INCOME TAX RATES, SLABS AND DEDUCTIONS FINANCIAL YEAR 2018-19 (YEAR 2019)
FRIENDS ITS TIME TO FILE YOUR INCOME TAX RETURNS NOW BY 31AUG19.
Let us update our selves on basic aspects for the current filing of Income Tax.
The detailed method of Filing is explained in succeeding paras and our post at * FILING ITR - HOW TO
It is so very easy even for a lay man to Prepare and Submit your ITR on line from the efiling site of the Income Tax department. It is user Friendly ITR on line, that it guides you at every step. Most of your data as submitted by banks is pre-filled saving you the labour of filling. You simply need to recheck this data and fill up other details like your Income from Other Sources, exempt income and the deductions.
SLABS and RATEs OF TAX- Sr Ctz
SLABS and RATEs OF TAX- Sr Ctz
1. Upto Rs 3 Lakh - No Tax
2. 3 to 5 Lakh - 5% (No Tax for VSC 80 Yrs and above in this bracket)
3. 5 to 10 Lakh - 20%.
4. Above 10 Lakh 30%
Surcharge above 50 Lakh (Does not apply to most of us since we, the fauji's will not have so much of Pension plus other income in our current life time)
Edn Cess - 4%. on Tax Calculated.
DEDUCTIONS -
*TAX RATES FOR SR CITIZENS FOR FINANCIAL YEAR (FY) 2018-19*
Assessment Year(AY) *2019-20* i.e. (FY 2018-19 also called Previous year (PY)), written as Year 2019 (One can remember that this fig, since it is common in AY as also in the corresponding FY) by the Taxman.
The following are the Income Tax *benefits for
the sr citizens*
1. Minimum Taxable limit *3 lakhs* for St Citizen, Rs 5 Lakh for those above 80 yrs and for others it is Rs 250000
only.
2 *No advance tax* need to be paid.
3.*Standard Deductions* for salaried class employees and pensioners is *allowed for Rs.40000/-* under Chapter VI A (Sec 16(iA). Std Deduction is Not applicable for the Family Pensioners.
NOTE -- FAMILY PENSION. Standard deduction is NOT allowed on
Family pension since the Family pension is not slated under head SALARIES** but as income from other sources. There is however no change
to deduction of 15000 or 33% as hither to fore on Family pension under Sec. 57 (iiA).
** U/s 17(1) salary includes: any annuity or pension received. however family pension (i.e pension received by family member after death of employee) is taxable under the head “Income from Other Sources” (Deduction of 1/3rdof pension amount or Rs 15,000 P.A whichever is lower is applicable u/s 57(iia). Beside it, annuity (also called pension) received from a person other than employer (like LIC Annuity) is taxable under the head “Income from Other Sources” and standard deduction u/s 16(ia) is not applicable on such Income. Ref https://taxguru.in/income-tax/pension-income-applicability-standard-deduction-u-s-16ia.html
4. *No Income Tax* for the *interest* earned in the Term Deposit *upto Rs.50000/-* under Sec 80 TTB. . The earst while deduction under 80TTA of Rs 10000/- is incl as part of Rs 50000/- and is not valid for sernior citizen (PL see the Note below).
6. *Deduction* under Sec 80 D for *medical insurance* is *raised to Rs 50000/-*
7. Medical expenditure for *critical illness* is raised to *Rs.60000* under Sec 80DDB*
8. Tax deduction for the interest earned on all sorts of investments (other than shares and Mutual Funds etc) by Sr Citizen incl the Saving.Account is * Rs 50000/-. applicable to pers above 60 Years of Age under the new section 80TTB.
9. There is No change in Sec 80 (C).
#Please keep 👆 in mind while filing Income tax returns due in July 2019
*Please circulate this information to your near and dear*
While Sec 80TTA provides deduction up to ₹10,000, on the other hand Sec 80TTB provides deduction up to ₹50,000.
