Income Tax or Service Tax Net

If I am receiving 15L - 10% TDS (1350000) as salary a year, but not employed i.e I am not in the muster roles of the company and not entitled to any  employee benefits like, PF, Gratuity, etc., how much tax I need to pay considering below yearly investments...

"Housing Loan Interest
component"	117,160.00

"Housing Loan Principal
component"	30,416.00

"LIC Premium 
including Pension Plan"	186,418.00

PPF (SBI)	50,000.00

MediClaim Policy	24,000.00
Asked 1 year ago in Income Tax from Bangalore, Karnataka
Income from business                          -                     1500000
Housing loan interest                           -                    -  117160

Other all deduction                               -                   -   150000
Mediclaim                                             -                   -      15000

Total income                                         -                   1217840

Total Tax on this including all cess        -                    196060

I have assumed you are individual male resident assessee for the above calculations. And I also have not gone into the advance tax provisions

As per the receipts you are also liable for service tax. please see to it.
Kavit Dilip Gadhia
CA, Mumbai
35 Answers
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Dear Sir,

Firstly if you are not on the payroll of the Company then you are a Professional/ Contractual Employee and hence liable for Service Tax.

In that case I assume that the salary of 15L is inclusive of Service Tax again in which the first 10 lacs are exempt as this is your first year.

So Amount of Service Tax payable  would be Rs.15L - Rs.10L (Rs.5L *14/114) = RS.61,404/-.

Now Comes Income Tax.

Gross Income - (Net of Service Tax)                                                                 Rs. 14,38,596/-
Less: Housing Loan Interest -                                                                           Rs.   117,160/-
Less: Deduction u/s 80C:
          HL Principal - Rs.30,416/-
          LIC Premium - Rs.186,418/-
          PPF - Rs. 50,000/-
          upto a maximum of 1,50,000/-                                                               Rs.   150,000/-
Less: Deduction u/s 80D:
          Medical Insurance                                                                                   Rs.    15,000/-

Total Taxable Income :                                                                                      Rs.11,56,436/-

Net Tax :                                                                                                             Rs.  177,089/- 

Less: TDS                                                                                                           Rs. 150,000/-

Net Tax Payable                                                                                                 Rs.   27,089/-

Please note Advance Tax Provisions shall apply and interest u/s 234 shall apply.
The above draft is prepared considering the Assessee is not a Senior Citizen and the Medical Insurance premium is also not paid for a Senior Citizen and paid in any mode other than cash.

Other Sources Income are also not considered.
Rohit R Sharma
CA, Mumbai
719 Answers
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As you have said that you were not getting salary for 2 months, I assume that you were not under employment for that period.

In that case the Service Tax amount would reduce by Rs.30,900/-. So the amount payable would be Rs. 30,504/-.

On the Income Tax front you will receive a refund of approx Rs.9,240/- considering the TDS deducted would also be for 10 months i.e Rs.125,000/-. 

2. To pay your Service Tax amount you will first need to get yourself registered and take a Service Tax Number, then you can make the payment with GAR-7 challan with interest and penalty.
Rohit R Sharma
CA, Mumbai
719 Answers
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COMPUTATION OF TOTAL INCOME AND TAX LIABILITY FOR F.Y.2014-15
CASE-1 : CONSULTANCY INCOME RECEIVED FOR 12 MONTHS

Income From House Property                                                              (1,17,160)
Consultancy Income                                                                             15,00,000

Gross Total Income                                                                              13,82,840
Less : Deductions under Chapter VI A
           U/s 80C                                                                                      (1,50,000)
           U/s 80D                                                                                         (15,000)


Total Income                                                                                          12,17,840

Tax Thereon                                                                                            1,85,352
Add : Cess @ 3%                                                                                          5,661

                                                                                                                  1,90,913
Less : TDS                                                                                                (1,50,000)

Balance Tax Payable                                                                                    40,913
Add : Interest U/s 234                                                                                     2,328


Therefore, Total TAX LIABILITY                                                                    43,241



CASE-2 : CONSULTANCY INCOME RECEIVED FOR 10 MONTHS

Then in that case you will be entitled to a TAX REFUND of Rs.8,030 /-
Shyam Sunder Modani
CA, Hyderabad
955 Answers
4.9 on 5.0
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The payment received by you seems to be on account of professional income. The same can be checked from the tds certificate received by you. It would be in form 16A on a/c of Fees for Professional / Technical Services. In such a case you are eligible to claim expenses towards Salary, Conveyance, Depreciation etc from the total Receipts of Rs15,00,000/-. Income Tax would be payable on your net income after claiming all expenses.

# You are also liable to register your-self with Service Tax Deptt as your professional receipts have crossed 10Lacs. Get your-self registered and start charging Service Tax to your clients
Anil Bedi
CA, New Delhi
10 Answers
4.8 on 5.0
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I don't know about your answer of Mr. Rohit Sharma. How he arrived. But you have to pay taxes under Challan 280
Kavit Dilip Gadhia
CA, Mumbai
35 Answers
4.2 on 5.0
  Talk to Kavit Dilip Gadhia
The TDS  @ 10% implies that the company is treating you as a professional and making payments for your professional services and not as an employee. Your income will then be assessed under the head : " Profits & gains of business or profession". You may need to explore whether the presumptive tax will be applicable to you, as your turnover is Rs 15 Lakhs only.  Even otherwise, you can claim reasonable expenditure actually incurred for the purpose of earning your income, such as salaries, rent, power, communication expenses etc.   

The exemption u/s 80C is limited to Rs. 1 Lakh ( which is enhanced to Rs 1.5 Lakhs from the current financial year). Thus your claims towards Repayment of housing loan, PPF and LIC contribution will be restricted to Rs 1 Lakh only.

You will be eligible to claim interest on your housing loan under the head : "Income from House property". If the property is let out you need to offer rental income also.

The deduction towards mediclaim policy u/s 80D will be Rs 15K towards insurance premia for policies for self and family and another 15K for parents.

As regards your follow up question, you can make online payment of tax through income tax department web site. As a professional you can offer your income on receipt basis and if you have not received salary (?)  for two months, you need not offer that income now and offer it as and when received.
B Vijaya Kumar
CA, Hyderabad
290 Answers
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