all about tax in financial year 2009

8/14/2019 All About TAX in Financial Year 2009

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All about TAXAll about TAXinin

Financial YearFinancial Year

2009 20102009 2010

FromFrom --
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Tax Slab for F.Y. 2009 - 2010

Taxable Income of Men Taxable Income of WomenTaxable Income of Senior

Citizens Tax

Upto Rs.1,50,000 Upto Rs.1,80,000 Upto Rs.2,25,000 Nil

Rs.1,50,000 To Rs.3,00,000 Rs.1,80,000 To Rs.3,00,000 Rs.2,25,000 To Rs.3,00,000 10%

Rs.3,00,000 To Rs.5,00,000 Rs.3,00,000 To Rs.5,00,000 Rs.3,00,000 To Rs.5,00,000 20%

Rs.5,00,000 and Above Rs.5,00,000 and Above Rs.5,00,000 and Above 30%

Note :

3% Education Cess also on the tax amount after tax and surcharge (if any)

What is surcharge?

* If salary is above 10 lacs , 10% surcharge will also be applicable.
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Following things will be discussed :Following things will be discussed :

1. Tax Slab in 2009 for salaried employees1. Tax Slab in 2009 for salaried employees

2. How much will you save and2. How much will you save and

3. How to Save Tax3. How to Save Tax


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The following incomes are completely exempt from IncomeThe following incomes are completely exempt from Income

Tax Without any upper limit.Tax Without any upper limit.

1. Interest on PPF/ GPF / EPF.1. Interest on PPF/ GPF / EPF.

2. Interest on GOI Tax Free Bonds.2. Interest on GOI Tax Free Bonds.3. Dividends on Shares and on Mutual Funds.3. Dividends on Shares and on Mutual Funds.

4. Any Capital Receipt from Life Insurance Policies. i.e.4. Any Capital Receipt from Life Insurance Policies. i.e.

sums received either on death of the insured or on Maturitysums received either on death of the insured or on Maturityof Life Insurance Plans. However, in case of Life Insuranceof Life Insurance Plans. However, in case of Life Insurance

Policies issued after March 31, 2004, exemption on MaturityPolicies issued after March 31, 2004, exemption on Maturity

payment u/s.10(10)D is available only if premium paid onpayment u/s.10(10)D is available only if premium paid on

any year does not exceeds 20% of the Sum Assured.any year does not exceeds 20% of the Sum Assured.

Tax Free Incomes :Tax Free Incomes :


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5. Interest on Saving Bank Account in Post Office.5. Interest on Saving Bank Account in Post Office.

6. Long term Capital Gain on sale of shares and equity MF6. Long term Capital Gain on sale of shares and equity MF

Dividend Income :Dividend Income :

Dividend income from companies / equity oriented MutualDividend income from companies / equity oriented Mutual

Funds is Completely Exempt in the hands of investors.Funds is Completely Exempt in the hands of investors.

Dividend is also Tax Free in the hands of investors in case ofDividend is also Tax Free in the hands of investors in case of

debt oriented Mutual Funds Schemesdebt oriented Mutual Funds Schemes

Tax Free Incomes :Tax Free Incomes :

Gif T


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Gift Tax was abolished with effect fromGift Tax was abolished with effect fromOctober 1, 1998.October 1, 1998.

The gifts are no longer taxable in the handsThe gifts are no longer taxable in the handsof donor or donee.of donor or donee.

However, with effect from September 1,However, with effect from September 1,

2004, any gift received by an individual or2004, any gift received by an individual orHUF will be included in taxable income,HUF will be included in taxable income,

provided the amount of gift exceedsprovided the amount of gift exceeds

Rs.50000/-.Rs.50000/-.

Gift TaxGift Tax


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1.1. SpouseSpouse

2.2. Brother or Sister.Brother or Sister.

3.3. Brother or Sister of Spouse.Brother or Sister of Spouse.

4.4. Brother or Sister of either of parents of the individual.Brother or Sister of either of parents of the individual.

5.5. Any lineal ascendant or descendant of the individual.Any lineal ascendant or descendant of the individual.6.6. Any lineal ascendant or descendant of the spouse of theAny lineal ascendant or descendant of the spouse of the

individual.individual.

