One has surely heard the famous saying " With Age Comes Wisdom " .Experience is a great teacher. More the number of times one files those income tax returns more is one’s understanding of the subject. One has heard the famous saying " Knowledge Is Like A Well Which Never Dries Up ". One still has to fill one’s pot with the water from this well. What can a person know in his old age if he does not fill himself with knowledge in his youth? Always invest in knowledge. It will definitely come to use at some point of time or the other. Interested in updating your knowledge on Income Taxes.The team of Financial Planners at IndianMoney.com are always there for you to plan your Taxation needs in a most effective and efficient manner. You can explore this unique Free Advisory Service just by giving a missed call on 022 6181 6111.
Individual Who Is Between 60-80 Years Of Age At Any Time During The Previous Year (Financial Year 2013-2014)
|
|
Income Tax Slabs |
Income Tax Rates |
Education Cess |
|
1 |
Where the total income does not exceed INR 2,50,000 |
NIL |
NIL |
|
2 |
Where the total income exceeds INR 2,50,000 but does not exceed INR 5,00,000 |
10% of amount by which the total income exceeds INR 2,50,000. |
2 % of Income Tax |
|
3 |
Where the total income exceeds INR 5,00,000 but does not exceed INR 10,00,000 |
INR 25000/- + 20% of the amount by which the total income exceeds INR 5, 00,000. |
2 % of Income Tax |
|
4 |
Where the total income exceeds INR 10,00,000 |
INR 125000/- + 30% of the amount by which the total income exceeds INR 10,00,000 |
2 % of Income Tax |
Education Cess :
Here Education cess on Income tax and Secondary and Higher Education cess on income tax shall be levied at the rate of 2% and 1% respectively.
Let us consider Mr Harish an Elderly 62 year old gentleman earns INR 14 Lakhs per annum working as a health and nutrition consultant. He believes " One Cannot Teach An Old Dog New Tricks ". Mr Harish pays his income taxes on time but does not make use of the income tax deductions available to him. One can calculate Mr Harish’s income tax paid in the following manner as shown below.
Table 1 :
Heads |
% Of Income Tax |
Income Tax |
|
Up To INR 2.5 Lakhs |
NIL |
NIL |
|
INR 2.5 Lakhs - INR 5 Lakhs |
10% |
INR 25000 (A) |
|
INR 5 Lakhs - INR 10 Lakhs |
20% |
INR 100000 (B) |
|
INR 10 Lakhs |
30% |
INR 120000 (C) |
|
Total |
INR 245000 (A) +(B) + (C) |
|
|
Educational Cess |
3 % Of INR 245000 |
INR 7350 (D) |
|
Net Tax Payable |
INR 252350 (A+B+C+D) |
One can understand that Mr Harish through his reluctance to update his knowledge and study the income tax deductions available to him pays an extra amount as income tax. How much can he save using the deductions available to him ....Care to find out? Let’s march ahead. Mr Harish can avail of the deductions under Section 80 C using the Senior Citizens Saving Scheme. He can claim deductions up to a sum of INR 1 Lakh.
Heads |
Amount |
|
Gross Taxable Income |
INR 1400000 (A) |
|
Less Senior Citizens Saving Schemes Under Section 80 C |
INR 100000 (B) |
|
Less Tax Deductions Under Section 80D |
INR 20000 (C) |
|
Less Tax Deductions Under Section 80DDB |
INR 60000 (D) |
|
Less Tax Deductions Under Section 80 TTA |
INR 10000 (E) |
|
Total Taxable Income |
INR 1210000 (A)-(B+C+D+E) |
Table 3
Heads |
% Of Income Tax |
Income Tax |
|
Up To INR 2.5 Lakhs |
NIL |
NIL (A) |
|
INR 2.5 Lakhs - INR 5 Lakhs |
10% |
INR 25000 (B) |
|
INR 5 Lakhs - INR 10 Lakhs |
20% |
INR 100000 (C) |
|
INR 10 Lakhs |
30% |
INR 63000 (D) |
|
Total Tax |
INR 188000 (A)+(B)+(C)+(D) |
|
|
Education Cess |
3% Of INR 188000 |
INR 5640 (E) |
|
Net Tax Payable |
INR 193640 (A)+(B)+(C)+(D)+(E) |
I would like to end this article with the famous saying " If Your Ship Doesn’t Come In Swim Out To Meet It ". This saying shows that one needs to be proactive in order to meet ones goals and targets and if one wants one wants to achieve success one has to chase after it. This is highly recommended when it comes to income taxes.
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