Struggling to find the right investments to save on Income Tax? Don’t worry, we have you covered! As per the old income tax regime, you can claim deductions and exemptions under the various sections of the Income Tax Act, 1961. These exemptions and deductions help you reduce your taxable income, and consequently, your tax liability.
Note: You must make these investments in suitable tax-saving instruments after April 1 and before March 31 of the financial year in question.
Any individual or business earning an income has to file their income tax returns irrespective of the earnings. However, filing income tax returns is mandatory only if the gross income earned is more than the basic exemption limit of ₹2.5 lakh.
Here are some of the entities that are liable to pay taxes based on the net taxable income and file IT returns:
Salaried and self-employed individuals
Hindu Undivided Family (HUF)
Body of Individuals (BOI)
Association of Persons (AOP)
Companies and corporate firms
We understand that filing your income tax returns can be quite a tedious and confusing process. It becomes a hassle to submit different acknowledgements. However, if you want to save money on tax, it is essential to manage your tax-saving investments.
So, when it comes to tax-saving, you have to understand the income tax slabs. In the Union Budget 2020, a new tax regime was introduced to help people save money via lower income tax rates. However, this new regime also eliminated most of the income tax deductions and exemptions available under the old regime.
To take a look at the old and new tax slabs and rates for the financial year 2020-21, you can head over to our comprehensive guide on income tax returns filing in India.
Here is where tax planning comes in handy. You can select either of the two tax regimes on the basis of your claimed income tax deductions and exemptions. The new tax regime has provided lower tax slabs for income less than ₹15 lakh. But to avail the benefits of a lowered tax slab rates, you have to forfeit a range of exemptions and deductions like HRA, LTA, investments under Section 80, and so on. If you are looking to save on taxes by opting for the old tax regime, you can choose to make investments in different tax-saving avenues. Here, we give you a detailed overview of the scope of the various tax-saving instruments.
Here are some types of tax-saving instruments available on Finserv MARKETS:
A health emergency can strike anytime. Moreover, with rising inflation, it can be difficult to cope up with the rising medical costs, thereby affecting your savings during an emergency. A health insurance policy covers emergency medical costs and secures you from the financial loss incurred during treatment. You can also enjoy tax benefits up to ₹1 lakh on purchasing a health insurance plan under Section 80D of the Income Tax Act. Health insurance plans available on Finserv MARKETS are tailor-made to suit your needs and offer various benefits, including comprehensive coverage, cashless claim facility across 6,500+ network hospitals, and much more.
Every person dreams of purchasing a home of their own. But did you know that you can avail tax benefits on home loans as well? Under Section 80C of the Income Tax Act, 1961, you can claim the principal repayment amount up to ₹1.5 lakh. This includes the registration and stamp duty charges. Apart from this, you can enjoy tax savings on the interest component of your home loan under Section 24(B) of the Income Tax Act, 1961. The maximum deduction is limited to ₹2 lakh per financial year. Moreover, you can claim additional deductions under Sections 80EE and 80EEA, provided you are eligible for the same. Head on over to apply for a home loan on Finserv MARKETS to purchase your dream house!
ULIP (Unit-Linked Insurance Plan) is a combination of insurance and investment. This financial instrument enables you to make the most out of your investment while also saving on taxes. Apart from this, you also get insurance coverage against unforeseen risks to safeguard your family. Moreover, you can claim tax deductions of up to ₹1.5 lakh on the investments made in ULIPs under Section 80C of the Income Tax Act.
Be it saving for your child, building a corpus for your retirement, or saving on taxes, Finserv MARKETS brings Bajaj Allianz Long Life Goal ULIPs that are sure to fetch you great returns.
Life is full of unpredictable scenarios, and you never know what could come your way. In this case, protecting your life's goals is important to ensure that you are prepared for the worse. A comprehensive term plan like the Smart Protect Goal Term Insurance available on Finserv MARKETS acts as an ideal financial blanket. It allows you to safeguard your future goals and ensure that your family keeps up with their aspirations even if anything were to happen to you. Also, it allows you to claim tax deductions under Section 80C of the Income Tax Act, 1961.
Looking for tax benefits through an investment vehicle? ELSS funds are the best choice for you. With a lock-in period of just 3 years, you can also enjoy tax deductions of up to ₹1.5 lakh on the ELSS investment under SectIon 80C of the Income Tax Act. Money can be invested either through the SIP or lump sum methods. Grow your wealth and save taxes with ELSS investments.