Now you must be thinking, WOW! I can claim benefit of ₹60,000.
No sir, you cannot. It is very clearly mentioned in law that Sec 80TTA will apply to all individual but not senior citizens. And Sec 80TTB will apply only to senior citizens as mentioned above..
*Senior citizen and above means citizen whose age is 60 years or more at
anytime during Previous Year.
HOW TO FILE INCOME TAX RETURN - STEP BY STEP GUIDE
Filing a tax return on line had been a challange but not any more. Its a child's play now and any Lay Man like me can easily do it following this guide. Some documents are required while filing a tax return so keep them ready. Documents like Bank account details, PAN number, Aadhar Card, the address of the house property, Form 16, Pay Slips etc. are required. Likewise, some other details are required as well if you have any mutual funds like details of mutual fund statement, sale and purchase of equity funds, debt funds etc. Always keep in mind that you should file the correct information because of the government always double check the information provided.
First of all calculate your total income from all possible sources. Do not hide any thing. It can land you in problem and after you your family (Legal Heirs). Do understand these terms.
Gross Income - The total income received from any source by the individual, to include every thing which adds to your cash in hand or in Bank. Even though the Exempted Income is also part of the Gross Income but is to be shown under the exempt incomes for reporting purposes in the ITR and not in the salaries or the Income from Other sources.
Total Taxable Income - Gross Income minus the total deductions under Chapter Vl as explained above in this post, is your taxable income on which the tax is calculated as per Tax bracket and rates.
Calculation of Income Tax - From the Emails received by us from the environment we find that a large number of pensioners have serious doubts in calculations. The ITR-1 on line, does all calculations itself you just do not have to bother. However for your own checks we give here a simple Lay Man's method for our readers.
Please refer to the table on the right side, in first column see the whole figures and the amt of Tax which is payable on this whole figure, given against it in the third column.
Let us understand by an example, let your Gross Income so calculated by you, be Rs 14,35,650/- incl your pension and income from all other sources, viz Banks Post Offices, House Rent received etc.
From This Deduct the Amt of total deductions (40,000 (Std Dedn) +50000 (80TTB) + 1,50,000 (PPF, etc 80C) = Rs 2,40,000/-
Hence the TOTAL TAXABLE INCOME will work out to be Rs (14,35,650 minus 2.40,000) = 11,95,650/- (DONOT HAVE ANY DOUBTS ON THIS)
The tax on this amount will be as under :-
(a) On Rs 10,00,000 = 1,10,000 from the above table.
(b) On Rs 1,95,650 = 195650 X 0.3 = 58695/-
Total = 1,68,695 (a+b)
Cess = 168695 X 0.04 = 6748/-
HENCE TOTAL TAX PAYABLE ON TAXABLE INCOME = 168695 + 6748 = Rs 1,75,443/-.
PAYABLE OF REFUND OF TAX - Minus the TDS deducted FROM 1,75,443/- is what is Refund or Payable. Any amt payable is to be paid on line before submission of the ITR Since the Chalan No etc is to be entered in the ITR to make 0 Tax Payable.
TCS - TAX COLLECTED AT SOURCE - In case you have bought a vehicle costing above Rs 10 Lakh the dealer should have collected 1% as TCS from yu which he would have deposited with Income Tax Dept and also so reflected in your 26AS. You would have received Form 27d from him specifying the TCS deposited. If the veh is for personal use this amount is refundable in your tax return and is to be filled under TAX DETAILS Page of the ITR.
TAX COLLECTED AT SOURCE - TDS3 - This concerns where your tenant has deducted the tax .
The easiest and the Best method of filing your return is to file online which is the simplest option. In this age of Internet and Wi-Fi, almost every one of us are very active on social Media platforms. In this age company like PayTM are earning billions of profit only through their mobile app through which a person can pay their TV cable, water, electricity or phone bills. So, now you can file your income tax return through the internet. Here is the way to do it.
