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Income Tax Planning for Doctors

Dec 24 | 1:30 PM

Income Tax Planning is viewed as a complex and time-consuming activity and is therefore underutilized by physicians in our country. With December 31st fast approaching, what is the best way to plan for the upcoming fiscal year? What are the tax-saving investment strategies available to doctors? How does a doctor keep up with the ever-evolving income tax code? To answer this, Medflix is hosting Komal Shivdasani - a financial planning and money management expert. She will demystify the jargon around income tax and help you save money more effectively!

[Music] good evening friends uh thank you for taking time let me uh let me introduce uh the session today and why we did this session then come to the speakers so uh we it's it's december and uh in three months the financial year comes to an end this gives us just about enough time to review our tax planning for the year and make any last minute alterations uh possible so we thought it would be a good time to talk about income tax we'll follow this up with another session on filing so this session is more restricted to planning and how we can use various provisions which are available to uh to the best extent uh we'll probably do another session on uh filing and what are the easy ways to file tax uh some online options so uh gives me great pleasure to introduce uh two young professionals from finance uh who've been doing some terrific work in financial literacy over the last few years komal and roshina they've spent over a decade in in this field they run a startup called rupeeco and both are qualified finance professionals they've they organize a lot of sessions and workshops and they'll talk more about it but you can also check out rupeeco's website and blog and learn more about the uh different things they're talking about over there uh komal and rushina before you start off with the topic uh it would be great to have some context about how you got into this and uh if you can just share some personal uh you know uh experience with rupico and then we can get started with the presentation yes uh thank you so much rohan for this introduction and uh it's really lovely to be here and talking to all the professional doctors out here and so um uh uh week like i've been working i i cleared my ca a few years ago and then got into a normal you know job uh as a financial professional and within a couple of years we realized both of us were working together in the same organization and we saw that a lot of people are struggling with you know basic personal finance not understanding how to go about investing or what are taxes and it would all scare them a lot and we thought that because we had this background and we do have some kind of understanding let's just make the most of it and uh start an educational form uh around this and just keep spreading awareness because that is what we both of us were really interested in and that's how we formed rupert and now our main focus is on spreading financial awareness so the practicing part of it has taken a little bit of a back seat and we are more into doing workshops on income tax on investments and topics like these and on the side we also keep on practicing so that you're always in touch and we know what's relevant as of now so yes that's about it perfect thank you so much uh roshina for the introduction uh and uh lovely to have you here i'll leave the stage for both of you to take us through uh to all the all the doctors in the audience we've tried to cover uh i mean the the speakers have tried to cover this topic to the best of their uh possibility given the time frame we have different people will have uh different levels of understanding to start with so it will start with a little bit of basic and then get into the the crux if you have any questions which are not being answered in the session please put them in the text box if we can answer them today we'll answer them today uh there might be things which we'll have to get back to you on we'll definitely get back to you via email to all the questions that are shared here wishing all yours yes perfect so uh income tax is one topic which may seem very complicated to a lot of people and this is what we've realized over the time spending uh with people talking to them and all but as a chartered accountant professional i want to tell you this is one topic which is our most favorite like common favorite every ca's favorite subject out of the 8 subjects that we have is income tax so it's not as difficult as it may seem initially and honestly it's very exciting and very interesting because it keeps on changing with every financial year so every year you may see there is a budget that comes in the finance minister gives a budget and every time there are something some new uh amendments to it and that makes it a lot more interesting because it's very updated so as of now there may be sections which are so relevant like there'll be there'll be something new about electric vehicles because that is in trend now or there are every year there are new newer and newer sections and that is one thing that makes it exciting from a lay person i understand that that is one thing which also makes it complicated because it's always changing but um if you understand the basics we'll be covering a lot of basics today and if you understand that it it's going to help you in the long run so everything when it comes to income tax the entire act is uh made in such a way that it's uh uh it's very thought out so it's not very random it's there's a lot of thought given to everything now that is put in the act and if we understand the basic structure of it uh will be under the newer amendments will never seem like a problem it will always just add on to what's already there so um the agenda for to today is this we'll be discussing the five heads of income so that's the basic like there are five different sources from where an individual can earn income then out of those five incomes we'll be discussing two which i think is relevant to most of us here so one is business and profession taxation so whether you have your own clinic or if you are earning a retainer ship fees or visiting a consultancy fees or as a freelancer for earning all of that comes under business or a profession and if you are employed somewhere uh with an organization with a hospital then it comes under salary so these are the two major heads of income that we aim to discuss today and then we will come to the deductions part which is where all the tax planning happens so deductions may there are a lot of sections where you can invest in certain places and save on taxes or if you have spent in certain places you can save on taxes so we'll discuss the deductions part and then we will come to the new and the old tax regime so if you may you may have heard of it because this year when we are filing the returns we have this option to switch or to select one of the two tax regimes so we'll discuss what is that what are the pros and cons and which one is more beneficial to you so this is the agenda and yeah so this is the poll uh and you all can select your options and submit the votes in and we'll get the results once you've submitted [Music] okay uh yeah so that's i think 56 percent of the votes go to employed with an organization all right so uh yes that was just to get a general idea of uh where uh where everybody is from and uh uh so before we get into the heads of income this is a very basic thing which sometimes is confusing there is there are two years when it comes to income tax and only in income tax we use this concept of assessment here so a financial year is the year in which you earn the income so say first of all our financial year starts from april and ends in march so april to march uh is when you are earning the income and after march you get a couple of months to assess your income and then file your returns so the year in which you are assessing your income is called the assessment here and uh usually the assessment here is always used when you see your income tax acknowledgement or when you see on the portal on the income tax portal it's always assessment here so here when you see 2122 the income in this entire form will be from april 2020 to march 2021 so uh the assessment here is the following year in which you are filing the income tax return and income tax will always use that year but you have to understand that your the income is from the previous year okay so this is just to clear the confusion before we begin and uh currently the financial year that got over was 2020-21 and the due date for that is just ending so 