The National Pension Scheme is a government scheme to provide people with post-retirement financial independence! You can get tax benefits under Section 80CCD (1B) of the Income Tax Act with an additional deduction of ₹50,000 on your NPS investments. What’s more! You get flexibility of choice with a host of investment options and fund managers. It is regulated by PFRDA (Pension Fund Regulatory and Development Authority). You can easily track and manage your NPS account online with easy portability.
Apart from the above-mentioned tax deductions, taxpayers can also look at the following investments to reduce their income tax liability.
If you are looking for a guaranteed return investment option, then bank FDs are for you. The five-year tax-saver fixed deposit is a hassle-free method of reducing your tax liability in case you have a low risk appetite. With a lock-in period of 5 years, you can claim a maximum amount of ₹1.5 lakh under Section 80C of the Income Tax Act, 1961, from your tax-saver FD investment. As the tax-saving bank FD has a tenor of 5 years, premature withdrawals aren’t allowed.
As a salaried individual, you contribute a certain percentage of your income towards Employees’ Provident Fund (EPF). This amount acts as a retirement fund for employees and ensures financial security after they retire. An employee's contributions towards EPF are eligible for deductions under Section 80C of the Income Tax Act, 1961. Hence, you can enjoy income tax savings on your EPF investment by increasing your contribution. Moreover, you can even ask your employer to increase your contribution towards EPF, essentially increasing your investment and reducing your taxable income.
Apart from the income tax-saving tools mentioned above, there are other financial tools that enable you to save money on tax:
Public Provident Fund is a long-term investment option that offers post-retirement financial backup. With a lock-in period of 15 years, you can benefit from the power of compounding as the interest rate on this government scheme resets on a quarterly basis. Moreover, PPF enables you to make partial withdrawals (after completing a certain tenor) and also avail tax benefits under Section 80C.
Sukanya Samriddhi Yojana is a government-backed scheme enabling low-income families to safeguard the future of their daughters. A maximum of two accounts can be opened, one for each girl child. The contributions can be claimed under Section 80C of the Income Tax Act, 1961, whereas the interest earned, maturity amount, and withdrawals are fully tax-exempt.
To plan your SSY investment maturity amount, use the Sukanya Samriddhi Yojana Calculator available on Finserv MARKETS!
If you are looking for a fixed investment scheme that offers tax benefits, then NSC is a suitable choice! It is a government-backed savings scheme offering you tax benefits under Section 80C. With a lock-in period of 5 years, you can begin investing in NSC through any Indian Post Office.
Specifically designed for senior citizens, SCSS is a low-risk investment option with a five-year lock-in. A maximum one-time investment of ₹15 lakh can be made with a minimum limit of ₹1,000. Such a financial instrument is a lucrative avenue for senior citizens due to the high interest rate of 7.4% and the tax benefit available under Section 80C.
Income tax rates for individuals in India are based on their age and income. Every year, the Government announces tax slabs applicable as per these parameters in the Budget. You can use our income tax calculator to determine your payable tax amount as per latest government guidelines.
For Males below the age of 60
For Females below the age of 60
For Senior Citizens (resident taxpayers aged 60 and above)
For very Senior Citizens (resident taxpayers aged 80 and above)
If you are a salaried employee, your employer would ask you to carry out an investment declaration at the start of each financial year. An investment declaration, as the name suggests, informs the employer of the estimated investments you intend to make in the given financial year. The proof of your actual investments need not be provided until the end of the fiscal year. You are permitted to invest more or less than the amount you originally declared. In other words, the final investments need not be exactly the same as were declared at the start of the fiscal.
The purpose of an annual investment declaration is so that your employer can know about your tax-saving investments for that year. Accordingly, your employer can then deduct tax at source (TDS) from your monthly salary. Therefore, declaring your investments is essential as it leads to greater in-hand salary.
Salaried employees have to submit Form 12BB at the end of the financial year to prove their investments and claim income tax deductions and rebate. Your employer may also ask for documentary evidence to verify your declaration. It is the final step of your investment declaration via your employer.