The first step you have to login to E-filing site , then go to E-file in the top line and then select submit ‘ITR Online’ from the drop down menu. Thereafter select the income tax return form and the assessment year. The ITR form will appear on your screen. Fill the details in the form and keep saving the draft. Click the submit button to send the return to IT dept. After submission, an acknowledgment detail will be displayed. We have tried to give step by step method in the succeeding paragraphs for you.
Nowadays, many private companies , CAs and TRPs are filing returns on your behalf at an hefty fee of Rs 1500 to 5000. Here too you have to provide all the data on paper to them, they simply fill the form on line and submit which can easily be done by your school going Grand Child.
Don’t forget that filing a return on time is important, The department will levy a late fee of Rs 5000/ and Rs 10,000/ if not filed in time. File in time even if there is a mistake which you may know later you can file a revised ITR.
FILING OF ITR ON LINE (PREPARE AND SUBMIT) - STEP BY STEP.
1. Open the Efiing site . https://www.incometaxindiaefiling.gov.in
2. You are already registered there since your ITR had been filed last year also.
3. Log in with your Pan Number Password and Capcha.
4. Go to -->> E FILING --->> Income Tax Return -->> Prepare and Submit.
5. Select ITR - 1. Fill Up details of the AY etc and Continue.
6. Prefilled ITR - 1 will open with 90% details prefilled for you.
7. Check and complete the data . Keep clicking every ten minutes on Save Draft, so that you are not logged out.
8. In the end click on Preview and Submit.
9. Save the ITR as previewed, if all OK Click on Submit .
10. Follow the instructions as seen .
11. E verify your ITR.
E VERIFICATION OF YOUR ITR AFTER SUBMISSION.
While you are going through the process of submission you need to tick one of the three options of e verification . The best method is by Aadhar for which you should have linked your Aadhaar with the Pan , you would have already done that last year.
The other method is by generating an EVC from your Bank account for this you need to Pre-validate one of your preferred bank account. it is another easy method which is also Lay Man Friendly.
The procedure to pre-validate your bank acct for verification of the itr submitted as explained below:-
These posts have proved very useful in the previous years and many Veterans have saved considerable income tax. These are applicable even today as such it is suggested that one should read the relevant posts specially e filing of returns.HOW TO FILE INCOME TAX RETURN - STEP BY STEP GUIDE
Filing a tax return on line had been a challange but not any more. Its a child's play now and any Lay Man like me can easily do it following this guide. Some documents are required while filing a tax return so keep them ready. Documents like Bank account details, PAN number, Aadhar Card, the address of the house property, Form 16, Pay Slips etc. are required. Likewise, some other details are required as well if you have any mutual funds like details of mutual fund statement, sale and purchase of equity funds, debt funds etc. Always keep in mind that you should file the correct information because of the government always double check the information provided.
First of all calculate your total income from all possible sources. Do not hide any thing. It can land you in problem and after you your family (Legal Heirs). Do understand these terms.
Gross Income - The total income received from any source by the individual, to include every thing which adds to your cash in hand or in Bank. Even though the Exempted Income is also part of the Gross Income but is to be shown under the exempt incomes for reporting purposes in the ITR and not in the salaries or the Income from Other sources.
Total Taxable Income - Gross Income minus the total deductions under Chapter Vl as explained above in this post, is your taxable income on which the tax is calculated as per Tax bracket and rates.
Calculation of Income Tax - From the Emails received by us from the environment we find that a large number of pensioners have serious doubts in calculations. The ITR-1 on line, does all calculations itself you just do not have to bother. However for your own checks we give here a simple Lay Man's method for our readers.
 |
| TABLE OF INCOME TAX PAYABLE - AY 2019-20 |
Let us understand by an example, let your Gross Income so calculated by you, be Rs 14,35,650/- incl your pension and income from all other sources, viz Banks Post Offices, House Rent received etc.
