(Meowersd Clouse, “UUs ei Ueda etl 4 i sont Ueptad wad AR tht toa bashed I gutsy | Sonu OLN) bootudes tortie oad prersol [ooneral ae ‘y! d 1 Peomerad wrmdbratct wuttlo got Financial Literac Learning Outcomes After studying this chapter, you should be able to understand: > the basic knowledge of financial literacy; > key concepts in personal finance; > benefits of financial literacy, 1.1 Introduction In the modern society, financial literacy has a significant role. Every person should be taught financial literacy asa life skill to handle their personal finances(The complexity of financial goods, the prevalence of fraud and Ponzi schemes, the need for money to attain « better quality of life after retirement, etc, are justa few of the problems people deal with) These problems have created'a demand for better personal financial management, including proper control of income and expenditure. People who receive financial education become more financially literate and adopt a responsible attitude toward managing their income, expenses, assets, and liabilities, which will chime improve their financial well-being. I For every household, financial planning is a nec; si a jough for financial | planning Jt is a financial commitment with a win pal be done properly-since it is a Strategy (0 conserve and spend money from future Income. ‘i the help of this literature, readers an gain a basic understanding of personal finance, including information on financial planning, key financial literacy concepts, different investment opportunities, wealth creation components, insurance and pension products, retirement planning, warnings against Ponzi schemes, tax-saving strategies, investor protection measures, dos and don'ts of investing, etc. The student will have a better grasp ofand1 nt) “puna dee pvotémncemarinre ean nia Een pein sd ei ant toc ti Coty oon ee, (ooo aa Sl rep de aot (eSeminar a ceed ote es Seti seraenae 1.2 Benefits of Final Leroy (s rove thea of rigor ndnls tea an ne i en Sea eax rset ec fbn Hea “aber ab beter scales 1 etc managers ef eye 1 Geese gapped rach anc 1 SEES Genes ops bee reo 1 Uestnmcal aren and ae 1 ee em gg ms ee i (3 Eee enti rere Zanetti ane ert an portant component of Me a am ee TE tae ene odie be aievenen franca ga 13 Key Concepsin Personal Finance “king re fw cri prion fines at» pron tall be aware of wen MB (0 Wht are sigs? Tre dser boen ce ed eens emer Caceres ane of ure ning saa ae 1 Mpa ect mer open been rane Mt Po cnet clue thea tm sje Mone Spt ina kein Tie asnn ine sabes ev tere pecan ey ison coun burs pa ois ft vy fm ity acolo, Sh Sait __ 2» Pee ine Paaatiny 113 (a) Wht reeset? ‘he a of insing bs puting mane rom si Sa or on Sena ra 3 he ng eeeing ange sere ens ee ae Ses enlistees 2 ap cpt a eer racmieuenceersn atte Sonam ifr been Sis nt nese enone nthe ee Sore Bu ant ‘irate Fan Dap "Ohara ce reduorake myo aoe [ing we le miley nan we maw Be ne ‘mere pw ye etc fk‘ Deen ee | fay [re [compres {5 Whats importa ling nisin? hein mms yt ee ee ana tant ha Yon ae ot on pope cy Ea ee [Sec iCincaeadiags mental oe heater yu proud rapes ers Ser arctic comay shew poe or lean (i) Wha oe sets nd bie? ‘our eset hin yond ve ena al. wee your bse eg youn teh torrsed fete hour ose ort yu te enmeshed ea ‘ifcone hod fyouterrw money ore at staan rm obrker ante pen.you wee feieaa (0) Whats ob etre to mee sul of ony whe expense me Dn fmt aren esp hn Bens hastPana ray 1 elu of Maney? z Principal 1 peer EE Hey od afna tor shee racer moar a Tainan Rae cesrmicaidedetasrttoml eur memany | LS am = ae acini cn i = nal os = a fay meanest nae a a = [se Saiegrhetagemeets men agains eS a So on eee "Secnsemmseaimreataee | yeresepne ecwmertoaoirenenracs en bee S dee nnd eae tae See ee tein ete ac sendy ume emvset twee eho ae eines caret fo (othe teens ie lesen (Banu o cesta, Ne reemseetid ein feet. ocd oun om te ce rs epee ae tere a Te! hw oem tp en _ heed orci ee pc ado forthe wine epost SSS wachnanbeusedionuine sci mien lisse fee a ae SSS eet ssa) hi The 0 bet wear : (a) eRe le ath psd per mana dat) {ea Ho ds ene loves! mahi rc es eh i de (i eae mtr Se Sera penagpec ct Oe Rharesteremaitmes tipsters: | etnias Soe sSetrestax a ian cc the eps tty cst ovate eer ee of inline? ‘Soin 12 years, your money wil ave dou to 400 2) ent eer aa fa fae Co ering (Lada the EYbans 4 shat ae nasty (Gringo tin cei