7.7. Spouse of the persons referred to in (2) or (6)Spouse of the persons referred to in (2) or (6)

8.8. Gifts received on the occasion of marriageGifts received on the occasion of marriage9.9. Gift received under a WILL by way of inheritance are alsoGift received under a WILL by way of inheritance are also

tax free.tax free.

Gifts received from following is Tax Free.Gifts received from following is Tax Free.


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1. Filing of income Tax Return is Compulsory1. Filing of income Tax Return is Compulsoryfor all individuals whose Gross Annualfor all individuals whose Gross Annual

Income exceeds the Maximum Amount whichIncome exceeds the Maximum Amount which

is not chargeable to income tax i.e.is not chargeable to income tax i.e.

Rs.1,80,000 for Resident Women, Rs.Rs.1,80,000 for Resident Women, Rs.

2,25,000 for Senior Citizens and Rs.2,25,000 for Senior Citizens and Rs.

1,50,000 for other individuals and HUFs.1,50,000 for other individuals and HUFs.

2. The last date of filing income tax return is2. The last date of filing income tax return is

July 31, in case of individuals who are notJuly 31, in case of individuals who are not

covered in point 3 below.covered in point 3 below.

Filing of Income Tax Return :Filing of Income Tax Return :

f


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3. If the income includes business or3. If the income includes business orprofessional income requiring tax auditprofessional income requiring tax audit

(turn over Rs.40 Lakhs), the last date for(turn over Rs.40 Lakhs), the last date for

filing the return is September 30.filing the return is September 30.

4. The penalty for Non- Filing of Income4. The penalty for Non- Filing of Income

Tax Return is Rs.5000 (afterTax Return is Rs.5000 (after

Assessment Year).Assessment Year).

Filing of Income Tax Return :Filing of Income Tax Return :


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Income is Computed under the foll. 5 Heads:Income is Computed under the foll. 5 Heads:

1. Income from salaries1. Income from salaries2. Income from House Properties2. Income from House Properties

3. Profit & Gains of Business & Profession3. Profit & Gains of Business & Profession

4. Capital Gains4. Capital Gains

5. Income from Other Sources5. Income from Other Sources

Computation of GrossComputation of Gross

Taxable IncomeTaxable Income


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Salary or Pension IncomeSalary or Pension Income

The pay which you get has many components ,The pay which you get has many components ,like HRA , conveyance allowance and others.like HRA , conveyance allowance and others.

Out of this income some things are deductibleOut of this income some things are deductibleon your hand and after deducting you arrive at aon your hand and after deducting you arrive at aamount called Taxable income , on which youamount called Taxable income , on which you

have to pay tax.have to pay tax.


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Income from House PropertyIncome from House Property

If the property is self occupied then the IncomeIf the property is self occupied then the Incomefrom House Property is treated as NIL.from House Property is treated as NIL.

If any loan is taken for the purchase of theIf any loan is taken for the purchase of theproperty then the amount paid towards interestproperty then the amount paid towards interest

up to a maximum of Rs. 1,50,000/- is deductedup to a maximum of Rs. 1,50,000/- is deductedfrom taxable income.from taxable income.


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Income from House PropertyIncome from House Property

In case Property is given on rent, then we have to findIn case Property is given on rent, then we have to findout the :out the :

Annual Rental IncomeAnnual Rental Income

From this deduct Property Tax paid if anyFrom this deduct Property Tax paid if any

From balance amount-deduct30% towards repairs &From balance amount-deduct30% towards repairs &

maintenancemaintenance

From the residual figure- deduct the amount of interestFrom the residual figure- deduct the amount of interest

paid on loan taken for the purchase of the property.paid on loan taken for the purchase of the property. The resultant figure is the Income from House PropertyThe resultant figure is the Income from House Property


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Profit from Business / professionProfit from Business / profession

Income as arrived on theIncome as arrived on thebasis of Profit & Loss A/cbasis of Profit & Loss A/c


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Income from InterestIncome from Interest Interest Income from the following sourcesInterest Income from the following sources

to be included in Gross Taxable Income:to be included in Gross Taxable Income: Interest on company deposits.Interest on company deposits.

Interest on debentures/bonds.Interest on debentures/bonds.

Interest on savings bank account/ fixedInterest on savings bank account/ fixed

deposits with banks.deposits with banks.


