What Is Miscellaneous Exempt On Property Tax: Fill & Download for Free

There are certain basic needs and wants that one would want to spend money on (and then there are other discretionary spending options). The tax exemptions are designed so that your expense on certain basic needs and wants is exempted from taxation. As you read on, you will understand that the word “basic” is vital here. JTax exemption options based on lifestyle needs:Investment Related1. Benefit for your retirement I: We earn today not just for today, but also to support ourselves once we retire. Section 80C allows you to save ₹1,50,000 every year for your retirement in pension funds, provident funds, long term life insurance policies, ELSS, retirement funds, etc. While not all options are long term, we encourage investors to invest this chunk with a retirement kitty mindset. We can dig into the details of these options, but for now it’s important to understand this option exists. Using this option to the maximum leads to an annual tax saving of about ₹45,000.2. Benefit for your retirement II: Beyond the ₹1,50,000 under section 80C, you are now also allowed an additional ₹50,000 investment in NPS under Section 80CCD which will be tax deductible. However, one must understand that while you save on taxes today, almost 60% of your withdrawal after retirement becomes taxable. Thereby making this an instrument of only deferring taxes rather than saving taxes. This point may make a strong case for not using this option.Beyond 80C3. Relief for your health cover: Everyone needs some monetary relief when it comes to health and illness. The government provides this relief by giving you tax rebates for the premium you pay for your family’s and your parents’ health cover. Under Section 80D, you are eligible for a rebate of ₹25,000 towards health insurance for your family and another ₹25,000 towards that of your parents (₹30,000 if they are senior citizens). Thus you get a rebate of a total of ₹50,000-₹55,000.4. Exemption for your education finance costs: In today’s ever-changing and competitive world education is of prime importance – for yourself as well as your children. The government allows you to take a tax rebate on the financing cost (interest) of an education loan. Section 80E puts no upper limit on this exemption. Interest on the loan taken for the higher education of self, spouse or child is exempt under this section. The loan can be taken from any bank, financial institution or charitable trust, but not from friends and family. The loan need not be an ‘education loan’ per say. Any loan (personal loan, loan against property) where the end use of funds is for higher education can be used for tax exemption.5. Exemption for your home finance costs: Buying one’s own home is perhaps one of the most important goals in many Indian’s lives. The government provides tax benefits of up to ₹2,00,000 every year on the interest you pay on a home loan. Further, one must understand that tax benefits on a joint home loan are available to all the joint holders. It is important to note that ownership in the property is required to avail this tax benefit. If a loan is taken jointly, but the borrower is not an owner in the property, then you may not be able to claim tax exemptions. Likewise, owners who are not borrowers and do not contribute to the EMI will not be able to claim tax exemptions on the loan.6. Relief for charitable work: Bas human beings, we are here to help one another. Contributions made to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G. One must keep in mind that not all donations are covered for deduction under section 80G – only donations made to prescribed funds qualify as a deduction. Interestingly, this deduction is allowed to all types of tax payers – individuals, company, firm or any other person.7. Exemption for your basic money needs: In our opinion, keeping money secure is the most basic need when it comes to money. For this, we keep money in a bank and earn savings interest on the sum. ₹10,000 of interest income from your savings bank account is exempt from being taxed.Salary Structure Related8. Relief for your house rent: For non-home owners, house rent can be quite a daunting expense to your finances. The government provides relief through tax exemptions on full or partial house rent paid. There is no absolute limit to this exemption. However the exemption amount will be the lower of actual House Rent Allowance as per of salary structure, 50% of basic salary (including DA) for metros (40% for non-metros) and the actual rent paid less 10% of basic salary.9. Help for your medical expenses: In spite of the medical cover that one may have, you are bound to have some other miscellaneous medical expenses in the family. Up to ₹15,000 worth of these expenses annually, if reimbursed by your employer are tax-free in your hands. Considering that this is a reimbursement, one must remember that exemption is allowed up to the actual amount spent.10. Happiness for your holidays: A holiday or a break is as important in your life as many other things. The government surprisingly comes to the rescue here as well! If Leave Travel Allowance forms a part of your salary structure, then this allowance can be used for tax exemptions for travel expenses on a trip within India. This allowance in only valid for immediate family and other dependent family members. The allowance allows economic air fare, first class AC train travel or other means of public transport.11. Exemption for regular commute: Travelling to work is another basic necessity for performing your duties. Commuting expenses of up to ₹19,200 every year are exempt from taxes and can be claimed without producing proof or receipts.This is not an exhaustive list but has all the major exemptions. There are many other exemptions that are eligible in various different special situations.As you can see, a lot these exemptions have limits to cover only your basic needs and expenses. Knowing and understanding these allowances and exemptions is the first step in tax optimizing your finances.Hope this helps!- -Anirudh Sheth, CFA(P.S. I am an ex-London based investment banker. I am a strong believer of mutual funds and have most of my own wealth parked in mutual funds. Currently, I advise clients on managing their personal finance in Mumbai. I am also a CFA charterholder.)

