Advice sought on how to reduce tax liability for senior citizen

PPF OR LIC PAID FOR DAUGHTER AND SON AND WIFE CONSIDER FOR TAX

DEDUCTION INVESTMENT IN OTHER SOURCES AS PER 80C HERE TAX IS

ONLY 12000/- AND 15H IS APPLICABLE ONLY UPTO BASIC LIMIT OF INCOME

SO BANK IS SUPPOSE TO DEDUCT TDS 

You have to claim for the refund after the completion of the financial year when you have all the TDS information with you. I am not sure but i think you have to visit the Assessment Officer of your area telling about your income, TDS cut and the refund. Or you can try using tax websites to know if you don't have to visit an AO for this case too. Maybe the website will calculate and will allow you to claim for the refund of the extra TDS deducted and you can pay tax only for the 12,000.

The interest your mother earns is her income, only after it is taxed, you can take from her not before taxed. So, either you take from her before you deposit so that the total income will be below 3 lacs or you take the interest after it is taxed.

Originally posted by : gunturboy26
	You have to claim for the refund after the completion of the financial year when you have all the TDS information with you. I am not sure but i think you have to visit the Assessment Officer of your area telling about your income, TDS cut and the refund. Or you can try using tax websites to know if you don't have to visit an AO for this case too. Maybe the website will calculate and will allow you to claim for the refund of the extra TDS deducted and you can pay tax only for the 12,000. The interest your mother earns is her income, only after it is taxed, you can take from her not before taxed. So, either you take from her before you deposit so that the total income will be below 3 lacs or you take the interest after it is taxed.

Thank you so much for the response. I did some "research" on the Internet and most of the income tax Web sites I checked state that the 10% tax rate is on THAT AMOUNT by which the income EXCEEDS 3 lakhs, which in my mother's case is Rs 12,000. Can you confirm if this is correct?

I presume the bank will anyway deduct a flat 10% TDS on the interest earned from EACH of her fixed deposits as they have no way of knowing her total annual income from all the FDs and by how much it exceeds the 3 lakh limit. So only when she files her tax return in July specifying the income and TDS for ALL the FDs, the excess TDS will be refunded to her. 

Originally posted by : Debashish
	Originally posted by : gunturboy26 You have to claim for the refund after the completion of the financial year when you have all the TDS information with you. I am not sure but i think you have to visit the Assessment Officer of your area telling about your income, TDS cut and the refund. Or you can try using tax websites to know if you don't have to visit an AO for this case too. Maybe the website will calculate and will allow you to claim for the refund of the extra TDS deducted and you can pay tax only for the 12,000. The interest your mother earns is her income, only after it is taxed, you can take from her not before taxed. So, either you take from her before you deposit so that the total income will be below 3 lacs or you take the interest after it is taxed. Thank you so much for the response. I did some "research" on the Internet and most of the income tax Web sites I checked state that the 10% tax rate is on THAT AMOUNT by which the income EXCEEDS 3 lakhs, which in my mother's case is Rs 12,000. Can you confirm if this is correct? I presume the bank will anyway deduct a flat 10% TDS on the interest earned from EACH of her fixed deposits as they have no way of knowing her total annual income from all the FDs and by how much it exceeds the 3 lakh limit. So only when she files her tax return in July specifying the income and TDS for ALL the FDs, the excess TDS will be refunded to her.

Of course it is true, for general people the exemption is 2.5 lacs and for senior citizens it is 3 lacs. So you only have to pay tax for the exceeding 12,000. Yes, the banks have no way of knowing what kinds of income a customer has, so unless we submit 15G or 15H in your case, they will deduct TDS. But as the total income 3,12,000 is entirely of the FD interests and if all the FDs are in the same branch, it is obvious that the bank will deduct TDS.

You also make sure, if you can use a tax website for filing the returns and filing the refund. For regular cases where the income is below the exemption limit, the filing is simple and you can claim for the refund if the total income is the interest from FDs, but in your case, i am not sure as it exceeded. Try the websites to know if you don't have to visit AO and can get file the refund online.