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Income from InterestIncome from Interest Interest on post office savings schemes likeInterest on post office savings schemes like

MIS, NSC, KVP etc.MIS, NSC, KVP etc.

Interest on private loans given to relatives,Interest on private loans given to relatives,

friends or any other entity.friends or any other entity.

Interest on government securities.Interest on government securities.

Note: Deduction u/s 80 L has been omittedNote: Deduction u/s 80 L has been omittednow and accordingly,interest income fromnow and accordingly,interest income fromthe above sources is Fully Taxable now.the above sources is Fully Taxable now.


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Capital GainsCapital Gains Capital gain arises when certain assets likeCapital gain arises when certain assets like

property (plot or a built up commercial /property (plot or a built up commercial /

residential unit) or shares / mutual fund units /residential unit) or shares / mutual fund units /

bonds etc are sold for a profit.bonds etc are sold for a profit. The treatment of capital gains is slightly different.The treatment of capital gains is slightly different.

It mainly depends upon whether the capital gainIt mainly depends upon whether the capital gain

(profit on sale) is Short Term or Long Term.(profit on sale) is Short Term or Long Term.


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Short Term Capital GainShort Term Capital Gain

Capital gain is considered to be short term ifCapital gain is considered to be short term if

immovable property is sold / transferredimmovable property is sold / transferred

within THREE years of acquisition.within THREE years of acquisition.

Similarly, if shares or other financialSimilarly, if shares or other financial

securities such as mutual fund units are soldsecurities such as mutual fund units are sold

within ONE year of purchase, the profitwithin ONE year of purchase, the profitearned is treated as short term capital gain.earned is treated as short term capital gain.


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Tax Treatment on Short TermTax Treatment on Short Term

Capital GainCapital Gain It is included in the gross taxableIt is included in the gross taxable

income like other sources ofincome like other sources of

income and normal rates of taxincome and normal rates of taxapply, which depend on the grossapply, which depend on the gross

taxable income from all sourcestaxable income from all sources

including short term capital gains.including short term capital gains.


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Long Term Capital GainLong Term Capital Gain

If Immovable Property is sold after THREE yearsIf Immovable Property is sold after THREE years

of purchase, Orof purchase, Or

Financial securities such as shares, deepFinancial securities such as shares, deepdiscount bonds, units of open - ended or close discount bonds, units of open - ended or close

ended schemes of mutual funds areended schemes of mutual funds are

sold/redeemed/transferred after holding the samesold/redeemed/transferred after holding the same

for more than Twelve Months, then the gain isfor more than Twelve Months, then the gain is

considered to be long term capital gain.considered to be long term capital gain.


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Tax Treatment on Long TermTax Treatment on Long Term

Capital GainCapital Gain With effect from October 1, 2004,With effect from October 1, 2004,

long term capital gain on transferlong term capital gain on transfer

of listed shares/units of equityof listed shares/units of equityoriented mutual funds schemesoriented mutual funds schemes

has been exempted from tax,has been exempted from tax,

provided securities transaction taxprovided securities transaction tax

has been paid on such sale.has been paid on such sale.


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Long Term Capital GainLong Term Capital Gain

Non listed shares/units of equityNon listed shares/units of equity

oriented mutual fund schemes, tax isoriented mutual fund schemes, tax is

payable in respect of long termpayable in respect of long termcapital gains at a flat rate 20% andcapital gains at a flat rate 20% and

the amount of gain has to bethe amount of gain has to be

adjusted for inflation. This inflationadjusted for inflation. This inflationadjustment is known as indexationadjustment is known as indexation

benefit.benefit.


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Section 54 ECSection 54 EC Long-Term Capital Gain Tax (after availingLong-Term Capital Gain Tax (after availing

indexation benefit ) can be saved by investingindexation benefit ) can be saved by investing

amount within 6amount within 6thth months in any of the followingmonths in any of the following

two schemes specified under section 54 ECtwo schemes specified under section 54 EC( upto Rs. 50 Lakhs only):( upto Rs. 50 Lakhs only):

1 Bonds issued by Rural Electrification1 Bonds issued by Rural Electrification

Corporation ( REC )Corporation ( REC )

2 Bonds issued by NHAI (National Highways2 Bonds issued by NHAI (National Highways

Authority of India)Authority of India)


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There are various Tax SavingThere are various Tax Saving

Schemes:Schemes: Life Insurance Premium.Life Insurance Premium.

