New Direct Tax Code in 2011-2012, India

Government of India has proposed a new Direct Tax code or Direct Taxes Code to replace the old Indian Income Tax Act of 1961. This Direct Tax code is an attempt to simply the tax-life of an individual. The way it works is that the income tax slabs are increased, however several deductions (e.g. deduction on housing loan) and tax-breaks are taken away. A detailed post will be written about Direct Tax Code. Below you will find the proposed income tax slabs under the Direct Tax code will be debated in the Parliament and if approved, will be implemented in 2011-2012.

Income Tax rates or Tax Slabs under Direct Tax Code : Table

Direct Tax Code slabs, 2011-2012, Men

Income: upto 1.6 lacs	no income tax
Income : 1.6 lacs to 10 lacs	10 %
Income : 10 lacs to 25 lacs	20 %
Income : above 25 lacs	30 %

Direct Tax Code slabs 2011-2012, Women

Income : upto 1.9 lacs	NO TAX
Income : 1.9 lacs to 10 lacs	10 %
Income : 10 lacs to 25 lacs	20 %
Income : above 25 lacs	30 %

Direct Tax Code slabs 2011-2012, Senior Citizen

Income : upto 2.4 lacs	NO TAX
Income : 2.4 lacs to 10 lacs	10 %
Income : 10 lacs to 25 lacs	20 %
Income : above 25 lacs	30 %

Education cess and surcharge on total income tax

It is not clear whether education cess and surcharge will be applicable on income tax collected under direct tax code. According to the current indian income tax act, in addition to the income tax calculated according to the above income tax slabs, a 3% of Education cess is charged on the total Income tax paid (not on the total taxable income). If the taxable income exceeds Rs. 10 lacs, a 10% surcharge on the total income tax (not on the total taxable income) is also charged.

Posts related to Income Tax rates in India Direct Tax Code Rates 2011-2012 Income Tax Rates for year 2010-2011 Income Tax Rates for year 2009/2010 Income Tax Rates India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

Read more ...

Income Tax Rates 2010-2011

Below you will find Indian Income Tax slabs decleared in Budget 2010, for the financial year 2010-2011. These ITslabs have been increased slightly (i.e. the tax rate has been reduced) as compared to the IT slabs for 10-11. Below you will find a detailed table of Income Tax slabs for men, women, and senior citizen. These tax rates are applicable for the financial year 2010-2011, i.e. effective from 1st April 2010 to 31st March 2011.
You may also like to use the quick-easy-to-use this Income Tax Calculator on the website of IT department or download this Tax Calculator (Excel Spreadsheet) for calculating your tax for A.Y. 2010/2011.

Income Tax rates or Tax Slabs 10-11 : Table

Income Tax Slabs 2010/2011 for Men

Income: upto 1.6 lacs	no income tax
Income : 1.6 lacs to 5 lacs	10 %
Income : 5 lacs to 8 lacs	20 %
Income : above 8 lacs	30 %

Income Tax Rates 2010/2011 or Women

Income : upto 1.9 lacs	NO TAX
Income : 1.9 lacs to 5 lacs	10 %
Income : 5 lacs to 8 lacs	20 %
Income : above 8 lacs	30 %

Income Tax rates 2010/2011 for Senior Citizen

Income : upto 2.4 lacs	NO TAX
Income : 2.4 lacs to 5 lacs	10 %
Income : 5 lacs to 8 lacs	20 %
Income : above 8 lacs	30 %

Education cess and surcharge on total income tax

In addition to the income tax calculated according to the above income tax slabs, a 3% of Education cess will be charged on the total Income tax paid (not on the total taxable income). If the taxable income exceeds Rs. 10 lacs, a 10% surcharge on the total income tax (not on the total taxable income) is also charged.
Related: Indian Income Tax Act - Tax Deductions, Tax Exemptions, Section 80C,80D,80DD,80E, etc.

