Income Tax Project

Topics: Tax, Capital gain, Taxation Pages: 62 (16156 words) Published: December 21, 2012


Project submitted in partial fulfillment for the award of degree


I hereby declare that this project report titled, Income Tax Planning in India with respect to Individual Assessee submitted by me to the Department of Business Management of XXXXX, is a bonafide work undertaken by me and it is not submitted to any other University or Institute for the Award of any degree diploma/certificate or published any time before.



A work well begun is half done. These encouraging words from my project supervisor and guide led me to churn out this concise yet comprehensive study.

I sincerely thank Shri XXX, Faculty, Department of Business Management at XXXX, for his support and guidance all through this study and for his unbiased feedback on my presentations all through the MBA course.

I extend my sincere gratitude to all the members of Department of Business Management for extending their co-operation for successful completion of my project.

This project would not have been possible without the regular reading of Tax Columns from the business related newspapers; hence, I am thankful to all the authors who contributed such informative articles which helped me accomplish my this assignment.

Heartfelt thanks to my parents and all my well wishers who made this project possible. Your contributions have been immensely helpful.


1. List of Tablesi

2. Introduction1

3. An Extract from Income Tax Act, 19616

4. Computation of Total Income13

5. Deductions from Taxable Income46

6. Computation of Tax Liability53

7. Tax Planning - Recommendations and Useful Tips58

8. Bibliography86

List of Tables

Table 1: Tax Rates for A.Y. 2007-08 - For Resident Male Individuals below 65 years of age54

Table 2: Tax Rates for A.Y. 2007-08 - For Resident Female Individuals below 65 years of age54

Table 3: Tax Rates for A.Y. 2007-08 - For Resident Senior Citizens (who are 65 years or more at any time during the Financial Year 2007-08)55

Table 4: Sample Tax Liability Calculations - For Resident Male Individuals below 65 years of age55

Table 5: Sample Tax Liability Calculations - For Resident Female Individuals below 65 years of age56

Table 6: Sample Tax Liability Calculations - For Resident Senior Citizens (over 65 years age at any time during F.Y. 2007-08)56

Table 7: Tax Planning Tools Mix by age group62

Table 8: Term Plan Returns Comparison69

Table 9: Traditional Endowment Plan Returns72




Need for Study


Scope & Limitations

Income Tax Act, 1961 governs the taxation of incomes generated within India and of incomes generated by Indians overseas. This study aims at presenting a lucid yet simple understanding of taxation structure of an individual’s income in India for the assessment year 2007-08.

Income Tax Act, 1961 is the guiding baseline for all the content in this report and the tax saving tips provided herein are a result of analysis of options available in current market. Every individual should know that tax planning in order to avail all the incentives provided by the Government of India under different statures is legal.

This project covers the basics of the Income Tax Act, 1961 as amended by the Finance Act, 2007 and broadly presents the nuances of prudent tax planning and tax saving options provided under these laws. Any other hideous means to avoid or evade tax is a cognizable offence under the Indian constitution and all the citizens should refrain from such acts.

Need for Study
In last some years of my career and education, I have seen my colleagues and faculties grappling with the taxation issue and complaining against the tax deducted by their employers from monthly remuneration. Not equipped with proper...
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