Contributions to Employees Provident Fund/ GPFContributions to Employees Provident Fund/ GPF

Unit-Linked Insurance PlanUnit-Linked Insurance Plan

Contribution to Public Provident Fund Scheme (Max.Contribution to Public Provident Fund Scheme (Max.Rs.70,000).Rs.70,000).

National Savings Certificates VIIINational Savings Certificates VIII

Tuition Fees Upto Two Children.Tuition Fees Upto Two Children.

Repayment of Housing Loan ( Principal)Repayment of Housing Loan ( Principal)


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Pension scheme of LIC of India or any otherPension scheme of LIC of India or any other

insurance company.insurance company.

Subscription to eligible issue of units of MutualSubscription to eligible issue of units of Mutual

Fund (ELSS).Fund (ELSS).

Interest accrued in respect of NSC VIII issue.Interest accrued in respect of NSC VIII issue.

Fixed Deposit with Banks having a lock inFixed Deposit with Banks having a lock in

period of 5 Yearsperiod of 5 Years

Premium on Mediclaim Policy.Premium on Mediclaim Policy.


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Life insurance Premium:Life insurance Premium:

Life insurance is a Very Good Investment.Life insurance is a Very Good Investment.

It gives Risk Cover, Tax Saving and GoodIt gives Risk Cover, Tax Saving and Good

returns.returns.

It is a contract that pledges payment of anIt is a contract that pledges payment of an

amount to the person assured (or hisamount to the person assured (or his

nominee) on the death of insured person.nominee) on the death of insured person.


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Savings through life insurance guaranteeSavings through life insurance guarantee

full protection against risk of death of thefull protection against risk of death of the

saver.saver.

Also, in case of demise, life insuranceAlso, in case of demise, life insuranceassures payment of the entire amountassures payment of the entire amount

assured (with bonuses whereverassured (with bonuses wherever

applicable)applicable)

whereas in other savings schemes,whereas in other savings schemes,

only the amount saved (with interest)only the amount saved (with interest)

is payable.is payable.


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Long-term savingsLong-term savings

EASY Instalment facility.EASY Instalment facility.

Premium payment for insurance is eitherPremium payment for insurance is eithermonthly, quarterly, half yearly or yearly.monthly, quarterly, half yearly or yearly.


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LOAN Facility Available.LOAN Facility Available.

Also generally accepted as security,Also generally accepted as security,even for a commercial loan.even for a commercial loan.


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A policy that has a suitable insurance plan or aA policy that has a suitable insurance plan or a

combination of different plans can be effectivelycombination of different plans can be effectively

used to meet certain monetary needs that mayused to meet certain monetary needs that may

arise from time-to-time.arise from time-to-time.

Children's education, start-in-life or marriageChildren's education, start-in-life or marriage

provision or even periodical needs for cash overprovision or even periodical needs for cash over

a stretch of time can be less stressful with thea stretch of time can be less stressful with thehelp of these policies.help of these policies.


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Alternatively, policy money can be madeAlternatively, policy money can be made

available at the time of one's retirementavailable at the time of one's retirement

from service and used for any specificfrom service and used for any specific

purpose, such as, purchase of a house orpurpose, such as, purchase of a house orfor other investments.for other investments.

Loans are granted to policyholders forLoans are granted to policyholders for

house building or for purchase of flatshouse building or for purchase of flats

(subject to certain conditions).(subject to certain conditions).


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National Savings CertificatesNational Savings Certificates

(NSC) :(NSC) : National Saving Schemes (NSC) is used to be one ofNational Saving Schemes (NSC) is used to be one of

the popular Income Tax Saving schemes. Butthe popular Income Tax Saving schemes. But

nowadays it is not so lucrative.nowadays it is not so lucrative.

This scheme is available throughout the year.This scheme is available throughout the year.

It can be operated singly, jointly, or by a minor withIt can be operated singly, jointly, or by a minor with

his/her parent or guardian.his/her parent or guardian.

Return on this scheme at interest rate of 8%.Return on this scheme at interest rate of 8%.


