How to Save Tax Using Income Tax Deductions?

How to SaveTax Using Income Tax Deductions?

The first step towards understanding how to save income tax is to know about various deductions allowed under Income Tax Act for tax benefit investments. They can help you lower the taxable income as per the tax-saving options you choose.

There are several tax-saving investments or incurred eligible expenses that can help you claim deductions that can help you save income tax to some extent. Furthermore, different there are multiple sections of the Income Tax Act dedicated to providing with a variety of tax saving options.

Let’s discuss various deductions related to tax-saving investments and other eligible contributions and how to save income tax this way:

1. Section 80C: Save Tax with Life Insurance & Other Eligible Investments/Expenses

Section 80C is a significant part of the Income Tax Act, which is why you should know about the different tax saving options it encompasses and understand how to save income tax maximally.

Under Section 80C of the Income Tax Act, 1961, you can claim deductions on your tax benefit investments and contributions in various financial products. Many tax professionals primarily consider 80C deductions while explaining how to save income tax.

You can avail a deduction of up to Rs.1.5 Lakh under section 80C. Also, learn about investing in tax saving options like ELSS and Public Provident Fund (PPF), to gain better insights on how to save income tax. Life insurance premium amount, ELSS investments, tax saver fixed deposit, PPF investments, PF contribution (Employee contribution only), home loan principal repayment amount, and much more are covered under Section 80C of the Income Tax Act, 1961. The total deduction which can be claimed from all the above-stated deductions is Rs.1.5 lakh. As a part of tax planning, it is crucial to consider different tax-saving aspects of various tax benefit investments.

2. Section 80CCD: Save Tax By Investing in Retirement Plans

While learning about how to save income tax, you may have heard about the National Pension System (NPS). NPS is one of the tax-saving options you can choose to reduce your net taxable income. Section 80CCD covers the deductions you can avail of with your NPS investments. To get the hang on how to save income tax with NPS, you must first know about Section 80CCD in detail.

Two of the subsections of Section 80CCD of the Income Tax Act elaborate on how to save income tax with retirement plans like NPS and Atal Pension Yojana (APY):

Section 80CCD (1)

It covers the tax benefits of investing in retirement plans like NPS and APY, which makes you eligible for deductions. You can invest in NPS and avail of tax benefits as per your intent on how to save income tax. 

The maximum deductions for salaried individuals and self-employed individuals under this subsection are 10% of their salary and 20% of their total gross income, respectively. You should know this while planning on how to save income tax.

Section 80CCD (1b)

This sub-section covers the tax benefit of NPS that allows an additional deduction of Rs.50,000 over and above the limit of Rs.1.5 Lakh in 80C. If you earn a handsome salary, you must include the tax saving options covered under this section in your plan of how to reduce your income tax payout.

3. Section 80D: Save Income Tax with Health Insurance

Under this section, you can avail of deductions of up to Rs.1. Lakh annually for the premium paid towards health insurance or critical illness rider in life insurance. So purchasing a health insurance policy not only reduces chances of out-of-pocket medical expenses but also helps you save income tax.

The subdivisions for the tax deduction limit are as follows:

Deduction of Rs. 25,000 on medical insurance premium for self, spouse and kids

Deduction of Rs. 50,000 if you are a senior citizen

Deduction of Rs. 25,000 on the premium paid on behalf of your parents

Deduction of Rs. 50,000 if your parents are senior citizens

Deductions under Section 80D Max Life Insurance

It is essential to know these subdivisions to dig deeper into how to save income tax.

4. Section 80E: Tax Benefit of Education Loan Interest Payment

As a part of planning how to save income tax, the education loan you have borrowed can help you avail of tax deductions. Unlike other tax-saving options, the interest you repay for the education loan qualifies for a deduction under Section 80E of the Income Tax Act.

