Tax Tips Guide ! Save Tax ! Help Filing Income Tax Returns

If you are a government employee or a public sector employee retired this year, then you must have received some gratuity amount. So the question arises Do you need to pay Tax on the Gratuity amount which you received this year in India.

If you are Government employee then you need not to pay anything. Any Gratuity amount is non taxable.

For non govt. employees, like Public sector companies pay Gratuity. For Public sector Employees (Non Govt.) gratuity up to Rs 350,000 is exempt from taxes (tax free). (According to Payment of Gratuity Act, 1972).

Its almost time for you to file income tax returns, and this is the last thing which you wanted to happen. You have lost your PAN card. Now you need to reapply for getting a duplicate PAN card. There is no need to panic as the procedure is not very difficult, however you shoul get yourself a duplicate PAN card as soon as possible.

First you need to get a FIR filed at the police station about you loosing your PAN card.
Now you need to know your PAN number. If you already know it then no problem, butif you don't then you cen get it by following ways .

1. Throug your Income Tax returns which you have already filed.
2. Credit Card department
3. From your Bank account
4. The cover letter which come along with the PAN card.
5. Through the PAN application counter foil numbers which you obtained at the time of PAN application. If the slip contains 15 digit acknoledgement No., then it is a NSDL application. If it contains 9 digits application number and 9 digit coupon number, then it is a UTITSL application. Fill these number on Income tax website and get your PAN number.

Once you know your PAN number you can apply for a Duplicate PAN card.
You can apply for a duplicate PAN card (its actually similar getting a fresh PAN card) in any UTI or NDSL branch. Pay Rs 67 fees, address proof, and colored photo. You can apply offline as well as online.

In India, as the financial year is closing down you need to file your Income Tax return. Its high time you should be aware of the Income tax slab (it was revised last year) for the assesment year 2009-2010.

1. Upto Rs 1.5 Lakh (Male)/ Rs 1.8 lakh (Female)/Up to 2,25,000 (Resident individual of 65 years or above) ----- Income Tax Rate (NILL).

2. Rs. 1,50,001 to Rs. 3,00,000 (Male)/ Rs 1,80,001 to Rs 3,00,000 (Female) ---- Income Tax Rate (10%)

3. Rs. 3,00,001 to Rs. 5,00,000 ---- Tax Rate (20%)

4. Rs. 5,00,001 and above ---- Income Tax Rate (30%)

You have to pay an additional surcharge of 10% of total tax liability, if you total income exceeds Rs 10 Lakhs.

* Agricultural Income is exempt from Income Tax. So, our farmers need not to pay any Income tax.
* Educational Cess - 3% of Income tax.

Once you are aware of total taxable Income then you can make use of the official Income tax calculator to find the exact amount of Income tax you need to pay.

There is always a dilemma in minds of Indian professional and website owners, whether they need to file income tax return for their online earnings.

Your online earnings may include commissions earned by Google AdSense, commissions earned for selling products whose money is paid to your Paypal account and other online means of earning. Now for most newbies, the confusion arises about the tax treatment of such earning.

Firstly, the online income earned (be it AdSense, or commissions paid via Paypal) is taxable in India (if you are a Indian citizen). This Income tax can be paid under the head ‘Income from Business or Profession’ or under ‘Income from other sources’. You can claim all the deductions and expenses like phone calls, computer cost, broadband service, cost of maintaining employee and all other associated expense. This will reduce your taxable Income. After all deductions if your taxable income is more than Rs 1.5 lakhs (men) or Rs 1.8 lakhs (women), then only you need to pay Income tax otherwise just file the returns. Just use any Online Income tax calculator to find the exact amount. Google AdSense Publishers are not liable to pay any Service tax.

One more common question being, What all documents you need to maintain/show while filing taxes. Well, your bank account books (Pass books) do all the work. All the details on your bank accounts passbook prove the expenses and earnings (this obviously include AdSense earnings, paypal transactions etc). The receipts received from AdSense, documents from other source needs to be just kept safe. You may be asked to provide these documents if auditing of your account is done.

If you have not kept the copies of the received AdSense cheques or the receipts then just take printout of the statement of earning from your AdSense dashboard.

Another issue being that of the cheques dates (should it be cash basis or actual earning date basis). As we know AdSense earnings are paid one month in arrears, that is the money you earned in month of March is paid in April. Well you can choose any among the two. Just keep a record of what you are opting at. I would suggest to go with the cheque date basis. I mean if your cheque is dated (month of March) then those earning will be included for Month of April (even if they were earned during February).

