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Complete Income Tax Project FY2024-25 FINAL

This research project focuses on income tax planning for salaried individuals for the financial year 2024-25, detailing the provisions of the Income Tax Act, 1961, and comparing the old and new tax regimes. It highlights available deductions and exemptions, practical examples for tax optimization, and suggests that individuals should evaluate their financial situations to choose the most beneficial tax regime. The findings emphasize the importance of tax planning and awareness of applicable sections for reducing tax liability.

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amol khondil
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22 views5 pages

Complete Income Tax Project FY2024-25 FINAL

This research project focuses on income tax planning for salaried individuals for the financial year 2024-25, detailing the provisions of the Income Tax Act, 1961, and comparing the old and new tax regimes. It highlights available deductions and exemptions, practical examples for tax optimization, and suggests that individuals should evaluate their financial situations to choose the most beneficial tax regime. The findings emphasize the importance of tax planning and awareness of applicable sections for reducing tax liability.

Uploaded by

amol khondil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Complete Income Tax Planning for

Salaried Individual Person for FY 2024-


25
A Research Project Submitted for M.Com Semester 4
Subject: Taxation
Index
1. Introduction

2. Objectives of the Study

3. Research Methodology

4. Income Tax Overview under Income Tax Act, 1961

5. Tax Slabs for FY 2024-25 (Old vs New Regime)

6. Deductions and Exemptions Available to Salaried Individuals

7. Practical Examples of Tax Planning

8. Comparative Analysis – Old vs New Regime

9. Findings

10. Suggestions and Conclusion

11. Bibliography
1. Introduction
Income tax planning is an essential part of financial planning for salaried individuals.
This project focuses on understanding and applying the various provisions of the Income
Tax Act, 1961 relevant to salaried persons, especially in the context of the Financial Year
2024-25. The aim is to optimize tax liability through legitimate means such as
exemptions, deductions, and choice between old and new regimes.

2. Objectives of the Study


1. To study the tax structure applicable to salaried individuals under Income Tax Act,
1961.

2. To understand the difference between Old and New Tax Regimes.

3. To explore deductions and exemptions available.

4. To present practical examples for better tax planning.

5. To suggest optimum regime choice based on income level and investments.

3. Research Methodology
This research is based on secondary data collected from government portals, finance
ministry reports, budget documents, CA articles, and Income Tax department circulars.
Examples are prepared based on realistic salary structures.

4. Income Tax Overview under Income Tax Act, 1961


The Income Tax Act, 1961 governs the levy, administration, collection, and recovery of
income tax in India. It provides detailed provisions related to taxable income,
exemptions, deductions, and compliance. Salaried individuals are taxed based on the
applicable slab rates, after considering permissible deductions.

5. Tax Slabs for FY 2024-25 (Old vs New Regime)


Old Regime:

Income up to ₹2,50,000 – Nil

₹2,50,001 to ₹5,00,000 – 5%

₹5,00,001 to ₹10,00,000 – 20%


Above ₹10,00,000 – 30%

New Regime (u/s 115BAC):

Income up to ₹3,00,000 – Nil

₹3,00,001 to ₹6,00,000 – 5%

₹6,00,001 to ₹9,00,000 – 10%

₹9,00,001 to ₹12,00,000 – 15%

₹12,00,001 to ₹15,00,000 – 20%

Above ₹15,00,000 – 30%

6. Deductions and Exemptions Available to Salaried Individuals


Section 80C – Investment in LIC, PPF, ELSS, etc. (Limit: ₹1,50,000)

Section 80D – Medical Insurance Premium (₹25,000 to ₹1,00,000 based on age)

Section 80TTA – Interest on savings account (Limit: ₹10,000)

Section 24(b) – Interest on home loan (₹2,00,000) under Old Regime

Standard Deduction – ₹50,000 (applicable in both regimes from FY 2023-24)

7. Practical Examples of Tax Planning


Example 1:

Mr. A has a gross annual salary of ₹10,00,000. He invests ₹1,50,000 in LIC and PPF
(eligible under 80C), pays ₹25,000 medical insurance premium (80D), and has a home
loan interest of ₹1,80,000 (section 24b).

Old Regime Calculation:


Gross Income: ₹10,00,000
Less: Standard Deduction: ₹50,000
Less: 80C: ₹1,50,000
Less: 80D: ₹25,000
Less: Home Loan Interest (24b): ₹2,00,000
Net Taxable Income: ₹5,75,000
Tax: ₹12,500 + 20% of amount above ₹5,00,000 = ₹12,500 + ₹15,000 = ₹27,500 (+
cess)

Under New Regime, most deductions are not allowed. Taxable income = ₹9,50,000. Tax
= ₹45,000 (+ cess)

8. Comparative Analysis – Old vs New Regime


For salaried individuals with significant deductions (LIC, PPF, 80D, home loan), Old
Regime is more beneficial. New Regime suits those with fewer investments and simple
salary structures. The choice must be based on available deductions and individual
preferences.

9. Findings
1. Tax planning can significantly reduce liability.
2. Old regime favors those with higher deductions.
3. The standard deduction now being available in the new regime helps to bridge the gap
slightly.
4. Awareness of sections like 80C, 80D is crucial for tax saving.
5. Tax regime choice should be made annually.

10. Suggestions and Conclusion


Salaried individuals should evaluate their salary components, investment capability, and
expenses eligible for deductions. Based on that, they should compute tax under both
regimes and select the most beneficial one. Timely investment planning and awareness of
new tax provisions are key to effective tax management.

11. Bibliography
1. Income Tax Act, 1961
2. Budget Documents 2024-25
3. www.incometax.gov.in
4. Articles from CAclubindia.com
5. Income Tax Circulars and Notifications

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