31st december usually 31st july is always the you did but this time you took over they had extended it to december so right now the assessment year 2122 is still relevant and anybody who hasn't filed um you still have like couple more days to file the return and we will be discussing from this your uh perspective like now we have three more months for the year to end up to march and um how to tax how to do your planning properly and all we'll be discussing on that front all right so coming to the five heads of income if you think about it um any individual who's earning an income will earn uh income and this it will all the income will fit under one of these five heads so a person may be employed an earning salary then somebody may have saved property and which may be given out on trend so that is income from house property then the third is uh income from business and profession so any business that you have or any profession or if you are a freelancer or consultant so all of that comes under uh pgbp the short form is that then there is capital gains so if you have any say shares or mutual funds or uh any other property that is sold so the profits or laws that arise from there comes under capital gains so this is the fourth head of income and then there is a miscellaneous one so anything that is not covered in the above four comes under the fifth head of income so you think of any of your income and it will definitely come in one of these five heads of income so the entire income tax act the chapters are divided in within these five heads and then each head has a lot of uh you know subsections and all so uh like i said we'll be discussing two from this the first and the third one uh we'll start with the third one because that's a longer one and there are a lot of provisions within that we'll cover only the basics one the basic provisions we won't go into very detail of how things are calculated how the tax is calculated on it because usually when you have profits from business or profession usually you may need a chartered accountant to help you out because there may be audit involved and all so yes so business profession taxation again within that there are three major types of people so you may be earning uh an income on a retailership basis so say for example you are a visiting faculty at a hospital or if you are um like usually when a professional person is employed somewhere they have an option sometimes they may have an option they may not even have an option but you have an option to work as a professional and derive income as a professional so cas and lawyers and doctors and all of us have this option to join an organization join a hospital or a company and take income as a professional so uh so it may be either as a professional or as a salary but if it's as a professional it comes under this head of income and the calculation is different than so this is where say for example i am getting a fees a freelancing income yes just a question there uh is one of them more beneficial so if if somebody has an option when they are joining a hospital and if they are given an option to join either as a salaried or as a professional is there anyone which is a better option to take yes so usually professional is a better option because here you can also claim the expenses when it comes to salary whatever salary you're earning you have to pay tax on it you can't really claim any um like you can't claim a lot of expenses there but if you are a professional you can claim expenses which are incurred directly in relation to your income so say for example i join a hospital and i'm a professional i can claim expenses on conveyance petrol i can claim my mobile bills anything that is directly related to the income that i am earning so you may you don't really have to give proof but you have to have an explanation of why this expense is related to my income and then you can claim these expenses so this makes this may reduce your taxes to some extent so with if you are ever given a choice it's always go to good with a professional and when you are joining as a professional or if you are getting fees from as a professional there will always be tds deducted if the amount is above a certain level uh that tds will always be 10 so again tds sometimes may be confusing what is tds uh it is tax deducted at source uh by the by the organization which is paying you from where you're earning the income uh this doesn't mean that your tax is ten percent this only means that the advanced tax that is paid on your behalf is so much so say if you are getting 50 000 rupees per month 5000 will be deducted and paid against your fan and it will be reflecting in your account and when you're filing your taxes say at the end of the year uh for example throughout the year say 60 000 is deducted and deposited against your plan now say if you have a payable so you again have to calculate it's always our responsibility to calculate our taxes if our taxes say are one lakh rupees and 50 000 or 60 000 is deposited then we only have to pay the balance amount if say our tax comes to only 10 000 rupees and if the tds is 50 000 rupees then we can also claim the refund of 40 000 rupees back so this is very important especially for professionals because sometimes we feel that okay tds thing is done so our income tax is taken into consideration but that is not the case we actually have to file returns and then either claim a refund pay or it may also be zero so the filing part is always our responsibility and it has to be done within the due date just answering dr harshita's question over there on what we mean by claiming expenses and uh whom do we claim it from so uh what what rushina means is uh claiming expenses means uh when you file your income tax return you can say that this is the professional fee i earned in the year and these are the expenses i incurred and you deduct those expenses from the money you earned and then you pay tax on the whatever is left so that is what she means by claiming expenses she doesn't mean um to claim them from the organization that is a different matter that is a matter of agreement between you and your employer so if the hospital has said that they will reimburse petrol they will reimburse petrol so that's a different matter and in that case you won't be able to claim it as an expense in your tax filing because you haven't paid it actually correct so here this is only if it is if you are earning income so here how to identify whether you are a professional or a salaried employees is to see in under which section your tds is deducted if it is 194 j then it is uh business and profession if it is 192 then it is salary and if it is 192 it's completely different will come to that only if it is 194 j this is what is applicable to you all right i think we'll take questions a little bit along as we go along because at the end the questions will become little irrelevant so i'm sorry for interrupting you uh but many people might have the same question so uh so uh dr prathiksha just said that she didn't understand the 60k deposited in 40k uh the the tds calculation which explains if you can just again explain what is tds and who has to pay tds and how the how it works yes yes so i say so first of all what is tds uh we if it is left on us we will file income tax written only once a year in say june or july and we will whatever tax is there we will be only once a year now the government doesn't really like getting income only once a year because that is income tax is the main revenue for the government so they want revenue also on a monthly basis just like we are earning on a monthly basis so what the government has done is they have identified all this income uh like from all the sources we are earning income they have identified those people and instructed them to deduct certain amount before paying income to us so say if i am working with a company hdfc they have identified my company and told my company deduct certain amount while paying income to me and deposit it directly to us so it becomes the company's responsibility to deduct tax at source if they don't do it they are penalized for that so they will deduct it and deposit against our pan so in a way it is like advanced tax paid by us to the government so throughout the year we are paying uh tax in advance so this is tds there is also something called as uh advanced tax so that's different from this but all of this is because the government wants tax throughout the year and not just once a year so that's why there is tds but this advanced tax is not necessarily the actual tax that we are liable to pay now throughout the year we our income we don't know at the beginning of the year