Lower Deduction Rates:

• Senior Citizens: For Income Tax individuals above 60 years of age, certain income sources like interest from bank deposits and government bonds have lower TDS rates. For example, interest from Senior Citizen Savings Scheme has a TDS rate of 5% compared to the regular rate of 10%.
• Specific Investments: The government Income Tax incentivizes certain investments by offering lower TDS rates. For example, Public Provident Fund (PPF) and National Pension Scheme (NPS) deductions have no TDS at all.
• Interest Income: For interest income, there’s a threshold of Rs. 10,000 annually. If Income Tax the total interest income in a financial year exceeds Rs. 10,000, then TDS applies at the normal rate, but on the amount exceeding Rs. 10,000.
• Section 197 Certificate: Under Section 197 Income Tax, individuals can obtain a certificate from the Assessing Officer authorizing lower deduction or nil deduction of TDS for specific income sources, based on their estimated total income for the year.

No TDS Deduction:

• Salaries below Basic Exemption Limit: If Income Tax your salary falls below the basic exemption limit (currently Rs. 2.5 lakhs for individuals), then no TDS is deducted.
• Agricultural Income: Income Income Tax from agriculture is exempt from income tax and therefore has no TDS deduction.
• Specific Expenses: Certain expenses like medical expenses and tuition fees can be claimed as deductions under relevant sections of the Income TaxIf your total deductions are sufficient to make your taxable income fall below the basic exemption limit, then no TDS will be deducted on your income.
• Tax-exempt Institutions: Organizations with tax-exempt status under specific provisions of the Income Tax Act do not have TDS deducted on their income.

Additional Points:

• You can use Form 15G/H to inform the Income Tax deduct or (e.g., bank) about your estimated total income for the year and claim exemption from TDS if your income falls below the taxable limit.
• Certain income sources like lottery Income Tax winnings and horse racing winnings have a higher than normal TDS rate.
• It’s important to stay updated with the latest income tax rules and regulations to Income Tax ensure the correct TDS deductions are being made on your income.

  EXAMPLE

Examples of Cases where Tax is deducted at Lower Rates or No Tax in Specific States of India:

Lower Tax Rates:

• Senior Citizens: In many states, income tax for senior citizens (aged 60 and above) is deducted at a lower rate compared to younger individuals. For example, in Kerala, senior citizens falling within the income Income Tax bracket of Rs. 2.5 lakhs to Rs. 5 lakhs pay only 5% tax, while the regular rate for this bracket is 20%.
• Agricultural Income: Income earned from agriculture is exempt from income tax in most states. This encourages Income Tax agricultural activities and ensures food security.
• Donations: Donations made to certain charitable organizations and educational institutions are eligible for tax deductions under Section 80G of the Income TaxThe deduction amount varies depending on the type of donation and the specific state’s regulations.

No Tax:

• Special Economic Zones (SEZs): Units operating in SEZs enjoy various tax Income Tax benefits, including exemption from income tax on export earnings for a specific period. This incentivizes foreign Income Tax investment and boosts exports.
• Startups: Many states offer tax Income Tax relief to startups for a specific period after their incorporation. This encourages entrepreneurship and fosters innovation.
• Specific Industries: Certain Income Tax industries, like handlooms and handicrafts, may be exempt from tax in specific states to promote traditional crafts and livelihoods.

Please note: These are just a few examples, and the specific tax rates and Income Tax exemptions can vary significantly Income Tax depending on the state, income level, type of income, and other factors. It’s always recommended to consult a tax advisor for accurate and personalized advice about your specific situation and state.

 FAQ QUESTIONS

• Senior Citizens: Individuals above 60 years Income Tax of age have lower tax brackets compared to younger individuals. (Check current tax slabs for specific rates)
• Disability: Individuals with specified disabilities Income Tax enjoy tax deductions and rebate schemes, effectively reducing their tax liability.
• Interest Income from Specific Bonds: Income from certain government bonds or specific savings schemes like Sukanya Samriddhi Account may have lower tax rates or tax-free benefits.
• Agricultural Income: Income derived from agriculture is exempt from income tax in India.
• Donations: Donations made to eligible charitable institutions under Section 80G can be deducted from taxable income, lowering the tax burden.
• Export-Oriented Unit (EOU) Income: Income Tax earned by export-oriented units under specific schemes may enjoy reduced tax rates or exemptions.

No Tax:

• Individuals below Basic Exemption Limit: Individuals whose total income falls below the basic exemption limit (currently Rs. 2.5 lakhs) are not liable to pay income tax.
• Agricultural Income: As mentioned earlier, income derived from agriculture is exempt Income Tax from income tax.
• House Property Income up to Limit: Rental income Income Tax from residential property up to a certain limit (currently Rs. 2.5 lakhs) is exempt from tax.
• Long-Term Capital Gains on Equity Shares: Long-term capital gains (held for more than one year) earned on equity shares listed in a recognized stock exchange are exempt from tax up to Rs. 1 lakh per year.
• Specific Allowances and Exemptions: Various Income Tax allowances and exemptions under Sections 80C, 80D, etc., for investments in pension plans, medical insurance, etc., can reduce taxable income to zero in certain cases.