INCOME TAX RATES
For the Financial Year 2004-2005

Taxable Income	Tax
Up to Rs. 100,000	Nil
Rs. 100,001 to 1,50,000	Rs. 1000 + 20%o f the income exceeding Rs. 60,000.
Over Rs. 1,50,000	Rs.19,000+30%o f the income exceeding Rs. 1,50,000.
Surcharge: If Total Income>Rs.850000, Surcharge @10% on the tax payable. Education Cess: @2% on the tax payable (including surcharge).

REBATES FOR SENIOR CITIZENS AND WOMEN

For resident senior citizens (above 65 yrs.), an amount of Rs 20,000 is deductible from tax liability u/s 88B.

Rules for ‘Senior Citizens’ are same for ‘Men’ and ‘Women’. Any person who turns 65 years on any day prior to or on 31 March 2005 will be treated as senior citizen.

In case of women below 65 yrs., an exclusive rebate of Rs 5000 is allowed u/s 88C.

STANDARD DEDCTION
Gross Annual Salary	Deduction
Up to Rs. 5,00,000	Rs. 30,000 or 40% of annual salary which ever is less
Above Rs 5,00,000	Rs. 20000

 

SOME PERMISSIBLE DEDUCTIONS

» 80 CCC(1)- Upto Rs. 10000 in respect of contribution to Pension Plan of any Life Insurance Co.
» 80 D- In respect of Medical Insurance Premium paid by cheque up to Rs. 10000 (Rs. 15000 if the premium is paid for a senior citizen)
» 80 L-

(a) Up to Rs. 12000 in respect of interest on Bank Deposits, Bank S/B A/c, PO MIS, NSC, NSS 92, Time Deposit, RD, FD with Housing Finance Cos, Bonds by Financial Institutions.
(b) Up to Rs. 3000 in respect of interest on state/ central govt securities.

TAX REBATE U/S 88

Tax rebate is allowed on maximum investment of up to Rs. 1,00,000 in one or more of the followings : -
» Infrastructure Bonds (Rs. 30,000 exclusively reserved)
» PPF/GPF/EPF
» Life Insurance premiums
» ULIP
» NSCs
» ELSS Schemes (maximum up to Rs 10,000)
» Retirement Benefit Plan (UTI)/Pension Plan from FTMF
» Repayment of Housing Loan upto Rs. 20,000.
» Tuition Fees of any two children up to maximum Rs.12000 per chid.

AMOUT OF REBATE U/S 88

» In case of an individual or HUF having gross salary up to Rs. 100000 and net salary being 90% of his gross Total Income- 30% of the qualifying amount.
» If Gross Total Income (before allowing deductions under chapter VI-A) is up to Rs. 1,50,000 – 20% of the qualifying amount.
» If Gross Total Income (before allowing deductions under chapter VI-A) is between Rs. 1,50,001 to Rs. 5,00,000 – 20% of the qualifying amount.
» If Gross Total Income is above Rs. 5,00,000- Nil

CAPITAL GAIN

Short Term-Gains on transfer of capital assets held by the assessee for not more than 36 months (12 months in case of shares held in a company or any other security listed in a recognised stock exchange in India, or units of Mutual funds
Long Term-Gains on transfer of capital assets held by the assessee for more than 36 months (12 months in case of shares held in a company or any other listed security or units of Mutual Funds.

RATES OF CAPITAL GAIN TAX

Short Term Capital Gain
» Short Term Capital Gain is included in Gross Total Income and normal rates of tax will apply which are applicable to the assessee.

» In case of ST Capital Gain from sale of equity shares or units of equity oriented mutual fund schemes, the ST Capital Gains are taxed at a flat rate of 10% irrespective of the tax slab applicable to the assesse, provided securities transaction tax is paid on such sale.

Long Term Capital Gain
» On sale of listed shares or units of equity oriented mutual funds schemes-LTCG is exempt from tax, provided STT has been paid on such sale

» On sale of other financial assets-listed securities (bonds/ debt) or units of debt oriented MF schemes-20% of the capital gain after allowing indexation benefit or @ 10% flat without indexation benefit, whichever is less.

» On sale of other capital assets-@ 20% flat after allowing indexation benefit.

HOW TO SAVE CAPITAL GAIN TAX

Any Long Term captial gain shall be exempt from tax if it is invested in bonds issued by NHB, REC, NABARD, NHAI or SIDBI within 6 months from the date of transfer.

Tax on LT capital gain on sale of a residential house can be saved by buying another residential house within a period of one year before or two years after the date of transfer of original house, or by constructing a new residential house within three years of sale.

HOW TO SAVE Rs. 21420 BY INVESTING Rs. 120000 ?

INVESTMENT (Rs)	SCHEMES	TAX SAVING
10000	Pension Plan	3,000*
10000	Mediclaim premium	3,000*
100000	U/s 88 @ 15% Tax Saved 21,000 Education Cess Saved 420 Total Tax Saved (Rs) 21420	15,000

*For an individual in 30% tax slab.

For more information on how to save tax please write to info@bajajcapital.com Or Contact your nearest Bajaj Capital Investment centre™