You can file your returns online or you may consult a CA about the Income tax returns on your online earnings. If you are filing your returns (on online earnings) for first time, then I would suggest you to consult your CA about your Income tax return. He will also help you to sort out if any queries implied by Income Tax Department after filing the return.

The time is around when you need to pay a part of your earnings as Income tax. Many people pay a lot of amount(about 10-20% income) as Income Tax. Though its a nice thing as this money is paid back in terms of public services but still there are lot of ways by which you can save Income Tax.

In India, the amount you are required to pay as Income tax is already substantially reduced but taking smart Tax tips you could restrict your tax payment (Income Tax) to just 1% of your Income (gross Income).

If you are a earning man you are required to Pay Income tax only when your Income exceeds Rs 1.5 Lakh and this amount is Rs 1.80 lakh if you are a woman.

Simple tax tips and investments can help you save almost 88% of Income tax you are otherwise required to pay. Lets show this how can you save Income tax in India.

Indian Income tax department already allows basic exemption limit. Now you can save upto Rs 30000 of tax by investing upto Rs 1 lakh under section 80C. This 1 Lakh is deducted from your taxable income if you invest it instruments covered under section 80C. You can always refer to post on Save Tax under Section 80C and find out how and where can you invest and save tax.

If you are paying for tution (education) of your Children then this money is also exempted from Income Tax, Principal component of home loan are also incurred in this (Interest which you pay upto Rs 1.5 lakh on home loan is also deductable). So, some people can avail maximum deduction of Rs 1.5 Lakh by taking some smart decisions.

You can also claim deduction upto Rs 20000 to buy a mediclaim policy for your parents (if atleast one of them is senior citizen). Apart from this you can also get deduction of Rs 15000 against medical policy for yourself, your spouse and children.

So, by taking smartly investing and taking Tax tips you can save good amount of Income tax. Reminding you that 31st March is approaching, its high time to invest your money and save tax.

If you are 16,17 or 18 years of age and have left compulsory education or you are about to leave it then EMA is for you. UK government does not want any of its citizen to be uneducated and want you to continue your learning. I guess this is a great step by UK government as learning is one of most important thing for a person and countries future.

Under EMA, entitles students will get weekly allowance worth up to £30 a week during term time which will be deposited directly to your bank account. You can buy books, travel, equipment or do any other thing as this money is paid directly to your bank account and not given to your parents or your college.

As long as you attent your school regularly and work hard, there should no be any problem in receiving EMA.

How is EMA calculated. How much money (EMA) will be paid to you ?
EMA is paid directly in your bank account in the denominations of £10 £20 £30 a week depending on your household income. (this exclude the money you earn from part time work).
EMA does not affect any of tax benefits which your parents get (child benefits, health in pregnancy grant tax, tax credits) or any other allowance which you get.

If your household income is -
Less than £20,817 per year (You get £30)
Between £20,818 - £25,521 per year (You get £20 a week)
Between £25,522 - £30,810 per year (You get £10 a week)
More than £30,810 per year (Sorry you wont get any EMA)

Who is eligible to get EMA (Education Maintenance allowance) ?
1. You need to be 16, 17 or 18 and have left or about to leave compulsory education.
2. You need to be pursuing a course in England. These courses can be -
Full time futher education in School or college.
LSC funed diploma.
LSC-funded Entry to Employment (e2e) course (if your e2e course starts on or after 30 June 2008, you’ll get the maximum £30 weekly EMA payment, regardless of your household income)

How to claim EMA.
Once you are sure that you are eligible to get EMA then you can apply to claim EMA anytime during the year. (Apply as soon as possible as allowances are weekly).
You can either apply for EMA by Phone (call 0800 121 8989) or get the application form from your college or school. After completing the application form you need to submit a proof of your household income for the relevant tax year. You also need to submit details of your bank account in which you want to receive the EMA money.

Once your EMA application is accepted you will get a Notice of Entitlement (NOE), confirming the weekly amount (allowance) which you will get. You also need to show this NOE to your school or college when you start with your course. (You will be asked to sign a aggrement - attendance, grades required to satisfy the criteria for keep getting EMA).

