Step by Step Guide to Income Tax Planning..!

 Your Small Steps Can Take you Forward by Leaps.!

by Personal FN Research

There is an old Chinese proverb which says, “It is better to take many small steps in the right direction than to make a great leap forward only to stumble backward.”  which in opinion applies even to your “tax planning” exercise.

Remember, it is vital for you to step by step ascertain where you stand, in terms of your Gross Total Income &  Net Taxable Income, so that you effectively undertake your tax planning exercise which in turn would deliver you the objective of long-term wealth creation along with capital protection.

In the past if you have taken your tax planning decisions at the eleventh hour, never mind. But, please learn from them &  do not repeat the same mistakes again. Adopt the prudent steps while doing your tax planning.

Steps to Income Tax Planning..!

Step 1:- Compute the Gross Total Income..!

The process of tax planning begins with computation of your Gross Total Income. This step enables you to ascertain the total income earned by you during a financial year, from various under mentioned sources of income, and helps you to judge where you stand.
* v Income from salary
* v Income from house property
* vProfits and gains from business and profession
* vCapital gains (short term & long term) and
* v Income from other sources.

Hence, Gross Total Income  is the total income earned by one before availing any deductions under the Income Tax Act, 1961. And it is vital to know the same, in order for you to undertake your tax planning effectively, so that you can plan within the sources of income (by using the relevant provisions of the Income Tax Act applicable to the aforementioned sources of income), as well as by availing deductions to Gross Total Income.

Now, one may ask – “how do I undertake this activity if I’m a novice?”

Well, the answer is pretty simple! You can either get it done at your office (many organisation do offer this facility), ask your CA / tax consultant to do it, or / use the convenience of the new and updated tax portals that have emerged in more recent times.

But, along with all this please do not forget to do your self-study to carry out effective tax planning exercise. One must note that it’s vital to know at least those provisions of the Income Tax Act, which directly have an impact on your finances.

Step 2: Compute the Net Taxable Income..!

After having done with computation of Gross Total Income by using the relevant provisions of the Income Tax Act for each source of income, the next step is to compute your Net Taxable Income.

Under Net Taxable Income from the Gross Total Income, the various deductions allowed under the Income Tax Act, should be accounted for (i.e. subtracted from your Gross Total Income), which would thus reduce your taxable income. These deductions enable you to enjoy reduction in tax liability, as it covers Sections under the Income Tax Act for:

& vInvesting in income tax saving instruments (your most loved & sought after Section 80C, along with the recently introduced RGESS - Rajiv Gandhi Equity Savings Scheme)

* vDonations

* v Expenditure on handicapped dependent

* vPremium payment for your medical insurance

* vInterest paid on loan taken for higher education

* v Rent paid for residential accommodation

* vExpenditure incurred on a specified diseases suffered by you

Remember, if you use the respective provisions effectively to do tax planning, it will enable you to achieve the long-term objective of wealth creation.

Step 3: Calculate the tax payable..!

After having effectively saved tax in the prudent way mentioned above, the next step is to compute your tax liability based on the present income tax slabs, and thereafter file your tax returns.

The income tax rates for Individuals & HUFs for FY 2012 - 13 are as follows..!

Net Taxable Income (in Rs)
Upto Rs 2,00,000 (for general tax payers – male and female)
Upto Rs 2,50,000 (for senior citizens)    Nil
Upto Rs 5,00,000
(for very senior citizens aged                    Nil
 80 and above)
Rs 2,00,001 to Rs 5,00,000 *
Rs 5,00,001 to Rs 10,00,000
Above Rs 10,00,000

(Source: Finance Act 2012, Personal FN Research)

* For senior citizens (age 60 but less than 80 years), with Net Taxable Income between Rs 2,50,001 to Rs. 5,00,000 taxable at 10%

Moreover you would also have to pay an education cess at 3 % on your tax liability computed.
So, say if your net taxable income  after availing for all deductions available is Rs. 10,00,000 then your tax liability will be computed as under:

Computation of Tax Liability  (2012-13)
Taxable Income (in Rs.)                   
Upto Rs. 2,00,000
Rs. 2,00,001 to Rs. 500,000
10 %
Rs. 500,001 to Rs. 10,00,000
20 %
Rs. 10,00,001 & above
30 %
Tax payable (in Rs.)
Education Cess
3 %
Total Tax (in Rs.)

(Source: Personal FN Research)

End of Season Sale from John Players ..!

Walk into the John Players stores & avail FLAT 40 %* discount on all apparel and accessories from John Players Autumn Winter 2012 collection.
The collection is available in a bevy of styles, fabrics & colors; perfect delights for the fashionistas.

