gunturboy26 (Self Employed) (217 Points)
30 December 2015Senior citizen woman has these income sources.
Service pension 3.3 lacs
Family pension 2.7 lacs
Interest on FD 2 lacs
Is this correct? total income is 8 lacs, senior citizen exemption is 3 lacs so remaining taxable income is 5 lacs. From 3-5 lacs tax at 10% is 20,000, from 5-8 lacs tax at 20% is 60,000. So total tax is 20,000+60,000=80,000.
Does 15,000 exemption for family pension apply? then tax is 80,000-15,000=65,000.
How much will be the tax? 80,000 or 65,000?
Many thanks in advance.
Stranger
(.)
(5531 Points)
Replied 31 December 2015
Dear, Rs.15,000/- is deduction u/s-57(iia) & not a tax rebate. Please refer the following:
Calaculation of Total Income of Mrs. X for the A.Y. 2015-16
Income u/h Salaries
Pension = 3,30,000
Income from other Sources
Family Pension = 2,70,000
Less: Deduction u/s-57(iia) = 15,000 = 2,55,000
(1/3 rd or pension or Rs.15,000, whichever
is less)
Interest Income on FD = 2,00,000 = 4,55,000
Gross Total Income = 7,85,000
Less: Deductions u/s-80C to 80U = Nil
Total Income = 7,85,000
Calculation of Tax Payable
Upto Rs.3,00,000/- = Nil
Rs.3,00,001/- to Rs.5,00,000/- = 20,000/- (10% of Rs.2,00,000/-)
Rs.5,00,001/- to Rs.7,85,000/- = 57,000/- (20% of Rs.2,85,000/-)
Total Tax Payable = 77,000/-
Add: Education Cess @ 3% = 2,310/-
Net Tax Liability = 79,310/-
Less: TDS = Nil
Self Assessment Tax = 79,310/-
(u/s-140A)
Notes:
(1) Service pension received is assumed to be the uncommuted pension.
(2) It is assumed that no TDS u/s-194A has been deducted on interest on FD amounting to Rs.2,00,000/- due to submission of Form 15H.
(3) Assessment Year assumed as 2015-16.
(4) It is assumed that the assessee is a resident senior citizen, hence there will be no liability on account of advance tax as the assessee doesn't have any income u/-h "PGBP".
(5) It is assumed that the assessee has paid the self assessment tax within due date, else interest u/s-234A @ 1% p.m. from the date after due date as per sec-139(1) to the date of furnishing of return or date of regular assessment u/s-144, whichever is earlier, will also be chargeable.
Hope your doubt is cleared now.
gunturboy26
(Self Employed)
(217 Points)
Replied 31 December 2015
Thank you for the very detailed information Stranger.
1)The service pension and family pension are uncommuted, she recieves both pensions every month.
2)How can she submit 15H as her income is more than 3,00,000? She did not submit 15H, and the bank will deduct tds and pay the remaining interest. They did the same last time.
3)Yes, it is for this financial year 2015-2016.
4)Yes, she lives in India.
5)As 2015-2016 financial year is not over yet, so did not pay any tax.
Thank you very much Stranger. It helped.
Stranger
(.)
(5531 Points)
Replied 31 December 2015
Since no information regarding TDS on FD is given by you (as it is related to P.Y. 2015-16), I thought it's related to P.Y.2014-15. Hence I assumed that assessee might have submitted Form No.15H, by declaring income lower than exemption limit to escape from TDS as sometimes assessees used to do this either intentionally or unintentionally
.. Anyways you are always welcome dear..
gunturboy26
(Self Employed)
(217 Points)
Replied 31 December 2015
Thanks for the reply Stranger.
So, she does not have any other exemption except the 3 lacs senior citizen exemption and 15,000 deduction from the family pension.
BTW, what is P.Y? i know about Assessment Year and Financial Year.
Stranger
(.)
(5531 Points)
Replied 31 December 2015
No dear no other exemption besides the slab rate exemption & deduction u/s-57(iia). However, the assessee can make eligible investments or payments by 31st March, 2016 to claim deductions under Chapter VIA.
As per Sec-3 of the IT Act, 1961
"For the purposes of this Act, "previous year" means the financial year immediately preceding the assessment year".
Provided that, in the case of a business or profession newly set up, or a source of income newly coming into existence, in the said financial year, the previous year shall be the period beginning with the date of setting up of the business or profession or, as the case may be, the date on which the source of income newly comes into existence and ending with the said financial year.
Hope ur doubt is cleared now...
gunturboy26
(Self Employed)
(217 Points)
Replied 31 December 2015
Thank you for the detailed information Stranger.
So Previous Year 2015-2016 is same as Financial Year 2015-2016.
Stranger
(.)
(5531 Points)
Replied 01 January 2016
Yes dear, for income tax purpose, there is no difference between F.Y. & P.Y as w.e.f. A.Y. 1989-90, all assessees are required to follow a uniform F.Y. (i.e.,1st April to 31st March) ,i.e., uniform P.Y. Though in case of a newly set-up business or profession, they can be less than 12 months too but can never exceed 12 months. However, for accounting purpose, F.Y. can be for a period of 12 months or less than 12 months or more than 12 months.
As per sec-2(41) of The Companies Act, 2013, F.Y. has been defined as 'the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up'. While there are certain exceptions included, this section mandates a uniform accounting year for all companies and may create significant implementation issues.
Hope ur doubt is cleared now...
gunturboy26
(Self Employed)
(217 Points)
Replied 01 January 2016
Thank you for the detailed information Stranger. Yes, everything is clear now.
Thank you very much for all the help.
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