This situation arises when an employee is not able to invest the amount as declared to their employer at the start of the financial year. As mentioned above, the employer calculates the Tax to be Deducted at Source (TDS) based on the original investment declaration. In this scenario, the employee owes more in taxes as they did not invest the amount declared. Hence, the employer shall recalculate the employee’s tax liability and subsequently adjust it in the next few month’s salary.
However, if the employee makes the investments before the end of the financial year (March 31), they can claim a tax refund from the Income Tax Department after filing the ITR (Income Tax Returns).
This situation comes up when an employee invests the exact amount that has been declared at the start of the fiscal year. The employer will deduct the right amount of TDS from the employee’s monthly income. Additionally, in this situation, the tax paid by the employee is also equal to the amount owed to the Income Tax Department. Hence, the employee simply has to file their tax returns during the year’s end and claim ‘nil’ returns.
In this situation, filing returns is simple, unless there is an additional source of income not accounted for.
Suppose an employee declares investments worth ₹60,000 at the start of the fiscal year. However, they end up investing ₹1.2 lakh into tax-saving instruments before the end of the financial year. Ideally, this would mean that the employee has saved more in taxes.
However, the employer has been accounting for more TDS from the employee’s monthly salary with the presumption that they will only invest ₹60,000 as stated in the declaration. Thus, the employer has been paying a larger amount of tax to the government than actually required on behalf of the employee.
In such cases, the employee is eligible for a tax refund, which can be claimed during ITR filing.
Thus, it is smarter to declare your investments at the start of the year. This ensures that your employer will deduct tax from your salary and you shall be maximising tax savings early on.
Continue your journey on Finserv MARKETS to know more about the different tax slabs and how to file ITR or to compute your tax liability for assessment year (AY) 2021-22 with our income tax calculator. Finsev MARKETS is a one-stop shop to help you reduce your tax liability. Invest today!
Tax laws that help in reducing the tax liability of eligible entities are known as tax benefits. Tax exemptions and deductions are some of the examples of tax saving investment benefits. The quantum of tax savings depends on the type of tax benefit sought as there are various forms of tax savings. Some of the tax-saving investment benefits are: Income Tax Exemption and Income Tax Deduction. Some of the Tax benefits include: The premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act, 1961, subject to certain conditions and limits. The benefits received from a life insurance policy are exempted from income tax under Section 10(10D) of the Income Tax Act, 1961, subject to conditions and limits specified under the law. If the benefit paid to the policyholder is not exempt under Section 10(10D), the amount will be subject to tax deducted at source under section 194DA of the tax laws. Changes in tax laws are announced periodically, hence, it is advisable to consult a tax consultant to ascertain exact tax benefits.
Life insurance provides financial protection to the family along with a host of tax benefits. The premiums paid for a life insurance policy are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. The available tax deductions lower your taxable income, boosting your overall savings. Tax benefits under Section 80C Investing in life insurance can help you receive a host of tax benefits under Section 80C: A tax deduction of up to Rs 1.5 lakhs is allowed for the premiums paid. For policies bought after April 1 2012, deduction of the premium of up to 10% of the sum assured is allowed For policies purchased before April 1 2012, the deduction is allowed for premiums of up to 20% of the sum assured. The tax benefits will be reversed if the policy is discontinued within two years of purchase. Tax Benefits Under Section 10 (10D) Any amount received at the maturity of a life insurance policy is exempted from tax under Section 10(10D). However, the exemption is not applicable to Amount received under Section 80DDA (3) or 80DD (3); Maturity benefits received under a Key Man Insurance Policy; Sum received under any insurance policy (other than as death benefit) issued on or after April 1, 2003, during the term of which the premium paid is more than 20% of the sum assured.
Health insurance has become a necessity and the government gives a variety of tax benefits to promote its adoption. The premiums paid for medical insurance are eligible for tax benefits under Section 80C and 10(10D) as applicable. Section 80C: A deduction of Rs 1.5 lakh can be claimed from your total income for health insurance premiums. Section 10D: Under Section 10D, any benefit received through an insurance policy will be exempted from tax (* subject to fulfillment of certain conditions)
With the wave of digitization sweeping the country, the process of tax calculation has undergone a drastic change. Now you don’t need reams of paper to compute your annual tax outgo. Tax saving calculator is a simple, user-friendly digital tool meant to compute tax liability. The tool uses investment details to project your annual tax details.