Originally posted by : gunturboy26
	Originally posted by : Debashish Originally posted by : gunturboy26 You have to claim for the refund after the completion of the financial year when you have all the TDS information with you. I am not sure but i think you have to visit the Assessment Officer of your area telling about your income, TDS cut and the refund. Or you can try using tax websites to know if you don't have to visit an AO for this case too. Maybe the website will calculate and will allow you to claim for the refund of the extra TDS deducted and you can pay tax only for the 12,000. The interest your mother earns is her income, only after it is taxed, you can take from her not before taxed. So, either you take from her before you deposit so that the total income will be below 3 lacs or you take the interest after it is taxed. Thank you so much for the response. I did some "research" on the Internet and most of the income tax Web sites I checked state that the 10% tax rate is on THAT AMOUNT by which the income EXCEEDS 3 lakhs, which in my mother's case is Rs 12,000. Can you confirm if this is correct? I presume the bank will anyway deduct a flat 10% TDS on the interest earned from EACH of her fixed deposits as they have no way of knowing her total annual income from all the FDs and by how much it exceeds the 3 lakh limit. So only when she files her tax return in July specifying the income and TDS for ALL the FDs, the excess TDS will be refunded to her.      Of course it is true, for general people the exemption is 2.5 lacs and for senior citizens it is 3 lacs. So you only have to pay tax for the exceeding 12,000. Yes, the banks have no way of knowing what kinds of income a customer has, so unless we submit 15G or 15H in your case, they will deduct TDS. But as the total income 3,12,000 is entirely of the FD interests and if all the FDs are in the same branch, it is obvious that the bank will deduct TDS. You also make sure, if you can use a tax website for filing the returns and filing the refund. For regular cases where the income is below the exemption limit, the filing is simple and you can claim for the refund if the total income is the interest from FDs, but in your case, i am not sure as it exceeded. Try the websites to know if you don't have to visit AO and can get file the refund online.

That clarifies everything. Thank you so much. :)

One last query. Is it mandatory for a person below 60 to file returns…even if he falls in the no tax bracket and his annual income is way below Rs 2.5 lakhs?

Originally posted by : Debashish
	Originally posted by : gunturboy26 Originally posted by : Debashish Originally posted by : gunturboy26 You have to claim for the refund after the completion of the financial year when you have all the TDS information with you. I am not sure but i think you have to visit the Assessment Officer of your area telling about your income, TDS cut and the refund. Or you can try using tax websites to know if you don't have to visit an AO for this case too. Maybe the website will calculate and will allow you to claim for the refund of the extra TDS deducted and you can pay tax only for the 12,000. The interest your mother earns is her income, only after it is taxed, you can take from her not before taxed. So, either you take from her before you deposit so that the total income will be below 3 lacs or you take the interest after it is taxed. Thank you so much for the response. I did some "research" on the Internet and most of the income tax Web sites I checked state that the 10% tax rate is on THAT AMOUNT by which the income EXCEEDS 3 lakhs, which in my mother's case is Rs 12,000. Can you confirm if this is correct? I presume the bank will anyway deduct a flat 10% TDS on the interest earned from EACH of her fixed deposits as they have no way of knowing her total annual income from all the FDs and by how much it exceeds the 3 lakh limit. So only when she files her tax return in July specifying the income and TDS for ALL the FDs, the excess TDS will be refunded to her.      Of course it is true, for general people the exemption is 2.5 lacs and for senior citizens it is 3 lacs. So you only have to pay tax for the exceeding 12,000. Yes, the banks have no way of knowing what kinds of income a customer has, so unless we submit 15G or 15H in your case, they will deduct TDS. But as the total income 3,12,000 is entirely of the FD interests and if all the FDs are in the same branch, it is obvious that the bank will deduct TDS. You also make sure, if you can use a tax website for filing the returns and filing the refund. For regular cases where the income is below the exemption limit, the filing is simple and you can claim for the refund if the total income is the interest from FDs, but in your case, i am not sure as it exceeded. Try the websites to know if you don't have to visit AO and can get file the refund online.   That clarifies everything. Thank you so much. :) One last query. Is it mandatory for a person below 60 to file returns…even if he falls in the no tax bracket and his annual income is way below Rs 2.5 lakhs?

Well, from what i know, it is advisable to file returns even if the income is coming from FD interest, even if it is below the exemption limit because the person might take some loan in the future and the bank might ask for IT returns of a few years. It helps as you have some proof to show to the bank. And it is simple to file returns, if you have all the information, there are many tax websites, you can file online through them if you cannot file by yourself. But if you think your person would not go for any loans, then maybe not but at least keep the bank records, in case you need a loan.