Income Tax Rate Slab For F. Y. 2017-18 ( A.Y. 2018-19)

As per Budget 2017 proposed by our Fin. Minister  on 01.02.2017 new revised income tax rates in case of every individual (other than those mentioned in (ii) and (iii) below or HUF family or every Association of Persons or Body of Individuals, whether incorporated or not, or every Artificial Judicial person referred to in Sub-clause (VII) of Clause (31) of Section 2 of the Act (not being a case to which any other Paragraph of Part III applies) are as under : -

BUDGET 2017-  PROPOSED
INCOME TAX RATE CHART FOR F.Y. 2017-18
INCOME LIMIT		TAX RATE		SAVE AMOUNT
		F.Y. 2016-17	F.Y. 2017-18
INDIVIDUAL TAX PAYERS     (BELOW 60 YEARS)	UPTO 2.5 LAKH	NIL	NIL	NIL
	2.5 LAKH – 5 LAKH	10%	5%	12500
	5 LAKH – 10 LAKH	20%	20%	12500
	10 LAKH - ABOVE	30%	30%	12500

In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year -

BUDGET 2017-  PROPOSED
INCOME TAX RATE CHART FOR F.Y. 2017-18
INCOME LIMIT		TAX RATE		SAVE AMOUNT
		F.Y. 2016-17	F.Y. 2017-18
INDIVIDUAL TAX PAYERS     (BETWEEN 60 YRS – 80 YRS	UPTO 3.0 LAKH	NIL	NIL	NIL
	3.0 LAKH – 5 LAKH	10%	5%	10000
	5 LAKH – 10 LAKH	20%	20%	10000
	10 LAKH - ABOVE	30%	30%	10000

In the case of every individual, being a resident in India, who is of the age of 80 years or more at anytime during the previous years -

BUDGET 2017-  PROPOSED
INCOME TAX RATE CHART FOR F.Y. 2017-18
INCOME LIMIT		TAX RATE		SAVE AMOUNT
		F.Y. 2016-17	F.Y. 2017-18
INDIVIDUAL TAX PAYERS     (ABOVE 80 YRS	UPTO RS.5 LAKH	NIL	NIL	NIL
	5 LAKH – 10 LAKH	20%	20%	NIL
	10 LAKH - ABOVE	30%	30%	NIL

The amount of income tax computed in accordance with the preceding provisions of he Paragraph shall be increased by a surcharge at the rate of :-

(1) 10% of such Income Tax in case of a person having a total income exceeding Rs.50.00 Lakhs but not exceeding Rs.1.00 Crore.

(2) 15 % of such Income Tax in case of a person having a total income exceeding Rs.1.00 Crore.

*Rebate U/s 87A is applicable as earlier for those whose income is below Rs.5.00 Lakh.

From AY 2018-19, this rebate shall be available only for individuals having income up to Rs. 3,50,000/-

Further up to AY 2016-17, rebate u/s 87A was restricted to Rs. 2,000/- . 

Rebate was later increased to Rs. 5,000/- w.e.f. AY 2017-18. 

Now, w.e.f. AY 2018-19, rebate has been deflated to Rs. 2500/-.

It means, having regard to exemption limit of Rs. 2,50,000/-, tax could have bill NIL for Income up to Rs. 2,70,000/- up to AY 2016-17. 

For AY 2017-18, tax could be NIL on Income up to Rs. 3,00,000/-. 

For AY 2018-19, tax again would be NIL up to 3,00,000/-, because of tax rate being reduced to 5%.

Hence the reduction in tax rate by 5% has been compensated by reducing rebate u/s 87A.

Read More

How To Make Claim in Insurance ?

What is Claim in Insurance?

Let’s talk about claim. Claim is the demand that the insurer (i.e. LIC of India) should redeem the promise made in the contract. Then the insurer settle the claim after satisfying himself that all the conditions and requirements for settlement of claim have been complied with.

Types of claims:-

An insured person can make claim according to condition complied to contract between Insurer & Policyholder. Claim can be made against Maturity; Death or by Surrendering a policy.