A tax saving calculator helps you make tax-efficient investments. Tax saving calculators have a simple interface and can be accessed by anyone. A tax saving calculator is an ideal tool for long-term financial planning as it utilizes factors like age and potential income growth.
The primary tool for tax saving is Section 80C of the Income Tax Act, 1961. You can claim a deduction of up to Rs 1.5 lakh per year under section 80C for certain investments. A variety of investments are eligible for tax benefits, but fixed deposits, PPF, ULIP and ELSS are some of the popular options. One should, however, not make an investment based solely on tax savings, but keep the financial goal in mind. For instance, if the aim is to ensure a regular income with low investment risk, you should choose FD or PPF. On the flip side, if you seek high returns and have a slightly high-risk tolerance, ELSS is an ideal choice for you.
Employers take into account the proof of investments submitted by employees to compute their taxable income. It is advisable to submit the proof on time, but if you fail to submit, you can always make the deduction claim at the time of filing the tax return. To claim deductions during filing of the return, the investment should have been made during the relevant financial year.
All the deductions available under Section 80C are valid only in the year the investments are made in. If you have made the investment on April 30 2019, you will be eligible to claim the deduction in the financial year 2019-20.
A deduction can be claimed for interest on a loan for higher studies under Section 80E. However, the deduction is available only if the loan has been provided by a financial institution. Interest on the loan granted by your employer will not qualify for a tax deduction under the law.
Interest paid during the year for education loan is eligible for tax deduction under Section 80E. However, the section doesn’t specify any limit for the deduction. The actual interest paid can be claimed as a deduction under the section. Law has not prescribed any upper limit for making a claim of deduction under Section 80E. Hence, the actual interest paid during a year can be claimed as a deduction.
A company cannot claim tax benefits under Section 80C as its provisions apply only to individuals and Hindu Undivided Family (HUF).
Deduction under Section 80C applies to all insurers irrespective of the nature of ownership. The insurance company should be registered with the Insurance Regulatory and Development Authority of India. You can claim a deduction of up to Rs 1.5 lakh under Section 80C for a policy issued by a private insurer.
You can claim a deduction for stamp duty paid for the purchase of a house in the year in which the payment is made. The deduction is available under Section 80C.
Donations to specific institutions, funds, etc qualify for tax deduction under Section 80G and every taxpaying entity, including companies, are eligible for the tax benefit.
Tax deduction of medical insurance premiums is available separately for policies that cover you, spouse and children and your parents. You can claim a deduction of up to Rs 25,000 under Section 80D for health insurance policy taken in your name, wife and children. Additionally, you can claim a deduction of Rs 50,000 for a policy taken for your senior citizen parents. Both deductions can be claimed together under Section 80D of income tax laws. The deduction limit for senior citizen parents was Rs 30,000 till 2017-18 but has since been increased.
Interest income from a Fixed Deposit is exempt for people over the age of 60 years under Section 80TTB.
The premiums paid for medical insurance are tax-exempt under Section 80D of the tax laws. The tax benefit is available only to individuals and Hindu Undivided Family, but not to corporate entities. The section also mandates payment through DD, cheque or electronic means to claim tax benefits. Cash payments are not eligible for tax deduction under Section 80D.
Section 80DD allows a tax deduction of up to Rs 50,000 for the treatment cost of a dependent handicap. The deduction limit can be extended to Rs 1 lakh depending on the severity of the disability.
You can claim tax deductions under Section 80DDB for the treatment cost of serious diseases such as hemophilia, neurological disorders, Parkinson’s disease, cancer (malignant), AIDS, thalassemia and chronic renal failure are tax-deductible. For those aged below 65 years, a deduction of Rs 40,000 is allowed, while those aged above 65 years can claim a deduction of Rs 60,000.
Various types of investments are eligible for tax deduction under Section 80C, but ULIPs are one of the best investments to achieve financial goals along with saving taxes. The contributions to a ULIP plan qualify for a tax deduction of up to Rs 1.5 lakhs in a year. To claim the deduction the total premium should be less than 10% of the sum assured. For instance, if the sum assured is Rs 15 lakhs, and the total premium in a year is less than Rs 1.5 lakh, the entire amount can be claimed as a tax deduction under Section 80C. Even if the premium exceeds Rs 1.5 lakh, the deduction will be limited to Rs 1.5 lakh.