Posts related to Income Tax Rates India Direct Tax Code Rates 2011-2012 Income Tax Rates for year 2010-2011 Income Tax Rates for year 2009/2010 Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

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HRA stands for Housing Residence Allowance. Everybody whose salary package includes HRA is potentially eligible for HRA. Most, or I think all government employees have HRA as part of their salary package. In order to get HRA not only must your salary package mention about it, but you must also be be paying rent for your accomodation. After all, HRA is allowance for Housing Rent. Are you eligible for HRA? Read this post to find out how you can claim tax deduction for HRA and the maximum tax exemption limit allowed.

You can get HRA only if you are paying rent for your housing more than 10% of your salary. In most cases, the rent, especially in cities is well above salary. For the purpose of this discussion on HRA, salary means your basic + dearness allowance.

The best part is that you can deduct HRA from your taxable income ! The amount of tax deduction you can claim for HRA is the smallest amount of the following three items:

1. HRA recieved. How much HRA you recieve will depend on your salary package. Refer your latest pay slip to check the exact amount of HRA recieved.
   
2. 40% of your Salary (i.e. Basic + DA). If you are in Mumbai, Delhi, Chennai or Kolkata then it is 50% of your salary.
3. Rent Paid in excess of 10% of your salary. (i.e. Rent - 10% of (Basic+DA)).

The smallest of the above amounts will be tax exempt part of HRA. The remaining part of HRA will be taxable.

Example of HRA Tax deduction and exemption limit

Suppose your

1. Basic + DA is Rs. 20,000/-. per month.
   
2. The rent your pay is Rs. 10,000/- per month.
3. HRA you recieve is Rs. 12000/- per month.

Then the smallest of the above amount, i.e. Rs. 10,000 is tax exempt. The remaining part of your HRA, i.e. Rs. 2000 in this example, is taxable.

Additional important Facts about HRA - You cannot claim rent paid to your spouse for HRA tax deduction. You can however claim rent paid to your parents for HRA tax deduction. Thus if you are living with your parents, it is possible to 'show' that you pay rent to your parents (you may have to get reciepts as proofs of rent paid) and claim HRA tax deduction.

Note that the Indian Income Tax Act allows several provisions for tax relief coming from your housing. For e.g. you can claim tax deduction for Interest paid on housing loan under Section 24, you can claim tax deduction for principal part of housing loan under Section 80C, Rent Paid under Section 80GG (when you do not get HRA). Be sure to take benefit of one of these provisions if it applies to you and consider it accordingly in your tax planning. Little attention to tax laws may save you a lot of Tax.

Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

Read more ...

Income Tax Deduction under Section 80C

Although it may not be able to completely avoid your tax liabilities, there are several deductions and exemptions allowed by the Indian Income Tax Act (for e.g. Section 80C, Section 80D, Section 80DD, Section 80G, Section 24, etc.) which help you reduce your taxable income and thus help you save taxes. One of the most common income tax deductions is Section 80C. One reason why Section 80C is the most popular is that it encourages people to do monthly savings from their income. This post discusses details of Section 80C and how to take maximum benefit of Section 80C for your personal tax planning. If your taxable income is in the highest tax bracket, then taking full advantage of deductions provided by Section 80C can help you reduce your taxable income by Rs. 1 lakh, which means that you can save about Rs. 33,000 taxes by provisions of Section 80C.

You may also be interested in reading my post on : Indian Income Tax deductions, Tax Exemption Limits for Section 80C, Section 80D, Section 80DD, Section 80G, Section 24, etc.
Understanding all tax deductions is important for your income tax planning.

What type of deductions are allowed under section 80C? Tax Exemption limit.

For the financial year 2009/2010 (as well as 2008/2009) Section 80C allows a maximum deduction of Rs. 1 lakh from your taxable income for money invested in one or all of the following.

1. Life Insurance premium: Any contribution to premium paid for Life Insurance policies, e.g. LIC policies, is eligible for income tax deduction under Section 80C. Note that apart from premium of your own policie's premium paid for Life Insurance policies of your spouse (wife/husband) or your children is also eligible for exemption under Section 80C. Income tax tip: If you and your wife/husband both have LIC policies, and your spouse's taxable income is in the lowest slab (i.e. he/she has does not have to pay income tax anyway) then you can show both your and your spouse's LIC premium and get more benefit of deduction under Section 80C.
   
