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How to Prepare Anticipatory Income Tax Statement?

To find out the taxable income and the tax to be paid for the financial year, the government servants calculate the anticipated income of a financial year. One 12th of the tax amount is deducted from the salary each month. This system prevails for a long time. But this was not followed properly by most of the govt servants. Now the finance department has published a circular regarding implementation of 8+4 EMI Model for the remittance of income tax based on the salary amount drawn by the govt servants.


What is 8+4 EMI Model?

Let us take the 12 months of a financial year as two parts – the first 8 months and the next 4 months. The first premium of income tax is usually deducted from the salary of March in a financial year. The deduction of same amount of tax premium would continue in the following 8 months if there are no other changes. We would get a clear idea of the income of the present financial year after 8 months. There may be changes in the salary income that was in the month of March. Hence it is preferred to make calculations again including the changes. Most of us have experienced the difficulty of paying a huge amount towards tax in the month of February for not revising our anticipatory income and tax. So, a revised anticipatory statement can be prepared after 8 months and tax deduction can be done based on the new amount.

Gross salary including basic salary, allowance, perquisites is calculated and deductions from 80 C to 80 U, housing loan interest, professional tax etc are lessened from the total salary income to calculate the tax amount. As per the anticipatory income statement, one 12th of tax should be deducted in the salary bill of every month. If the income tax amount is not deducted from the income sources, 1% interest and 1.5% of interest for not being paid the tax amount should be remitted. Penalty can be levied upon the defaulters and those who reduce the amount that is to be deducted. When there is an increase in the total salary amount due to salary hike or interest or other allowances, the govt servants should give a revised anticipatory statement and revised income tax amount ought to be deducted from the salary of the following months.


Revised Tax Rates 2018-19 

The prevailing changes in the new financial year
1. The basic slab would remain the same as it was in the previous year.
2. Rs.40000 can be deducted directly from the salary as standard deduction.
3. Tax has been levied for the interest amount of fixed deposits, RD and other such deposits except SB. No changes are made here for an ordinary citizen. Whereas the senior citizens would enjoy a significant reduction of maximum Rs. 50000 for the said interest amount. For instance, if a senior citizen gets Rs.55,000/- towards interests from various deposits, it is sufficient to remit tax for Rs.5000/- only. All but senior citizens can avail of deduction of Rs.10000 at the maximum for interest amount incurred from SB deposits only.
4. A deduction of maximum Rs.25000 of medical insurance policy premium from salary is allowed in chapter VI A. Though there are no changes made in this, the deduction amount for the senior citizens has been raised from.Rs.30000 to Rs.50000.
5. In the previous year, 3% more cess on tax was considered while calculating the tax amount to b paid. Further it would be 4%.
6. Those who availed of medical reimbursement were benefited with the reduction amount of Rs.15000/ and only the rest of the amount had to be included in the taxable income. But it is completely withdrawn now. Hence, from now, the complete amount of medical reimbursement comes under taxable income.
7. The maximum deduction amount of Rs.60000/ for senior citizens and Rs.80000 for super senior citizens as per section 80 DDB for persons who are seriously ill or dependents, has been increased to Rs. One lakh.
8. The conveyance allowance as part of salary allowed to some employees with a deduction of Rs.1600/ per month to the maximum limit of Rs. 19200/ per annum won't exist further.


Anticipatory Income Tax Software 2018-19

Various software tools given here can be made use of, for preparing anticipatory income tax statement.

Downloads
Anticipatory Income Tax Software for 2018-19 (Ms Access) Utility Prepared by Alrahiman
Anticipatory Income Tax Software for 2018-19 (Ms Excel) Utility Prepared by Babu Vadukkumchery
Anticipatory Income Tax Software for 2018-19 (Ms Excel) Utility Prepared by Sudheer Kumar T.K
Anticipatory Income Tax Software for 2018-19 (Ms Excel) Utility Prepared by Unni Mammad
Related Downloads
Income Tax 2018-19 Notes Prepared by Babu Vadukkumchery
Income Tax Software Tools

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