In Money Back Policy, LIC or other Insurance company also pays Survival Benefit Payment before the date of maturity.

How to Make Claims and what are the documents required for?

(A)Maturity Claims:-

When Life Insurance Policy is maturing, the insurance company will usually send intimation prior to due date at least two to three months in advance of the date of maturity with maturity amount payable details.

Policy holder should contact his servicing branch to know about claim procedures & sets of documents required. The Insurance Company asks for following documents:

(          1)Maturity Claim Form No. 3825

(          2)Original Policy Bond

(          3)Discharge Voucher with witness sign

(          4)NEFT Details with cancelled Cheques

(B)Death Claims :-

When a person with life insurance policy dies, claim intimation should be sent to the insurance company as early as possible. The Assignee or the Nominee under the policy can do this with the help of his agent or relative.

The claim intimation should contain information like Date, Place and Cause of Death. The Insurance Agent should help the Insured Person Family or Assignee to deal with the Insurance Company. The Insurance company will respond and ask for the following document :

(       1)Maturity Claim Form No. 3825

(       2)Certificate of Death

(       3)Original Policy Bond

(       4)Discharge Voucher with witness signature

(       5)NEFT Details with cancelled Cheques

*If the policy has been assigned in favour of any other person or entity like any Loan provider company – the claim amount will be paid to the assignee who will give discharge.

(C) Surrender of Policy : - Please visit post How to Surrender LIC Policy?

Read More

Insurance And Tax Savings

Earlier we says for Insurance nowadays we also add Insurance with Tax Savings. Mostly people invest for tax saving purpose. And before taking any insurance plan peoples ask how much tax benefit they may get!

Here highlighting some LIC Plans with tax benefit as per Income Tax Act.

1) Deductions Under Section 80C  

   

    (i) Life insurance premium paid in order to effect or to keep in force an insurance policy on the life of the assessee or on the life of the spouse or any child of assesee and in the case of HUF, Premium paid on the life of any member thereof under an insurance policy, (Other than a contact for a deferred annuity) issued on or before the 31st day of March 2012 shall be eligible for "deduction only to the extent of 20% of the actual capital sum assured or actual  premium paid whichever is less." 

   And issued on or after the 1st day of April 2012 shall be eligible for "deduction only to the extent of 10% of the actual capital Sum Assured or Actual Premium paid  whichever is less".

     Where the policy, issued on or after the 1st day of April 2013, is for insurance on life of any person, who is - 

     (a)a person with disability or a person with sever disability (Section 80U)

     (b) Suffering from disease or ailment as specified in the rules under section              80DDB.

   (ii) Contribution to deferred annuity plans in order to effect or to keep in force a contract for deferred annuity, on his own life or the life of his spouse or any child of such individual, provided such contract does not contain a provision to exercise an option by the insured to receive a cash payment in lieu of the payment of annuity is eligible for deduction.

  (iii) Contribution to Annuity Plans like - New Jeevan Dhara, New Jeevan Dhara -I and Jeevan Akshaya -VI.

Under Section 80CCC

 New Jeevan Nidhi Plan & New Jeevan Suraksha - I Plan :- A deduction to an individual for any amount paid or deposited by him from his taxable income in the above annuity plans for receiving pension is allowed.

*The aggregate amount of deductions under U/S 80C, 80CCC & 80CCD (1) shall not in any case exceed Rs.1,50,000/- (Rupees One Lakh Fifty Thousand)*

2) Deductions Under Section 80D

a)    Deduction allowable upto Rs.25,000/- if an amount is paid to keep in force an insurance on health of assessee or his family (i.e Spouse & Dependent children) or any contribution made to the central Government Health Scheme or such other scheme as may be notified by the Central Government in this behalf or on account of Preventive health check-up of the assessee or his family.

b)    Additional deduction upto Rs.25,000/- if an amount is paid to deep in force an insurance on health of parents or on account of Preventive health checkup of the parent of the assessee, whether dependent or not.

(c) In case of HUF, deduction allowable upto Rs.25,000/- if an amount is paid to deep in force an insurance on health of any member of that HUF.