The regular premiums paid for a retirement/pension ULIP are eligible for a tax deduction of up to Rs 1.5 lakh in a year under Section 80CCC. The cumulative deduction limit under Section 80C and Section 80CCC is Rs 1.5 lakhs. You can invest in a higher amount in ULIP to fulfil your financial goals, but the deduction will be limited to Rs 1.5 lakhs.
Under Section 10(10D) of the Income Tax Act, the amount received on partial withdrawal or maturity of a unit-linked plan is exempt from tax. To be eligible for exemption the annual premium of the policy should not be more than 10% of the sum assured. If the policy is bought before April 1, 2012, the premium should not be more than 20% of the sum assured. If the premiums exceed the prescribed limit, the benefits received in the future will be taxed. In the case of receiving death benefits, the amount will be taxed as per the income tax slab rate.
Section 10(10A) of the Income Tax Act allows tax-free accumulation of pension if you have invested in a ULIP pension/retirement plan. However, the pension received is taxable as per income slabs. The amount received on the surrender of the policy is also taxable. One also has to pay the premiums without fail to receive complete tax benefits. If you discontinue the unit-linked plan within 2 years of starting, you will not be eligible for tax deduction under Section 80C.
Section 80C is very specific about the investments eligible for deduction and recurring deposit does not qualify for a deduction. To claim deduction under the section, you will have to invest in specific tax-saving instruments. For instance, a five-year bank fixed deposit will be eligible for deduction but a recurring deposit even for five years will not qualify for a deduction.
The deduction of Rs 1.5 lakh per year allowed under Section 80C includes the deductions allowed under sections like 80CCC and subsection (1) of Section 80CCD.
The nature of the allowance determines if it is taxable or not. Allowances like Hostel Expenditure Allowance, Children Education Allowance, Leave Travel Allowance and House Rent Allowance, which are often part of the salary are partially tax-exempt. On the flipside, allowances such as City Compensatory Allowance, Special Allowance, and Overtime Allowance are taxable in the hands of the employee.
Form 16 has two parts—Part A and Part B. If the employer deducts TDS, he/she will issue Part A of Form 16. Form 16 (Part A) can be downloaded from the Traces website. If the employer does not deduct TDS, no Form 16 is required. However, Part B is issued by the employer and can be issued even if your salary does not exceed the annual exemption limit.
Since no employer-employee relationship exists in the case of family pension, it is not taxed as salary income. Family pension is taxed as income from other sources.
Yes, any amount received as leave encashment is taxed as under the income from salary head. Leave encashment is tax-exempt for government employees, but the lowest of the following is exempt for non-government employees. An amount equal to salary for the period of leave earned (maximum leaves earned will be 30 days for every year of actual service) 10 months average salary. [Avg. salary = salary (basic + DA) of 10 months immediately preceding the retirement or resignation] Maximum Rs.3,00,000.
Under Section 80U, tax benefits can be availed by any individual certified as a person with a disability by a medical authority. A deduction of Rs 75,000 is allowed to anyone with at least 40% disability and Rs 1.25 lakh to people with over 80% disability.
Section 80D of the income tax act specifies in detail the tax deductions available for buying a health insurance policy. A deduction is available for policies covering self, spouse, children and parents under the section. If you buy a policy for yourself and your spouse and children, you can get a maximum deduction of Rs.25, 000. If you are a senior citizen, the deduction limit increases to Rs. 50,000. If you buy a policy for your parents, you can get a maximum deduction of Rs. 25,000. If your parents are senior citizens, the deduction limit increases to Rs. 50,000f you buy a policy for yourself, spouse and children and another policy for your parents, you get two deductions: up to Rs. 25,000 for your policy and up to Rs. 25,000 for your parents’ policy. If your parents are senior citizens and you also buy a plan for them, you get two deductions: up to Rs. 25,000 for your policy and up to Rs. 50,000 for your parents’ policy. If both you and your parents are senior citizens and you buy two policies, one covering your family and another for your parents, you get two deductions: up to Rs. 50,000 for your policy and up to Rs. 50,000 for your parents’ policy.
Yes, both the earning members of a family can individually claim maximum tax benefits for home loan taken in joint names. The interest on a home loan is eligible for a tax deduction of up to Rs 2 lakhs in a year under Section 24B of the Income Tax Act. Additionally, the principal repayment qualifies for a deduction of up to Rs 1.5 lakhs under Section 80C.
