Tax Planing for Salaried person ( FY 2018-19)

Tax Planing Time : Useful Income Tax information for Salaried Person for FY 2018-19 

As we are in last quarters of the 2018 - 2019 tax year, As a salaried person we need to think about tax planning for this financial year.According to Indian Tax law, there is mandatory tax deduction requirement by employer if employee falls in the ambit of taxation. So usually employee need to submit tax declaration(Basically investment declaration) in the start of every financial year to employer and on the basis of it TDS has deducted on average basis throughout  whole year on monthly basis.

So main concern start when employer asked for original proofs of investment/expenses which is normally happens in last quarter of financial year and on the basis of these documents tax has to revise and final computation of tax has made.

Are you worried that you have not utilized all the tax saving provisions? 

If you have already made the provisions and investments, then it’s no big deal for you. But in case you are one of the late movers, time has come to make fast moves.

In this article we brings the useful information which are helpful for every salaried person :

1. From Fy 2018-19, there is new standard deduction has provided of Rs 40,000, will replace the  existing transport allowance of Rs 1600 per month and medical allowance of Rs 15,000 per annum which are usually deducted from the gross salary and claimed as an exemption. 

2. From Fy 2018 -19, there is a hike of cess by 1%, in the name of Health Cess, making it effectively 4% ‘Health and Education Cess’.

3.There is no change in Income Tax Slabs :

The Income Tax Slabs for the Financial Year 2018-19 would continue to be as follows

For Individuals (resident or non-resident) upto 59 years
Upto 2,50,000	NIL
2,50,001 – 5,00,000	5%
5,00,001 – 10,00,000	20%
10,00,001 & Above	30%

For resident individuals who are 60 years and above but below 80 years
Upto 3,00,000	NIL
3,00,001 – 5,00,000	5%
5,00,001-10,00,000	20%
10,00,001 & Above	30%

For resident individuals who are 80 years and above
Upto 5,00,000	NIL
5,00,001 – 10,00,000	20%
10,00,001 & Above	30%

Surcharge too has not undergone any change from that of AY 2018-19
- Income from Rs 50,00,001 – 1,00,00,000              10% of tax
- 1,00,00,001 & Above                                             15% of tax

4. Salary From More Than One Employer : 

Where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the tax payer may choose) from the aggregate salary of the employee, who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head "Salaries" due or received from the former/other employer and also tax deducted at source therefrom, in writing and duly verified by him and by the former/other employer. The present/chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer).

5. Savings from HRA Deduction : Read our recent blog on HRA Deduction (https://bit.ly/2RaPIk3)

6. Tax Savings from Investment and specified expenses (like 80C , 80D ,80GG etc )

  

Broadly here you deal with the provisions of Sec 80C/Sec 80 CCC, 80G and 80 CCG. You are primarily expected to invest in any of the products listed in these sections and in return you get the benefit of paying lesser tax. But there is an upper limit to this. For both section 80C and section 80CCC the upper limit collectively is Rs 1,50,000.

     Other deduction available :

     

 Note : we will share separate blog for detailed analysis for all deduction under chapter VI.

7. Section 80GG Deduction for Rent Paid . : 

If you do not receive HRA from your employer and make payments towards rent for any furnished or unfurnished accommodation occupied by you for your own residence, you can claim deduction under section 80GG towards rent that you pay.(Need to fulfilled some conditions)

8. Information regarding Income under any other head:  

Section 192(2B) enables a taxpayer to furnish particulars of income under any head other than
"Salaries" ( Only Loss under the head Income from house property allowable) received by the taxpayer for the same financial year and of any tax deducted at source thereon. The particulars may now be furnished in a simple statement, which is properly signed and verified by the taxpayer in the manner as 5 prescribed under Rule 26B(2) of the Rules and shall be annexed to the simple statement.

Reach out to us if you have any questions taxmunshi@gmail.com and we will be happy to address your queries !

Praveen Chandolia

Partner
TaxMunshi.in
Contact us for all taxation & related queries at
Email id : taxmunshi@gmail.com, 
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