maton rg tn Ct ore ato Seleaataseedincae ‘Ein sunesie — pear ° Se amie yous aad elt Pas pent ening aa nol ata ohare Oe aE Pov cl oe Se ae ieee eases) de eee ca enn ont ee chm ie he mo 8 A Se ers or mn osm ston ba te pina an res atthe bled 7 arnt egmgmng enh dn ae | ea ATS] ae pacar [ Rar | nara = ne a 4 TT rm ~ * ne p00 Fa =| | (1 «sexes eared ay 2000 = | 7 [in ean) | PS ms mm 0 oo © 12 ow et heer hy ie + Fest fomen msi reg ons Te Man aT, + Noa decid Sure TDS on ten Secon ene + Account can be opened in[snge nama a font mh In the case of jl. whan etn zag ep es So os 22 of depositor Def 20m S eo tae bea tha lesen of 00 ove «peed oe spon ne ee sto revere Pe et unt came Te Spe Titra 31500 as) Wy tep mney in bans? ety docs of saniag ah tba nt renh OPPORTUNTTIS- Los of mest coe or Ey chee or ta Doe Nau Cases. 1 SELES Giger Dqots in Bans Crete lpi for Borowing enews adage deh bas ahr than theme, a Banking ecm nk del wt ube nd bd wus hey ae reputed nancial ising SSEESSTIEL Fists ese commen bond At euler es, aks mt wes a pens Te Reserve Ban of nia conducts nana uit of bans. Taresne wth relic isk pol code ba sings. Depending onthe demands of he it bac str of pte Te by ad macy of bak eps ae aed ware tan SSeS tad depo from bk resale up 05090 pet te eqesTi ae ‘A costae cnr Othe goverment unde hel Cen Goverment Deposit tact ‘cache oa ational ad pe es nhat pce bank Deposos alee: promed rch oe evetl stack ete Government wl terveneandecve opiate fant On ey oc oto the Reeve Bak an webs fr deta eta tev Know Your Cent YC] Nees forthe count Opening Process Cre th he in order to open any or ofan acount. "KYC™ a8 He galo EV ute help bun beter know and undead _ in igs opoiyThe KYC damental uk PAY {Sac p acu rece diction (uh a9 copy of PAN cad 8 ‘atures Ucn aan eon (ch apy ofan ey et ‘eee pespr saa cr) + Mos at pec an opens rg Be av tk cue hough th aa lj dno et Sn ang ae 2H endl or umber ode et naan + ATR esate ed afar 7. SOBA corte oil og oer sap kd cnn Stan >. Fed Deposit (2) Account no + motes sinh te bak tra fag atceniniue {ec 7 Mr jot oe Ds he fi See ey + Seer cies my penta on ett 1 Teradata on Fs we on atk 4. Rec Dena RD) Account + ford ancun epost! ont sera pein 1 tami seth ig ue *TOSipisteon cetacean splat ¢ Senior cen my exe enn he te. + Tee and tat iron RD mk 5. Spec Bak Term Dep Scheme Reanmgaden nigh + ele wef 0 he ne TAC. + em epost wi jar oki pero + Nope onan lone.ro fn tae and boing po le plc, evens nda ure tn eset om ny pace et ae cee Boman pre Seeaicar wmet ee Cee Tab ta mem | nor toot ee + Ginn stam the hp tenth er bogs + Canpriesemte — pt thn sn tea ‘qintineenip Sha eee | | ee er erence , | are ep ny une dn ted and aero oe crated he [reeitcentmias a k ecm ny ncurses TFC Cade dn Func em Cade * EgAaetiideen batten) 1 SES ante nym bank tk ‘Gvl) Whats Credit Card ane Debt rah ‘eds cad tarscton: Ts Dota asap, ‘Wiha ad te cade le men what ce sth ot bd ht yy sing os eit sor oe net ee onc Fm a ATM, Deb dw meer aor ations Sa ak [ESTs ett te rast clontecatadatee dy oy tia [Eevee ‘Conparson beeen acedilcrdandadebacatdaelindvbdoe Ti ne Pere So) aE cae —— nal arb a ot Taig a a cs ynte eh nro te an run SC Cale ni iss om eee FAS torr sign ca acl a ete nce Isang sat ep Spe acinar cat er me or Tsar ards ohana pe wisnDPAN Viral Payment ABC 1 ae hd nett ine bate + Ore en dwaend UP este bk apd ogi sing bk eta Now aeore of banks nd bane corepondents A has avedeced cen aw tee oan nd Busines correspondents whos fesse lead able [Na wine fr er oO Sy sonkipwahite [No ompyice w e wo vg aso eh | bok agree ‘hngsto Keep nod whe Wanening raph ATO fumed fer eceig thecal rte ak hang he PN + Aol making any notes af your PLN ser Real Repu PIN ne sm hers + Wipf to wean ATM on nk pope ton pope wea secur ga on dy trod the elo Use we ounl1.12 || Financial Literacy «When utilizing the vietual Keyboards for online ransaction», the bank Is not responsible if the ArMeand has been given fo someone other thai the account holder for &transschion. «Sign up with your bank to receive SMS notifications of transactions, Banks, however, have the right to change clients for sending them cmail or SMS warnings about their accounts. + Change your PINs as often as practical + Notify’ the bank right away ifthe card is missing Dont let anyone use or access your card, 4 (xix) Customer Liability for Unauthorized Banking Transactions , ( (According