(d) If the sum specified in (a) or (b) or (c) is paid to effect or keep in force an insurance on the  any person specified therein who is a senior citizen, then the deduction available will be up to Rs.30,000/-. Here senior citizen means the person who is of sixty year or more during the previous year.

(e) In case the amount are paid in (a) or (b) or (c) on account of preventive health check up, the deduction for such amounts shall be allowed to the extent it does not exceed in aggregate Rs.5,000/-

(f) For the purpose of deduction, the payment shall be made by  - any mode, including cash, In respect of any sum paid on account of preventive health check up and Any mode other than cash in all other cases.

(g) the insurance as mentioned above shall be in accordance with the scheme framed by (i) the GIC of India or any other insurer approved by IRDA.

3) Deductions Under Section 80DD

Jeevan Aadhar Plan - Deduction from total income upto Rs.75,000/- allowable on amount deposited with LIC under Jeevan Aadhar Plan, Jeevan Vishwas for maintenance of an handicapped dependent (Rs.1,25,000/- where handicapped dependent is suffering from severe disability)

4) Exemption in respect of commutation of Pension under Jeevan Suraksha & Jeevan Nidhi Plans : 

Under Section  10(10A)(iii) of the Income Tax Act, any payment received by way of commutation of pension out of the Jeevan Suraksha & Jeevan Nidhi Annuity Plans is exempt from Tax.

5) Income Tax Exemption on Maturity / Death Claims proceeds under section 10(10D) :

As per Section 10(10D) of the Income Tax Act, 1961, any sum received under a Life Insurance Policy, Including the sum allocated by way of Bonus on such policy is exempt from tax where the sum s received as a death benefit. However, to get exemption under above section for sum received other than death benefit.

* Policy shall not be issued under Section 80DD(3)  Or

* Policy shall not be issued as Keyman Insurance Policy  Or

* Policy which has been issued on or after April 1, 2003 and the premium paid      in any of the years during the term of the policy not exceeding 20% of the          Actual Capital Sum Assured.

* Policy which has been issued on or after April 1, 2012 and the premium paid      in any of the years during the term of the policy not exceeding 10% of the          Actual Capital Sum Assured.

Where the policy issued on or after the 1st day of April 2013 is for insurance on life of any person, who is - 

(i) a person with disability or a person with severe disability as referred to in section 80U, or 

(ii) Suffering from disease or ailment as specified in the rules made under section 80DDB,

*Exemption under this section shall be available only if the premium payable in any of the years is not more than 15% of the actual Capital Sum Assured.*

Read More

Income Tax Rate Slab for Financial Year 2016-2017 (A Y 2017-18).

It again time to recalculate our Income Tax liability on the basis of our Net Total Taxable Income. Tax is calculated on the basis of Income Tax Rate announce by Government every year in their Annual Union Budget in this month of February.
Government announced Income Tax Rate Slab for Financial Year 2016-2017 ( Assessment Year 2017-2018).

Normal Income Tax Rate applicable to a Resident Individual below the age of 60 years; Non-Resident Individual; Resident/Non-Resident HUF, AOP, BOI, and Artificial Juridical Person.

NET INCOME RANGE	INCOME TAX RATE	EDUCATION CESS	HIGHER SECONDARY EDUCATION CESS
Upto 2,50,000/-	NIL	NIL	NIL
Rs.2,50,001 - to- Rs.5,00,000	10% of (Total Income - Rs.2,50,000/-)	2% of Income Tax	1% of Income Tax
Rs.5,00,001 - to -Rs.10,00,000/-	Rs.25,000/- + 20% of (Total Income - Rs.5,00,000/-)	2% of Income Tax	1% of Income Tax
Rs.10,00,001 - to -Above	Rs.1,25,000/- + 30% of (Total Income - Rs.10,00,000/-)	2% of Income Tax	1% of Income Tax

Normal Tax Rates Applicable to a resident individual of the age of 60 years or above at any time during the year but below the age of 80 years.

