Filing of return of Income
Every person whose total income during the previous year exceeded the maximum amount not chargeable to tax shall furnish a return of income. In case of salaried employees, there is an exemption from filing return of income if (i) total income not exceeding Rs. 5,00,000, and (ii) the total income consists only of income chargeable to income-tax under the head 'Salaries' and interest income from savings bank account if such interest income does not exceed Rs. 10,000.
Allowances and perquisites exempt from tax
House rent allowance, Leave travel allowance, Travel allowance, Transfer allowance, Conveyance allowance, Child education allowance, Transport allowance. While designing a salary structure, These exempt allowance should be incorporated to make the salary more tax friendly.
Interest amount paid on housing loan is deductible expense. If the house is given on rent, it can be adjusted from the rent received. If the house is self occupied, it can be adjusted from Salary income (Upto Rs. 150000).
Principal repaid on housing loan is eligible for Deduction U/S 80C
Deduction from gross total income
- Sec 80C- LIP, PF, PPF, Housing loan principal, MF ELSS, Tution fees
- Sec 80D- Mediclaim premium of Dependent family member or parents.
- Sec 80E- Interest on loan for higher education
- Sec 80G- Donation
HUF is considered as a separate entity for Income tax purpose. HUF dose not arise from contract but from status. HUF comes into existence with Husband wife and one child.
Common mistakes people make while filing tax returns
- The most common notion among salaried employees is that since tax has already been deducted from their salary, there is no need to file their income tax returns. This is not at all true or legal.
- Employees do not include the interest that they receive on their savings bank account. The entire interest earned on your savings bank account is taxable.
- Omission of income received on Mutual funds, Equity shares and other investments.
We at Dhulji advisory specialize in Taxation services for salaried Individuals.