2. Provident Fund: Any contribution made to Provident Fund can be deducted from your taxable income according to Section 80C. Note that for most of the salaried employes, a fixed amount gets automatically deducted from your salary every month. Note that this amount qualifies for tax exemption under Section 80C. You can also increase this contribution to Provident fund (Voluntary provident fund or VPF) and the increased contribution also qualifies for deduction under Section 80C. You can also open a Public Provident Fund or PPF account and any money saved in your PPF account qualifies for deduction under section 80C. PPF accounts can be opened in most of the well known banks and the minimum investment allowed for PPF account is Rs. 500 while the maximum investment allowed is Rs. 70000.
3. Fixed deposits, National Saving Certificate (NSC): Any amount invested in Fixed deposits of term period greater than or equal to 5 years is eligible for tax exemption under section 80C. This is a recent amendment and in my opinion on of the best risk free saving options where you can save money as well as take benefit of Section 80C deduction. Moreover you can get benefit of your savings just in 5 years as compared to PPF option above where you will have to wait for 15 years or certain Life insurance policies where the maturity period is usually over 10 years. Amount invested in National Saving Certificate (NSC) is also eligible for deduction under Section 80C.
   
4. Mutual Fund Investments in ELSS: Investments in certain type of mutual funds called Equity Linked Savings schemes or ELSS are eligible for income tax deduction under Section 80C. Note that not all mutual fund investments qualify for 80C deduction. All mutual funds which qualify for 80C or belong to the ELSS category have a lock-in period of 3 years and most (although not all) have something like 'tax saving' in their name , e.g. SBI Magnum Tax Gain, Reliance Tax Saver, etc. Before planning any mutual fund investments for the purpose of tax planning under Section 80C, it is advisable to make sure whether that Mutual Fund is an ELSS.
   
5. ULIPs - Unit Linked Insurance Plans - ULIPS or Unit Linked Insurance Plans are a combination of Life Insurance as well as stock market investment or mutual fund investment. Money invested in ULIPs is eligible for deduction under Section 80C.
   
6. Principal Part of the Home Loan: If you have bought a new house and have a housing loan for this, then you can take benefit of Section 80C deduction. The EMI or Equated Monthly Installment you pay for your housing loan has two components - The Principal Part and the Interest. The principal part is tax exempt under Section 80C. Note that even the interest part is eligible for tax deduction, not under Section 80C but under Section 24. If you pay rent for your house and dont recieve an HRA, even the rent is eligible for tax deduction but again under some other section, Section 80GG and not Section 80C. Read more about Tax deductions other than Section 80C.
7. Stamp Duty and Registration Charges: Stamp duty charges and registration charges paid while purchasing a new house are eligible for tax deduction under Section 80C.
8. Tution Fees: Amount paid as tution fees for education of one or two of your children is exempt from Income Tax and you can use it as tax deduction under Section 80C.

How to use Section 80C for your tax planning?
Which tax saving options of Section 80C are best for you?

There are numerous tax deduction options under Section 80C mentioned above which you can take benefit of. Which option is best for you? In planning your tax and savings for the current financial year it is useful to keep the following in mind.

1. Keep in mind that the total amount of exemption allowed by Section 80C for financial year 2008/2009 (as well as 2009/2010) is Rs. 1,00,000. For any mount invested or saved in excess of Rs. 1,00,00 you do not get any further tax relief from Section 80C.
   
2. If you pay tution fees, or have just bought a home, then you should definitely take benefit of (6) and (7) deduction options of Section 80C mentioned above. In this case you do not have to do any additional investment or saving to take benefit of Section 80C.
3. In case you are going to need money in the near future (i.e. next few years, say for e.g. you are planning to have a baby, buy a house etc.) then go for those tax saving options of Section 80C which have short term maturity period and are risk-free. For example Fixed Deposits is the best 80C option in this case. As compared to PPF which typically have a maturity period of 15 years, in fixed deposits you can get your 80C money back in 5 years. ELSS also has a 3-year lock in period which means you can get your money invested in ELSS after 3 years. However investments in mutual funds involve risk and you must understand the risks before you make any investments.
   
