Tax Saving

Marginal Relief 

Marginal relief is available from surcharge in the following manner

a) in the case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs. 

b) in the case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crores, marginal relief shall be available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

c) in the case where net income exceeds Rs. 2 crores but doesn’t exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crores by more than the amount of income that exceeds Rs. 2 crores.

d) in the case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crores by more than the amount of income that exceeds Rs. 5 crore

Relief under section 89(1)

Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in the receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (ii-a) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed:

Provided that no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i) of clause (10C) of section 10, a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under clause (10C) of section 10 in respect of such, or any other, assessment year.

Double Taxation Avoidance Agreements

When a taxpayer is a citizen of one country but earns income in another. There exist a chance that the same income is taxed in both the country as per laws. 

So to avoid this, the government of India has entered into an agreement with most of the countries regarding avoidance of such situations. 

They may be

• Comprehensive agreements 

eg Australia, Austria, Bangladesh, Belarus, Bhutan, Brazil

• Intergovernmental agreement to Improve International Tax Compliance and to Implement FATCA

Eg USA only

• Tax Information Exchange Agreement (TIEA)

Eg Argentine, Bermuda, Cayman Island

• Limited Multilateral Agreement

Eg Bangladesh, Nepal, Bhutan, Srilanka, Maldives, Pakistan, 

• Limited Agreements

Eg Afghanistan, Iran, Pakistan, Lebanon, Maldives, Yemen, Ethiopia

• Other agreements

Eg Aden Rules, African congress mission,  Dominion Rules

• Specified Associations agreements

Eg Taipei only

• Synthesised Text

Eg Australia, Austria, Canada, Belgium, Finland, Georgia, Ireland, Japan, Latvia, Lithuania