Below are the income tax slab rates for FY 2009-10 (corresponding to Assessment Year 2010-2011):
(a) Male assessees (< 65 years of age):
(b) Female Assessees (< 65 years of age):
(c) Senior Citizens (> 65 years of age):
Let’s take an example to clearly understand the tax calculation. – Vikky, 30, is a Marketing Manager employed at XYZ with taxable income of Rs. 9,90,000. As per the tax slab, his tax liability (including education cess of 3%) would come to Rs. 2,07,030 for FY 09-10.
Instead of paying such high amounts in tax, one can claim various deductions under Chapter VI A and reduce the net taxable amount. This way one can invest as per his/her financial goals and save on taxes too.
Let’s continue the same example to see how much amount can be saved in taxes by investing in tax saving instruments under Chapter VIA.
Let’s assume Vikky had bought a mediclaim insurance policy in FY 2009-10 (insurance premium Rs 10,000 p.a). He has also invested in PPF for Rs 40,000, term life insurance policy (insurance premium Rs 25,000; annual), ULIP (premium Rs 26,000; annual), tax saving mutual fund (amount invested in FY 2009-10 is Rs 50,000), pension plan of mutual fund PQR (contribution for FY 2009-10 is Rs 25,000).
From the above, you can see that Vikky has invested a total of Rs 1,66,000 in various tax saving products for FY 2009-10 apart from the contribution to mediclaim insurance policy. As per the tax slabs for FY 2009-10, he can claim a maximum of Rs 1 lakh tax deduction with Sec 80C, Sec 80CCC (contribution to pension funds) put together and up to Rs 15,000 p.a. for payment towards medical insurance premium paid towards policy for self. Therefore, under Sec 80C and Sec 80CCC he gets a deduction of Rs 1 lakh and under Sec 80D he gets a deduction of Rs 10,000. Claiming the total tax deduction of Rs 1,10,000, his net taxable income reduces to Rs 8,80,000. Hence, his tax liability is reduced to Rs 1,73,040 – a saving of Rs. 33,990, which can be directed towards other investments/financial commitments.
The above is a simple example of saving in taxes through investments in government approved schemes. You can click here to know more about the tax saving options available for FY 2009-10.
Note:
1. Surcharge of 10 % on income tax is not applicable from FY 2009-10.
2. Below is the brief list of documents required for filing IT returns -
Documents Required for Salaried individuals with/without interest income:
1. Form 16, salary certificate
2. Receipt of investments made
Documents Required for House Property Income:
1. Rental income details (rental receipts, bank statements)
2. Municipal tax/property tax payment receipts
3. Interest certificate for loans
Income from capital gains:
1. Proof of sale
2. Proof for ‘cost of acquisition’ and ‘cost of improvement’
3. proof of purchase of original asset
Income from Business/profession
1. Financial statements
2. Audit report/certificate (if required)
3. In case of salaried class, you may consider availing reimbursements from your employer and take maximum advantage of the same. A person in lower tax slabs can reduce his tax liability with exemptions alone.
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Calculate your taxes for the return to be filed this year as per the existing income tax slabs