To understand more about how to save income tax under this section, you must first check the total amount paid as the loan interest in a financial year. There is no upper limit to deductions claimed under this section, unlike other tax benefit investment avenues. This is a differentiating factor you must know about while thinking about how to save income tax.

 5. Section 80EE: Save More Tax with Affordable Housing Home Loans

You must consider the home loan you have borrowed while planning your taxes. It is because Section 80EE allows a tax deduction of up to Rs.50000 on the interest you pay for home loans. This tax benefit is over and above the limit of Section 80C and Section 24 home loan tax benefits.

Include this section in your tax planning, if you are a first-time homebuyer. Furthermore, the loan amount should not exceed Rs.35 lakh. Knowing about such intricate details is crucial while thinking about how to save income tax.

6. Section 80G: Tax Saving Benefits of Making Donations

Donations are considered one of the tax-saving options for Indian taxpayers. Therefore, your charitable acts must be included in your tax-saving strategies. You can claim deductions on donations made to non-profit societies under Section 80G.

You must also know the following facts to plan your tax savings under Section 80G:

·         Donations must be made to societies registered under Section 12A to qualify for deductions.

·         Cash donations of above Rs.2000 are not considered valid for deductions.

7. Section 80GG: Save Tax By Declaring Rent Paid

While planning on how to save income tax being a salaried individual, you can claim a deduction on the House Rent Allowance (HRA) of your salary. However, you can claim a deduction under section 80GG if you live in a rented place and your salary does not include the HRA component. This way, the rent paid becomes one of the tax-saving options you can utilize.

Under the section, you must not own a home. Also, you can claim the least out of the following in a year as tax savings under Section 80GG:

Rs.5000 per month

25% of your annual salary

Total rent paid minus 10% of the total income

8. Section 80TTA: Get Tax-Free Interest from Savings Bank Accounts

Your savings bank accounts give you a fixed rate of interest on your deposits. It becomes a part of your income and Section 80TTA allows a deduction on such interest income.

To better understand how to save income tax under Section 80TTA, you must know that you can avail of deductions on:

 Interest income from a savings account in a bank/post-office

Interest earned up to the limit of Rs.10,000

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Phone: 9604121000

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QUESTION & ANSWER

Q. You can avail a deduction of up to Rs……. under section 80C.

A. 1.5 Lakh

B. 11.5 Lakh

C. 1.1 Lakh

D. 15 Lakh

Ans. A. 1.5 Lakh

Q. What is the Full form of NPS

A. National Public System

B  National Pension System

C. National Post System

D. None of the above

Ans. B National Pension System

Q. APY Stands for…

A.  Atul Pension Yojana

B . Atal Pen Yojana

C. Atal Pension Yojana

D. None of the above

Ans. C. Atal Pension Yojana

Q. HRA Stands For

A. House Rent Allowance

B. Home Rent Allowance

C. House Receipt Allowance

D. None of the above

Ans. A. House Rent Allowance

Q. Which Section allows a deduction on such interest income from a savings account in a bank/post-office

A. 80GG

B. 80TTA

C. 80EE

D. 80C

Ans. B. 80TTA

Need to Know about the ESIC Online Payment Process

 

Need to Knowabout the ESIC Online Payment Process

ESIC also known as the Employee State Insurance is a scheme by the Indian government and its objective is to avail stress-free services to the employees and employers by utilizing the services and information portal. This means that all Filings and payments are made via an online portal. All the employees can easily submit their monthly contributions related to ESIC by using the portal. In this blog, we will discuss the Payment Process of ESIC Online in 2023 and its benefits.

What is theMonthly Contribution Rate for ESIC?

The current contribution rate for employees is 1.75% of the wages that they earn whereas the contribution rate for employers is 4.75% of the wages that are being paid.

If any firm is newly appointed, then the contribution will be 1% of the total wages of Employee and for the starting two years, the employer pays 3% only.

Moreover, the employees whose daily average wages ware up to Rs. 137 are free from any sort of payment for contribution but employers do not enjoy any such exemptions and have to pay their contributions.