It offers a profusion of options spanning from formal wear, casual wear to the stylish denims, trendy sweaters, tweed jackets etc.

So hurry and be the first to grab stylish apparels available in various designs, fits and washes - that should be in everyone’s wardrobe. Make the most of these exciting offers now!
* VAT extra

About John Players..!

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For further information, please contact:
Deepak Kapoor - Torque Communications
Mobile: 98335 82474

Global Economic Events Calendar

January 30, 2013

3:30 PM Euro Zone Euro-Zone Consumer Confidence Value

7:00 PM US GDP Qoq (Annualised)

January 31, 2013

7:00 PM US Initial Jobless claims

2:25  PM Germany Unemployment change

12:45 AM US FOMC rate decision

February 1, 2013

2:25 PM Germany PMI Manufacturing Value

7:00 PM US Change in Nonfarm payrolls

7:00 PM US Unnemployment rate

3:00 PM UK PMI Manufacturing Value

6:30 AM China PMI Manufacturing Value

February 5, 2013

2:25PM Germany PMI Services Value

February 7, 2013

5:30 PM UK BOE Announces rates

6:15 PM Euro Zone ECB announces interest rates

3:00 PM UK Industrial Production

February 8, 2013

5:29 PM China Exports

February 11, 2013

5:29 PM India Imports and Exports

February 12, 2013

11:00 AM India Industrial Production

3:00 PM UK CPI (YoY)

February 14, 2013
12:00 PM India Monthly Wholesale Prices YoY

12:30 PM Germany GDP nsa (YoY)

3:30PM Euro Zone Euro-Zone GDP

Source: Bloomberg, Angel Research

Madras Stock Exchange: Investors Awareness Programme for Beginners On Feb 2, 2013

MSE (Madras Stock Exchange) Institute of Capital Markets has been decided to conduct Investors Education Programme for Beginners every first Saturday of the Month at Chennai.

Investors Awareness Programme to be held on Saturday, 
the 2nd February,  2013 at 04.00 p.m. at the Madras Stock Exchange registered Office of the Exchange, No.30, IV Floor, Second Line Beach, Chennai - 600 001.

February Month Topic:

“Importance of Goal Based Investments"

The programme will be handled by Mr. Suresh Parthasarathy, CFP, Chennai

Date: Saturday, 2nd February,  2013

Time: 4 pm to 6 pm

Venue: Madras Stock Exchange Building, IV Floor,
30, Second Line Beach, Chennai - 600 001

No Registration Fee

Tea Time : 3.30 p.m.

Mr. P. Sampath Kumar,
Asst. General Manager,
Madras Stock Exchange
 044 - 2522 8951 / 52/ 53

India Result Calendar

January 28, 2013

Mundra Port, Bank of India, Adani Power, JSW Steel , Reliance Infra., Amara Raja Batteries, KPIT Cummins

January 29, 2013

Sterlite Inds, Idea Cellular, Dabur India, Crompton Greaves, Reliance Capital, Glenmark Pharma., United Phosphorus,
Areva, Indoco Remedies

January 30, 2013

Titan Inds., Power Fin.Corpn., Nalco, Colgate, Central Bank, IOB, Ipca labs, Dena Bank, Jyoti Structures, PVR

January 31, 2013

ICICI Bank, Punjab Natl.Bank, Siemens, Grasim Inds, Lupin, Union Bank, Godrej Consumer, Cummins India, Mahindra Satyam, Allahabad Bank, Tata Global, Thermax, Jagran Prakashan

February 01, 2013

Bharti Airtel, BHEL, Adani Enterp., IDFC, Marico, Corporation Bank, TVS Motor, Hind. Const., Graphite India

February 02, 2013

Divi's Lab., Indian Bank

February 04, 2013

J & K Bank, Bank of Baroda, Rural Elec.Corp., United Spirits, ITNL, Taj GVK

February 05, 2013

NHPC, UCO Bank, United Bank

February 06, 2013

 MOIL, Apollo Tyres, Automotive Axle, J K Lakshmi Cements, Honeywell Automation

February 07, 2013

Ambuja Cements, ACC, Aurobindo Pharma, Anant Raj, CEAT, MRF, Jyothy Laboratories

February 08, 2013

M&M, Sun Pharma, Hindalco, Cadila Healthcare, GMR Infra., Tata Chemicals, GSPL, BGR Energy , Nagarjuna Const., Subros, Cravatex

February 11, 2013

ONGC, Tata Power Co., Britannia, Hexaware, GIPCL, Dishman Pharma

Source: Bloomberg, Angel Research


Existing 2,238 Apartments Would be Demolished : TN Govt to Construct 6,254 New Flats..!