we can't really tell what's our income going to be or how much investments we are going to make so that's why at the end we have to calculate that okay this is my income these are the expenses that i can claim these are the deductions that i am eligible for now this is the tax so save the tax comes as 10 000 rupees and the tds or everything that was paid in advance is say 40 000 rupees i am not liable to pay so much so i can claim a refund yeah sorry i can give an example so say say you join apollo hospitals as a consultant in the month of april and uh it was agreed that you will be paid a professional fee of one lakh rupees the apollo hospital will deduct a tds of 10 000 rupees because they have to deduct 10 of tds so they will deduct 10 000 they will deposit it against your pan card and they will give you 90 000 as a bank transfer now suppose may onwards you don't work with apollo so for the entire year you have no other income right so at the end of the year your only income was that one lakh rupees and if you will see the tax labs etcetera then on one lakh rupee income you're not supposed to pay any tax but 10 000 was already deducted so now you can file your income tax return and say that look i only earned one lakh rupees my tax should be zero but apollo directed 10 000 so please give that 10 000 back to me and the government will give you a check or ecs transfer into your bank account so so that is how tds works i think we will need to move faster so sorry a couple of other questions were there here uh roshina if you can just take that quickly uh if if it's possible for you to answer them uh in a rapid fire mode that will be great uh can can claim can we claim conference expenses as expenditure is one question if you can prove it's directly related to the income you're earning then yes perfect is stipend received by resident doctors also taxable yes okay but it may not be taxable if it's below 2.5 lakh so that is depending on the slabs for a hospital then also it comes under business profession taxation and in that case you may have to maintain books of accounts although there are different sections which say that you have to maintain uh like if it goes beyond this amount you have to maintain and all it's always always good to maintain books of accounts from the beginning so as soon as you start your own practice start your own clinic or whatever you have to maintain everything it's good to have everything on records so that whenever there is a proof required you have your documents in order books of accounts would mean that having um you know first of all always giving out receipts for anything uh always having vouchers and all for cash transactions and also maintaining things in tally or any software that may be useful but having everything in documentation when you have a business or a profession usually the income the gross receipts minus all the expenses that you are incurring whatever the net income is there on that you have to pay tax so this is how it works in uh a business when you have a full-fledged business a hospital or something and that's why uh uh there are also certain uh deduct allowances disallowances on all of that there is just one that we have which is very common and uh relevant which i have put in here so there is certain limit on cash transactions and if you do a cash transaction above this limit it is not allowed as an expense so if you all know i am not expecting everyone to know but if you know what is that amount okay so the actual answer is 10 000 rupees and if in a day you pay 10 000 rupees in cash to anybody uh 10 000 or more in cash to a certain party then it's not allowed as an expense so here um it gets disallowed so say for example your your income is one lakh rupees your expenses are 20 000 rupees and if the 20k is paid in cash in a day then that expense won't be allowed and you will have to pay tax on the entire one lakh rupees so that's why the crux here is to avoid cash transactions as much as possible to everything in bank and this is something that if you have a ca they will always take care of it there are ways they will if there are cash transactions they usually will divide it into number of multiple transactions over multiple days and all of that but um it's good to do things uh more via bank transfers and all is what i'm trying to cover yeah so this to clarify on that uh any amount can be expensed can be taken as a deduction as long as it is done via check or bank transfer uh uh what happens with cash is it it's a lot of times it's a retrospective thought you may have withdrawn for personal utilization and then you may have been claiming for it to be a professional expense which is why there is this limitation so even if you are trying to submit an expense you have to make sure it's less than 10 000 rupees if it's a daily expense yes yes so uh yeah so here there are more requires ea to do all the audit part of it there is one more very interesting thing that uh is applicable to professionals so it's called a presumptive taxation so for somebody who has a clinic or has a practice which is uh small as of now it's just they've started out and if the total receipts during the year are 50 lakhs lacks or less the receipts i'm talking about all the income that you earn if it's 50 access then you may not require to maintain any books of account and directly consider 50 of it as your income and pay tax on that so you don't have to do income minus all the expenses directly claim 50 percent so this is applicable to all the professionals this section and say if you are getting uh income also from your as a visiting faculty and all freelance income even then you can apply this section but if you claim that okay my income is say 50 lakhs my expenses are more than 25 lakhs then you may have to get your books audited so this is if you are okay to pay tax on the under 50 percent of your income yes right so your books of accounts are not required but you also have to maintain it because how else will you prove that it's 50 lakhs or less so you usually always have to maintain it but it's not really required they will not ask for it but you can just maintain the income side and not have to maintain the detailed expenses yes yes but what if in case it exceeds then you can't backtrack and get all the expenses so it's always good to maintain both income and expenses always good to have in the synagogue in the scenario where i'm pretty sure that my income will not exceed 50 lakhs which is also you know a very likely scenario because this means four lakhs per month uh so which should cover a large majority of uh professionals uh in that case uh and and if i'm okay to pay tax on fifty percent of that income so just to take a yes in a practical example let's say i earn half like rupees a month my uh to be 30 lakh rupees uh so what this section says is that 15 lakh rupees can be given to me a standard deduction this is like the standard deduction alternative yes uh on the professional side perfect and i only pay tax on the balance 15 lakhs and that too uh given the slab structure that is there so the first two and a half lakhs there is no tax then five percent ten percent twelve percent so effective tax rate is going to be let's say about uh twenty percent then the tax you are going to end up paying on that balance 15 lakhs is going to be about two lakhs two and a half three lakh rupees yes yes and but on this on this our standard sections like atc 80d all of them available on this mode yes everything is available deductions are available irrespective so after uh benefiting from after 15 years you can still benefit from atc and other reductions yes yes so it's very good as long as our income is below 50 lux and this income is not salaried income it has to be from profession so if it is if you are getting income under 194 j wherever you are employed then you can apply this section but if you are employed as a salaried person then you can't go for this section got it so all of this has to be under the head of business and profession so just to again uh clarify if you run a clinic it is business income if you run a hospital nursing home if it's your own uh it's a it's a business income uh whether it is a proprietorship partnership llp private limited company whatever way you have structured it it's going to end up becoming a business income uh if you are working with a corporate hospital you may be a professional or you may be a salaried person that depends on the contract uh that has been set out uh and if you are professional then the same things which applies to business side also applies business and professional if you are salaried uh we'll now get to that yes also this 44 ada is