What are thedue dates of payment for monthly contributions?

An employer needs to submit the contributions of ESIC with respect to each employee and after deducting the contributions of employees from the salary and pay the contributions to ESIC within 15 days of last day of the month at the rate that has been specified.

If the monthly contribution due for a specified month is Rs. 1000 and an offline challan generated by the system has been created for a payment of Rs. 1000, then the employer will not be able to make any sort of payment online even is the challan is unrealised.

If the monthly contribution due for a specified month is Rs. 1000 and an offline challan for the payment of Rs. 700 has been created which has not been deposited, then the employer will make the payment online only for the amount that remains i.e. Rs. 300.

When online payment to pay Rs. 200 has been initiated by an employer against the total amount of dues i.e. Rs. 1000 and the transaction is declined, the challan amount cannot be modified by the employer during the double verification online. Firstly, the employer should complete this transaction to make another payment of Rs. 800.

 What is the Payment Process OF ESIC ONLINE?

The Payment process of ESIC online can be done by following the steps that are listed below. These steps will provide you some insights on how you can make payment process of ESIC online quite effortlessly and easily.

Step 1: Visit the official portal of ESIC and use the user ID and password that was provided to you at the time of registration to login the portal.

Step 2: When you have successfully logged in, you will see a page that has various hyperlinks under different modules that redirect you to specific sections.

Step 3: The nest step in the payment process of ESIC online is filing the contribution by using the “Online Monthly Contribution” option on the screen.

Step 4: Once you select this option, a preview page will appear on your screen.

Step 5: After filling all the details of your ESIC monthly contribution, you need to click on “Submit” to finish submission of your details.

Step 6: For the uploading of bulk amounts of data, an employer can easily upload the excel file as attachment using the bulk upload option. This way the employer does not have to manually type each employee’s contribution.

Step 7: The next step in your payment process of ESIC online, an MC online payment can be made by the user through internet banking of the respected bank by selecting the option “Pay Online.”

Step 8: To proceed further with your payment process online of ESIC, you need to click on “OK”.

Step 9: For any future reference, you should note your Challan Number. Now, once you click on “Continue”, in order to proceed for payment, you will be redirected to the payment page.

Step 10: Once you perform the previous step, you will be redirected to the bank’s site to make the online payment. In order to make the payment to complete your payment process of ESIC Online, the user will have to provide his credentials for net banking.

Generation of Online Challan

After following the above steps for the payment process of ESIC online, to generate an online challan follow the listed steps:

Step 11: Login the portal once again and click on the link that states ‘Generate challan’, you will be redirected to another screen. Now, you have to click on View button.

Step 12: Select those records for which you want to make the payment and then provide the amount of money you need to pay.

Step 13: Select the option ‘Online’ and then ‘submit’. After submission, a message will appear on your screen on which you need to click ‘ok’.

Verificationof Payment

The next steps in your payment process of ESIC Online are required for the verification or rechecking of the transaction’s success. These steps are listed below:

Step 14: Select the button on the right side that represents “Online Challan Double Verification.”

Step 15: The page for double verification of online challan will be displayed. Now, you need to enter the Employer’s code and the challan number provided to you and then click on ‘Submit.

Step 16: In order to print the success page, you will have to click on ‘Print’ option.

How toprocess a failed transaction?

If the payment process of ESIC online fails and your transaction gets declined, then you need to follow certain steps to process it again. But first let us understand what could be the reasons for the failed transaction. The following reasons may be responsible for the failure of your transaction:

1.      Any sort of Connectivity Issues

2.      Due to the shortage of funds

3.      User failed to remember either the user ID or password or both

4.      The failure of the ESIC site in proper redirection to the payment page or the net banking page

5.      Some sort of Link issue on the ESIC portal

However, by clicking on the link for “Online Challan Double Verification”, the failed transaction can be processed quite easily. Enter your challan number in the text box for challan number and click on the submit button in order to continue your declined transaction. Once you submit, you will see the amount along with the challan number on your screen. Now, the user needs to click on ‘Payment’ option to continue to a banking payment gateway. Then, you will be redirected to the internet banking portal to make the payment. You can finish your payment process of ESIC Online by making the payment.