4. I personally do not prefer ULIPs as their fees and charges are somewhat hidden and not easy to understand. So for Section 80C or otherwise, i would prefer ELSS+Life Insurance separately to ULIP alone.

Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

Read more ...

There are various Income tax deductions or tax exemptions as allowed by the Indian Income tax Act. These tax deductions allow you to subtract an amount from your taxable income and thus help you to save tax ! Understanding these income tax exemptions can help you save tens of thousands of rupees in income tax every year. Below I have listed all important income tax deductions in a table, and then after the table there is an explaination of each section of Indian Income tax act in detail. I hope these deduction and tax exemption limits will help you for your tax planning this year. I have also included links to the official page of Indian Income Tax so you can actually go there and verify the information yourself.

Indian Income Tax deductions, Tax exemption limits

Financial year 2008/2009 (will be updated later for 2009/2010)

Income Tax Deductions Explaination	Maximum deduction allowed Remarks
Income Tax deduction - Section 80C Provident Funds, Life Insurance premia, ELSS, Bank deposits (>5 yr.), tution fees, principal part of EMI on housing loan, etc.	Maximum tax deduction or tax exemption limit: Rs. 1,00,000
Income Tax deduction - Section 80D Premium in health insurance of you, your spouse, children or dependent parents	Maximum tax deduction or tax exemption limit: Rs. 15000 (tax exemption limit for senior citizen is Rs. 20000)
Income Tax deduction - Section 80DD Medical treatment (including insurance) of disabled dependent	Maximum tax deduction or tax exemption limit: Rs. 50000. (Rs. 75000 if disability is severe, e.g. >80%)
Income Tax deduction - Section 80E Interest paid on educational loan taken for higher education of you, your spouse or children.	Maximum tax deduction or tax exemption limit: no limit !
Income Tax deduction - Section 80GG House rent in excess of 10% of income, if no HRA is received.	Maximum tax deduction or tax exemption limit: Rs. 2000 per month or 25% of your gross salary, whichever less.
Income Tax deduction - Section 24 Interest paid on housing loan.	Maximum tax deduction or tax exemption limit: Rs. 1,50,000
Income Tax deduction - Section 80G Donations	Maximum tax deduction or tax exemption limit: 100% of donation amount for special funds(see below), 50% of donation amount for all other donations.

Indian Income Tax deduction - Section 80C (official page India Income Tax Act)
Section 80C of Indian Income Tax Act is the most popular because it is directly related to tax deductions for your monthly savings or life insurance. In financial years 2008/2009 and also in 2009/2010 the maximum income tax deduction allowed under section 80C is 1,00,000. The following is a list of important ways in which a taxpayer can get benefit of section 80C of Indian Income Tax Act.

1. Provident Fund (PF): Any contributions to Provident Fund, Voluntary provident Fund (VPF) or savings made in Public Provident Fund (PPF Account) are eligible for income tax deduction under section 80C of Indian Income Tax Act.
   
2. Life Insurance Premiums: Any Life Insurance premiums (for one or more insurance policies) paid by you for yourself, your spouse or your children is eligible under income tax deduction under section 80C of Indian Income Tax Act.
   
3. ELSS Equity Linked Saving Schemes: Any investment made in certain Mutual Funds called equity linked saving schemes qualifies for section 80C deduction. Please note that not all mutual fund investments are eligible for this deduction. Some examples of ELSS funds are
   : SBI Magnum Tax Gain, HDFC Tax Saver, HDFC Long term advantage, etc.
   
4. ULIP (Unit Linked Insurance Plan): Investments made in certain ULIPs of Unit Trust of India and LIC of India are eligible for 80C deduction.
5. Bank Fixed deposits or Term deposits of >5 years: According to a relatively new provision amount saved in fixed deposits of term at least five years is eligible for income tax deduction under section 80C of Indian Income Tax Act.
   