applicable only to individuals here and partnership firms not llps not companies nobody else all right so now we come to uh salary so majority of you all said you are employed as a salaried person but you may not know whether you are professional or salary so you should check your form 16 that you get you will understand under what section your tds is being deducted simply that in 194j you are a business professional if it is 192 then this is applicable to you so when it comes to regular salary then you have yes yeah apart from the firm uh form 16 if you want to check where uh i mean if you want to check whether you fall under 194 j or 192 you can also log into the income tax portal using your pan and you can go to this other form called form 26 a s so we'll also be coming to the forms in a little bit but you can go to this part on the income tax portal and you will see if your company if the organization has already deducted and paid tds under your fan you will see it there which section you fall under so form 16 is something that we get once a year so in case you don't have that yet you this is where you can check yeah super helpful thanks yes uh it is 26 years uh yeah i mean sangeetha or someone will just type that in in the chat box for your reference yeah so when it comes to salary do you get all these allowances as a part of your pay slip so if you see a pay slip there may be some house rent allowance leave travel allowance and all of that so uh when it comes to salaried income these are the major benefits these are the only benefits that you actually get you can't claim the expenses that you are actually incurring whatever the income tax rules have said only that is what you can claim so say your salary is 20 lakhs per random the house rent allowance is applicable only if you are actually staying on rent so if you are staying on rent there is a and and if you are getting house rent allowance as a part of your salary then you can claim that expenses there is a calculation of how much you can claim which usually the company will do and give you so you can claim that amount so say 20 lakhs is the salary the house rent allowance comes to 2 lakh so you can reduce 2 lakhs from your 20 lakhs balance is 18. then there is leave travel 11 so that is also applicable if you are actually taking leave going out for travel and submitting those travel documents to your employer then they may calculate how much is allowed as per income tax rules so this is applicable only for domestic travel if only the airfare the train fair and all can be allowed so this is a lot of us know this so they may calculate leave travel allowance for you and there is also books and periodicals allowance that if you are say subscribe to a magazine which is relevant for your profession or if you are taking buying books or something you may save the bills give it to your hr or while filing your return also claim that expenses so these are the only few expenses generally now what happens is when the salary contract is created you are given a number and then everything is back calculated to fit in um so so it's going to be very unlikely that uh you know you are given a salary of two lakhs a month and then additionally uh you can claim for these expenses that's i think how i understand so they'll basically say two lakhs and then they will give you the option to structure it as x amount hrax amount yes yes yes yeah it's usually like that so if two lakhs is per month salary 50 percent will be basic 25 will be hra and the balance will be either special allowance or other allowance or anything so every company has their own salary structure but this is the basic like fifty percent of that and that's always basic i think the key takeaway here is when you are negotiating a salary so the first thing i think which russian said was try and get into a professional income category if possible because you will be able to save a lot more tax especially using the 44 ada but if you get into the salaried contract then try and negotiate and get as much amount as allowed into books and periodical allowance into lte allowance etc so that you reduce your basic you reduce the taxable part of your salary so this is one negotiation which you should do and it would help to get a ca on your side when you are fine when you are getting into your contract with your hospital yeah yeah because really in salary there is not much you can say one only if you are staying on rent you can claim hr what if you are not staying on rent then all of this is not allowed like you can't really claim anything so the entire salary only standard deduction is available which is just 50 000. so whether you are earning 2 lakhs a year or 20 lakhs a year you are only going to get 50 000 as standard deduction which is standard so um so only 50 000 can be reduced and then there is also professional tax which is some 2 400 2 500 so that's not really much so only that can be reduced from your salary and the balance is what is taxable so yeah like rohan said it's always good to negotiate to get professional because you can directly cut 50 percent if the your ctc is going to be below 50 lakhs a lot of these things are you know very technical and as roshina said the start they change a lot so i think one major takeaway uh anyway would be that whenever you're getting into a contract whether it's salary or professional it's always helpful to get a professional ca opinion to structure that contract for you instead of just signing and taking what is offered because you know from the hospital side it doesn't matter to them to save tax for you uh it is always your prerogative and your everybody so the income tax government is also not going to give you a refund just like that you are going to have to claim that refund so i think it the big takeaway is that when you get into a contract just make sure you have structured it to the best possible then uh you can just let it be perfect i think uh this has been a great uh first half uh and i'd like to invite pankaj uh and ajay on stage uh pankaj and ajay are very senior uh management professionals from bajaj pankaj is a very good friend pankaj it's fantastic to see you again uh and and i'm here hi everyone how are you perfect so thank you if we can quickly in a couple of minutes share with our audience uh what what special deals you have for them and then we'll head right back into the session yes yes yes absolutely so thank you rohan for a very warm welcome i won't take much time it is quite an interesting topic taxation as always is very complicated subjects in various countries mine with multiple forms i was just listening uh 44 ada and multiple things are there so even we as salaried professionals struggle to find ways to save tax i always understand from my self-employed uh i am from a business family so they always tell they always find better ways to save tax than the salaried so we just learned that we just learned pankas that you can only get 50 000 standard deduction too bad for you yeah yeah yeah okay so i'll just keep it very short uh so i'm from bajaj finance limited uh what i want to cover today is just a very brief thing as to i'll explain as to who we are what kind of offering that we have for doctors uh how are we different from others and those for those who are interested in getting to know more details uh they can reach out to me or i have shared my personal contact detail as well as ajay's personal contact details so i'll just start with that first who are we basically bajaj finance limited as most of you might have heard it's uh wherever if you would go in a electronic store or to buy a mobile you would always see bajaj finance offering a no cost tmi so to give you a number in india if 100 mobiles are getting sold 30 are being financed through bajaj finance so 100 washing machines are being sold 30 or financed to bajaj finance on the doctor loan side of you who are already joined here might be our existing customers uh 2.25 lakh doctors are our customers and we have the largest loan book doctor loan book in the country it's one of the very trusted and reputed brand and we are known for speed and agility especially in the financial space and you might be reading many articles more from a stock market perspective because that's where we have made a lot of value for the shareholders uh what do i have for you i am going to explain just two specific products one is the medical equipment loan and one is the doctor flexi loan and what is different over there so a medical equipment loan on the medical equipment loan we offer loan up to 1.5 crore to doctors if a doctor is starting a if it's a radiologist doctor who is starting a new diagnostic center and