Skip to main content


ADOPT TO INCOME TAX SEASON 2020 :- “OLD TAX REGIME VS NEW TAX REGIME”:-


TAX PLANNING GUIDE 2020-JATIN RATHOR & ASSOCIATES

        

As per the union budget 2020, announced by FM Nirmala Sitharam, it is clear that tax payer has to choose between two options- Old tax regime and new tax regime. Explaining the change, she said “an individual who is currently availing more deductions and exemptions under income tax act may choose to avail and continue to pay tax under old regime”

TAX PLANNING GUIDE 2020 - BEST CA FIRM PUNE - CA JATIN RATHOR

SYNOPSIS OF OLD TAX REGIME VS NEW TAX REGIME :-

In new tax regime although rate of tax is lower, fix slabs but there is no way to 
reduce the taxes as one has to forego almost all the exemptions and deductions and concessions.
In the Old Tax System – Though the tax rates are higher but there are various deductions exemptions and benefits if utilized properly can make a notable tax reduction.


TAX PLANNING GUIDE 2020 -CA IN VISHRANTWADI


 WHICH ONE TO PICK UP ? :- confusion ?


Simple three steps  to select Tax Regime :-

       Step 1 :- One has to make a detailed calculation of all the prospective investments, deductions and exemption for the whole year

       Step 2 :- Make a tentative calculation of  Income tax under both the schemes (Old Regime and New Regime) Examples illustrated below.

       Step 3 :-  Compare the burden of Tax and Make selection of Lesser One.

Regrettably, there is no single answer to this. And reason is the complexity of the Indian tax rules. Refer to the Tax Planning guide 2020 below in this article.
TAX PLANNING GUIDE 2020- BEST CA FIRM IN PUNE



Only those taxpayers who do not have any income through business are allowed to move to the new tax regime. Slab for individual & HUF for FYR 2020-2021 is as below :-


TAX SLAB 2020-2021-CA JATIN RATHOR- BEST CA IN PUNE


 I have tried to explain the Comparative analysis of both the regimes with the help of few examples for easy understanding:-
Income Tax calculator 2020- BEST CA FIRM IN PUNE - CA JATIN RATHOR


CA IN VISHRANTWADI

CA IN VISHRANTWADI-BEST CA FIRM PUNE -CA JATIN RATHOR


CA IN VISHRANTWADI


             BEST CA IN VISHRANTWADI PUNE- CA JATIN RATHOR


On case to case basis the above tax calculation is to be made by every individual and proper selection of regime has to be made. For those opting or planning to opt for Old Tax Regime, I have tried to summaries tax planning guide/ tips as below :-

     
CA IN VISHRANTWADI- CA JATIN RATHOR & ASSOCIATES


    PERSONAL TAX PLANNING GUIDE UNDER OLD TAX REGIME:
  
   (FOR BOTH SALARY & NON SALARY ASSESSES- Tax Planning Guide 2020) :-

  1.    FULL UTILIZATION OF POPULAR TAX SAVING OPTIONS LISTED                           BELOW :
      (SECTION 80 C + 80 CCC + 80 CCD)LIC, POLICY, STAMP DUTY ON HOUSE PURCHASE, EPF, PPF, NSC PRINCIPAL REPAYMENT OF HOUSING LOAN, KVP, TUITION FEES, ELSS MUTUAL FUND, TERM DEPOSIT/ FIXED DEPOSIT OF FIVE YEARS ETC.

  2.  GO FOR MEDICAL INSURANCE OF PARENTS (SECTION 80 D) AND CONSUME THE LIMIT.

3.   FULL UTILIZATION OF BENEFIT LIKE STANDARD DEDUCTION, SECTION 24 B, LTC, HRA, PT, OTHER ALLOWANCES AS AVAILABLE UNDER OLD REGIME.

4.   PLAN FOR NPS (NATIONAL PENSION SCHEME)  AND CONSUME THE MAXIMUM LIMIT.

5.  IF YOU ARE PLANNING TO BUY A RESIDENCE AND YOU HAVE OUTSTANDING PERSONAL LOANS, IT IS ALWAYS BENEFICIAL TO FINANCE AS MUCH OF PURCHASE PRICE AS POSSIBLE RESERVING YOUR OWN FUND TO MEET PERSONAL LOANS. THIS APPROACH WILL REDUCE THE EFFECTIVE INTEREST RATE AND WILL AVOID ADDITIONAL BORROWING EMERGENCY COST.