From This Deduct the Amt of total deductions (40,000 (Std Dedn) +50000 (80TTB) + 1,50,000 (PPF, etc 80C) = Rs 2,40,000/-
Hence the TOTAL TAXABLE INCOME will work out to be Rs (14,35,650 minus 2.40,000) = 11,95,650/- (DONOT HAVE ANY DOUBTS ON THIS)
The tax on this amount will be as under :-
(a) On Rs 10,00,000 = 1,10,000 from the above table.
(b) On Rs 1,95,650 = 195650 X 0.3 = 58695/-
Total = 1,68,695 (a+b)
Cess = 168695 X 0.04 = 6748/-
HENCE TOTAL TAX PAYABLE ON TAXABLE INCOME = 168695 + 6748 = Rs 1,75,443/-.
PAYABLE OF REFUND OF TAX - Minus the TDS deducted FROM 1,75,443/- is what is Refund or Payable. Any amt payable is to be paid on line before submission of the ITR Since the Chalan No etc is to be entered in the ITR to make 0 Tax Payable.
TCS - TAX COLLECTED AT SOURCE - In case you have bought a vehicle costing above Rs 10 Lakh the dealer should have collected 1% as TCS from yu which he would have deposited with Income Tax Dept and also so reflected in your 26AS. You would have received Form 27d from him specifying the TCS deposited. If the veh is for personal use this amount is refundable in your tax return and is to be filled under TAX DETAILS Page of the ITR.
TAX COLLECTED AT SOURCE - TDS3 - This concerns where your tenant has deducted the tax .
The easiest and the Best method of filing your return is to file online which is the simplest option. In this age of Internet and Wi-Fi, almost every one of us are very active on social Media platforms. In this age company like PayTM are earning billions of profit only through their mobile app through which a person can pay their TV cable, water, electricity or phone bills. So, now you can file your income tax return through the internet. Here is the way to do it.
The first step you have to login to E-filing site , then go to E-file in the top line and then select submit ‘ITR Online’ from the drop down menu. Thereafter select the income tax return form and the assessment year. The ITR form will appear on your screen. Fill the details in the form and keep saving the draft. Click the submit button to send the return to IT dept. After submission, an acknowledgment detail will be displayed. We have tried to give step by step method in the succeeding paragraphs for you.
Nowadays, many private companies , CAs and TRPs are filing returns on your behalf at an hefty fee of Rs 1500 to 5000. Here too you have to provide all the data on paper to them, they simply fill the form on line and submit which can easily be done by your school going Grand Child.
Don’t forget that filing a return on time is important, The department will levy a late fee of Rs 5000/ and Rs 10,000/ if not filed in time. File in time even if there is a mistake which you may know later you can file a revised ITR.
FILING OF ITR ON LINE (PREPARE AND SUBMIT) - STEP BY STEP.
1. Open the Efiing site . https://www.incometaxindiaefiling.gov.in
2. You are already registered there since your ITR had been filed last year also.
3. Log in with your Pan Number Password and Capcha.
4. Go to -->> E FILING --->> Income Tax Return -->> Prepare and Submit.
5. Select ITR - 1. Fill Up details of the AY etc and Continue.
6. Prefilled ITR - 1 will open with 90% details prefilled for you.
7. Check and complete the data . Keep clicking every ten minutes on Save Draft, so that you are not logged out.
8. In the end click on Preview and Submit.
9. Save the ITR as previewed, if all OK Click on Submit .
10. Follow the instructions as seen .
11. E verify your ITR.
E VERIFICATION OF YOUR ITR AFTER SUBMISSION.
While you are going through the process of submission you need to tick one of the three options of e verification . The best method is by Aadhar for which you should have linked your Aadhaar with the Pan , you would have already done that last year.
The other method is by generating an EVC from your Bank account for this you need to Pre-validate one of your preferred bank account. it is another easy method which is also Lay Man Friendly.
