Key Income Tax Provisions That Every Taxpayers Should Understand
Taxes are unavoidable in the society that we are living today but there are several ways in which you can reduce or minimize their impact. If you want to manage your taxes well then you should have a proper tax plan. Failure to plan means that you will not get anywhere. When you don’t know to calculate your taxes what are you supposed to do? It is advisable for you to hire a tax professional who can assist you meet your tax returns target. Today paying taxes has been made easy because you can hire a tax professional to assist you. Below are some of the key income tax provisions that you as a tax payer need to understand in order to avoid confusion:
1. Any money that is donated in cash to registered charitable organizations or trusts is fully allowed despite the fact that this money is not more than Rs. 10,000
2. Any donation that is made to an electoral trust or to a political party is eligible for deductions of 100% or u/s 80GGC.
3. Any expenditure that has been incurred on preventive health check-ups of individual/parents/spouses or dependent parents should be deducted u/s 80D to around Rs. 5,000 and this can apply even when cash has been paid.
4.Under Chapter VI A there is a maximum deduction and this deduction has been extended from the year 2015-16 to Rs. 1,00,000 to around Rs. 1,50,000. They include investments, NSC, PPF, LIP, PPF, New Pension Schemes and much more.need more information? checkout more articles at http://www.mycentraloregon.com/2016/02/14/hiring-unlicensed-tax-preparer-can-be-risky/
5. Deductions that are available in respect of paid interest are u/s 24 and they are paid on house properties that are self occupied. They have also been extended to Rs. 2, 00,000 from Rs. 150,000.
6. In case you are planning to club your minor child’s income u/s 64 1A using your income then you are not supposed to forget that claiming Rs. 1,500 standard deductions per child.
7. We have the long term capital gains which come from Equity oriented funds, transfer of equity shares. These capital gains are exempted from the income tax payment and they are chargeable only to the security transaction tax.
8. Deduction u/s 80TTA is usually charged in respect of the interest that has been allowed which is up to around Rs.10, 000 and this is only if the tax refund has been received from a post office, banking Co or Cooperative Bank.
9. In case the assesse owns several residential houses then he or she should consider any one of them to be self occupied and consider the other as let out property.read her latest blog post for more tax return information.
10. The main aim of claiming the deduction u/s 54EC is particularly to save income tax especially on Investments in bonds of NHAI & RECI, capital gains that are long term and they should be made in less than 6 months from transfer date. Last but not least it is essential for you to visit a tax professional for advice or hire one of you don’t understand on how to calculate your tax return.