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  • Category: Miscellaneous

    What is the maximum limit of the annual salary package that doesn't involve payment of income tax?

    All of us don't like paying income tax. There is a set income limit below which income tax is not applicable. Also, there are different exemptions and relaxations, e.g., if the annual salary package is Rs.three lakhs only, then no income tax payment is involved.

    What is the maximum limit of the annual salary package that doesn't involve payment of income tax?

    Considering the slab rate of income tax deduction, will a salary offer of Rs. Ten lakhs per annum be better than a yearly package of Rs. Twelve lakhs?

    Do all employees and companies pay income tax honestly? What are tricks used by the employees to evade the payment of income tax?
  • #756464
    Good question posed by the author. While there is need for everyone to pay the income tax, but there are ways and means as to how little one gets the impact of paying the same and our IT companies are very intelligent in this regard as the total take home salary are not subjected to lump sum tax has invariably one earns 16 lakh to 22 lakh per annum and the salaries has the basic, perks, cash payment, company shares transfers and personal materials are sent to the employees to avoid the whooping income tax burden. Moreover some chartered accountants are well known to manipulate the over all income and suggest little payment to the govt. But govt also knows this is happening and soon there could be major rejig on this. Nevertheless there is no hard and fast rule to follow what the Income tax has laid for each employee to pay.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #756467
    In case of payout of public sector employees, the management takes care of deduction in the income tax and the same is finally sent to income tax department. It would be the responsibility of the individuals to fill up the tax return to their own interest and they need to ensure whether the tax components filled up by the management is matching their expectations. Normally calculations of management in respect of income tax does not reflect any disparity. However, there are some firms such as IT, Finance etc where the emoluments are split up into several components so that taxable salaries are shown less diversifying some components into non taxable income. In that way, the staffs of these sectors are benefited substantially. It appears that there is the chance of manipulation of taxes if the same is to be filled up by some tax consultants.

  • #756478
    There are some basic exemptions and deductions for which most of the salaried people are eligible and some of these exemptions are standard deduction of Rs 40000 and savings deduction for Rs 150000. Apart from these there are some reimbursements which do not attract tax. If we consider these basic exemptions then people having annual earnings of approx imately about Rs 700000 will be at the boundary above which tax would have to be paid.
    Those who are earning more have to pay more tax as after a limit there is tax rate of 30%. Which means any earning if Rs 1000 becomes 700 after paying tax.
    Senior citizens have some more exemptions for tax relief for their interest income.
    The tax consultant or CA would help a person to avail all the exemptions and deductions in the matter of paying I Tax.

    Knowledge is power.

  • #756487
    There are two options now. Without availing of any tax exemption benefits paying tax is one option and the other one is to avail of all exemptions and then pay the tax. When we pay taxes we feel we are also a part of the nation's cause. Unfortunately, due to the corrupt politicians and administrative staff, we are all feeling that our money is getting wasted. I think even though we pay tax, it is better to earn more. For a person who earns Rs.10/- lakhs and manages without paying tax, he will be left with all the money with him. But a person who earns Rs,12/- will be left with definitely more than.10/[ Lakhs. So I feel we all should make hay while the sun shines and keep the money for a happy retired life. This is true for private employees who will not get any pension after retirement. Paying IT is felt as a prestige once upon a time. But these days that feeling is going away as the money is being wasted by the government.
    drrao
    always confident


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