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INCOME TAX - DEFENCE PENSIONERS (2018-19) USEFUL TIPS

INCOME TAX - DEFENCE PENSIONERS (2018-19) USEFUL TIPS

This is the time to calculate your income tax liability and start investing in the Tax savings schemes before  31st March, 2018.  The rates of Income Tax have not changed.  But our Pension has increased to some extent.  As result, all the defence pensioners of the Rank of Havildar and above and equivalent ranks in other services will have tax liability.

The rates of Tax for the Assessment Year 2018-2019 is as follows:-

1 Taxable Income Below 60 years Above 60 yrs-80 yrs. Above 80 years
A Upto Rs.2,50,000 NIL NIL NIL
B Rs.2,50,000 to Rs.3,00,000 5% NIL NIL
C Rs.3,00,000 to 5,00,000 5% 5% NIL
D Rs.5,00,000 to 10,00,000 20% 20% 20%
E Above 10,00,001 30% 30% 30%

The pensioners whose income exceeds Rs.2.5 lacs (Before any deductions) will have to file Income Tax return before 31 July 2018. (Due date)  Delayed filing will attract fee of Rs.1,000, Rs.5000 and Rs.10000 under various conditions.  Therefore, it is advisable to file your return before 31 July, 2018.

Make use of various tax saving schemes to reduce your tax liability.  Rs.1,50,000 eligible for deduction under Sec.8C.  They are:-

a)      LIC premium (10% of sum assured)

b)      Mutual fund deposit..

c)      Tution fee for two children.

d)      Housing loan principal.

e)      Fixed deposit with Scheduled Bank for a period not less than 5 years as per the scheme.

f)       Under Senior Citizens savings scheme.

g)      5 years time deposit in Post office Deposit rule.

Whatever tax savings you make, you must produce the receipt to the bank before 31 March, 2018.  Also you have to submit PAN Card.  If you do not submit the PAN Card the bank will charge double the tax.

If the bank deduct any tax from your pension or from your fixed deposits, you must collect Form 16 from the bank and keep ready for filing Income Tax Return.

Those who are drawing two pensions must account both the pensions for Income Tax.  The same way, those who are re-employed in any department including Texco must include their pension along with their salary and calculate the tax.  Be aware of some basic Income Tax rules and pay your tax regularly.  You can make use of various tax savings scheme to reduce your tax burden

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