriented fund through recognized stock
exchange is exempt if such transaction is chargeable to Securities
Transaction Tax (u/s.10(38)).
Short Term Capital Gains arising on sale of equity shares or unit of
equity oriented fund through recognized stock exchange is subject to tax
at the rate of 15% if such transaction is chargeable to Securities
Transaction Tax.
EXEMPTION U/S.54EC:
The Capital Gain arising out of sale of long term capital asset can be
2/8/2010
invested in National Highways Authority of India, Rural Electrification
Corporation Limited, within six months from the date of sale. (Lock-in
period is 3 years)
For Cost Inflation Index, refer website.
STANDARD DEDUCTION FOR FAMILY PENSION U/S.57(iia):
An amount of Rs.15,000 or 331/3% of family pension whichever is less is
allowed as deduction. If an assessee receives arrears of family pension,
then Relief u/s.89(1) can be claimed by him.
Family Pension received by the widow or children or nominated heirs, as
the case may be, of a member of the armed forces (including paramilitary
forces) of the union, where the death of such member has
occurred in the course of operation is exempt.
EXEMPTIONS – OTHER SOURCES
Any income by way of Dividends from company, Income received in
respect of units from the Unit Trust of India, Income received in respect
of the units of a mutual fund are exempt.
DEDUCTIONS FROM GROSS TOTAL INCOME (CHAPTER VIA):
Sl.No. I.T.
Sec.
Nature of Deduction Amount of
deduction
1.
a.
b.
c.
80
CCE
80 C
80
CCC
80
CCD
Life Insurance Premia, PF, PPF, NSC,
ELSS, Units of Mutual Fund referred to
u/s.10(23D), Tuition Fees(max. 2
Children), Repayment of Principal of
Housing loan, Bank Fixed Deposit of 5 yrs
period, notified Bonds of NABARD,
Deposit in an account under Senior
Citizens Savings Scheme rules, 5 year
time deposit in an account under Post
Office Time Deposit Rules, 1981 etc.
Premium paid towards approved Pension
Fund (like LIC’s Jeevan Suraksha) max. 1
lakh.
Contribution to Central Government
Pension Schemes. Up to 10% of salary
with matching contribution from
Government.
Maximum
overall
Deductions
allowed u/s.
80C, 80CCC
& 80CCD is
Rs. 1,00,000
2 80
D
(a) Medical Insurance Premium paid by
an individual/HUF by any mode of
payment other than cash to effect or keep
in force an insurance on the health of the
assessee(self) or his family(spouse &
dependent children) for policies taken
from General Insurance
Corporation /other approved Insurance
Regulatory and Development Authority.
(b) Medical Insurance Premium paid by
an individual/HUF by any mode of
payment other than cash to effect or keep
in force an insurance on the health of
his/her parent or parents for policies
taken from General Insurance
Corporation /other approved Insurance
Regulatory and Development Authority
(c) For Senior Citizens
Upto
Rs.15,000
Up to
Rs.15,000
Up to
Rs.20,000
3. 80
DD
(a) Any expenditure for Medical, Nursing
& Rehabilitation incurred on dependant
suffering from permanent disability
including blindness, mental retardation,
autism, cerebral palsy or multiple
disabilities
(b) Deposits under LIC, UTI’s Scheme &
other IRDA approved insurers for the
Rs.50,000
with an
additional
Rs.1,00,000
if the
disability is
severe
exceeding
2/8/2010
benefit of physically handicapped
dependent
80%
4. 80
DDB
(a) Actual expenditure incurred on
Medical treatment of Self or dependant or
a member of HUF suffering from terminal
diseases like Cancer, AIDS, Renal failure
etc.
(b) For Senior Citizens(self or dependent
on whom expenditure on medical treated
is taken)
Up to
Rs.40,000
Up to
Rs.60,000
5. 80 E Interest on loan taken from
Financial/Charitable Institutions for
Self/Spouse/Children for pursuing Higher
Education (for a max. period of 7 yrs)
Actual
Interest
repaid
6.
80
G
(a) Donations made to National Defence
Fund, Prime Minister’s National Relief
Fund, approved Funds of reputed
Educational Institutions, National Trust
for Welfare of persons with Autism,
Cerebral Palsy etc.