NET INCOME RANGE	INCOME TAX RATE	EDUCATION CESS	HIGHER SECONDARY EDUCATION CESS
Upto 3,00,000/-	NIL	NIL	NIL
Rs.3,00,001 - to- Rs.5,00,000	10% of (Total Income - Rs.3,00,000/-)	2% of Income Tax	1% of Income Tax
Rs.5,00,001 - to -Rs.10,00,000/-	Rs.20,000/- + 20% of (Total Income - Rs.5,00,000/-)	2% of Income Tax	1% of Income Tax
Rs.10,00,001 - to -Above	Rs.1,20,000/- + 30% of (Total Income - Rs.10,00,000/-)	2% of Income Tax	1% of Income Tax

Normal Tax Rates applicable to a Resident Individual of the Age of 80 Years or Above at any time during the year.

NET INCOME RANGE	INCOME TAX RATE	EDUCATION CESS	HIGHER SECONDARY EDUCATION CESS
Upto 5,00,000/-	NIL	NIL	NIL
Rs.5,00,001 - to -Rs.10,00,000/-	20% of (Total Income - Rs.5,00,000/-)	2% of Income Tax	1% of Income Tax
Rs.10,00,001 - to -Above	Rs.1,00,000/- + 30% of (Total Income - Rs.10,00,000/-)	2% of Income Tax	1% of Income Tax

After taking the Deductions Under Section 80 (C) to 80 (U), and Rebate 87A(Applicable to those whose Total Income is below Rs.5,00,000/-) 
the tax is payable after adding the Cess and Surcharges (If applicable)
The Surcharge is levied @ 15% on the Amount of Income Tax where Net Income Exceeds to Rs.1 Crore. In case where Surcharges is levied, the Cess will be levied on the Tax Amount plus Surcharge.
Extract of Section 87A is as follows :-
The following section 87A shall be inserted after section 87 by the Finance Act, 2013, w.e.f. 01-04-2014 :
Rebate of income-tax in case of certain individuals:

87A. An assessee, being an individual resident in India, whose Total Income does not exceed Five Hundred Thousand Rupees (Rs.5,00,000/-), shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of two thousand rupees, whichever is less.

Read More

Know-What is ULIP ???

A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that unlike a pure insurance policy gives investors the benefits of both insurance and investment under a single integrated plan. Unit Linked Plans refer to Unit Linked Insurance Plans offered by insurance companies. These plans allow investors to direct part of their premiums into different types of funds (Equity, Debt, Money market, Hybrid etc.)

History:-

The first ULIP was launched in India in 1971 by Unit Trust of India (UTI) with the Government of India opening up the insurance sector to foreign investors in 2001 and the subsequent issue of major guidelines for ULIPs by the Insurance Regulatory and Development Authority (IRDA) in 2005, several insurance companies forayed into the ULIP business leading to an over abundance of ULIP schemes being launched to serve the investment needs of those looking to invest in an investment cum insurance product.

Working Principle:-

 A ULIP is basically a combination of insurance as well as investment. A part of the premium paid is utilized to provide insurance cover to the policy holder while the remaining portion is invested in various equity & debt schemes. The money collected by the insurance provider is utilized to form a pool of fund that is used to invest in various markets instruments  (debt & equity) in varying proportions just the way it done for mutual funds. Policy holders have the option of selecting the type of funds or a mix of both (debt and equity) based on their investment need and appetite. Just the way it is for mutual funds, ULIP policy holders are also allotted units and each unit has a net asset value (NAV) that is declared on a daily basis. The NAV is the value based on which the net rate of returns on ULIPs are determined. The NAV varies from one ULIP to another based on market conditions and the fund’s performance.

Features:-

ULIP policy holders can make use of features such as top-up facilities, switching between various funds during the tenure of the policy, reduce or increase the level of protection, options to surrender, additional riders to enhance coverage and returns as well as tax benefits.

Types:-

There are variety of ULIP plans to choose from based on the investment objectives of the investor, his risk appetite as well as the investment horizon. Some ULIPs play it safe by allocating a larger portion of the invested capital in debt instruments while others purely invest in equity. Again, all this is totally based on the type of ULIP chosen for investment and the investor preference and risk appetite.