AIAT Institute is the Best Tally Prime Training in Nagpur. Here We Provide Detail Knowledge of Tally ERP 9, Tally Prime, GST, Accounting, TDS, TCS, and Payroll & Provide 100% JOB Placement. AIAT is the Best Platform for those who want to make Career in Accounting. Visit www.aiatindia for More Details or You can Call on 960412100.       

CONTACT US

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Address: AIAT Institute, 15 Bhande Plot Umred Road Nagpur.

Phone: 9604121000

Website: www.aiatindia.com

Aadhaar Authentication for GST Registration

Aadhaar Authentication for GST Registration

What is Aadhaar Authentication?

The process of submitting the ‘Aadhaar number’ along with other biometric details of the Aadhaar holder to the Central Identities Data Repository (CIDR) for verifying its correctness is known as Aadhar authentication. The CIDR verifies the correctness of details on the basis of information available with it.

This process is an attempt to create an online platform to validate the identity of Aadhaar holders easily from anywhere with an intention to reduce frauds.

Aadhaar Authentication / e-KYC for Existing Taxpayers

All taxpayers registered as Regular Taxpayers (including Casual Taxable persons, SEZ Units/Developers), ISD, and Composition taxpayers can do their Aadhaar Authentication for GST registration or e-KYC on GST Portal.

It is not mandatory for every authorized signatory, promoter, or partner to get Aadhaar authenticated for a new GST Registration. Aadhaar authentication is based on the constitution of business (COB).

Type of constitution of businesses that are excluded from Aadhaar authentication:

1) Not a citizen of India

2) Department or establishment of Central or State Government

3) Local Authority

4) Statutory Body

5) Public Sector Undertaking

6) Person applying for registration u/s 25(9)

Authenticating the Aadhar or getting the e-KYC done:

If Aadhaar is available, the Primary Authorized signatory and 1 person who is Proprietor/ Partner /Director /Managing Partner or Karta of the entity registered can go for the Aadhaar Authentication.

However, if the aadhaar is not available then the person can upload any of the following documents to undergo e-KYC:

1.      Aadhaar Enrolment Number

2.      Passport

3.      EPIC (Voter ID Card)

4.      KYC Form

5.      Certificate issued by Competent Authority

6.      Others

Steps of Aadhaar Authentication for GST registration:

For all the authorized signatories mentioned in the application, this is the process to be followed:

The authentication link will be sent to the registered mobile number and email ID (mentioned in the application) after you submit the application for registration.

You need to click on the link that you have received and then enter the required details such as the aadhaar number and OTP (which will be sent on your mobile number and email id)

If done correctly, you will receive a confirmation message stating ‘successful authentication’

You can get the authentication link anytime on the GST Portal. The link is available in

My applications > Aadhaar Authentication Status > Resend Verification Link

Here are the screenshots for better understanding:

Aadhar authentication under GST is a step taken by the government to keep a tap on malpractices and to lay down ease of registering the business. It helps a user to authenticate their identity anytime and anywhere in case of any concerns. So, it is now simple and easy for new and existing GST taxpayers to get their aadhaar authentication done as per the guidelines.

AIAT Institute is the Best Tally Prime Training in Nagpur. Here We Provide Detail Knowledge of Tally ERP 9, Tally Prime, GST, Accounting, TDS, TCS, and Payroll & Provide 100% JOB Placement. AIAT is the Best Platform for those who want to make Career in Accounting. Visit www.aiatindia for More Details or You can Call on 960412100.        

CONTACT US

AIAT Institute

Address: AIAT Institute, 15 Bhande Plot Umred Road Nagpur.