This question has been in minds of many. Income Tax department launched a new rule of applicable from 1st April, 2008 that epayment (online) payment of Income tax is mandatory for the following categories of tax-payers:-

1. All corporate assesses;
2. All assesses (other than company) to whom provisions of section 44AB of the Income Tax Act are applicable.

Now as we know many people in India have never made any online payments (people are scared of giving account and password details online, though it is absolutely secure) so how will they be able to file income tax. For those, you can make epayment of tax from some other bank account. Is making payment from another bank account (of different person) legal ?

Yes, Income tax department issued circular no.5/2008 Dt. 14/7/2008 that a person can pay tax from any one's bank account. (so you can ask any one of your friend with ebanking facility to help you file returns).

1. A person can pay tax from any one's bank account.
2. TDS/TCS are also covered in the word "tax" for online payment.

I hope you find this a useful Tax tip and will help you file your Tax returns.

Knowing about one's own country Tax system is one of the most important thing. This might help you understant the importance of paying taxes or even ways by which you can save Taxes. You know that government offers many tax bnefits and money grants for its citizen. Government offers different grants for pregnant mother, already a mother of new born, family grant (to raise children), unemplyed grant etc.

HM Revenue and Customs collect different taxes so that it can offer public services to its people. The amount of tax collected varies each year (government decides this) but the major tax heads remain almost same.

This guide should help you understant the various taxes that UK government collects from its citizens.

1. Income Tax (on your earnings, pensions, savings, investments and other benefits) - You pay income tax on the salary (if you are employed), on the profit you earn if you run a business (self employed), pensions you receive, dividends from shares and on many more things. Basically, if you are earning money (getting money from any source) then yo may have to pay taxes on this money earned. You are not sure whether you have to pay income tax on your money earned then better surf more or consult your Taxman (charted accountant or finance consultant).

2. Taxes on Transaction (buying, selling or giving away of things) - These include Capital gains tax, stamp duty and inheritance tax.

3. Tax on services and goods - Value Added Tax (VAT) on many everyday purchases, Fuel Duty on petrol diesel and LPG, Excise Duty on alcohol and tobacco , General Betting Duty.

4. Council Tax- to help pay for local services like policing and refuse collection.

This include the major taxes imposed but not all the taxes. You need to consult your government tax website for more details on various taxes.

If you were to get Tax refund from Income tax department for the financial years 2003-04 to 2006-07, and you could not get it due to changed address or for any other reason then you can claim this Tax refund again.

It might be possible that you changed your house and due to incorrect address, your tax refunds get undelivered. Income Tax department India has set up a website listing the tax refunds that could not be sent to salaried taxpayers for want of correct address.

The link for the official address of Income Tax department to track your Undelivered Tax refunds -:
http://www.incometaxindia.gov.in/CCIT/refundsearch.asp

Just visit the above link, enter your PAN number and assessment year. If you find that the address and other details are old, then just update your address and tax refunds will be sent to your new address.

All the college graduates, and other those who will start working and earning this year must have wondered about getting a PAN card. If you have not thought about it, then its high time to do so.

What is a PAN Card.
PAN refers to Permanent account number (a 10 digit alphanumeric number) laminated card much similar in look to a credit card or your driving license. This card is issued by Incom tx department of India.

Who all require to have this PAN Card.
All those who will be filing their Income tax returns are required to have a PAN number. It is a must to have a PAN number as you are required to quote this number while filing your tax returns. You will be asked to quote it whenever you have any kind of correspondence with Income Tax Department. It is also mandatory to mention PAN for obtaining a telephone or cellulartelephone connection. Likewise, PAN has to be mentioned for making a time deposit exceeding Rs. 50,000/- with a Bank or Post Office or for depositing cash of Rs. 50,000/- or more in a Bank.

So, in simple words all the people who will start earning this year must apply for a PAN number. Its time to apply for PAN Card.

If you are a pregnant Women (to be a mother) then you have one more reason to smile. UK government has brought Tax free payment act for Pregnant Mothers. From April 2009, you may be able to get a one-off, tax-free payment if you're a mum-to-be. The payment is called 'Health in Pregnancy Grant' .

If you are to be a Mum then you can make a claim for Health in Pregnancy Grant from 1st January if you are expected to give birth to a baby on or after 6th April 2009. You can get a one-off payment of £190 for each pregnancy (if you give birth to twins then too you just get one-off payment of £190). It will not affect your tax credits or any other benefits. Everyone will get the same amount – you will not be asked about your income. This saved Tax money will surely help you to meet the pregnancy bills.

