Income Tax Saving Tips: The income tax exemption limit is Rs 2.50 lakh. Income between Rs 2.50 lakh to Rs 5 lakh attracts 5% tax. But the government gives Tax Rebate on this. For example, if your income is Rs 5 lakh, then you are taxed at the rate of 5 per cent to Rs 12,500. But the government gives tax concession under section 87A and the taxpayer does not have to pay any tax.
No tax rebate on taxable income above Rs 5 lakh
But it is important for you to know that you will not get any tax rebate under section 87A if your annual income exceeds Rs.5 lakh by even one rupee. For example, if your income exceeds Rs 5 lakh even after taking the benefit of standard deduction of Rs 50,000, then you will have to pay 5 per cent tax on income between Rs 2.50 and Rs 5 lakh.
You will not get rebate under 87A if the taxable income is more than Rs 5 lakh. In this case, you will be taxed at Rs 12,500. If the taxable income is more than Rs 5 lakh, tax will be calculated on all the amount above Rs 2.5 lakh.
Cess along with tax
Suppose even after deducting the standard deduction of Rs 50,000, your income becomes Rs 5 lakh 10 thousand, then you will have to pay a total tax of Rs 14,000. Education and health cess will have to be paid separately on this.
Invest to save tax
If you want to avoid tax liability, then the most important thing for this is that you do your tax planning from the beginning of the year itself. Make sure to invest in a place where tax benefits are available.
Gautam Adani is Richest Man: Gautam Adani overtakes Mukesh Ambani to become Asia’s richest person
Mobile Recharge Price Increase: Know how expensive mobile recharge and data plans spoiled the budget of people’s household?