to the RBI, if an unlavful transaction occurs because of fraud (contributory carglessneds, or (failing on the part of the bank, the consumer is not responsible. Jn a sumilar vein, even in cases where neither the customer nor the bank is at fault but instead another component of the system is at fault. the fy the bank of any unauthorized or illegal activity customer is exempt from liability as long as they not. within three days of receiving a notice from the bank) Additionally, the bank must immediately credit the customer’ account with the sum involved in the transaction. However, in situations when such fraud occurs due to the negligence of the client, the customer will be responsible for paying all losses up until the date that the unlawful transaction is reported. The RBI has made it clear to banks that they must instantly notify consumers via SMS and email when a transaction occurs in their account. In order for 2 _custémer to report any such fraud nghtaway, they have been told to make sure that such messages can also convey the client's reply. (xx) Reserve Bank of India (RBI) The Reserve Bank of India Act authorized the establishment of the Reserve Bank of India (RBI), the nation’s central bank. on April 1, 1935. [The Reserve Bank of India is responsible for overseeing the nation’s monetary and credit systems and implements monetary policy to establish financial stability in India The primary objective of the RBI is to perform comprehensive supervision of the Indian financial sector, which consists of commercial banks, financial institutions. and hon-banking financing firms. It develops, enacts, and oversees India’s monetary policy Maintaining price stabihty and ensuring that credit 1s flowing to productive economic sectors are the central bank's management goals. The RBI governs and regulates the entire Banking system in addition to serving as the goverament of Indias banker. All commercial banks’ lender of last resort is the RBI. Review Questions 1. What do you mean by Financial Literacy with reference to Investment in India? 2. Wnite the difference between Saving in Hanks and Investment in Securities? 3. Know Your Customer (KYC) does is It important for the bank to know their own customer? Explain 4. Write the difference between Digital Banking and Mobile Nanking with illustration ou04 Time Value of Money Learning Outcomes ‘After studying this chaptor, studonts will bo able to: > know the d nition and importance of the tIme value of money; > know the formula for calculating presemt value and future value of money; > solve life question using the formula mentioned above 4.1 Introduction The time value of money is « basic financlal concept that holds that money in the present is worth more than the same sum of money to be received in the future. This Is true because money that you have right now can be invested and carn a return, thus creating a Jarger amount of money in the future, (Also, with future moncy, there is the additional risk that the money may never actually be received. for one reaso or another.) ‘The time value of money concept helps in arriving at the comparable value of the different points of time into equivalent values at particular points of time, present or future. There are two ways by which the cash flows arising at different points of time can be made comparable: dirst by compounding the present money to a future date, and second by discounting the future money receipts to present date, In financial decision-making, interest on funds plays a very crucial role, ‘The LVM concept explain: why the interest is paid on money borrowed. asto ‘The time value of money can work for you or against you. For example, if you are deciding between buying a new phone for ®50000, or invest in a stock for example that ylelds 10% per year. Hf you buy the phone, you have just Incurred an opportunity cost of 10%, In this chapter, we discussed about the time Value of money techniques and {ts application in our life.42 Hehe Timo Value of Monoy Works wedtoshow the tie alae a oa Asuae tht someone alr edt They meer py you ko neal nas ramen Per, "ei Noch pepo shoul you a depend on what i of een en you can Aeaany nie pret tte, Sie F100} HOW of F.00 then you bleve yo ca itor On he ube an ty do hin yu cou etn ave ton 9 nthe et ery a ‘mnwncy the usb! ete fat pyoen of 1,10 =o nga yout peat pet 43 Reason for Time Value of Money Says lero fain 140020 om e.g ths om es {yeu What dncton leu make fou conte thes today ore made he ig ae ‘ease reson by hing pte st opon ter ton ce of nit 3 ale one tha amount of mony cn we strc nd pods han can nt future You hve hte opto nthe pro: ample cae youd ht LA 09 can gt ou mae hing oy tan alg younger le 2 Rls voted Wha nthe pres expe, ou cos 1 sce he one aye, Bethe ou apache the I dor have ay money Beto ou? ‘sco! shapes you youend mone to someone bul they bak fot {anrepey ou Tuas ha thre ta certain ee sk ive iyo hae gy ‘one Hater date 2. Preference for caret consump: In hs expe you choos the preseason {ur communion. er epi avy ound he pee fo cet ‘Seman fey fd itmere lng rue mone fr tie pret ees ting Slothing shee te rater deteing them the tre Asal you per ye and ater an ha oe ected in tre 4. vestmentoportnits: force the money tls, oa wl net hat one ‘Nghe ales tte wceved taro (rier cern pero of) ough een {overtime ae nthe fr of teres ‘Wh hse four ean, we can ly he extene ofthe ease he tine val of 8 44 Importance of Tine Value of Money ‘he ne vale of moncy (TV) se tot in ping you wert he wath of ene ‘soto sme tr rfamue fen sed by isos ter sndntan he ae fay 28 Ccmpurstis vein ante Blo wel goon than ou the TV ou sounded hele ume hton hale ou any = Bie tty 3 selina ay einen name h centre unease ad enmucen oSiap in sone att 45. Components of Tina Valeo Honey ae nD He =e cg ‘move mony aes Sppecnte faut ae mee th nny tree Src amg rt me ‘eee oanceneagrnimeern ‘on the fine vale of yeah iw me HEE oe fate alu (V7 - The te howe he ae ‘aves toy The moun ty that eta by Sa Fre! alae fone oe erent 5 Intima (sda tt pt = iced dc cpa. he eo shen aes Nata eS, ‘becomes negative When payment ae wade = 46 Techniques of Time Value of Money Compounding 1 ces ocomping tee ale nate dao serene mate Brrapariod atime The prosesaliveing mony swells eimesog the uuortnees ee ‘cad composing The fae walt compound var sf sh een ser tice ve he nuestra percent i ~~ RyePvGe Wao ae sha ve rerun he Whe, A PV = Peseta, 1 ltt te, wae val, ne Tinelr ret fro ng th tare alae) ae ware Tn a ne ate acuta wantaknow the tage oe 2 omen Sb eo eg ge wane manny sweet 6? eration (and tee ete mong) 2 Aen revamp: Wht te fre aN Ae 1 EOE yay sonia at re v= kono (tte = 00000» (1.10) = 1009 ra Lgon0 xs)" 10000» (29) = £239.000 soyan Fv Labo (1-0107"= 100000 (175) = 1750000, Secule kn dot ie ae of 0-8™ Haaren Baton te fase amount alae fe ners ae and ine period ow zane Pad bez awa leeing€00 for yeast pr compounded ana Seteuoe pvepva(ient = 6000(1 +0099 60» 1.09 = 600012905 su (Non Are! Compounding ‘he cectf cmpoenin done mae ha nce year can be expres by wing tab for, Fe Pvt sme Where me mabe fee yea compounding mate Ia selene crpoundngm =? Inqunety compound Inox compoandingm = 12 (eeu epost 2080 5 ra, oat het of atari amend = ‘ben thee sm soy hemi Pca. Wht ald be be sete campoanding done uate ni FV foam Het 20e = om wc1-3u a (eee inert ony then ms 2 FV tom «(etawnay 2 lt ned {ie hearings ORE ern i) hcve Rate of Inerest eee nlite ms eh (Calne tn a nl oa ei batt Ee Bete ener pound oo is she pce he ing gee te ne cae et y shows future wale of 21 ater ane yest== Lm ns 901 ee nt mgd eg, E(t &(0F oe {i} Fe Valu of Ser ls Flow When die mount of ath ow iin os yea fo ers of yea thefts ‘gulch How cn esl lst on he tse compounded tere Example MFA depos heed fe 508100150, 100083003 5% The sg, thecompoundg te we ace ear elo Tater [Annual Depeit [Na off Copeandag[ Conponded aoe [AV 5 1s 2 0s ast ‘ 000 1 0s as L Ta978 Ai) Fare Vu of katy ‘anno h seam ean fo pment fi acca sour ine ‘Be prem oun or. eames sna hr Ta ec sslel hati lay Sang When ecw sural bpnng ote yean shoe aay de ample Sup yo et 1.00 aly nth 3 yas al your depts ah +18 omprunel ss Wha wil be the sere fps the endo 3 ea, Asami ht epi ocettheend ote eae There vat he any vate 47 0a. ‘on san el so te pl ae ay ett 2 eee eo etna (n) ature Vou of on Annuity Due ete enon ts ptt Otay dy FV(annuity due) = Annuity amount x CVAF, tian ua rere et A sn al FV fanouity de) = 20,000 CVAF,, » (162) Seastamrcrice canon (See A286 ead stag nee a) Power of Compounding ‘cn ytingmpnae e e ecl ‘ec lon eel ster anti in ‘so money wr rou haste reales eae eer ete power Teonpound an ous hue goat aah meson ornate ee pa ae! bleanashcna eee SLT oar tereae armas rete