Income Tax on Salary is taxable under direct tax, but governed by Income Tax Act, 1961. Indian Taxation is divided in two parts, so it is direct tax and indirect tax. It not only includes all monetary payments from employer to employee, but also includes non-monetary payments.
What is Income Tax on Salary?
Income Tax slab rates for salaried individual are as follows:
|Up to Rs. 250000/-||0|
|From Rs.250000/- to 500000/-||5%|
|From Rs.500001/- to 1000000/-||20%|
*Health and Education Cess is also chargeable at the rate of 4% on income tax.
- Standard deduction of Rs.40000/- can be claimed from head income of salary, even if no amount is paid.
- Deduction of Rs. 2500/- from tax is also allowed, if net taxable income is below Rs. 350000/-.
How to save income tax?
6 Ways to save income tax are as follows:
- Housing Loan: Interest on housing loan is allowable, if it is payment done during previous year. Principal amount of housing loan is also deductible from income under section 80C.
- Tax Saving Investments: Investment in tax saving investments, such as tax saving FDs, term plans, etc is deductible from gross income.
- School Fees: Deduction section 80C for payment of school fees, if it is paid during last year.
- Mediclaim: Amount of Mediclaim is allowed as deduction for amount up to Rs. 25000/-, but payment should be through bank.
- Education Loan: Deduction for interest on education loan is allowed under section 80E, but it should be previously paid.
- Rent Paid: Payment for rent can be claimed from salary,but if hra is received.
Last to file salary return is 31st, July 2019.
Email your query at firstname.lastname@example.org, so that you can know more about income tax on salary. WhatsApp /Call at 7900567567, so that you can get income tax return filing, gst registration and pvt ltd company registration done.
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