WARNING: Non-payment of income tax may soon become prosecutable
The government may prosecute those accused of evading taxes under the Prevention of Money Laundering Act (PMLA) as part of a wide-ranging crackdown on black money. Further, non-declaration of foreign bank accounts and assets may also be made a criminal offence, according to people who have been briefed on the thinking within the tax authorities and the finance ministry. Under laws currently in place, neglecting to pay income tax is a compoundable offence – that is, offenders can end proceedings by paying a penalty. Failing to pay service tax, in certain specific situations, and excise duty are criminal offences even now. Such acts could be added to the list of offences to which PMLA is applicable, known as ‘predicate offences’. Annuity plan of LIC or any other insurer for receiving pension from the funds referred to in Section 10 (23AAB)
Amount paid (excluding bonus and interest paid) as above by salaried individuals to keep in force a contract for any annuity plan of LIC or any other insurer for receiving pension from the funds is exempted from tax.
Central government employees who joined the service on or after 1 January 2014 and who invest in such annuity plan or pension fund as above are also entitled to this exemption under Section 80 (CCD [I]). This exemption, however, cannot be more than 10 per cent of his salary, which includes DA but excludes all other allowances and perquisites.
It is also to be noted that the aggregate amount of deduction under sections 80 (C), 80 (CCC) and Sub-Section (1) of Section 80 (CCD) shall not exceed Rs 150,000. However, contribution made by the central government or any other employer to a pension scheme under Section 80 (CCD ) shall be excluded from the limit provided under Section 80 (CCE). Tax deduction of Rs 2,000 under Section 87 (A) for assessees of taxable income below Rs 500,000 Do not forget to claim deduction under Section 87 (A) which provides for a maximum tax relief of Rs 2,000 for assessees with a taxable income below Rs 500,000. Many of us could be unaware of this provision. Payment of medical insurance premium enjoying tax deduction under 80 (D) Here, tax deduction is available up to Rs 15,000 for self/family and additionally up to Rs 20,000 for medi-claim insurance in respect of parent/parents of the assessees.
Deduction under this section will also include contribution made to the Central Government Health Scheme-CGHS (not exceeding Rs 15,000). The premium should be paid in respect of health insurance of the assesse, his family members or his parents. Deduction of Rs 40,000 in respect of medical expenditure actually paid u/s 80 DDB A tax deduction of Rs 40,000 is available in respect of medical expenditure actually paid. Further, where the expenditure is incurred for a senior citizen,