Who is entitled to get the "Health in Pregnancy Grant" -:
You should be 25 weeks pregnant or more.
Expectation date should be on or after 6th April 2009.
You have been consulting a doctor or midwife for safety of yours and your baby.
Be present, 'ordinarily resident' and have a ‘right to reside’ in the UK

So, How to Cliam Health in Grant Pregnancy Tax Credits.
Once, you are eligible to get the Tax credits, you need to get your claim form filled in and signed by your midwife or doctor before you have your baby.
You should get your completed claim form to the Health in Pregnancy Grant Office within 31 days of your midwife or doctor signing it. For example, if your midwife signs the form on 6 April, the Health in Pregnancy Grant Office will need to receive it before 7 May.

So where to get this "Claim form" from
You better ask your Midwife or your doctor to get the claim form. They actually need to fill in their part and sign the document before you submit it to Health Pregnancy Grant Office.

Now where to send this Claim form to ?
You need to send duly filled and signed Claim form to -
HM Revenue & Customs Health in Pregnancy Grant
Comben House
Farriers Way
Liverpool
L75 1AX

Well for more help and information you can consult to Health Pregnancy Grant website.

So, you are not a unmarried person. You have a family. England government wants to help its citizens to bring up their children. The step taken by them is to provide them with Tax benefits.

Government has set different tax benefits to help families with the extra cost to bring up their children.

So, who all have these benefits-:

• Pregnant Women.
• Women who just had her baby.
• Tax Benefits for men whose spouse just gave birth to a child.
• Tax Credits/benefits for those who adopt.

Government also provide Child Trust Fund Payment and Tax credits for the parents.

India Service Tax :

Indian Government has reduced the service Tax in India. The old Service tax rate in India was 12.36%, however it has been reduced to 10.36% w.e.f from 24.02.2009. (24th Feb 2009).

So, you donated some money to a charitable organization and got Income Tax receipt for them. Now what. Should you need to submit those Receipts while filing tax returns to get tax benefits (refunds on Taxes)..?

Firstly yes you are entitled to get Tax benefits for the donations you made.

Now it depends whether you are paper filing your taxes or filing your taxes online.
If you are filing a paper return then its better to send all your receipts which you received from those charitable organizations.

If you are filing your tax returns online then just keep your receipts with you, so that you can show them whenever someone asks for it. (However you have to notify about these donations while filing the returns online).

Under the Income Tax, India.

If you have filed your income taxes or if you are filing your income taxes for the first time, then Section 80C is a must read section for all. Section 80C is the single most important provision under Income Tax India. You save a lot of Tax money utilizing this section carefully.

One can invest upto Rs 1 Lakh in various approved schemes to save Tax. This is irrespective of how much money you earn and under which tax slab does your taxable income lie.

Investing money properly will help you save taxes of about (upto) Rs 30000. This investment of Rs 1 Lakh is deducted from your taxable income thereby reducing the tax liability.

The invesments which you can make -:
1. Contribution to Provident Fund
2. Contribution to Public Provident Fund.
3. Payment of life insurance premium
4. Investment in pension plans
5. Investment in Equity Linked Saving Schemes of mutual funds
6. Investment in Infrastructure bonds
7. Investment in National Savings Certificate

The amount of money which you pay for your Home loan is eligible for income tax deduction. If you are paying education fees for your children then too, this amount will get deducted from your income.

Few points to be noted here are-:
1. There is a maximum limit of amount which you can invest under each scheme. This maximum limit vary from scheme to scheme.

So, keep the above points in mind while making an investment or filing your tax returns. Its better to invest in those schemes which will help you save taxes. So, next time you visit your Charted accountant, do ask him/her about Section 80C.

Tax season is around and everyone must be worried of filing their Income taxes. At this point of time you require a good Online Income tax calculator which can help you know the exact amount who need to submit to Income Tax department.

Tax rules for different countries vary, however I will try to cover different Tax calculators for different countries like India, USA, UK, Singapore.

Free Income Tax Calculator for India : http://law.incometaxindia.gov.in/TaxmannDit/xtras/taxcalc.aspx
The above calculator is official calculator by Indian Income Tax department, it takes into account the newest tax rules. I will try to post free taxalculators for US, UK too.

Its time to Calculate your Income taxes and file your Tax returns.

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