wants a funding for a ct machine or a ultrasound machine we do provide that so our capping ticket size over there is 1.5 crore the best part is that we are the fastest in the industry in terms of and i think rowan can also vouch for that so we are the fastest in the industry in terms of the approval in uh turnaround time we wouldn't ask you to visit our branch or go do this or do that we will send a person to you assist you in terms of the entire process uh the interest rates are very competitive in the especially on the medical equipment loan side uh we are as competitive as the uh banks that are offering on the medical equipment loan there are zero foreclosure and prepayment charges by zero foreclosure and prepayment charges for those who you do not understand basically if you take a loan today and if you want to close it within a month you want it just for one month you can close it absolutely absolutely with zero charges only medical equipment loan not the doctor flexi loan so medical equipment loan is zero for prepayment and foreclosure charges we fund new as well as refurbished machines so we have seen that doctors do by refurbished machines in the market when they're starting a new they don't want to invest in a very high-end equipment and would like to buy a reefer machine so we do fund refurb machines as well and the biggest pieces that the documentation required is minimal from our end so we always strive to see that there is as much less documentation that is needed from doctors as possible and we try to save your time other offering is a doctor flexi loan now this is our on the doctor's side this uh product month on month is bought by close to 5000 customers 5 000 doctors month on month buys this product from us uh on a month month-on-month basis it's a pre-approved loan where we can provide you a od facility you might have heard of od facility so the biggest advantage over here i'll tell you is when you go in the market and if you ask a bank to provide a od facility they'll provide you an od facility but it is always you have to put a fixed deposit against that they'll provide you an od facility or you have to mortgage your property and against that they'll provide you an od facility we provide od facility up to 42 lakhs in pure unsecured format you need not put any fd with us which is lean mark to us you need not put a collateral value with us and that is the proposition that we provide so this is the dr flexi loan these are the two primary offerings that we have in offering for uh doctors and we are pretty well known in the doctor segment uh we have done quite as i was stating in india we have the largest loan book on doctor's side we have a book size of upwards of 7000 thanks a lot absolutely thank you thank you rohan yeah if you can see this uh statement this is again how the income tax form looks like this is just a short form of that it's a very lengthy form actually so there will be income from salary then there will be house property business and profession uh capital gains and other sources so these are the five heads that are there we discuss salary and business profession out of these five then uh you come to an income like you arrive at a gross total income you add it all up and then there is something known as deductions so these deductions are something that are applicable to everybody respective of where your income is coming from whether it is from salary or from house property or from anywhere you get these deductions and even if it's 44 ada irrespective you are going to get these deductions and that's where you can also plan some more of your taxes like you can plan and reduce your tax liability to a certain extent so now we'll consider this example where your gross total income is 20 lakhs and then we see what that what are the deductions that are applicable so uh the deductions are of two types one is when you are doing certain kind of investments and the second is when you are doing certain payments and expenses uh it's very interesting because these investments are uh like you are given a deduction because the government also wants us to it's it's trying to encourage us to also do investing so that is why you are given this tax benefit so generally if you see these are all deductions which are either in government uh places or uh are a very long term so the idea is that people in india should save for their retirement should save for a long time and not short-term savings only so that's why you if you see all the uh investment like places that are there are all long-term ones and so this section called atc is the most popular one you will hear it every time you are doing your taxes and here you can save up to 1 lakh 50 000 uh of your income like you can reduce 1 lakh 50 000 from your income so say for example your total income comes to 20 lakhs and if you are investing uh in one of these places or a couple of these places you can reduce the invested amount up to a maximum of 150 so your income will come reduced to 18 lakh 50 000 instead of 20 lakhs so these are the common places that there is life insurance premiums if you are paying for any premium or anything uh yeah there is a poll just to get an idea if you are aware of which of this has the lowest lock-in period so all of them have a lock-in period but if you know which has the lowest one so these are part of the atc provision you can also invest in national pension scheme then you can invest in a provident fund public provident or the employers provident fund that you get is also allowed here then there is something called as elss which is mutual funds i saw the poll answer it was elss and which is right so els says the lock-in period is three years nps is up to the age of retirement fixed deposit it's given five years ppf is 15 years so all of them have different lock-in periods elss is the shortest and the uh the most popular one these days because everybody is investing in mutual funds and this has the lowest like three years of flopping period so if you invest in one of these it's best way to uh you know save on your taxes and this has to be done within the uh time frame of a year so right now we are in december and up to march is the year yes yes just a quick explainer on how this works if you if you invest one and a half lakh rupees in an equator link saving scheme then uh when when at the end of the year you are calculating your tax taxability um and in the continuing the example that we had so if you have a 30 lakh rupee income and government is going to give you 50 000 rupees a standard deduction because you are salaried then basically from that 30 lakhs you can deduct this one and a half lakhs and then whatever tax rate 30 tax you're going to pay is going to be paid on 28.5 lakhs and not on 30 lakhs so what you are saving effectively is 30 of one and a half lakhs uh which is about 45 000 rupees so by just investing one and a half lakh rupees into any of these five or six areas to actually save potentially 40 45 000 rupees of tax in that year and it's not like it's an expense because as russian said it's an investment um so that money is anywhere else uh whatever interest you earn on it is anybody else uh and in the case of uh schemes like ppf even the interest is tax free so uh so in in that sense i think ppf is a is a fantastic tool available to all of us it's just that if you can uh accept a slightly lower interest rate uh or compared to what mutual funds nowadays uh provide because markets are good ppf in that sense is very good yeah it's actually not lower interest rate yeah it's a fixed interest thing where you're getting 7.1 as of now usually it's around eight nine so it's not low interest when you compare it with fds and all ppf is very good uh nps is also really good so all of these are good investment avenues so this is the government is trying to encourage individuals to invest yeah just spending one more minute on ppf so the best so the ppf interest rate can be assumed as more like 11 12 because the interest is tax free uh so so that's a very big advantage of the ppf uh scheme the only downside is uh as he said there's a 15-year lock-in so the money you put into ppf is not like money you put in your bank or money in shares which you can instantly in cash uh there are various rules like you can take you can withdraw 50 of the balance you had three years back etc etc so there are various rules around what you can withdraw in emergency situations uh so that's the only drawback of ppf otherwise as she said interest rate is pretty good better than fds tax free and it saves you 30 income tax that's the additional benefit yeah actually i wouldn't say it's a downside because it's a great way to keep ourselves