Income tax & Tax saving
FY 2022-23
Introduction
Different Sources of Income
Tax regime- Old v/s New
Allowances
Deductions
Form 16
ITR forms
Different sources of income
Salary
Interest Income from savings account, fixed deposit, etc
Income from House property
Dividends from shares, mutual funds, etc (Fully taxable)
Gifts received
▪ From relatives (partners, spouse, siblings of parents) is tax free
▪ From others > INR 50,000 are fully taxable.
Which Tax Regime to choose?
Old Vs New Tax Regime Few Deductions not claimable under
New regime-
OLD ANNUAL INCOME NEW Standard deduction of INR 50,000
NIL Up to INR 2.5 Lakh NIL under Salary
5% INR 2.5 Lakh to INR 5 lakh 5% Professional Tax
INR 5 Lakh to INR 7.5 lakh 10% Allowances under the head of salary.
20%
INR 7.5 Lakh to INR 10 lakh 15%
(HRA, LTA, Children Education
allowance, etc)
INR 10 Lakh to INR 20%
12.5lakh
Chapter VI-A deduction (Section 80C,
30%
80D, 80E, 80TTA and so on, except
INR 12.5 Lakh to INR 15 25% Section 80CCD(2))
lakh
Above INR 15 Lakh 30%
A taxpayer (not having income from
Individuals having net taxable income up to business or profession) can choose
INR 5lakhs can claim rebate u/s 87A and no between new regime and old regime
every year.
tax shall be payable under both old and new
tax regime.
Salary Structure of Company
Basic Salary Structure of Finnable Employees
Basic
House Rent Allowance
Laptop Allowance (if self owned laptop is used)
Mobile Allowance
Conveyance Allowance
Special Allowance
House rent allowance
Amount exempt under HRA is lower of the following:
Actual HRA received
40% -50% (depending on the city) of the basic
Rent paid less 10% of salary
Documents required to claim HRA exemption-
• Rent receipts or Rental agreements
• If payment of rent is more than INR 1lakh per annum, the PAN of the landlord.
80C deductions
A taxpayer can claim deduction up to INR 1,50,000 u/s
80C if he invests in the following: FD -Lock-in period is 5 years and
Interest on FD is taxable.
Public Provident Fund (PPF)
Employees Contribution to Provident Fund PPF- Lock-in period is 5 years
LIC premium and Interest is tax free.
Equity linked saving scheme
Principal amount payment towards Home Loan
Tax saving FD for 5 years
Sukanya samriddhi yojana (SSY) , National saving certificate
(NSC) , Senior citizen savings scheme (SCSS), ULIP
Tuition Fees paid to university, college or school in India.
HOME LOAN DEDUCTIONS- 80C & SEC 24
HOME LOAN DEDUCTIONS- 80C & SEC 24
Particulars Section 24 Section 80C
Tax deduction Interest Principal
Amount allowed INR 2,00,000 INR 1,50,000
Purpose of the loan Purchase/ Construction/ Purchase/ Construction
Repair/ Reconstruction of new house
Property not Interest would be Not applicable
constructed within 5 reduced from INR 2 lakh
years to INR 30,000
Interest certificate has to be
submitted to the employer.
80CCD deductions- National Pension Scheme
80CCD (1)- Maximum deduction is 10% of the salary (Basic+DA)
subject to 80C limit of INR 1,50,000.
80CCD(1B)- Additional Deduction for contribution to NPS which
shall not exceed INR 50,000.
National Pension Scheme
• Minimum contribution INR 6,000 per year.
• Lock in- up to 60 years
• This scheme falls into the category of Exempt- Exempt- Taxable
Other Deductions
Deduction u/s 80D- Medical Insurance Premium
Eligible Deduction Limits( in INR) Total Eligible Deduction u/s
Medical Insurance Premium paid in 80D(including INR 5,000 on
Situations Based on Age respect of preventive health checkup)
Self and Family Parents ( Whether
dependent or not)
No one has attained age 25,000 25,000 50,000
of 60 years
You and your family is 25,000 50,000 75,000
less than 60 years &
Parents are above 60
years
You and your parents 50,000 50,000 1,00,000
have attained the age of
60 years and above
Other Deductions
80E- Interest paid on loan taken for higher studies is fully deductible.
Maximum period to claim deduction is 8 years.
80EEB- Interest on loan taken to purchase electric vehicle up to INR
1,50,000.
80G- Amount paid by the taxpayer as donation to any fund or institution
or charitable Trust subject to certain conditions.
80TTA- Deduction up to INR 10,000 on interest income earned on savings
account.
Professional Tax
If an employee is opting Old tax regime, Professional tax deducted
from the salary can be claimed as deduction.
State Salary (INR) PT per month (INR)
Delhi NIL
Gujarat Above INR 12,000 INR 200
Karnataka Above INR 15,000 INR 200
INR 7,500- INR 10,000 Men - INR 175
Maharashtra Women- NIL
Above INR 10,000 INR 200
Telangana INR 15,000- INR 20,000 INR 150
Above INR 20,000 INR 200
Employee declaration & tax deduction by
employer
Employees are required to give a declaration on investments during the period
April 1st, 2022 to March 31st, 2023.
Supporting for the investments made will be collected by the employer during
the period December 2022 to February 2023.
Based on these, total tax and tax withholding will be computed and deducted
over the year.
Employees are free to report other income including-
▪ Salary from previous employer
▪ House property loss
▪ Interest income
Form 16
Form 16 is a certificate of deduction of tax at source and issued on
deduction of tax by the employer on behalf of the employees.
Form 16 will be issued annually to all employees.
Employee can choose between old and new tax regime.
Part A of Form 16- This will include details of TDS deducted by the
employer.
Part B of Form 16- This includes details of salary paid, other
incomes, deductions allowed, tax payable etc.
ITR forms for salaried individuals
ITR-1 ITR-2
• Resident individuals having income • Income from
< 50 lakhs ✔ Every income from ITR-1 >50 lakhs
✔ Salary/ Pension ✔ Capital gains
✔ Others Sources ✔ More than 1 house property
✔ One House property ✔ Foreign income/ Foreign asset
• Holding directorship in a company
• Holding unlisted equity shares