Charges:-

Unlike traditional insurance policies, ULIP schemes have a list of applicable charges that are deducted from the payable premium. The notable ones include policy administration charges, premium allocation charges, fund switching charges, mortality charges and policy surrender or withdrawal charge. Some insurer also charge “Guarantee Charge" as a percentage of Fund Value for built in minimum guarantee under the policy.

Risks: -

Since ULIP returns are directly linked to market performance and the investment risk in investment portfolio is borne entirely by the policy holder, one need to thoroughly understand the risks involved and one's own risk absorption capacity before deciding to invest in ULIPs.

Providers: -

There are several public and private sector insurance providers that either operate solo or have partnered with foreign insurance companies to sell nit linked insurance plans in India. The public insurance providers include LIC of India, SBI Life and Canara Life while some of the private insurance providers include ICICI Prudential, HDFC Life, Bajaj Allianz, Aviva Life Insurance & Kotak Mahindra Life.

Advantages: -

(1) ULIP has limited liquidity. One needs to stay invested for a minimum   period of time as specified in the policy before redeeming the units.

(2) ULIP gives you flexibility to invest as per your risk profile, financial commitments and convenience. You can choose to invest either in equity or in debt or in hybrid fund and even change your investment    strategy. Unit Linked Plans offer you a wide range of flexible options such as   -- 

        (a)  The option to switch between investment funds to match your changing needs.

       (b) The facility to partially withdraw from your fund, subject to charges and conditions.

       (c) Single premium additions to enable the policy holder to invest additional sums of money (Over and above the regular premium) as and when desired, subject to conditions.

(3) Market Linked Returns:  ULIP give you an opportunity to earn market- linked returns as part of the premiums are invested in market linked funds which invest in different market instruments including debt instruments and equity in varying proportions.

(4) Life Protection, Investment and Savings: ULIP offer the twin benefits of life insurance and savings at market-linked returns. Thus you have     the opportunity to invest you money to earn higher returns, while     taking care of your protection needs. Investing in unit linked plans    helps to inculcate a regular habit of saving and investing. Which is important for building wealth over the long term?

(5)  All ULIPs offer Tax benefits under section 80C upto a maximum of Rs.1,50,000/-

Read More

Missed To File Income Tax Return In Time…. You Missed These Benefit

Did you missed to file Income Tax Return in Time or thinking that I have Refund / Zero Tax so I can file my ITR upto 31st March. Failing this you are also loosing some benefit / facility also provided by Income Tax Department. For your information some important points are highlighted here:-

* Avoiding interest under section 234A
Though interest under 234B and 234C is levied if there is tax due and taxpayer did not pay advance tax. Taxpayers can avoid paying interest under section 234A by filing their return on time. This interest is charged @ 1% per month. It is calculated from the due date till the date on which you actually file your return.


*Loss of Interest on Refund
If your calculation shows Refund and did not file ITR in its due course then you will loose interest @1% per month on the Refund Amount which is calculating from April to date on which your refund get process  .

* Faster Refund Process 
Income tax department has been processing refunds faster for returns filed on time. Delays in filing also mean delay in receiving refund. Last year, the department processed refunds within 2-3 weeks of filing. So if excess TDS has been deducted on your income, do not delay your filing.

* Revise Return Filing is Possible
Many times; taxpayers commit mistakes while submitting their returns. Forgetting to claim a deduction is common errors. Sometimes an income may not have been included. Filing your returns by due date makes revision possible.

* Carry Forward of Losses
A lot of taxpayers have short term losses from equity shares. These losses can carried forward in your tax return and set off from capital gains in succeeding 8 years. To be able to do this, your return must be filed within the due date. Losses from business and profession are also allowed to be carried forward when return is filed on time. So remember to file on time if you have losses.


* Paying Tax Dues Timely
A lot of taxpayers see a tax due in their return after they consolidate their incomes and prepare their submission. This may happen due to inclusion of interest income. If there is a tax due, interest keeps accumulating until it is paid. So filing on time makes sure taxes are paid in time and interest (under sections 234B and 234C) does not keep adding up. Why shell out extra money when you can file on time and save on penal.

Read More