disciplined uh to stay invested for a long time because usually otherwise we would give in to our impulses and withdraw money from bank and mutual funds but here we can't really withdraw so it's it's a great way to discipline ourselves then there is also this additional deduction that we are getting now is 50 000 if you invest in nps is the national pension scheme uh and so this is this will make the entire deduction to two lakhs rupees one lakh fifty in atc and additional fifty thousand only in nps so you can claim a maximum of 2 lakhs worth of deduction with both these sections so these are the investment ones and then we come to expenses so there are also when you are making certain expenses you get them as deductions uh the most common one here is uh health insurance or medical like we call it so that is under section 80d when you are buying a health insurance policy for yourself your parents your spouse you can claim uh 25 000 rupees uh that's the maximum you can claim for yourself and 25 000 for parents if parents are senior citizens you can claim up to 50 000 for them and also there is one very interesting thing here that if parents are senior citizens and if they don't have a health insurance because it's possible that senior citizens don't get it very easily then you can claim the actual medical expenses that is incurred for them up to a maximum of 50 000 this is only for senior citizens above the age of 60. so whenever you're filing a return and if you have paid all of this has to be paid by a bank it is not if it's done in cash it's not allowed so all the medical expenses that i that you are going to claim has to be done via bank transfer check anything but not in case so themselves not filing taxes right yes yes if you are doing for them whoever is paying can claim it if they are paying it and they are filing they can claim it if you are paying for your parents and you can claim it even if they are filing taxes you can claim it as long as the money wears from your back yes but overall it shouldn't exceed 50 000 it's not like they can also claim 50 and you can also claim 50. the overall has to be 50 right so 25 025 so um this is a good because most of us have a health insurance so it's a good this thing to include then there is also education loans if you have taken education loan for yourself your children anybody then you can claim the interest amount on that so if say the loan is for 10 lakhs rupees and you are paying an interest of say 40 50 000 per year there is no upper limit to this whatever is the actual interest that you are paying on your loan is what you can claim as an expense and it's it is higher studies anywhere so there is no universities or anything that's mentioned here so anywhere if you've taken a loan for education also speaking but no other personal loans or any things are allowed yeah um just coming in when because we are talking about education we saw section 80c earlier so atc another thing that you can claim there is if you have paid for your child's school fees so that's also a part of atc and in case you haven't made those investments but you have actually paid for your child's school fees that will fall under atc ah then there is atg which is donation so if you have donated to any charitable organization and he tries tens of anything which is recognizing that your certificate of under atg then you can claim uh the amount that is donated in most cases it is going to be 50 of the amount donated only if it's for a pm fund or there is a list of six seven funds only in those places you can claim the full hundred percent otherwise if you donated ten thousand rupees to uh a trust or a temple or anywhere then you can claim fifty percent so five 000 can be reduced from your total income all of this is from your total income not from your tax yes tax is going to be calculated this is going to say that that a very good thumb rule to think about any deductions is whatever you are deducting or whatever you are claiming you are basically getting one third benefit of that so if you've made a 10 000 rupee donation to the pm relief fund at the time of making donation itself you can tell yourself that i am going to get 3 300 rupees back out of this 10 000 because when i will submit this 10 000 rupee certificate in my income tax they will deduct this 10 000 from my taxable income and therefore i will pay 3300 less tax so by by paying 6500 rupees of your personal money it's like the government is putting in 3500 rupees on your behalf and therefore totaling of the donation that you are making to 10 000 so whatever it is so whether it's education loan health insurance so when you are buying health insurance for example 50 000 rupees you can tell yourself that you're getting a 33 discount on it right away because you will basically claim that under section 80d and you will get that deduction that entire 20 000 rupees gets deducted from your income and therefore when it when the tax calculation happens you save 30 on that entire income it's almost like getting a 30 discount on all of these things when you incur it that's a good thumb rule to have and this is assuming you are in the big tax bracket so assuming your income is more than 15 20 lakh rupees then you will mostly be falling into the large tax bracket and mostly paying 25 30 kind of tax yes and then there is one more section atg which is if you are a professional all that business profession income if you are under that category and if you're staying on rent then you can claim under 80 gg but here the maximum amount is 5000 rupees per month so you can even if you're paying 20 000 rent per month you can only claim 5000 rupees per month so it comes to it yeah this limit really needs to be revised yeah yes so these are the four kinds of expenses if you're making any of these expenses you can also claim it under your income tax thing so then we come to this lab rates and where we will also discuss the new and the over um this is as per the old tax rates now one common confusion here is say for example your income is 12 lakhs rupees what do you think is the tax rate tax amount that you have to pay a lot of us may think that it is 12 lakhs by 30 but that's not the case it is always going to be progressive so say if my income is 12 lakhs rupees for the first two and a half lakhs of the 12 lakhs i'm not paying anything for the next two and a half lakhs which is 2 lakh 50 to 5 lakh i'm paying five percent so 12 500 there then for the next five lakhs i have to pay 20 percent so it's one lakh there and only on the balance two lakhs which is about 10 lakhs only on the balance two lakhs i have to pay 30 so it's 60 000 so it is 1 lakh 60 plus 12.5 so 172 that is the tax you are going to pay and not 12 lakhs by 30. how much is that you're not paying so much yes sir yeah so it's not 3.6 it's one sec one lakh 72 thousand so uh this is uh like this is how we usually think [Music] yeah so it's not always going to be thirty percent even if you earn about 10 lakhs because that would be really long wrong on uh to charge it that way so it's going to be progressive and um these are the old tax slabs uh when like all these years we were paying as per these slab rates usually so also it keeps changing uh every financial year sometimes it's same sometimes it keeps on changing there were times when um for women the tax slabs were different for men it was different now it is all same there is more gender equality coming in for senior citizens for super senior citizens it's still slightly different so uh if your income is below 2 lakh 50 000 in a year say you've just started working or you've taken a gap or something it's not compulsory to file return but it's always recommended you file your returns every year like there shouldn't be a break in between once you start filing your returns you should always keep it on because income tax returns are also required for say visas or for loans or for many different purposes also so it's always good to not keep have a break in between even if the income is low you can file a return with zero tax it's it's a very easy thing to do these days via online portals the income tax portal itself has become very easy since this year they have changed it all and it is very like you if you log in you will understand very self-explanatory kind of so this is the old slab rates now uh last year in the budget they came up with a newer uh scheme and that is uh pay tax at a very lower rate so if you see there it was only five twenty and thirty percent only three slabs and here you see 10 15 20 a lot of different percentages so uh of course you if you're given benefit here some benefits are also taken away from you and that is all the deductions