Income For Tax File (Income Tax Filing) Related The next step after collecting all the documents is to know some income to save tax deduction. According to the rules of Income Tax, Gross Salary is divided into five parts. This includes income from salary, house property, business profits, profession and other resources. Knowing the source of income, you have to pay Income Tax for the financial year 2019-20. Here are some tips to help you calculate your 2019-20 financial year. So let us tell you how you can calculate income tax
Income under head celery
In it you can find out about your annual income from Form 16 received from the company whether your tax has been deducted or not. It tells you what percentage of the total salary will be taxed and how much tax is deducted. The taxpayer also has to submit some of his investment documents for tax exemption. House rent, standard deduction, leave or travel allowance are tax deductible. If the house rent goes above one lakh in a year, you will have to give the landlord’s pen card to the office for tax savings. No document is required for standard deduction of Rs 50,000. If you have not received Form 16 in your office, you can find out about tax deduction from the salary slip.
Income from house property
If you have rented your home, you have to show the income under it. If someone has a house in which he himself lives, the income will be zero. In addition, if a home loan is running, a deduction of up to Rs 2 lakh can be claimed on its interest. If he lives in two or three houses, he will not be taxed. This arrangement has been implemented from the financial year 2019-20.
The tax on house income will be calculated in this way
1. Compare the expected rent and the municipal assessment and take the higher value between the two. This is called the expected fare.
2. Compare the actual rent with the expected value and whichever is higher will be considered the annual gross value.
3. Calculate the net annual value by deducting the municipal tax during the Gross Annual Value.
4. Cut three percent of the annual value for home maintenance and do not need to show the document. If interest has been paid on the loan, deduct it. The amount that comes after that is the income from the property. Which can be both positive and negative.
Income from business profits
Income from the sale of property such as a house, mutual fund, etc. is taxable, it also looks at how long the person has sold these assets. There are two types of capital gains, short term and long term. Equity Oriented Mutual Funds and equity shares are held separately for more than one year and are covered under LTCG. Without index, it is tax deductible at 10 per cent. If sold a year ago there is a 15 per cent discount under STCG. Mutual funds are taxed differently from equity funds.
If a home is sold two years after purchase, it will come under LTCG. 20.8 per cent tax will be deducted after assessing the benefits. Selling two years ago will incur STCG and will be deducted as per tax slab.
Business and Profession Income
Lawyers or other such professionals have to show their profits. In addition, stock market transactions have to be shown. It has tax count from cash system and accrual system. In the cash system, when the expenses are paid and when they make a profit, etc. In the accrual system it is due, it doesn’t matter whether the payment is made or not.
Other means of income
This is the income not shown in the above four instruments. It includes interest, fixed deposit, divided income, commission income etc. from savings account.