The NPS being a retirement-focused instrument receives additional tax benefits under Section 80 CCD (1B) of the Income Tax Act. A taxpayer can claim an additional deduction of up to Rs 50,000 for contributions to NPS. The tax benefit is over and above the limit of 80 C.
Filing the income tax return on time is as important as honestly paying the tax. An assessee can be penalised for late filing of taxes under Section 234A. Interest is charged on the outstanding tax liability if the assessee is late in filing his/her tax returns.
A savings bank account is a popular choice for millions of Indians. Section 80TTA of the Income Tax Act allows a tax deduction on the interest income from a savings bank account. However, the tax benefit is available only till Rs 10,000, and any income beyond that is taxable. Section 80TTA of Income Tax Act allows for a tax deduction on the interest income from a savings bank account. Interest earned above Rs. 10,000 will be taxable.
The income generated by resident individuals and companies from foreign countries is taxable in India. Non-resident Indians, on the other hand, have to pay taxes only on the income earned in India or from a source/activity in India.
Buying a health insurance policy provides a variety of tax benefits. Besides a tax deduction allowed for a policy taken for self, children or spouse, a tax deduction is also available for a health insurance policy taken for parents under Section 80D of the Income Tax Act. You will get the tax benefit irrespective of the fact that your parents are dependent or not. Tax benefits can increase depending on the age of the parents. You can claim a tax deduction of up to Rs 50,000 per year if your parents are over 60 years of age.
The interest earned on tax-saving fixed deposit is always taxable.
No, the HRA benefit is only limited to salaried people, but self-employed people can avail deduction for house rent under Section 80GG of the income tax law.
House rent allowance is not mandatory to receive tax benefits for rent paid. Self-employed individuals can claim a deduction under Section 80GG for the rent paid.
An individual can easily get tax benefits for education loan taken for self, spouse or children. Under Section 80E of the income tax law, a tax deduction can be claimed for the interest paid on an education loan.
A maximum deduction of Rs 2 lakhs can be claimed for the interest paid on home loan taken for a self-occupied or rented property under Section 24. Earlier, there was no limit for the interest paid on home loan for a rented property.
The income tax is a form of direct tax levied by the government on the income of every person. Income tax in India is governed through the Income Tax Act, 1961.
In India, the period between April 1 and March 31 is considered to be the financial year, which is used for all purposes of accounting and budgeting by the government. Taxes are an important source of government revenues and hence the financial years is used for purposes of Income Tax. The financial year is further classified into ‘Previous Year’ and ‘Assessment Year’. The year in which the income is earned is known as the previous year, while the year in which the tax is computed is known as the assessment year. For instance, the previous year 2019-20 will be the income earned between April 1, 2019, and March 31 2020. The tax on the income earned in the previous year 2019-20 will be computed in the assessment year 2020-21.
Sometimes income tax terms can be confusing. According to tax laws, every person has to pay income tax. ‘Person’ as per the law includes natural as well as artificial entities. For the purpose of charging Income-tax, the term 'person' includes Individuals, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person not covered under any of the above.
Tax exemptions are among the various tax benefits provided by the government. If an income is tax-exempt, it will not be considered for the computation of income tax. On the other hand, the incomes which have to be considered for taxation purposes are known as taxable income.
Tax is not levied on agricultural income in India. However, if an agriculturist has non-agricultural income, he/she will have to declare the agricultural income for the calculation of tax on his/her non-agricultural income. Section 2(IA) of the Income Tax Act, 1961 deals with the meaning of agricultural income.
One has to maintain proof and records as per the income tax act for every source of income. If the act doesn’t specify or prescribe the type of records, you should maintain relevant records to prove your claim of income.
Records have to be maintained for every kind of source of income, including agricultural income. Even though agricultural income is exempt from taxes, it is advisable to maintain some proof of earnings and expenditures.
Tax is deducted at a flat rate of 30% without any basic exemption limit in the case of lottery and prize money. Generally, the tax is deducted at source and the balance is paid to the winner
The Government of India provides relief to people who have paid income tax in a foreign country. The relief can be granted as per the double taxation avoidance pact or Section 91 of the Income Tax Act.