(b) Donations made to Jawaharlal
Memorial Fund, PM’s Drought Relief fund,
Any approved Charitable
Institution/Trust, Religious Institutions, a
corporation established by the
Government for promoting interest of the
members of a Minority Community
100% of
Donation
50% of
Donation
restricted to
10% of
Adjusted
Gross Total
Income
7. 80
GG
Deduction in respect of rents paid,
provided the assessee is not in receipt of
HRA and no house is owned by self,
spouse, minor child or HUF in the place of
work subject to filing of declaration in
Form No.10BA
25% of
income
or rent paid
in excess of
10% of
income
or ceiling of
Rs.24,000
p.a
whichever is
less
8. 80
U
Persons suffering from Permanent
Physical Disability as specified in Rule
11D
Rs.50,000
(Rs.1,00,000
in case of
severe
disability)
FRINGE BENEFIT TAX (FBT)
In view of discontinuance of Fringe Benefit Tax from A.Y.2010-11
onwards, the value of specified fringe benefit and amenity is not
chargeable to tax in the hands of employer. Consequently under subclause
(vi) of Sec.17(2), provides that the value of any specified
security or sweat equity shares allotted or transferred, directly or
indirectly, by the employer, or former employer, free of cost or at
concessional rate to the employee is a perquisite chargeable to tax in the
hands of the employee.
PENALTY U/S.271F: If a person who is required to furnish a return of
income as required under section 139(1) or by the proviso to subsection,
fails to furnish such return before the end of the relevant
assessment year, shall be liable to pay by way of penalty a sum of
Rs.5,000.
INTEREST U/S.234A: Where the return of Income of any assessment
year u/s.139(1) or 139(4) or in response to a notice u/s.142(1), is
furnished after the due date as specified in sub-section 1 of section 139,
or is not furnished, the assessee shall be liable to pay simple interest at
the rate of one percent for every month or part of a month comprised in
the period commencing on the date immediately following the due date.
INTEREST U/S.234B: Where an assessee who is liable to pay advance
2/8/2010
tax under section 208 has failed to pay such tax or, where the advance
tax paid by such assessee under the provisions of section 210 is less
than 90% of the assessed tax, the assessee shall be liable to pay simple
interest at the rate of one percent for every month or part of a month
comprised in the period from the 1st day of April following the financial
year.
INTEREST U/S.234C: Where an assessee other than a Company, who is
liable to pay advance tax under section 208 has failed to pay such tax or,
1) The advance tax paid by the assessee on his current income on or
before the 15th day of September is less than 30% of the tax due on the
returned income or the amount of such advance tax paid on or before
the 15th day of December is less than 60% of the tax due on the
returned income, then, the assessee shall be liable to pay simple interest
at the rate of one percent per month for a period of three months on the
amount of the shortfall from 30% or, as the case may be, 60% of the
tax due on the returned income.
2) The advance tax paid by the assessee on his current income on or
before the 15th day of March is less than the tax due on the returned
income, then, the assessee shall be liable to pay simple interest at the
rate of one percent on the amount of the shortfall from the tax due on
the returned income.
DUE DATES FOR FILING RETURN OF INCOME : All
Individuals/HUF/Firms deriving Income from Salary, House Property,
Capital Gains, Business or Other Sources and not covered under section
44AB are required to file the Return of Income by 31st July. All Tax Audit
Cases covered under section 44AB, Company returns are required to file
the Return of Income by 30th September.
PERMANENT ACCOUNT NUMBER: Every assessee is required to obtain
10 Alpha numeric Permanent Account Number (PAN) and quote the same
in his returns, challans & correspondence. PAN can be obtained by
applying in new Form No.49A at the designated Service Centres of
UTITSL OR NSDL(Log on to our website). PAN is essential for processing
the Return of Income and for giving credit for taxes paid. If a person
who is required to quote his Permanent Account Number fails to do so or
intimates or quotes false number, the Assessing Officer may direct that
such person shall pay, by way of penalty, a sum of Rs.10,000.
To Know Your PAN, visit our website.
For PAN Grievances : UTITSL - e-mail - isw.bangalore@utitsl.co.in
NSDL - e-mail - tininfo@nsdl.co.in
TAX PAYMENTS: Advance tax payments and Self-assessment tax
payments have to be made in Challan No.280. Please obtain counterfoil
of challan containing Challan Identification Number (CIN) from the Bank
and enclose copy of the same with the return and quote CIN in the
return.
This brochure should not be construed as an exhaustive
statement of law. In case of doubt, reference should always be
made to the relevant provisions of Income Tax Act, Rules or
Notifications.
For further information, please contact:
The Public Relations Officer
Income-tax Department, C.R. Building, Queen’s Road,
Bangalore-560 001. E-mail: itprbangalore@rediffmail.com
Website: www.incometaxbangalore.org
2/8/2010

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