Phone: 9604121000

Website: www.aiatindia.com

READ MORE:

READ MORE:

QUESTION & ANSWER

Q. What is the full Form of CIDR?

A. Century Identities Document Repository (CIDR)

B. Central Identities Data Repository (CIDR)

C. Central Identification Data Repository (CIDR)

D. Central Identities Data Recovery (CIDR)

Ans.  B. Central Identities Data Repository (CIDR)

Q. Is it not mandatory for every authorized signatory, promoter, or partner to get Aadhaar authenticated for a new GST Registration?

A. True

B. False

C. Maybe

D. None of the above

Ans. B. False

Q. Type of constitution of businesses that are excluded from Aadhaar authentication:

A. Not a citizen of India

B. Department or establishment of Central or State Government

C. Local Authority

D. All the Above

Ans. D. All the Above

Q. Aadhar authentication under GST is a step taken by?

A. NMC

B. CBCI

C. Government

D. None of the above

Ans. C. Government

 Q. if the aadhaar is not available then the person can upload Aadhaar Enrolment Number

Documents to undergo e-KYC:

A. True

B. False

C. Maybe

D. None of the above

Ans. A. True

 Multiple Currency in Tally Prime

Create, use maintain multiple currency and set rate of Exchange in Tally Prime. Step by step notes with example and practice assignment

Multiple Currencies: Many Organizations have transactions in more than one currency. Such transactions have to be recorded either in the base (home) currency or in the foreign currency. If the transactions are recorded in home currency, the rate at which the foreign currency is exchanged should be recorded as well.

Create Currency in Tally Prime

Gateway of Tally > Currency > Create

Symbol	Formal Name
$	Dollar
Word representing number after the decimal	Cent

Set Rate of Exchange in Tally Prime

Set Dollar Rate: Create > Rate of Exchange

Standard	Selling	Buying
Date	Specified Rate	Date	Specified Rate	Date	Specified Rate
1-Apr-21	₹75/$	1-Apr-21	₹80/$	1-Apr-21	₹73/$

Create Ledger : Gateway of Tally > Create > Ledger

Ledger Name	Under
Suresh Rawat	Sundry Creditors
Purchase	Purchase Accounts
Haider Enterprise	Sundry Debtors
Sales	Sales Account

 Create Stock Group : Gateway of Tally > Create > Stock Group

Group	Under
Food	Primary

 Create Item : Gateway of Tally > Create > Stock Item

Item	Under	Units
Pizza	Food	Pcs
Chips	Food	Pkt

 Purchase Entry Gateway of Tally > Voucher > F9

Supplier invoice no.: 001

Party A/c name ledger: Suresh Rawat

Purchase ledger: Purchase

Name of Item	Quantity	Rate	Amount
Pizza	10 Pcs	$2.00 Pcs	$20.00
Chips	10 Pkt	$1.00 Pkt	$10.00
			$30.00 @ ₹ 73/$ = ₹ 2190.00

Sales Entry: Gateway of Tally > Voucher > F8

Reference no.: 001

Party A/c name ledger: Haider Enterprise

Sales ledger: Sales     

Name of Item	Quantity	Rate	Amount
Pizza	5 Pcs	$3.00 Pcs	$15.00
Chips	5 Pkt	$2.00 Pkt	$10.00
			$25.00 @ ₹ 80/$ = ₹ 2000.00

AIAT Institute is the BestTally Prime Training in Nagpur. Here We Provide Detail Knowledge of Tally ERP 9, Tally Prime, GST, Accounting, TDS, TCS, and Payroll & Provide 100% JOB Placement. AIAT is the Best Platform for who want to make Career in Accounting. Visit www.aiatindia for More Details or You can Call on 960412100.         

CONTACT US

AIATInstitute

Address: AIAT Institute, 15 Bhande Plot Umred Road Nagpur.

Phone:9604121000

Website: www.aiatindia.com