The procedure to pre-validate your bank acct for verification of the itr submitted as explained below:-
1. log on to your e-filing account using your pan number and the acct password. https://www.incometaxindiaefiling.gov.in/home
2. Go to - profile setting --->> prevalidate your bank acct. in case one of your bank accts is already validated it will be seen here, however you can validate your another bank acct in addition if you so like.
3. Click on the option and go on as per instructions filling details of your bank acct details and the Bank.
4. Submit when completed.
5. you will get the confirmation of Validation on your email. Note down the Transaction Number.
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LONG TERM CAPITAL GAINS
He wrote :-
Dear Brig, PFA details as I have filled in. The crux is if Buy NAV is more than Fair Mkt Value (31/01/2018), former has to be taken into account, as such it is beneficial in case of CFL (Carry Forward Loss).
Sec 112A is applicable only for listed Stocks & MFs.
Thanks n Regards
Govind Nihalani
NOTE - On clicking on the images above they will enlarge to full screen size, you can read or save the image on your laptop in full size by right clicking. Once finished click the cross X on right top corner of the enlarged image to return to this page.
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ILLUSTRATIONS
Article explains with examples Tax on long term capital gains on Sale of Listed equity share in a company or on unit of an equity oriented fund in view of recent amendment proposed vide union budget 2018 by proposing amendment in Section 112A of the Income Tax Act, 1961.
The proposed new section 112A provides that where the total income of an assessee, includes any income chargeable under the head “Capital gains”, arising from the transfer of a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust, subject to the conditions specified under the section, the tax payable by the assessee on the capital gains exceeding one lakh rupees shall be calculated at the rate of ten per cent.
It is further proposed to provide that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax.
It is also proposed to provide that capital gains under the said section shall be computed without giving effect to the first and second proviso to section 48.
It is also proposed to provide that the cost of acquisition for the purposes of computing capital gains under the section in respect of capital asset acquired by the assesses before the 1st day of February, 2018, shall be as provided in the said section.
The cost of acquisition for the purposes of computing capital gains referred to in sub-section (1) in respect of the long-term capital asset acquired by the assesses before the 1st day of February, 2018, shall be deemed to be the higher of-
(i) the actual cost of acquisition of such asset; and
(ii) the lower of-
(a) the fair market value of such asset; and
(b) the full value of consideration received or accruing as a result of the transfer of the capital asset.
Where the gross total income of an assessee includes any long-term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
“Fair market value” means,-
(i) in a case where the capital asset is listed on any recognized stock exchange, the highest price of the capital asset quoted on such exchange on the 31st day of January, 2018:
It is also proposed to provide that where the gross total income of an assesses includes any long-term capital gains, deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
It is also proposed to provide that where the total income of an assesses includes any long-term capital gains referred to in the said section, the rebate under section 87Ashall be allowed from the income-tax on the total income as reduced by tax payable on such capital gains.
This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years.
LONG TERM CAPITAL GAIN :-
Assessment Year 2019-20 Eg - 1
Assessment Year 2019-20 – Eg 2
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INCOME TAX RELATED OTHER POSTS IN THIS BLOG SITE. CLICK ON THE REQUIRED TITLE TO OPEN
LONG TERM CAPITAL GAINS
We are grateful to Wg Cdr Govind Nihalani for providing us the contents of this post as under to help out who have to show Long Term Capital gains in ITR-2 in filing their returns. He has very kindly offered to help out any one in case of doubts. They may append their queries under comments at the bottom of this post for wider access so that others too can take advantage of this post
Dear Brig, PFA details as I have filled in. The crux is if Buy NAV is more than Fair Mkt Value (31/01/2018), former has to be taken into account, as such it is beneficial in case of CFL (Carry Forward Loss).
Sec 112A is applicable only for listed Stocks & MFs.