and all the exemptions so um everything that we discussed atc hra atd ate all of that is not allowed and then you pay tax at a lower rate so say you have 30 lakhs of income and you don't claim anything like you don't claim the standard deduction of 50 000 you don't claim one like 50 000 or that additional 50 000 anything of that and on that 30 let's directly calculate as per these lab rates so um sometimes this is uh beneficial sometimes that uh when we've seen usually if you are going to claim up to two to three lakhs worth of benefits in like hra standard reduction atc if that's going to around 3 lakhs of rupees then the old slabs are always beneficial but different places and not in the ones mentioned in the section or say you're not living on rent or you're just starting out and you have no clue what is atc and where to invest in all of that then in those cases for those people these newer slab dates are a lot more beneficial so you have an option to switch for salaried employees you can switch every year every year whatever is more beneficial you can select but for business people for people who are into profession you can only switch once in your lifetime so you have to be very mindful of which scheme you are opting for and because if you opt for one you can you only have one more chance to switch you can't really keep switching it on and off so uh this year was the first year when this is uh being tested and when you you have filed your returns if in case you've done it there is also a footnote which says four percent says which is always applicable so say your tax comes to 20 000 rupees you have to pay an additional four percent on that 20 000 rupees uh assess is basically tax only which is collected for a specific purpose so right now there is says which is collected for uh higher secondary education and whatever amount is collected as s will be used only for that purpose a couple of years ago there was such bharat appearances so this they keep on changing depending on what is their main focus what is the government's main focus um so that is standard and this new regime and old regime for salaried people also you should always check before your filing if you go on the income tax portal there are good calculators where you just put in your income and it will calculate as per both the regimes so you can decide which one is good for you if you're using portals like clear tax and all even there you will get this option to you know just check before you file your returns and don't just file it like you've been doing all these years uh because there is this upgrade now and for people in profession me be very mindful of when you are switching from one to another uh usually the old regime only is beneficial if you are going to make investment somehow one question which i saw quickly on the screen was what if your nature of contract changes uh from your salary for a few years and then you go into profession for a few years then you come back to salary for a few years is there any provision for situations like that so whenever your salaried whenever you are salaried you can select whichever scheme you want to new regime regime but if your uh like if it keeps on changing then you may have to see like in profession you can't do whichever was ongoing you have to keep at it yeah also this we don't know how whether they are going to make the new regime yes this new regime also seems like a stepping stone to remove all the deductions because so far the government was always encouraging us to invest in all but it's not really their responsibility to you know make sure everybody is investing it's up to us whether we want to invest or not and also it seems like they are trying to see how yeah yeah also the intention for the new regime was to boost the economy by promoting consumption so moving away from uh the focus on investing now we're moving to more focus on spending so the intention was to boost the economy by promoting consumption that's why the new regime came about and yeah that's that's i think about today yes um so um that was the calculate taxes now these are just some of the important forms that you may hear ah form 16 is what all the seller salaried employees get from their employers every once in a year so april to march is the year march end is when they'll do the last of uh paying salary and doing tds and all so then they need two months of time to give you form 16 so usually in may june you will get your form 16 and only after that it becomes easier to file your return so that's why july is the due date you have to file it before july so form 16 is what you get from your employer once in a year if you're a professional that is if you are under 194 j and if you are getting a freelance income or anything if you are a visiting faculty one at school or something then you will get form 16a which is which is given quarterly to people and in form 16 a the tds usually is always 10 percent and you will get it quarterly although whatever details are in 16 and 16 you can directly see it on your income tax portal under this form 26 years so this was also mentioned earlier you can log into your portal using your fan uh and check form 26 says there so throughout the year you have a real time update on how much tds has been deducted you can also see all the previous years from 26 years so you'll always know what is the tds that has been deducted from you uh then there are investment declarations and proofs so this is relevant for salaried employees and every time you join an organization they will ask you to declare income every year at the beginning of the year also you will be asked to declare uh so this is why they do it is uh if you are salaried the your employer will try to calculate your exact tax amount so your exact tax will be your income minus all the deductions that you are going to do and whatever the balance income is on that you have to pay tax so they ask you to declare your income so that they get an idea of how much tax is going to be applicable for you and then they will divide their tax by 12 months and pay get a pds accordingly so that's why tds on salary won't be 10 or 12 percent like it won't be a standard amount it will be your actual tax that they think is going to be divided by the number of months like 12 months or whenever you joining from them so investment declarations are asked at the beginning of every year and then towards the end of the year like in december so right now if you are salaried they will also ask you for proof of investment so if say at the beginning of the year you've declared that okay i'm going to invest one like 50 000 in ppf right now you have to give a proof in december jan feb i think up to feb you may get time to give this proof so when you give proof it's after that in the last two months they will adjust the tds accordingly so say you did you said that you will invest 1 lakh 50 but you don't do it you fail to do it so then the tds will increase because now your tax liability is going to be more than what was earlier calculated so in the last two months they will adjust tds accordingly more or less depending on how much you've invested uh it will be there so this is again like a time line at the april is the beginning of the year where you have to to invest so much so much so much um then in may you actually receive your previous years from 16 and 16 here then in june and july of the year you have to file your income tax returns so these are all the dates where you have to do something related to tax then in jan and feb you have to ensure that whatever you've planned for the year it's done or not so now in december it's where you're ensuring that okay i have to invest so much in ppa for so much in 80 80 whatever we have discussed so before march you have to make sure you're doing all that you've said and you also have to give proof of investment to your employer if you are employed and then march is end of year so again next year the cycle continues this is very useful and online you will get an idea of when all something about income tax is going to happen and just in this year's case as you said the july deadline has been shifted to december so yes correct december is the due date and you have five six more days to file uh 2020 21 return that was the last slide and uh uh like then everything that we discussed we did it very briefly but it's always good to know the basics so even if you have a ca you can ask more intelligent questions or you can ask you know why this is happening why this is not happening um you can read more about it there is a website called tax guru which is one good source where you can read about income tax related stuff it's very