venient tt cae aaa Ses ata ep aoealn se nsraadeaite te Seach cme mabe occ weheyo a ttt 49 Ses om sh poe aco eee sepa coco hte da che i a ft km me Sinden eta Se nsdn cnepean es Wl SH OF at hg ens So nee ray cuumnerpeot a ea a oS : —[ ere — a 1s | | “es | Soccer ——e — 2 ase | aa (eaeesseo canoe [eae Cas |e EE Seeet tae DR] Sonia erin atnn eS Soe ese anecdote ey ioc Sete cope tsar Ot pectaen oe sary of C1 he amount wll get doubled 96h dy for 50 SRS Eaten tt oa a rea ES eee ott gy erect Sena cetecpatm tsa a eRe Ta enna reesei, {ncraniontene te etx cen stots eos eee Seeerlampeoning bere cansse nina spe eee rela tore a 447 Discounting Ith nding the ps al yo many se Inf Th pen hin fa wee looping eae fe Set Inne Ineo eee poem dora cmarhcavwacl Pres aloft aoun— Femcompoundag whoo ta = PY «(or aor “ocr conyers alpen rae ites li eet nt at veto roe ho wali iets ample Xs ayo cen 40.0 ae oa let Wp mga tana eae et oop Shsgn «078 nea ibe rena to 8 00 ser 3 ye 10%. sousex ve ey fom a bak The dicen, amie Ras 1900072 ash ow Ce ame Fr xml tec fo sn (sexes = comferemmssaah uel anctaneee in eget a ame raiser Scapa ee yon - oa an a ale ie ot oe alae ontopinn satan = "Present value of Cash flows TSE Year | Cables = =e = ss : = >| on oe |e ta nat : os : 164 PV Aantal tot te tor atte sample X cet indo 2500 pr yen noe tome es CAE epee aetna E98 os neem ai ened a (i) Press Vl of Series of gl Fut ah or anty nor ido the ere ul eh owe Uepadied Pret vale a ee om may ihe) zane MM. As deposi 12500 ny rns Po i sg a io Rnd he Pret Veo aut ements, fotaion: so et ae ae eed ined bas es et a Es PV Avouty moans PYAR 25000 PVA ample: sen is awarded chap and etna pl efi er | ow ata reeve 000 Per menth tthe end et mat Whchopsn deo (Rr otiteee 2 pa? Noes ‘Opt: Since fOr now it sey epee a pet cnt ee ot sostuamer bo ‘Opn Since the tof ees 12% pad thea ps of 12 pea he nee per eriad may Bespesed a8. nthe ale rset mated wv ny anoHaEX PYAR = 1000 PYF = Loco sins 1285 Sine. the Pent ae noon 2 ihe than he peat ein cpon the seta onc aon 2eae he presen i tee aoe 1 he ane come as ens fer eS eeu ava Henin or a semua glares ier of etl for 8 se rote ont! sana seoecen cesta ta eta ics under wih 2 peso egal pve any XPV apo 500" PAF vi 2900500; — sexi pre enaconeeninge rie int 7 an a a era 839916 se stats aig yt 2 Detention Grew Res a tert sine conser neers view" =I ‘eune eo echi Me eee The compound pow me Define tax structure of India, > Explain different types of tax prevailing in India, Explain tax authorities of India, + Understand the income tax slabs rate, ‘Compare the old and new tax regime. 13.1 Introduction Jnda offers a well-structured tax system for its population. (Taxes are the largest source of income for ‘icgnvernment, This money is deployed for various purposes and projects for the development of the sabon. ‘The government collects money from the general public in the form of taxes which it uses for ferent developmental schemes and functioning of the economy. The general public may comprise ‘aured people, business peuple, industrialists and many other service providers. All these people pay ‘axe with the expectation that the government would function efficiently. In your lifetime, you definitely ave to pay taxes. The prices that we pay when we buy things in the market, is inclusive of taxes that have beet charged on them{ We bear taxes when we spend money and also when we earn money) Not many ws willingly pert with their hard earned money for taxes. You must have ofien heard your elders’ say, “hat do we get Uhat we should pay taxes?’(Payment of taxes is not only the duty of every cl ‘cual cequusement for existence of out country as a prosperous, secure, stable and a justi St a ers a eo Sipser nee pa ae Someone tenancn eee =e ge Some feccin | | eras i | Banas er eee en eg yi we eho eat pany ter 13.2 Tax Structure of India tn entree can re ot nt =o eg ane es Se Bee eater SSL SS Sey one pera Reston amano ommaafootsstosentes | ce ganegnargnememnpriamre renee nce tele el an Tee edd an ay i | [Seiad are alwed cli open andes os as eee | sp pp epi marie Tee eat 2 ado a eee Sioene means te haa wd 13.3 Types of Taxes deta peduncle Be eon aot {i iconnoopa in tnawesnars toe te ee nay clonanng oon mem ieee ie aoe sn ne toca sey ead nt Tg er oataonenon nde tt apt toe atl Sendai manenng nn Spat 0 Scanners en A eet at ma 0 Spenser Bes mmdcoe pacse Stata hp oe Tet 1 Gd Seven GST hs gn a Gi) Diced Toes ate she Te i enigaaes gt oon Did a ee Seer i leans ax se wpe) hte os a8 (stein pet se aueem eH A Component ES name anima | 4 FST Sub fr Cereal Gand and Services ct the ene pet ean bea ae ti i enter se mee anos unary eyo charges thereee ec Pcl RS Varios Heads Under lace Tex Sele eee Ts 141 Ge Tate Cab Prat et eam te se eee orSee | 1 imone se ce ats pov enene ryote tro ltseeyeodeana cota feta pi SSSR SST ia, pera ety, ci costes | S i “punta ead ee nan oe aris we sta fy a ee oe ST Atos sangre mony nol ERs Scraper ioe Peel a i cet ene + Daten at stoumrmenes "Since nl cis pt ntti ig