Thanks n Regards
Govind Nihalani
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SCH 112 A :- CLICK TO ENLARGE
CG Sec 112A :- CLICK TO ENLARGE
NOTE - On clicking on the images above they will enlarge to full screen size, you can read or save the image on your laptop in full size by right clicking. Once finished click the cross X on right top corner of the enlarged image to return to this page.
********************************************************************************
ILLUSTRATIONS
The proposed new section 112A provides that where the total income of an assessee, includes any income chargeable under the head “Capital gains”, arising from the transfer of a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust, subject to the conditions specified under the section, the tax payable by the assessee on the capital gains exceeding one lakh rupees shall be calculated at the rate of ten per cent.
It is further proposed to provide that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax.
It is also proposed to provide that capital gains under the said section shall be computed without giving effect to the first and second proviso to section 48.
It is also proposed to provide that the cost of acquisition for the purposes of computing capital gains under the section in respect of capital asset acquired by the assesses before the 1st day of February, 2018, shall be as provided in the said section.
The cost of acquisition for the purposes of computing capital gains referred to in sub-section (1) in respect of the long-term capital asset acquired by the assesses before the 1st day of February, 2018, shall be deemed to be the higher of-
(i) the actual cost of acquisition of such asset; and
(ii) the lower of-
(a) the fair market value of such asset; and
(b) the full value of consideration received or accruing as a result of the transfer of the capital asset.
Where the gross total income of an assessee includes any long-term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
“Fair market value” means,-
(i) in a case where the capital asset is listed on any recognized stock exchange, the highest price of the capital asset quoted on such exchange on the 31st day of January, 2018:
It is also proposed to provide that where the gross total income of an assesses includes any long-term capital gains, deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
It is also proposed to provide that where the total income of an assesses includes any long-term capital gains referred to in the said section, the rebate under section 87Ashall be allowed from the income-tax on the total income as reduced by tax payable on such capital gains.
This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years.
LONG TERM CAPITAL GAIN :-
Assessment Year 2019-20 Eg - 1
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INCOME TAX RELATED OTHER POSTS IN THIS BLOG SITE. CLICK ON THE REQUIRED TITLE TO OPEN
* E FILING ITR-1 ON LINE;HOW TO CHECK IF ITR ASSESSMENT DONE OR NOT YET
* FILING OF REVISED ITRs (FOR REBATE ON ARREARS)
* TAX EXEMTION FOR PERSONS WITH DISABILITIES
* NOTICE FROM INCOME TAX
* INCOME TAX RETURN OF THE DECEASED - VERY IMPORTANT
* LINKING AADHAAR AND PAN (INCOME TAX)
* RELIEF ON INCOME TAX FOR ARREARS - RECEIVED IN FY 2016-17
* RELIEF IN INCOME TAX ON ARREARS RECEIVED DURING FY 2015-16
* VARIOUS TYPES OF NOTICES FROM INCOME TAX DEPT
* RELIEF ON INCOME TAX FOR ARREARS RECEIVED
* INCOME TAX RETURNS OF DECEASED
* INCOME TAX EXEMPTION ON DISABILITY
* INCOME TAX RETURNS OF DECEASED
* RELIEF IN INCOME TAX ON ARREARS RECEIVED DURING FY 2015-16
* ITR FILING - DEDUCTIONS
* ITR FILING - DEDUCTIONS PERMITTED
* FILING ITR - 2017 - HOW TO
* TAX-FREE INCOMES
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Highlights of Sec.87A (REBATE).
1.
You must be a RESIDENT INDIVIDUAL
2.
Your Total Income, after Deductions, (as under Section 80C) is equivalent
to or under Rs.5,00,000 (Earlier it was Rs.3,50,000).
3.
The discount is constrained to Rs.12,500 (Earlier it was Rs.2,500).
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Do recall that there are no annual duty chunk rates changes for FY 2019-20. In any case, because of changes in Sec.87A, you can expect that in the event that your assessable pay is under Rs.5,00,000, at that point your expense obligation ought to be zero.