6.    BOOK PROPER AND CALCULATED LTCG ON EQUITY INVESTMENT. 

7.     IF LTCG IN EQUITY INVESTMENTS EXCEEDS 1 LAKHS IN A FINANCIAL YEAR AMOUNT OVER THE THRESHOLD LIMIT SHALL BE CHARGEABLE TO INCOME TAX @ 10%. SO PLAN TO AVOID THIS BY BOOKING LTCG EVERY YEAR SUCH THAT GAIN DOES NOT EXCEED THRESHOLD LIMIT.

8.   CONSIDER SELLING ASSETS IN TAXABLE ACCOUNTS THAT HAVE LOSSES AT THE END OF THE YEAR TO OFFSET THE CAPITAL GAIN TAX.

9.  THE INVESTMENTS OPTIONS SHOULD BE THOROUGHLY EVALUATED FOR TAX BENEFIT AND YIELD ENHANCEMENT.

10.   ENSURE A PROFESSIONAL MANAGEMENT OF YOUR FINANCIAL ASSETS

11. CONSULT YOUR TAX ADVISER TO ENSURE THAT YOU PROPERLY EVALUATE ALL SCENARIOS.



JATIN RATHOR & ASSOCIATES
TAX PLANNING GUIDE 2020


 AFTER UNDERSTANDING THE ABOVE TAX PLANNING TIPS START COLLECTING  YOUR DATA AND GET READY FOR THE UPCOMING INCOME TAX RETURN FILING SEASON.


GET YOURSELF READY WITH FOLLOWING DATA IN LOCK DOCKDOWN FOR UPCOMING INCOME TAX RETURN FILING FOR FYR 2019-2020 :- 


  1. GET YOUR BANK ACCOUNT STATEMENT READY FOR FINANCIAL YEAR 2019-2020.
  2. DOWNLOAD YOUR FORM 26AS :- TRY AND GATHER TDS DEDUCTION DETAILS FROM FORM 26AS WHICH CAN BE EASILY DOWNLOADED FROM INCOME TAX SITE. DATA FOR QUARTER 1 , 2 AND 3 SHALL BE REFLECTED. QUARTER 4 DATA MAY NOT AVAILABLE DUE TO EXTENSION & LOCKDOWN.
  3. GATHER ALL THE PROOF OF YOUR INVESTMENTS DONE DURING FYR 2019-2020
  4. COLLECT ALL THE INFORMATION OF INCOME FROM YOUR BANK STATEMENT
  5. TRACE ANY ABNORMAL INCOME IF RECEIVED DURING THE FINANCIAL YEAR AND NOTE DOWN SEPARATELY IF ANY.
  6. DOWNLOAD INTEREST & PRINCIPAL STATEMENT FOR HOUSING LOAN REPAYMENT FROM BANK MOBILE APP OR INTERNET BANKING
  7. LINK YOUR ADHAR CARD WITH PAN CARD IF NOT DONE TILL DATE.
  8. DOWNLOAD THE SUMMARY STATEMENT OF MUTUAL FUND & SECURITY TRANSACTIONS FOR THE YEAR IF ANY
  9. DETAILS OF CAPITAL GAIN FROM SALE OF HOUSE/FLAT/OTHER CAPITAL ASSETS DURING THE YEAR – SALES CONSIDERATION RECEIVED, DATE OF RECEIPT, COST OF PURCHASE, DATE OF PURCHASE, COPY OF SALE DEED, INDEX 2 COPY

       Conclusion :-

“The only thing that hurts more than paying an income tax is not having to pay an Income Tax”
It is always advisable to Plan your finance and work your plan, road maps with a clear vision and proceed positively for tomorrow belongs to the people who prepare for it today.


              ARTICLE BY
            CA. JATIN RATHOR
            (MOB 9595121481)
            (E-MAIL: cajatinrathor@gmail.com)



        LINK  OF PREVIOUS  ARTICLES : -

1.      INVESTMENT PLANNING FOR FYR 2020 ( COVID -19 CRISIS AND ITS IMPACT ON EARNINGS . https://cajatinrathor1.blogspot.com/2020/04/investmentplanning-for-fyr-2020-covid.html


2.      “SIPs  DURING SINKING MARKET AND WAY TO DEAL WITH IT” – PAUSE, REDEEM OR CONTINUE IN VOLATILE MARKET?


3.      “TROUBLES” OF BUSINESSMAN & WAY TO OVERCOME WITH OPTIMISM – POST LOCKDOWN AND GLOOM :-


4.      LOOKING FOR STARTUP??  14 HIGH GROWTH BUSINESSES :- "POST LOCK DOWN & PLIGHT"

           

   Please note :
1.       The above article is mere expression of opinion of the writer and does not in any way bind the writer in any mode or manner whatsoever.
2.        For any queries you can post a mail to the writer in the above mentioned email id.


Comments

Post a Comment