6. Principal part of EMI on Housing Loan: If you are paying EMI on a housing loan, note that the EMI (equated monthly installments) consists of two parts - principal part and interest part. The principal part of the EMI on your housing loan is eligible for income tax deduction under section 80C. Note that the interest part is also eligible for tax deduction, however not under section 80C but section 24. (read below). If you do not own a house but pay rent for it, see section 80GG of Indian Income Tax Act below.
   
7. Tution Fees: Amount paid as tution fee for the education of two children of the assessee is eligible for deduction under section 80C of Indian Income Tax Act.
8. Other 80C deductions: Amount saved in National Saving Certificate (NSC), Infrastructure Bonds or Infra Bonds, amount paid as stamp duty and registration charges while buying a new home are eligible for income tax deductions under section 80C of Indian Income Tax Act.

Indian Income Tax deduction - Section 80D: (official page Indian Income Tax Act)
Section 80D of Indian Income Tax Act is especially useful if your employer does not cover your health or medical expenses. It is a good idea to get medical insurance or health insurance for you, your spouse, dependent children or dependent parents, as you can claim a deduction of upto Rs. 15000/- per anum for the premia paid on this insurance. For senior citizen this limit is Rs. 20000. With effect from 1-4-2009, you can claim the total of the following items for deduction under section 80D.

1. Total amount of premium paid for health insurance of family (meaning spouse + children), or Rs. 15,000 , whichever less.
2. Total amount of premium paid for health insurance of your parents or Rs. 15,000, whichever less.
   

Thus if you are paying premiums of mediclaim policies for your spouse children and parents you can get a total tax deduction of upto Rs. 30,000.

Indian Income Tax deduction - Section 80DD: (official page India Income Tax Act)
Section 80DD of Indian Income Tax Act provides provision for tax deduction if you incurred medical expenditure for a dependents who are disabled. Here dependent means spouse, children, brothers, sisters or any one of them. The maximum tax deduction provided by section 80DD is Rs. 50000 in case of ordinary disability and Rs. 75000 if the disability is severe. The definition of severe disability is as defined in the official page of Indian Income tax Act.

Indian Income Tax deduction - Section 24: (official page India Income Tax Act)
Whenever you take a housing loan build or buy a new home, the interest payable on this home loan is eligible for income tax deduction under section 24. Maximum deductible amount, i.e. maximum interest you can claim for income tax deduction under section 24 is Rs. 1,50,000. In case you are paying interest on money borrowed for renovation of your home, even this may qualify for tax deduction under section 24 of Indian Income Tax Act. (see official page or ask in a comment).

Indian Income Tax deduction - Section 80GG: (official page - India Income Tax Act)
If you pay rent for the house that you are staying in and do not get HRA, any rent you pay in excess of 10 percent of your salary is eligible for income tax deduction under section 80GG of Indian Income Tax Act. The income tax deduction you can claim is the minimum of the following amounts.

1. Rent you pay minus 10% of your salary.
2. 25% of your gross total income.
3. Rs. 2000/- per month.

Indian Income Tax deduction - Section 80E: (official page India Income Tax Act)
Under section 80E of Indian Income Tax Act, any amount of interest paid on educational loan taken for your higher education or higher education of your husband / wife or children is deductible from your taxable income. Here higher eduction means - studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics.

Indian Income Tax deduction - Section 80G: (official page India Income Tax Act)
Donations made to funds like Prime Minister's Relief Fund, National Children Foundation, any University or educational institution of 'national eminence', etc. (see official page for complete list) are deductible from your taxable income according to section 80G of Indian Income Tax Act. For any other donations you are eligible to take income tax deduction for 50% of the donation amount. See the offical page of Indian Income Tax Act.

Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

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The budget for 2009/2010 is out. Income Tax slabs for the financial year 2009/2010 remain unchanged. They are the same as income tax slabs for the financial year 2008/2009. The income tax slabs are mentioned below. You may also like Income Tax Calculator (Excel Spreadsheet)- 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010).

update July 6 2009: A new Budget for 2009/2010 was presented by Pranab Mukherjee today. Income Tax slabs have been increased slightly (by Rs. 10,000 for men & women and Rs. 15,000 for Senior Citizen). The following income tax slabs are updated.

Income Tax Slabs 2009/2010 for Men

Income: upto 1.6 lacs	no income tax
Income : 1.6 lacs to 3 lacs	10 %
Income : 3 lacs to 5 lacs	20 %
Income : above 5 lacs	30 %

Income Tax Slabs 2009/2010 or Women

Income : upto 1.9 lacs	NO TAX
Income : 1.9 lacs to 3 lacs	10 %
Income : 3 lacs to 5 lacs	20 %
Income : above 5 lacs	30 %

Income Tax slabs 2009/2010 for Senior Citizen

Income : upto 2.4 lacs	NO TAX
Income : 2.4 lacs to 3 lacs	10 %
Income : 3 lacs to 5 lacs	20 %
Income : above 5 lacs	30 %

In addition to the income tax calculated according to the above income tax slabs, a 3% of Education cess will be charged on the total Income tax paid (not on the total taxable income). If the taxable income exceeds Rs. 10 lacs, a 10% surcharge on the total income tax (not on the total taxable income) is also charged.
Related: Indian Income Tax Act - Tax Deductions, Tax Exemptions, Section 80C,80D,80DD,80E, etc.

Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

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How to track your India INCOME TAX REFUND status online?
IT returns 2008/2009

Have you already filed your Income Tax Refund and are waiting for your refund cheque? Indian taxpayers can now easily track income tax refund status online. All you need is your PAN CARD number. The following indian income tax refund tracking link works for the latest financial year. i.e. currently it works for financial year 2008/2009. After March 2009, it will work for 2009/2010 and so on.

Click on : Track your Refund Status Online

Have you forgotten your PAN CARD number or dont have it available right now? Indian Pan card holers can easily find it out by clicking on the link below.

Click on: Know your PAN.

(you will need to enter your exact surname on your PAN CARD and birth date)
Related: Indian Income Tax Act - Tax Deductions, Tax Exemptions, Section 80C,80D,80DD,etc.

Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

Read more ...

There are several advantages of paying your income tax online. For example you dont have to go personally to get a challan and stand in a queue for getting the receipt of payment, no need to write cheques or deposit cash. All you need to file your income tax online is to have an internet banking account in one of the banks listed in a link below and a PAN Card. Here is how you can pay your income tax online.

1. First you need to have a transactions enabled internet banking account with one of the banks listed in this Bank list.
2. Next, go to the website e-Tax Payment and select the Challan applicable to you. For payment of Income Tax you need to select Challan No./ITNS. 280. Most of you will need to fill in this challan. A complete list of challans is given below.
   
3. After selecting or clicking on that Challan fill in your details like PAN card information, etc.
4. After filling your details, a confirmation screen will be displayed. If the taxpayer confirms the data entered in the challan, it will be directed to the net-banking site of the bank.
5. Login to the net-banking site with your user id/password (the one used for internet banking) and enter payment details.
6. On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.

List of Challan's available for paying your taxes

1. Challan No./ITNS 280 - for payment of Income Tax and Corporation Tax.
2. Challan No./ITNS 281 - for payment of Tax Deducted at Source / Tax Collected at Source (TDS/TCS) from corporates or non-corporates.
3. Challan No./ITNS 282 - for payment of Security Transaction Tax, Hotel Receipts Tax, Estate Duty, Interest Tax, Wealth Tax, Expenditure Tax /Other direct taxes & Gift tax.
4. Challan No./ITNS 283 - for payment of Banking Cash Transaction Tax and Fringe Benefits Tax.

Questions? visit FAQ about e-payment of your tax or Income Tax Department.
You may also like to
read : Latest Income Tax Slabs, Tips, Deductions.
download : free Income Tax Calculator Excel Spreadsheet.

Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

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Here you will find easy to read information income tax system in india for the latest financial year 2008-2009. The following topics are discussed in this post and you may scroll down directly to the topic you are looking for.

• Income Tax Slabs.
• Exemptions/Deductions : 80C, 80D, 80DD, 80DDB, 80E, interest on housing loans.
• Tax on Bank Interest and Capital Gains.
• Three more types of taxes which every investor must know.
• Tips for saving income tax.
  
• Which Income tax return form should I use ? (download forms and instructions)
  
• Latest Income Tax Calculator - India (2008/2009) : Excel spreadsheet available for free preview and download.
  

You may also read my latest posts on Indian Income Tax Act - Tax deductions under various sections OR Section 80C: How to save upto Rs. 33000?

If you are interested in knowing how to pay your income tax online, click on How to pay your income tax online.

Income Tax Slabs - India (2008/2009)

For Men

upto 1.5 lacs	NO TAX
1.5 lacs to 3 lacs	10 %
3 lacs to 5 lacs	20 %
above 5 lacs	30 %

For Women

upto 1.8 lacs	NO TAX
1.8 lacs to 3 lacs	10 %
3 lacs to 5 lacs	20 %
above 5 lacs	30 %

For Senior Citizen

upto 2.25 lacs	NO TAX
2.25 lacs to 3 lacs	10 %
3 lacs to 5 lacs	20 %
above 5 lacs	30 %

In addition to above, a 3% of Education cess will be charged on the total Income tax paid (not on the total taxable income). If the taxable income exceeds Rs. 10 lacs, a 10% surcharge on the total income tax (not on the total taxable income) is also charged.


Exemptions / Deductions for Income Tax 2008/2009

Type of Exemption / Deduction	Maximum allowed deduction
Deduction under section 80C: Pension + Provident Fund + ELSS (tax saving mutual funds) + Life Insurance	Maximum: Rs. 1,00,000
Deduction under section 80D: Medical Insurance or Mediclaim policies	Maximum: Rs. 15,000 For senior citizen, Maximum : Rs. 20,000.
Deduction under section 80DD:Medical expenditure, insurance for treatment of a disabled dependant.	Maximum: Rs. 50,000 If disability is server (>80%) then Rs. 75,000.
Deduction under section 80DDB: Medical treatment of spouse, parents, sibblings, dependants.	Maximum: Rs. 40,000.
Deduction under section 80E: Interest on loan taken for higher education.	Maximum: Rs. 40,000.
Interest paid on Housing Loan	Maximum: Rs. 1,50,000 per year.

Income tax on Interest earned on Fixed deposits- 2008/2009

It is mandatory to pay income tax on interest earned on fixed deposits. To calculate your income tax, simply add the amount of interest earned to your total annual income and use the above tax slabs to calculate your tax. If the interest earned on a fixed deposit exceeds Rs.10,000/- then income tax will be deducted at source. It is possible to avoid TDS (TDS means Tax deducted at source) by splitting the amount in a number of fixed deposits. However, one will still have to pay tax.


Capital Gains Tax 2008/2009
Long term capital gain: Gain or Profit that you make after holding (i.e. buying and then without doing any trade) shares, equity, Futures and Options(F&O), bonds, mutual funds for more than one year. Currently you do not have to pay income tax on Long term capital gain.

Short term capital gain: Gain or Profit that results from trading equities, F&O, mutual funds, etc. within a span of less than one year. (i.e. profits which dont qualify for long term capital gains come under short term capital gains. Currently, i.e. in 2008/2009, short term capital gain tax is 15%.

Click here to read more about Capital Gains and Capital gain tax.


