Income Tax Return filing for AY 2019-20: Avoid these five BLUNDERS to save more money in New Year
Income Tax Return filing for AY 2019-20: The Income Tax law provides several tax exemption options. As only a few months are left for filing Income tax returns, it is time for making a count of those exemptions.
Income Tax Return filing for AY 2019-20: The Income Tax law provides several tax exemption options. As only a few months are left for filing Income tax returns, it is time for making a count of those exemptions. While looking out for such options, it is important not to fall for transactions that may actually force you to bleed money. Income-tax is to be paid by every person. The term 'person' includes Individual, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person not covered under any of the above.
Here's a look at five cash transactions that don't qualify for Income tax exemptions:
1. Cash business transactions above Rs 10,000
Any businessperson or professional should not do not cash transactions worth over Rs 10,000 for any business-related expenses. You will not be able to get an income tax rebate if such business expenditure is paid in any other way other than a check, DD or online medium in your name.
2. Cash donations above Rs 2000
You cannot claim a tax rebate for making cash donations above Rs 2000 to any charity or political party. Electoral bonds are a better means for funding political parties. The new instalment of electoral bonds will be released in January.
3. Cash payment above Rs 20,000 for buying home
If you are buying a house or any real estate, then do not pay more over Rs 20 thousand. Use options like a check, DD or NetBanking. On being found guilty, under section 271D of Income Tax, you can be fined up to the amount of transaction up to equal to the amount of loan.
4. Accepting cash above Rs 10,000
Accepting Rs 2 lakh in cash in a day comes under the purview of the income tax law. Therefore, check or online payment is a better option.
5. Cash health insurance premium payment
Any banking or insurance product is better paid online or through check. But the provision on health insurance premium is much harder. If you pay in cash then you will not be able to claim the exemption under Section 80D of Income Tax Act. The Income Tax Department may also ask for additional information from you on such a purchase. If the transaction is questionable then you can be fined.