Need and advantage of tax planning; > Types of tax planning > Concept af tax evasion, management and tax avoidance, 141 Introduction (Tax Planning may be.described.as a legal way of reducing tax lability ina year by investing indifferent “hemes as prescribed by the income tax Act Itmay also include entering or exiting investment schemes ‘osave the maximum tax possible within the legal framework. 142 Need For Tax Planning: TAX PLANNING Tu payments are compulsory for all individuals in the |! ya by PAX These who DONT bracket. Nowadays tax planning is a must to reduce tur lability by investing in different investment schemes prescribed by the income tax Act; with tax planning, coe will be able to make his/her tax payments such that i ~ cs nen nm Py ptr ‘cor she will receive considerable returns over a specific fetod of time involving minimum risk. Also, effe ‘planning will help reduce a person’ tax liability.MB Rey 143 Advantages of Tex Planing me ne eed oa Sa oa etre 2 To rece aes Fey ape wh ore het brenda (eee me or ora uy omg vere ‘Scoerdenie te cnc Yas ce De cea ee estan can rc ore ly “ > Rpm ender gn set 4 Rim terme whan ene pl nemo, | sole rea ond a a sch ee ates cn + Papo rng gan Satootecion Se 1 sean the potent Tor mings ay tt oma ME se Sayan "EY Pera tie ce ce So se soe 144 Types of Tox Planning Mos pepe mal pve ning ts rn ha is thm ee i eam ee naaete ern Sag atc hg ap iteahcr apa “ath nde rach datntn 1 Shr ange ta planing Und th mos alight ottbetailme inewnrourtmnplmcy mcesnemprccacncoe i || 146 ToxAtidone Seale cgimmareamnea Ramtec || (usin tem any , 2 lepglemurpinig Tec tutiteonnglSctilateuy || densa ET? Ae [pga foo aiouphouttheyew Unlleshr-noge parnng.yumantesteg | [lings aga ea S ase seeds befits Stl an prove cpl in theo rh iene bars ene cee GI 2. Remi pling Ta nll ove enn end ets in =n a Sea ma Frome erica acsen || 2 Menge 145 Tox Erosion ‘xeon hs porn “her cight salg as oe pay pes Tia oy es el es ere ne ee Se) oe i ‘anon done vnc way some te sted expe bow | Ie prseton sc xt {hart tine a) 2 Orato breyani sey i drpr bd wl pasez etal Petes Fg sas tno svn 0) Tan Hg EE eaten em nooo rare Bac eae ee geeaen reer cee Ren So acme Ler crent tai * SOMA tery antennae” «Porm ana any ein cn emia open Nina le cme i np ns pee dep red asa deduction ls 80C of he Kncome "pean range psig 805 na hep + Snag tren om psy a em 36 rt + Satna fer dsr rte ere Se oatrancn tanec cpene ssn srt 1 nds bert atonal teeta me oe anamartn depts 65000 the term posto ere wth the Pow Oe aa Naar enc nesnnyhramehSoomcemerscnconnstrane ce pena pore pe aae ne | RSE Einar conn eel ee Fo mabe inten ay cn Sec pupacetconpanyeyee sotto ‘Cassa se ec nd sat toned mais per of ot eb ly rain see pate Sa bow ten fd es cet ie 9000 ft (© Sey wh te ese, wher gg esr he campy hep a era en egg mieten hepa ge rented Femoral mcrae te Re edna eet; 15 } Income Tax Allowances and Allowances Learning Outcomes Alter studying thls chapter, you should be able to understand: Meaning of allowances and deductions: > Differentiate between exemption and deduction: Deduction and exemption allowed to salaried employees: Deductions with market linked instruments, vv Taxable, non-taxable and partially taxable allowance: Deduction, Exemption not available in new tx regizae 15.1 Introduction Salaried employees form the major chunk of the overall taxpayers in the cc they make to the tax collection is quite significant. Income tat deductions of for saving tax for the salaried class. With the help of tho deductions and exem: reduce his/her tax substantially. In the ‘old tax regume’ there are 120 cempts from all of them. Most of them complicate the direct tax system ARet of Finance has removed around 70 