Income Tax for earnings < 5lacs

POSTED BY rajeshs ON January 27, 2014 5:59 pm COMMENTS (15)

Hi,

My sister is a school teacher in private school earning 10,000 per month(no payslips are given, no breakup of salary into Basic, HRA etc). She is also getting 25,000 per month as rent for furnished house (which comes under village panchayat) starting from April 2013. She has no other income. My doubts

1) How much tax should she pay?

2) can she pay online just by quoting her PAN?

3) should she file ITR

4) is the panchayat tax based on rent?

15 replies on this article “Income Tax for earnings < 5lacs”

  1. srb1985 says:

    Ashal, i didn’t get the ‘d’ part, what is that standard deduction? Also how should we declare the ‘ Property Tax paid to’ while filling the return?

    1. ashalanshu says:

      Dear Srb, the standard deduction is there to cover the cost of maint. and upkeep of the house. No matter the actual expenses is less or more than this 30%. It’s there in Income Tax Act.

      Regarding property tax, you only need to mention the amount in the prescribed place in your ITR. You do not need to submit any proof at the time of filing. Yes if IT people ask to prove any thing in your ITR, you should have proof of the same and you w’d have to visit in your local Income Tax office alonf with these proofs.

      Thanks

      Ashal

  2. akgc2 says:

    Hi Ashal
    Just to add this I believe she can also get deduction for any expenses on house maintenance like repairing, fixing or any type of expenses occurred on the house maintenance during the financial year apart from Property Tax and Standard deduction.

    Also I am nor sure but can she be eligible for deduction in total income for medical expenses up to 15 thousand per annum in case employer has not mentioned the same in her salary ???

    1. ashalanshu says:

      Dear Akgc, the standard deduction of 30% is meant for the things (maint. and upkeep of the house) you are mentioning. No separate deductions for these things are allowed in Income Tax act other than this 30% standard deduction.

      Thanks

      Ashal

  3. ashalanshu says:

    Dear Rajesh, it’s in her own interest to file Income Tax Return to avoid any issues later on.

    Thanks

    Ashal

  4. ashalanshu says:

    Dear Rajesh, yes she can pay her due tax online. What do you mean by TDR?

    Thanks

    Ashal

    1. rajeshs says:

      Ashal,

      Sorry for the typo. I meant ITR V

      Thanks,
      Rajesh

  5. rajeshs says:

    Ashal,

    Thanks for the detailed answer. Can she pay this online by quoting her PAN.
    I think there is no need to file TDR.

    Thanks,
    Rajesh

  6. ashalanshu says:

    Dear Rajesh, let me try to calculater her income on the nos. given by you.

    A. Salary income = 120000 (10000*12)
    B. Income from house property –
    a. Gross rent received = 25000*12 = 300000
    b. Property Tax paid to Panchayat = 10000
    c. Net rent received = a – b = 290000
    d. Standard deduction @ 30% for c = 290000*30% = 87000
    e. Income from house property = c – d = 203000
    C. Gross Taxable income = A + Be = 120000 + 203000 = 323000 Rs.

    She may invest 1L Rs. in section 80C investment and thus taxable income = 223000
    Now 200000 Rs. income is tax free, hence for her only 23000 Rs. is taxable.

    So Tax @ 10.3% for 23000 Rs. = 23000 * 10.3 = 2369 Rs.

    Now as her total income is less than 5L Rs. she is entitled for section 87a relief for 2000 Rs. tax amount.

    hence net tax liability for her = 2369 – 2000 = 369 Rs.

    Thanks

    Ashal

  7. ashalanshu says:

    Dear Rajesh, How much amount is she paying as panchayat tax?

    Thanks

    Ashal

    1. rajeshs says:

      I am not sure about that. But it is <10,000 per anum

      1. rajeshs says:

        i just came to know that she has paid Rs.1350 for this year

  8. rajeshs says:

    Dear Ashal,

    it is monthly rent
    yes she is paying property tax to panchayat

    Thanks,
    Rajesh

  9. ashalanshu says:

    Dear Rajesh, is it 25000 Rs. mly rent or yly rent? Is she paying any property tax to panchayat for her house?

    Thanks

    Ashal

    1. rajeshs says:

      Dear Ashal,

      it is monthly rent
      yes she is paying property tax to panchayat

      Thanks,
      Rajesh

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