This may be too general of a questions. How do they work in what respect?An individual tax returns starts with your income from wages, interest, dividends, business income, sale of securities or other investments, rental income, royalty income, partnership or S-corp income and any other income you may receive during the year. That total income is reduced by the itemized or standard deduction. The standard deduction is a deduction that the government gives you based if you are single or married. However, if you total up your itemized deductions and that is larger than your standard deduction, you use that number. Itemized deductions are made up of state, local and property taxes, mortgage interest, medical deductions, contributions and miscellaneous business or investment expenses . You get one more additional deduction against income. This is called the personal exemption and its an amount given to you by the government and is multiplied by the amount of people in your family. When i say family, it means you and your wife and children. Once you take your income, subtract our the standard/itemized deduction and your personal exemption, you arrive at your taxable income. There is a table or tax rate that determines your total tax. This total tax is then reduced by withholding your pay check may have and any estimates you may have paid during the year. If you there is a still a balance after that, you need to pay that to the IRS, if you overpaid, you get a refund. That is how it works. I have left out 5000 other things that can occur on a return, but that is the basics

Thank you for the A2A, Mike.Everyone knows that American tax rates on the highest incomes were once 90%+. What’s less commonly known is that in many cases those rates served to produce an aristocracy, not prevent it — thus was the AMT born.When the world was fighting for its life in 1941, people could understand that income above $85 million might be taxed at 81%. When it was 20 years later and income above $3 million was being taxed at 91%, money pushed back.Tax Planning became a cottage industry in the postwar years. The idea was simple: open up a loophole in the word “income” and cram in as many tax deductions as possible. Say you buy real estate and claim lots of depreciation on it without ever really taking a loss. Say you give assets to charity, but claim a mammoth deduction on a gift that barely cost you anything.Justice and OpportunityDone right, punitive tax rates on the highest incomes might bring the wealthy down closer to the level of the ordinary American. In this case, they stood in the way of people trying to move up. Boxer Joe Louis is a classic example: being self-made he did not know the right advisors, and lost his fortune to a poor understanding of the tax system. By contrast, those who were already wealthy used tax planners to defend their high status.The Alternative Minimum Tax (AMT), or rather its predecessor, passed in the late 1960s to combat this issue. In 1966, 155 high-income households employed such capable tax planners that they paid zero dollars in taxes. Under the new law, if you took too many special deductions you would still owe taxes. Predictably, tax planners and aristocrats were no doormats, and they developed new techniques. A fresh round of legislation fought back in the late 1970s, but again the gains were ephemeral.Lower Rates, Higher TaxesIn the early 1980s the time was right for an overhaul: the government needed money for the Cold War, yet interest rates were too high to rely on government debt, so tax revenue could not wait. 1982 law TEFRA effectively gutted tax planning in exchange for much lower tax rates. And it worked! Rates dropped to 50% (38.5% by the end of Reagan’s time in office), while tax revenues actually increased, because so many stopped gaming the system. The AMT structure we have today was put in place at this time.Note that these are 2009 projections. Congress “patched” the AMT to prevent the spike in 2010–11, but the long-term trend remained.Justice and Opportunity RevisitedWhile the AMT was designed to deny loopholes to the super-rich, its numbers were not updated to reflect inflation, and by Obama’s election the tax applied to millions of American households. It was quickly becoming a hidden tax on the middle class. The Congressional Budget Office projected the tax would affect tens of millions during the 2010s. The bipartisan tax bill ARTA began inflation indexing after 2012, stopping the bleeding but not yet healing the wound.I have served a number of successful business owners and executives as they consider their tax liabilities, and therefore I highly support a good AMT. We need justice and opportunity. The loopholes of the old tax code served to protect the already-wealthy while preventing others from rising high. Today the AMT has its troubles: about a quarter of those paying AMT have middle- or upper-middle incomes (27% in 2008), and the majority of those on their way up have AMT liability. Meanwhile the super-rich commonly have their finances structured correctly to avoid the minimum tax.I would not take a position on any particular tax policy proposal without considering how it interacts with the rest of a proposed tax system, however, the phrasing of our question makes it clear that today’s AMT pushes far beyond its true purpose. If someone might justifiably think that it is primarily concerned with deductions for state and local taxes, the AMT has transitioned from a defense against the abuses of the super-rich to a pitfall for ordinary Americans.Brass TacksNow let’s address the question head-on: What does the AMT affect, beyond deductions for state and local taxes? While the minimum tax has become so intricate as to require tomes and specialists, here are some common scenarios where the AMT may come into play.High Dollar Tax ReturnsAn individual gives a lot of money away to charity.A company has lots of special depreciation, big net operating losses, research preferences, installment sales, etc.A company loses money but has life insurance policies for a non-qualified pension plan that appreciate.Ordinary Tax ReturnsPersonal exemption and standard deduction. Especially matters if you are married and/or have children.State and local taxes, as well as property taxes and foreign taxes.“Miscellaneous” itemized deductions, such as business expenses not reimbursed by your employer.Some medical expense deductions, particularly if you are old or very sick and spend a large portion of your income on medical bills.Stock options that are exercised, even if they are not yet sold for a profit. This affects, for instance, startup employees who are stuck in a lock-up period.Bottom LineA strong, straightforward Alternative Minimum Tax should be in place to prevent abuses by some of the super-rich, yet the current tax is a labyrinth. It adds great complexity for those who do tax compliance and can sneak up on even ordinary Americans. The process of refocusing it on its true mission began during the Obama administration and should continue to develop, in order to promote both economic justice and opportunity.Sources:New York Times: A.M.T., Which Hit Trump in 2005 Taxes, Is No One’s FavoriteCongressional Budget Office: The Individual Alternative Minimum TaxInternal Revenue Service: SOI Tax Stats - SOI Bulletin: Fall 2010Disclaimer: This is not professional tax advice or investment recommendation.