Tamil Nadu (TN) government plans to construct 6,254 apartments in Chennai, costing Rs. 1,740 crore, to alleviate pressure brought on by steady increase in population in the city.

Accordingly, the existing 2,238 flats at Peters Colony and Lloyds Colony (Royapettah) and Thatender Nagar Phase I and II (in Saidapet) would be demolished and new apartments constructed in their place, an official press release said.

In the first phase, 2,522 rental flats for TN government employees and 1,770 flats under self-financing scheme for the public would be constructed, it said.

Observing that well planned development leads to provision of all basic necessities for the people, the release said only 6950 square km area of the total of 1,28,869 square km of the city was used, while the unplanned area was 1,21,919 square km.

To streamline uncontrolled urban development, government has decided to implement a well planned scheme to utilise the unplanned area, it said.

In the first phase, a well planned project using latest technology at a cost of Rs. 4.92 crore would be undertaken along with Bharatidasan University in a 8,447 square km area, comprising Coimbatore, Madurai, Tiruchirapalli, Tuticorin, Tiruppur, Erode and Hosur areas.

Similarly, to upgrade maintenance work in the state government officers' quarters at Thanjavur, Erode, Hosur, Tiruchirapalli, Madurai, Ramanathapuram, Villupuram, Tirunelveli & Salem, Chief Minister Ms. Jayalalithaa issued orders to allot Rs. 10 crore for this purpose, the press release also said. 

Monthly Real Estate Monitor Pune January 2013

By JLL India 
Pune residential market..!

The Pune residential market witnessed stable demand during December, 2012.

The major residential projects launched in the month included Montvert’s Vesta Valley Town, SKYi Developers’ Songbirds in Pirangut and Dreams Group’s Dreams Avani in Manjri.

The new launches in December marginally increased the capital value in selected sub-markets.

Capital Value
Key Precincts
INR per month for a 1,000 sq ft two-BHK apartment
INR per sq ft
10,000 to 12,000
3,800 to 4,800
11,000 to 15,000
4,500 to 5,300
12,000 to 16,000
4,500 to 5,500
9,000 to 11,000
3,500 to 4,300
9,000 to 12,000
3,500 to 4,500
8,000 to 12,000
3,500 to 4,200

Pune Retail Market..!

With only a few major transactions concluded in December, 2012 Pune retail activity in the malls remained subdued.

The key transactions in December included Karnik and Malabar Gold leasing space in Market City in Viman Nagar. Season’s Mall in Hadapsar would be ready in the market in the next  3 to 5 months. Rents and capital values remained stable over the month.
(High Streets)
Capital Value
Key Precincts
INR per sq ft per month
INR per sq ft
MG Road
100 to 150
10,000 to 15,000
Bund Garden Road
90 to 130
9,000 to 13,000
F.C. Road
100 to 150
10,000 to 15,000
J.M. Road
100 to 150
10,000 to 15,000
D.P. Road
90 to 130
9,000 to 11,000
S.B. Road
80 to 130
8,000 to 11,000

Office Market in Pune.!

The office market in Pune witnessed an increase in leasing activity in December, 2012 decreasing the vacancy levels marginally.

The key transactions during the month included Affinity Express leasing space in Eon special economic zone (SEZ) in Kharadi, Augnum Technologies renting space in Pentagon Tower at Hadapsar and Sales Build taking space in Commerzone at Yerwada.

SBD was the main destination for leasing activities during December. The month also saw a number of pre-commitments. Rents and capital values remained stable.

Capital Value
Key Precincts
INR per sq ft per month
INR per sq ft
32 to 40
4,000 to 5,000
40 to 50
5,000 to 6,000
Bund Garden Road
60 to 70
6,500 to 7,500
Viman Nagar
50 to 60
6,000 to 7,000
S.B. Road
55 to 75
6,500 to 7,500
Koregaon Park
60 to 70
6,500 to 7,500


The Maharashtra government approved a metro rail project in Pune. A special purpose vehicle, the Pune Metro Rail Corporation (PMRC) had been set up, and the Pune Municipal Corporation (PMC) will be the nodal agency.

The entire project will be developed in phases and is anticipated to be completed within five (5) years.

For more information about JLL India research

Ashutosh Limaye
Head, Research and REIS
+91 98211 07054
Trivita Roy
Assistant Vice President, Research
+91 40 4040 9100



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