simplified it's there is not too much jargon in the entire listing and if you have any questions we can discuss it now yeah thank you so much uh rashina and komal uh extremely useful session you really tried to make it understandable for all of us there are many questions uh in the comment box so let me start taking them do you do both of you have another 5-10 minutes to take the questions then i'll just try and take most of the questions for overseas earned money what is the taxation policy on it uh any point of view on that it's similar to have you earned income here yes it is very similar to your income here because if you are earning in india you have to pay taxes on it and if it's as a business or if it's a professional income it will be like any other professional income and what about agricultural income if you are a salaried employee so if you are salaried and you also have agricultural income agriculture income is always exempt so there is a special category of exempt income where you just have to mention it but you don't have to pay tax on it so agriculture income is one interest on ppf on this one all of that has only it's only required to be mentioned under exempt income okay there is a question on who can invest in nps national pension scheme anybody so actually pension plans usually were always for government employees so that's why they launched this nps back in 2008 where anybody can individually whether you are employed not employed you can invest just like you invest in fds or anything else but the only thing is nps the lock-in period is up to the age of your retirement which is 60 years according to the government so you the lock-in period will be till the age of 60. uh nps again can be invested via some seven eight bank uh they've tied up with different banks like hdfc and kotak and icici and all so it can be done online it's very easy to do it through net banking for many doctors they have their own clinic as well as employed to a hospital so what category should they apply under so it is possible that you may have both the heads of income some from business and profession some from salaried so it won't be clubbed it is both separate and together on that you have to pay taxes so also on the business part you can claim 44 ada on the salary it will be like normal salary taxation there is a question on is says stable for all slabs i think roshina answered that that the says is payable on the final tax which is calculated for everybody yeah go ahead no i was telling this something known as surcharge which is only for very high income individuals but says is for everybody if we are a bg resident then do we come under higher education and that four percent says is applicable so the four percent says uh is always applicable uh whether you are yourself uh studying working uh it doesn't matter so the four percent says is something which every single citizen will have to pay um there's a question around uh somebody incurred an expense of 15 lakh rupees uh for kovit treatment uh will that be exempt so i think again if you can make that distinction between expense and insurance yeah so you can only claim health insurance uh premium you can't claim whatever money like that is not something that you have to claim it only whatever premium that you've paid for health insurance is what can be reduced not the 15 lakhs that you've actually spent and if you are a senior citizen with no health insurance the max you can claim is 50 000. otherwise uh no expenses can ever be claimed when it comes deposit to be considered under atc no or opening ppf account what is the best suggestion of banks if if in your experience you've had any particularly good experience with any of the banks i have it through hdfc and it's pretty good like it's very easy because whichever bank you have your net banking through that bank you can you don't need to open a separate bank account for bpf actually dr sunita's question was on the rate of interest for the loans by bajaj we will get in touch with you dr sumita and dr swatis is available to dentist making the answer is yes to uh that do you mean by zero cost emi uh so what it means is generally when you want to buy let's say a 50 000 rupee washing machine you may have to pay 50 000 upfront but what a zero cost emi does is you can pay 5000 rupees per month for 10 months and typically when that happens uh the lender charges a certain uh fee so instead of paying 5000 per month for 10 months you end up paying 5100 or 5200 per month a zero cost emi means that that additional fee won't be charged so a 50 000 rupee will be converted into 10 equal installments of 5000 only so you don't end up paying more than what you would have paid so interesting uh the whole concept of zero cost emi came and now there is this whole concept of buy now pay later which is becoming very popular so you uh you buy today and then you pay later which is almost similar to the zero cost email i think has said that for critical diseases for parents uh like stroke model infarction chronic failure up to one lakh can be known uh that that's uh that's his point so that's one of i think we missed on that 180 ddu where you can claim if there is a chronic uh health issue then you can claim higher amount i'm not sure whether the limit is one lakh i think it is one lakh but i'll have to recheck it once no excellent thank you so much dr narayanan uh your your inputs have been very value valued throughout all the sessions in the finance club we've always seen you there so thanks a lot for pointing this out there's one question on uh income from a husband who's a freelancer is deposited in the wives account so how is the taxation policy as the wife is salaried uh there are some provisions with relating to clubbing last year i have chosen that new tax regime my total income including the interest on beneficial deposit and pension less than 15 lakhs this year also i have opted for it which is actually beneficial for me since my income doesn't exceed 15 lakhs per year i'm a pensioner kerala government retired doctor so this new regime is beneficial just like last year oh yes so the directions can come up to 3x which hra or is of that sort if it's up around three lakhs then the old regime is beneficial but if it's below that then the new one is more beneficial so you may have to calculate once with both these scenarios sir my question is one of my friend asked me he he runs a keonix a professional occasional training institute and the income after that he has put 20 lakhs on his wife's fixed deposit whether he needs to pay for that fixed deposit interest his wife is a housewife sir hello yes yes so on the fixed whatever interest is earned is taxable you have to pay tax on the interest amount no if you show her he has shown her as a housewife no other earning only this fixed cfd earning is there so the fd is in the wife's name uh and the wife has no other yes sir oh yes sir so the interest on 20 lakhs will be two lakhs right more or less less than that six point seven percent six point seven percent yeah so one point four lakh rupees will be the flags yes then there is no tax required so that is as per the tax labor investment came from the husband so that's okay yes sir yes sir but but here what is the taxation system sir if the husband says he has put the money in his wife's fda so whether husband has to show in his book of accounts no it's not required for the husband to show it in his books of accounts if the fd is in the name of the wife then the wife would need to file the return and show the interest income in her return even though even though she is not under the taxable uh slab she has to see actually shows her it's better if she does show it and file the return because a lot of times what happens is the bank might also have deducted tds so banks also deduct tds on fd interest or savings account interest if it exceeds a certain limit so that should be checked and in case there is a tds that has been cut if she files the return she can get that amount back as a refund thank you thank you thank you thank you right if we come to the end of this session uh kumar and rishina you've been amazing thank you so much uh patiently answering all the questions uh also took us through the entire uh fairly complicated uh update uh in a very nice manner we'd love to have you again uh more frequently on a variety of topics you now understand the platform you understand the vibe and and the user's needs and requests so would love to have you again

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dr. Komal Shivdasani

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Komal Shivdasani

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