exempions. In the new tax rez: alowed. In this chapter, we try to list some of the mayor deductions tulaied persons, using which one can reduce their income tax Labelity fer a gamet of ofp152 Mecsing of Allowances and Deductions Siseurnechree nena i Tomen ere ne tessa hd Ba ey a Metin an log ef wr nwnee a ersten tla lr et a of eh Aeon vy sal geinge mle ai sascha. unesen Po ksonghes Saeco meee ScEze shes claim eettdetio umes be gos nce ieee, Serratia See ciara me sade eS ence Nawal exten 12 BY yD ht a ther desc soa pa ees seen tse arama heh he an “na ation - The slowed een {hice voces dee oe sae hy Tes detuctn - Deron ean te a Sn en aed eh re Ot es al ee ee cern Stunting Oe Se aa eae . Nee npeskee eh “actnpion emp ur pe ch ele comet nwo pete te amo ‘andelucton Desa ade Bo pe tance TBeeenplon- crite het ch tte etctin-Dliton ase tem sh a at c belea sera here =A A eth a eeasiny Tenn pin at cele ip SS Frc eames Bi feluin apes a he wp uy epee aise ‘tsa a ft mann can debs anremupalirnnede Sst emo a edn ine he ‘oe or oa eye edge you ta pty tas ete a meray hwy mad wea ene La a [) Seittmgretet ec ening ayer Se anna ] mare sen shah or delat nd oeA Financ ey 154 Dedudion ond Exemption 6 Send Ddon (nse i oe eset a ee ee Se naar are a eee oe be atre (@ Felesioral ox / Tex on Eloy (Secon 16) tn ome tes of nt, gece de reais fy Dee Whe one onguiemployers py hose ‘Spey miso s (0) Hats pity aploer cade nal nem setelt ode bycanpy (0 ns pa 6 emre nt Note peso a de bt op hn tt alban ddl in lt ey eed fo a) Chun econ Nowe nd stl xen 2 Hot ender anans ae (i) te rove Avon 8) ahh oe EEN)" a ear Shmwnnatargis aati ‘Io Food Coupons ‘sr Le a eeumtn ee EN serene oe te SSeS Qaimceenneat ees (i) Deo onder Sen 89 (0 tama ay fen at abd omp Tasca BE) Teme] ec ee Tt. ey nna ay spt 822) wwe | |p natu scce nr ereetara NN ee ne rote y wee | | (Eisai [een a te ddan pfeil see} free] sonen 7 ‘name tol tose] | Se [ion SE ES Seo terre eT i a ene sp (0 ening ple pr Pt i teeta ane eh ee ia] | eityersen cnc act me ry dec en |__| f lt Sten uy tk cogs fecme en lary ro sett chery apn See i wrungtn tn ome me Syoienanennta easy | nem | ss, Fein sourbion MSs |p Fecal yee ee [sen aa be ce Eee $fEMCoeedv a perqa te antec oh eplye, Suchs ier a =a aa foo Seceeca | | taanaymnaty a oe ] | nsesteeat tt oon at mtn ct age = oa TT eae fete RT| |] teweseoetonrennimatsinmanieutiee Safa a cae leremmtersmmienmsis] | aditgndlndtdewtes cera ao sialic gaara [ seerentemn non spade mt met Sec sb | 0 peat emer] TE 2, tmmir ale echenpy apo [rao Sd ene of gpl A 2 Rechte etc emt ey meer ote iy etn ithe = Leen serereoem——| || ettmuscmumaener cnn Saar | arta ala i eneapatan SS cee enmeeel si enamel CS oa or |) “"Maccevniscratnnnnte etsy cna aera pao Goes Eta tng Tom pop Say oma ec btn Mela emt ey wt ce se eve by inde ens by (6 The etn on eel eed rm perc a hc fn cies Joma» ac re ee | Shee mien auton cgtmentenn open a, SE ead a a cnn yaa ra i15.8 Paes 15.5 Tax Planning by Avan Rl of Tox {bartonc 208 0b hon ghee rsseehedincee yer 15.6 Income Tox Exemptions Claimed in Specific Cases, ies tte mi Macao ice veer + ont pension esd onal, Tesvernacins | Alowsd a te Une of] Unite lion 1 Say pr punted ke fm mim 3 as ene pre fy al Ste aermem pee in intrenen or mignon rep (i) Lene ences coed gl ee clones fax 5.7. Deduction with “Morkelinked” Instruments too concent inthe mkt inked ec where iskand return the se ds cinta rene at dct below } natlonal Pension Scheme NPS) rs. intodeced on sy 1,209 there addon aay eaves qi rd 4 | cnr bt ann ee, hme se inary ad wat op soe ‘arn ‘heen ls our money wal fennel com Se Asta Ae Under 80 Egat Cte ya ti) 44x Coenen Innes in NS at die br dts ‘mcdctn) However wihova tea ane 2 if 1000p. ut fe a steiheaeh te Betton 1 Egy Unked Savings Schemes.)