Checklist for Income Tax filing

As we gear up for filing our tax returns for the last financial year, here is a simple checklist of  documents to be kept handy to calculate your tax liability.

Bifurcate your earnings in five different heads of Income to calculate your Income Tax:

1. Income from Salary
2. Income from House Property
3. Income from Business (Profits and Gains of Business or Profession)
4. Capital Gains
5. Income from Other sources

The next step you will require the following documents to help your CA or your self calculate the taxable income and file your return accordingly.

Sr.No. Asset/Item Institute Statement Name 1 SB Bank Account Statement 2 SB interest Bank SB interest statement 3 FD Bank FD Advice 4 FD interest Bank FD interest statement 5 RD Bank RD Advice 6 RD interest Bank RD interest statement 7 TDS Bank/Corporate/ Employer TDS certificate 8 PPF Bank PPF account statement 9 MF AMC Capital Gain, Portfolio 10 Equity Demat (Bank/Broker) Demat holding statement 11 Equity Broker Global Report,Profit &  Loss 12 Life Insurance Life Insurance Company Premium Paid Receipts 13 Medical Insurance General Insurance Company Premium Paid Receipts 14 Home Loan Bank/ other Institutes Home loan statement for claiming principal amount under 80C and interest amount under Sec. 24 15 Education Loan Bank/ other Institutes Education loan statement for claiming the interest under 80E 16 Property - detail of property transactions
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Sukanya Samriddhi

Since the annual budget has been announced, we have got many of our clients, friends raising queries on Sukanya Samriddhi Account. So, today we would share with you a brief outline, also add to it a perspective for your goal planning.

Sukanya Samriddhi Account

Features:

1. Investment to be made only for girl child – maximum up to 2 girl child.
2. The daughter’s age limit to start the account is 10 years (completed). For this initial year it is extended up to 11 years of age.
3. The expected minimum investment is Rs1,000 pa and maximum investment is Rs. 1,50,000 pa.
4. Either of the parents can open and operate the account.
5. The account can be opened currently only at Post office and public sector banks. Although, currently only post offices have started the schemes. (Please confirm more details with your nearest public sector bank branch)
6. The interest rate for this investment is announced at the beginning of year for next financial year similar to PPF. The interest fixed for the current year is 9.1% compounded annually.
7. The investment is eligible for deduction under 80C. The interest earned on it and the maturity proceeds are also tax free.
8. The investment tenure is up to the age of 14 years of your daughter’s age.
9. The first withdrawal –allowable maximum 50% (of then value) is possible on completion of 18 years of your daughter’s age. The remaining amount can be withdrawn at daughter’s age of 21 or on her marriage – which ever is earlier.
10. If the amount is not withdrawn at that time, it would continue to earn the interest announced for that year.

 Benefits

1. Additional tax free avenue to save for girl child
2. The interest rate announced would be 75 bps higher than average 10 year government bonds versus 25 bps in PPF.
3. The scheme is designed to meet the expenses for daughter like – higher education and marriage. i.e. 18 years and 21 years.

 Drawbacks

1. Not a feasible investment for taking tax benefit under 80C
2. The corpus collected would be substantial only if account is started for new born girl child. However, the lock in is as high as 21 years.
3. The investment only up to age 14 years makes it unattractive for child currently aged 9 years. Since, only 6 years would be there for contribution versus PPF.

We would thus like to summarize that this investment should be preferred only if you have excess liquidity and you wish to make additional savings for your daughter for long term. In case, you are already operating a PPF account for her, it is preferred to take the equity route now for additional savings.

Note: A basis point(bps) is a unit equal to one hundredth of a percentage point.

Thanks and Regards

Team

Saarthi Financial Planner

Email: saarthifp@gmail.com

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Union Budget 2015-2016 What to Expect ?

The annual national budget for FY 2015 -16 is on its way to be unveiled in a day's time. Every year it brings a lot of hope to improve our current financial situation. The small changes tweak our home budget to a great extent. We are affected by its announcement as not every state has its head promising lower tariffs on electricity and water. All that the budget can do is broaden the gap to accumulate savings and better lifestyle, but not the reservoir of monthly income. The income may improve only when there are special rebates or tax holidays announced.

So what would you like in this budget:

• Higher basic tax exemption limit for both - male and female
• Increased limit for deduction under Section 80C (currently at `1,50,000)
• Additional deduction beyond the clubbed limit of `1,50,000 for investment in pension products to induce long term savings.
• Increase in health insurance premium deduction - especially for senior citizens. (currently at `20,000 for senior citizens)
• Higher exemption limit for non guaranteed education loans. Preferred interest rate on education loan.
• New tax savings especially for investment for girl child (up to 12 years).
• Revised reforms in MWP Act to safeguard the rights of spouse and children.
• Revision of allowances limits for salaried class especially in medical and conveyance.
• More initiatives to promote low cost housing projects
• Low prices for essential commodities

 Your homework once the budget is out: 

• Establish your new projected total income.
• Calculate the change in taxable income.
• Make a list of all your fixed annual deductions available for claims and start investing in it.
• In case of any additional deductions announced utilize it only if matches your goal planning tenure.
• If retirement savings have not begun, consider to begin saving for it.
• Start all your paper work from April itself.

Be Informed. Be Proactive.

The national budget is a precursor to design our own home budget. 

Devise your own financial plan today.

Thanks and Regards

Team

Saarthi Financial Planner

Email: saarthifp@gmail.com

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