SOME MORE LINKS
All New details Required for filing ITR FY 2018-19 - https://economictimes.indiatimes.com/wealth/tax/all-the-new-details-required-in-income-tax-return-forms-for-fy18-19/articleshow/68860468.cms
ITR filing: Don't make these mistakes to avoid getting tax notice -
https://economictimes.indiatimes.com/wealth/tax/itr-filing-dont-make-these-mistakes-to-avoid-getting-tax-notice/articleshow/69700937.cms
Got a Tax Notice -- https://economictimes.indiatimes.com/wealth/tax/got-a-tax-notice-heres-what-you-should-do/articleshow/69700716.cms
How to get E-Refund - https://economictimes.indiatimes.com/wealth/tax/how-to-get-tax-e-refund/articleshow/69700234.cms
How to Report Tax Exempt Income In ITR - https://economictimes.indiatimes.com/wealth/tax/how-to-report-tax-exempt-incomes-in-itr-1/articleshow/69630173.cms
Filing Your ITR - https://economictimes.indiatimes.com/wealth/tax/income-tax-returns-filing
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2. Please avoid emailing us unless you have first gone through the post in detail and have worked out the solution on your own.
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NOTE - VETERANS NOW CITIZEN OF UNITED STATES OF AMERICA
All those who are US citizens filing Tax Returns in India and US.
Pension earned through Government service is only taxable in the country service provide as per Article 19 (Reproduced below) of the mutual Tax convention signed by both Countries effective from 01 Jan 1991. The amount can be mentioned in US tax return as exempt. Those who have been paying taking credit of the Tax paid in India while filing taxes in US can now claim refund for past three years. Please inform your CPA of this article and claim refund for the past three years.
Artcle 19. Remuneration and Pensions in Respect of Government Service
1. (a) Remuneration, other than a pension, paid by a Contracting State or a political
subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of rendering the services.
2. (a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that
state or subdivision or authority shall be taxable only in that State.
(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
3. The provisions of Articles 16 (Dependent Personal Services), 17 (Directors' Fees), 18 (Income Earned by Entertainers and Athletes) and 20 (Private Pensions, Annuities, Alimony and Child Support) shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.
Col Prasada Rao Kolli (KP) USA
EMAIL - raopkolli@gmail.com
All those who are US citizens filing Tax Returns in India and US.
Pension earned through Government service is only taxable in the country service provide as per Article 19 (Reproduced below) of the mutual Tax convention signed by both Countries effective from 01 Jan 1991. The amount can be mentioned in US tax return as exempt. Those who have been paying taking credit of the Tax paid in India while filing taxes in US can now claim refund for past three years. Please inform your CPA of this article and claim refund for the past three years.
Artcle 19. Remuneration and Pensions in Respect of Government Service
1. (a) Remuneration, other than a pension, paid by a Contracting State or a political
subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of rendering the services.
2. (a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that
state or subdivision or authority shall be taxable only in that State.
(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
3. The provisions of Articles 16 (Dependent Personal Services), 17 (Directors' Fees), 18 (Income Earned by Entertainers and Athletes) and 20 (Private Pensions, Annuities, Alimony and Child Support) shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.
Col Prasada Rao Kolli (KP) USA
EMAIL - raopkolli@gmail.com
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ब्रिगेडियर_नरेन्द्र_ढंड
Brig Narinder Dhand,
Founder & Convener
Veteran's Web Portals.
Brig Narinder Dhand,
Founder & Convener
Veteran's Web Portals.
NOTE - Do Join our Email List - Please email your Rank and Name, Regt/Corps , Email ID and Mob Number to our Managing Member at " mgr.sigs@gmail.com " for Registration to receive updates on Veteran's issues regularly.
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WE WHOLE HEART IDLY WELCOME YOUR COMMENTS , QUERIES, REMARKS AND SUGGESTIONS ONCE THESE ARE PLACED UNDER THE COMMENTS BELOW.