Other Types of Taxes for Investors - 2008/2009

Type of Tax / Description	Limit / Details
STT: Securities Transaction Tax : Tax charged while trading securities like equities, options, etc. (stt is directly charged by your broker)	Equities: 0.02% of the transaction amount Options premium: 0.017% , charged to the seller
Service Tax: Charged on brokerage amount directly by the broker.	12.5% of the brokerage amount.
DDT: Dividend Distribution Tax : Tax charged to institutions distributing dividend (Investor's do not pay DDT)	Equity Funds: 0% (no DDT) Money market and Liquid Funds: 25% Debt Funds: 12.5%

Tax Saving Tips to minimize your Income Tax

• Take full advantage of deductions allowed under 80C : If you find it hard to balance between savings for avoiding tax and your current expenses, try to invest in ELSS (Equity Linked Savings Scheme) Mutual Funds (or tax saving mutual funds) with dividend pay out option. With dividend option, you will also get part of your money back. For example, if you invest Rs.50,000 and get Rs.10,000 back at dividend, then effectively you invest only Rs.40,000 but get full tax benefit for 50,000/-. The dividend paid out is also currently tax free. However mutual fund investments carry a risk factor.

• Use deductions allowed under 80DDB, 80E, 80DD whenever applicable.
  

• Invest part of your Liquid cash in Liquid Funds: Liquid funds offer tax advantage over short term fixed deposits, especially when your total taxable income is in the highest bracket. The income tax one would have to pay on interest earned on short term in this case would be roughly 33% while the dividends paid out Liquid funds are subject to only 25% of DDT (Dividend distribution tax). This tax is paid by the fund itself before distributing the dividend and the dividends in the hands of the Investor are tax free.

• Plan for a Housing Loan: It makes sense to take a housing loan even if you have the money to buy a house. A simple calculation would show that once your taxable income is in the highest bracket, this strategy is beneficial.
  

• Cutting down Short term Capital Gain Tax: I will mention one standard and well known method for traders to cut down your short term capital gain tax. For example, if a company declares a dividend, you can buy its shares just early enough to get the dividend and immediately sell the shares after the dividend is declared. Since price of the share would fall after the dividend, that would show as a loss of capital and reduce the amount of your capital gain. The dividend you get will be tax free. This strategy would work best in a stable market and the risk involved would considerably increase if the markets are volatile.

• Leave travel allowance (LTA): This is one more way of getting tax exemption on part of your income. I will add more about LTA later in this post.
  

Which form should I use for filing IT returns?

Form	Description
ITR1 (most popular) (download ITR1, download instructions)	for Individuals having income from Salary, Interest (e.g. Fixed Deposits), Pension, Agricultural Income
ITR2 (download ITR2, download instructions)	for Individuals and HUF* having income from above sources and/or House Property, Capital Gains but not having income from business.
ITR3 (download ITR3, download instructions)	for Individuals and HUF who are partners in firms but not carrying out any business of profession under propreitorship.
ITR4 (download ITR4, download instructions)	for Propreitary Business Owners

*HUF=Hindu Undivided Family.

This single page post has answer to all your questions : What are the latest income tax slabs for 2008/2009? What the the latest income tax rates? How can I take benefit under different types of income tax deductions and exemptions in India? What are tips for income tax planning in order to save or minimize income tax? Which forms should I use to file my income tax returns? What are different types of taxes like STT, DDT, Capital Gains tax? Where can I download Income Tax returns forms and instructions?

If you have any other questions regarding Income tax in India or tax planning, deductions etc. plesae ask your questions in the comments section.

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This is a FREE Indian Income Tax Calculator for the financial year 2008-2009, available for free preview and download. Enter your annual income, deductions and calculate your income tax. The calculator is very easy to use and looks as shown below. You can download the Income Tax calculator in excel spreadsheet format by clicking on

Download Latest Income Tax Calculator - India - 2008/2009 - Excel spreadsheet

The above calculator takes into consideration the 3% education cess and 10% surcharge on taxable income exceeding 10lacs. Click here for details on income tax slabs for the financial year Apr 2008 to Mar 2009.

If you do not want to download anything, and are interested in a no download, or online Income Tax calculator, you may find one on the Indian Income Tax department website. To access that calculator click here. For this India Income Tax calculator, no download is necessary.

Related posts:

• Income Tax made easy
  
• How to pay your income tax online?
• Indian Income Tax Act - Tax Deductions, Tax Exemptions, Section 80C,80D,80DD,80E, etc.

Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

Read more ...