My annual income is 7lk per annum . I have invested 3lk in equity this year . So my query is what is the best way to cut my tax and can i show this 3lk investment while i file my tax
For FY 2019-20 following are the tax implications:
- If this investment is made in ELSS scheme then deduction up to Rs. 1,50,000 is allowed u/s 80C. And the remaining salary i.e, Rs. 5,50,000 (7,00,000 - 1,50,000) will be taxable income at slab rate. Hence you might end up with a refund of excess TDS deducted on Rs. 7,00,000. No other benefit is allowed on investment.
- Any dividend income from equity investment will be exempt from taxes.
- Capital Gain will arise only when you sell the investments.
Note: In FY 2020-21, your dividend income will be taxable if its more than Rs. 5,000 and TDS on the same will be deducted @10% u/s 194K.