Budget 2023 has introduced a tax rebate in the new tax regime, and with this, the effective tax-free limit is now Rs. 7 lakhs. Here is how this works. We use the New Tax Regime vs Old Tax Regime Calculator for this illustration. Consider first the old tax regime. For a salaried tax-payer with an income…

Budget 2023 has made significant changes to the new tax regime. Although the old regime is still valid, the new regime will now be the default regime, and taxpayers must opt for the old regime if they wish to. Here is a free calculator to find out if you should switch to the new tax…

Budget 2023 has proposed welcome changes in the presumptive taxation rules for small businesses and certain professionals. Section 44AD: Old rule: Individuals, HUF or partnership firms (other than LLP) with a turnover or gross receipt of two crore rupees or less are eligible.  Taxable income (profit from business) can be set to 8% or 6%…

Three major changes have been proposed in Budget 2023 for senior citizens. Senior Citizen Savings Scheme: The maximum deposit limit for Senior Citizen Savings Scheme has been enhanced from 15 lakhs to 30 lakhs. The entire amount invested is attributed to the first holder. So a husband can open an account for 30 lakhs, and…

Only the slabs of the new tax regime have been reduced (lowered for some slabs) in Budget 2023. The new tax regime will now be the default regimen, and taxpayers will have to specifically select the old regime if they wish to use it. Update: Download the free revised income tax calculator below! This is…

Budget 2022 has not increased Equity LTCG Tax from 10% to 15%! The mention of 15% was a reference to the capping of the surcharge on LTCG from other assets. An explanation. How does surcharge work:  If your income is Rs. 100 and the tax is Rs. 30 and the surcharge applicable is 10%, then…

The finance minister announced that virtual digital assets including cryptocurrencies will be taxed at a rate of 30% from 1st April 2022. Here are the details. The finance bill 2022 defines a virtual digital asset as follows: Any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic…

Finance Bill 2021 has proposed several amendments to the Lic Insurance Corporation Act 1956. Most notable among these is the 10% reservation of the LIC IPO issue size to policyholders. Here is an explanation of the associated rules. What exactly does the finance bill say? Extract from Page 108 of the bill regarding various categories of…

Finance Bill 2020 has proposed that contribution above 2.5 lakhs by employees into recognised provided funds will be taxed. Here is why this rule does not apply to the public provident fund (PPF). The change proposed in Budget 2021 is an inclusion to clause(11) and clause (12) of section 10 of the income tax. Clause 11…

Finance Bill 2020 has proposed that contribution above 2.5 lakhs by employees into recognised provided funds will be taxed. If an excess contribution is made in one financial year, will it be taxed only in that year or in subsequent financial years until maturity or withdrawal? While a precise answer to this is not available…

From 1st April 2021 onwards, the interest on any contribution above Rs. 2.5 lakh by an employee to a recognised provident fund is taxable as per the provisions of the Finance bill 2021. Here is a simple illustration of how the tax works: How employee contributions over 2.5 lakhs get taxed like an FD. Many have…

We had earlier reported that the Finance Bill 2021 has proposed that employee contributions over 2.5 lakh will be taxed as per slab. Here is a simple illustration of this works. Update 1: Find out taxable EPF Interest with this calculator <= This is the exact calculation Update 2: The Central Board of Direct Taxes has…

Budget 2021 has only one offering for senior citizens. If some conditions are met, those aged 75 and above need not file income tax returns. They have to pay the necessary tax but need not file returns. The conditions for exemption from filing ITR from 1st April 2021 are: The senior citizen should be a…

Finance Bill 2021 has extended the provisions of the five lakh deposit insurance. Earlier it applies to only banks that went bust (liquidation). From 1st April 2021, the insurance will also apply to banks placed under temporary restrictions by the RBI. Investors can redeem up to Rs. five lakh from banks under stress. This may…

From 1st April 2021 onwards, the interest on any contribution above Rs. 2.5 lakh by an employee to a recognised provident fund is taxable as per the provisions of the Finance bill 2021 announced today. Update: Find out taxable EPF Interest with this calculator That is, if the total employee PF contribution (mandatory + voluntary) contribution is…