1. Kindly post your remarks under the comments below ending the same with your RANK , NAME and YOUR MAIL ID. Comments posted without your identification, we are sorry, will not be published.
2. Please avoid emailing us unless you have first gone through the post in detail and have worked out the solution on your own.
3. We regret that we have no infrastructure to take on individual tasks on their behalf. Please do not embarrass us by offering donations etc to work for you, we have no commercial leanings.
4. Our aim at Signals Parivaar is to guide so that you can work on it as a "DO IT YOURSELF" exercise. Ours is a "NISHKAAM SEWA" to our Community.
Dear Sir, I think that the under Section 80TTB, only bank FD interests are Counted and not any interest. Please check.
ReplyDeleteOn 03 June I recieved my pay slip from CPPC of Central Bank of India. On perusal of the same I found that Rs 14950/- had been deducted as Income Tax. Recovery of similar amount was deducted as recovery for the month of April 2019.
ReplyDeleteI immidiately initiated a letter to the Bank that I being a Senior Citizen was not liable for deduction of advance Income Tax under Section 207(2). Telephonically I have been intimated that RBI as issued guidelines to deduct TDS on the pensions for all categories. I was also informed that in order to reduce my deduction I should make available details of my savings U/S 80C.
I have asked the Bank official to forward a copy of the RBI guidlines. It woulb be worthwhile that other officers also bring to fore a similar sort of deduction carried out in their payslip. It is only then we will be able to evaluate the suitable action.
Col Jayant Vij
IAM receiving Rs 15000 yearly from LIC as pension on maturity of my policy Jeevan Suraksha. This is a life long annuity. Kindly inform whether this is taxable?
ReplyDeleteThank you for this informative blog.
ReplyDeleteDear Brig Dhand,
ReplyDeleteWith change in rules /Govt instr on disability, many PMR offrs and NANA cases veterans have fought cases in AFT for sanction of Disability element (DE). They have received sanctions of DE in the recent past. They would be receiving /going to receive arrears for DE back dated of 3 /6 /10 yrs .
For veteran with disability 20% and above both service element (SE) & disability element (DE) of pension is exempted from income tax.
Of course, the backdated arrears are also exempted from ITax.
However, the veterans must have paid ITax in previous years when the sanction of DE was not issued. I would like to know:
a. In which para in ITR-1 form pension (SE+DE) is to be reflected for exemption of ITax?
b. Is there any possibility of getting refund of ITax paid in the previous years (as the veteran is exempted ITax from the date of sanction of DE)?
Regards,
Lt Col Jayachandran (retd), Signals
IC 32987K email Id: majayach@gmail.com
If one sells shares held in foreign companies in UK and USA , can we claim double taxation benefits on the sale proceeds , if so how. Regards Col DK Bhattacharya, veteran,Sigs, deekay_18@hotmail.com
ReplyDeleteDear Lt Col Jayachandran of ex Signals Corps
ReplyDeleteRegarding your query on which para of ITR-1 form should a veteran in receipt of disability pension reflect his disability & service element. The form is not ITR-1, but ITR-2 . In ITR-2, go to EI Schedule (Exemption Income) and type under Column 5. "Disability & Service Pension Exempt " and reflect the pension amount given at your Form 26 AS.
Regarding refund of IT paid for previous years of a disabled veteran- No refund of tax will be given if already paid. You will get exemption of Disability & Service Pension from the year your DISABILITY PPO is notified by PCDA Allahabad.
Col Vijaya Kumar B (Retired).
We have added Long Term Captl Gains as required to be filled in ITR 2 for those with shares etc. Thanks Wg Cdr Govinda for providing us the inputs
ReplyDeleteStandard deduction has been increased for this year from 40 K to 50 K.
ReplyDeleteThere is no tax for income below 5 Lakh (Rebate under 87A)