‘15.8 Taxable, Non-Taxable and Partolly Taxable Allowonces AY 2021.27 7 Ccencneinene f eomedetatae' | maranaay erence] Men a + Rage gene + Alan UN one Sergey lane pape Fipeneconneng ae Texebellovonces, Table arses ar alorances ht setae yar tay nd eer olay EE etae any secton lino Ta Set pops owncs tbat) 1 Enteainment ilowance nrainmetlorance the scant of money ever 1 a8 eoplee nak mer Nae erst odie bran ouings cet cig hl ie Bee else scrape scr sms Hone perme ern sa eee ey ta gow ry xclg aller owns pos le Sorc ewe y peso a spe apne em oe se ere yep compa le vo work arta he peritoneal shes Ay Ovene ‘ceesatonnt) tre nk pans ti se a agree “resp smn Sect eli rt ee a Sintec ae (ahalraneo pe mae wage et Farley cote oy ten Rok mene oie or poet heen cere ach hl eer ern ret Alowance eas oven pies onc o Svoncund compile + de owanee Eneeinerotatancnpins ne Ww ie ep en Wes toring ane t a etn lovones aetna a thaw dh a ‘soe fn ts Hee te ea Hasbanulieetoeer el ns yo pay fn a yh a ot on tae bas overeat Employee Abend Sain rc ya cpa shee te epmaien nt t + MowanesPaldto UNO Emplyees want weal UNO Ferns+ Atowonces Pld to igor ot NCSC ‘Matera Sr ia oo mpg Sen leo ah Co an Sone Gt os ey corny lnc, Povo Toxabl lower io 48 pet speed inthe income Lax roles relatos Some ofthe fray tule lowe ss «+ conveyance Allowance Exempt Unit “hse flwane ea yes fr contig th od ae ame ey omqunesowance teu thon 0, hen al become ss tombe Te hae ‘empl upto 1 on ny amount mon tanh wiles er ees nt lac pe epic hi ae he se lnc enrar moem {func sear ene Ln cepa eee ay ae eee rloyes ea cam deacon on hae et loware wer con 0(12Ah nel HRA red an ne om epoyes ITteemploee renin nm eke De arb Chena once Shoukdteat mach n 305 he bo hy 1 enc ten pad annualy ns 1S fel ry «+ Media Allowance Exemption Jhtaaee dy an eps hen eee ony fis ray ebb | aan antntd hei eames! Hower theme expe ect eta am ek + Specat Allowance J spect aiowance pad an rpc Jen le ma asthe cor fur the psomace of dat. penne adsl ue i / 159 Dedoctions, Exemptions Nat Ava in Propesed te etter ener tet bematety ya RI ee Pee piace eee teen ‘Eton seep Mobeni A ergtosin cues ind dedi Tc wd ee bd eso, * neha hg le ting cm acount of earns ce ‘nar ig 2 10 ene alinone exemption iain tm ar ate ny (0 Now soa erly pd ‘seme ot cen eye ce a a Ta abe (Ded ei under scen to STANT tee ate tap (0) Debio for ety Ne alone sion cand "rtm cee) od ape ‘tun 298 cao Ecvinieeitintntmtniesunerse cs Sata tr eta Single he kote wen ean Daan te ae hy cen acdr oe g he16 Income Tax Return Learning Outcomes ‘After studying this chapter, you should be able to understand: Concept the E-Filing > Ways to do E-filing Benefits of Filing income tax return > Steps to register for E-Filing Documents required for E-filing PAN No 16.1 Introduction to E-Filing E-filiny ing is the short form of electronic filing of income taxes. E- filing is when you ele ctronically file your income tax returns online for a particular year. This means you no longer need to visit the nearest. Income Tax Departments office to file your returns physically. Instead, you log onto the internet and do ee (the process of electronically filing income tax return through the internet is known as ¢-FILING! ling has become very easy with a few steps and can be done by self. ua Who can E-file The following person can file the E-file return. + Individual _* Hindu Undivided Family+ EoMpmON Ar msec hot ene 16.3. 3 Woys todo Efing eran non stery * vg dca RIE CMS re SCout den, SSarhcite earl mnrinany eee ey agree wit yah dag pth lor mmbe ah tan Inthe HRY neue ei nine oC =a 164 Benefits of Filing Income Tox Returns Pigg ci pe geen ampere mtn lig Sete TR gh ig he cn te eae + Immeine Anode eh ng Seem se eye ie «Rf pon of wap in bi tan pi ee Siri cacy i ee eae as See te onlin Spe ea eon ard oes SINE pd Mie ccna pan bf Cue etndd on oe ee aie Si fn arte a al elantarwiaa rans jennie cea ncanecocod mc ntohaoe whe hecedicdappiatsna pin 165 Steps to Regier fr EFing Qn imma Sing he nk piso + So ent + Wd nthe OTP etn emi ane nde ea 166 Steps tod EFling indo — Eling income Tox Press —prrereeen ae Down eT lar ae * IR indus igo ft ti. nn epoca ga ot SEE Int nan Hr yore | ‘Peta Yes Use lining mao Saceasms se tne stm i ago ce aa re ech ube pd oan targa seca amare ok Cmte fing pea fs Tarnfind—[aearvinda afd entanin ora [ssnpes cance starrcndon L at ut tl anon of ewig en 16,7. Documents Required for Eling ‘While ingot the FR frm olin, abe o Keep hte documents anf el General dts + PAN + Aadhat (Lined PAN) coun deta Computime fom sary + Say ais 1 Rent cit for calming Hoste Rent Allowance RA) + orm 6 oe s tem tn bs hig edn 5 ma ndboneon ce me emt hte pany 168 Eeifiction of Ren Ae os th ee ol hp etn schol Reema St en indou ty bring thom Deparment EDC ced you wal son po ea ‘bpeinet i tr pooh "octane ap am src gear, cae cae ate pete onan + Shee Guten pads waereren en & Scans tr dent urine) Te meee nS steal retry he NN trina peestaae aHome pogeforeling of name tar Retin (2. te