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Working on NSC InterestWorking on NSC Interest

Amt Invested Rs. 100.00Amt Invested Rs. 100.00

Interest Earned @ 8% P.A. Rs. 8.00Interest Earned @ 8% P.A. Rs. 8.00

Tax @ 30% on Rs.8/-Tax @ 30% on Rs.8/- Rs. 2.40Rs. 2.40 Net Interest ReceivedNet Interest Received Rs. 5.60Rs. 5.60


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Public Provident Fund (PPF) :Public Provident Fund (PPF) :

Under this scheme, there is a return at theUnder this scheme, there is a return at the

interest rate of 8% p.a.interest rate of 8% p.a.

The minimum investment limit is Rs. 500/- andThe minimum investment limit is Rs. 500/- andmaximum limitation is Rs. 70,000/-.maximum limitation is Rs. 70,000/-.

It can be opened any time throughout the year. ItIt can be opened any time throughout the year. It

can be operated either singly or jointly. In case ofcan be operated either singly or jointly. In case ofminor, with parent / guardian.minor, with parent / guardian.


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This scheme has a maturity period ofThis scheme has a maturity period of

15 years.15 years.

Loan Facility is available.Loan Facility is available.


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Loan amount can be returned in maximum ofLoan amount can be returned in maximum of

36 installments.36 installments.

A person can withdraw an amount (not moreA person can withdraw an amount (not morethan 50% of the balance).than 50% of the balance).

Tax Benefit Under Section 80C of Income TaxTax Benefit Under Section 80C of Income Tax

Act, 1961 is available.Act, 1961 is available.

Interest on this scheme is tax free.Interest on this scheme is tax free.

M t l F d (ELSS) / ULIP PLANSM t l F d (ELSS) / ULIP PLANS


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Mutual Fund (ELSS) / ULIP PLANSMutual Fund (ELSS) / ULIP PLANS

An ELSS (Equity Linked Savings Scheme)An ELSS (Equity Linked Savings Scheme)

is a mutual fund scheme that invests inis a mutual fund scheme that invests inequity & equity-related securities.equity & equity-related securities.

ULIP Plans (ULIP Plans (Unit Linked Insurance Plan)Unit Linked Insurance Plan)is a Plan that offers Tripple Benefitis a Plan that offers Tripple BenefitTax BenefitTax Benefit

Insurance CoverInsurance Cover Benefit from the long term growthBenefit from the long term growth

potential of equities.potential of equities.


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ULIP & ELSS are also eligibleULIP & ELSS are also eligible

investments under section 80Cinvestments under section 80Cofof

Income Tax Act 1961.Income Tax Act 1961.

ELSS have a lock-in period of threeELSS have a lock-in period of three

years. This allows the investors toyears. This allows the investors to

benefit from the long term growthbenefit from the long term growthpotential of equities.potential of equities.


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ELSS / ULIP Key DifferentiationELSS / ULIP Key Differentiation

ELSS is the only investment product that offers .

Twin Advantages

Equity Returns Tax Benefits


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ELSS / ULIP A ComparisonELSS / ULIP A ComparisonInstrument Expected Returns Lock-In Period

National Savings Certificate - NSC 8.00% 6 years

Public Provident Fund - PPF 8.00% Up to 15 years

Mutual Fund ELSS / ULIP Around 15%-20% 3 years

Investment 1 Lac End Value of Investment in Rs. Lac after - Years

Avenue Returns 3 6 8 10 15 20

NSC 8.16% 1.27 1.60 1.87 2.19 3.24 4.80

PPF 8.00% 1.28 1.63 1.92 2.26 3.40 5.11

ELSS / ULIP 15.00% 1.52 2.31 3.06 4.05 8.14 16.37

Mutual Fund ELSS/ ULIP Plans returns are the assumed returns dependent on the markets

and are not guaranteed or assured

D d ti / 80D


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Deduction u/s 80DDeduction u/s 80D

Mediclaim PolicyMediclaim Policy

Medical Insurance Premium paid forMedical Insurance Premium paid for

(Self, Spouse and Children Rs. 15,000/-)(Self, Spouse and Children Rs. 15,000/-) additional for parent Rs. 15,000/- andadditional for parent Rs. 15,000/- and

in case of senior citizen Rs. 20,000/-in case of senior citizen Rs. 20,000/-


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I hope this information was helpful. If you need

any further help you can get in touch with me via

my email id [email protected] can also get in touch with me on

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