Let’s understand your total income, how to calculate your total taxes and about deductions that you can claim.
To your net income from home tutoring add any other income that you earn. Do you have money kept in a savings bank account or have Fixed Deposits? Add the interest income that you earn under the head income from other sources. If you earn rental income you should add that under the head Income from House Property. You can understand about house property income in detail.
Once you have your total income – you can reduce deductions under section 80. Here are all the deductions you are eligible to claim. The most notable one is the deduction under section 80C. You can claim deduction on any investments in PPF, purchase of NSCs, life insurance premium paid. You can even claim school fees you paid for your children for their full time education in a school or a college. If you have paid medical insurance, claim deduction under section 80D. A deduction of Rs 10,000 is available on interest income in savings bank account. You must show the income under other sources and then claim this deduction. If you file with ClearTax we give you this deduction automatically.
Now apply the slab rates to your amount which is your total income less deductions. This is the final amount of tax payable by you. If any tax has been deducted on your interest income you can take credit of it. This TDS is allowed to be deducted from your final tax liability. You can find out the details of all the TDS deducted on your income by downloading your Form 26AS. ClearTax can automatically pull out your TDS information from the government’s website. We make sure you do not miss taking any TDS benefit J
Hopefully, this helped you understand your taxes better – write to us firstname.lastname@example.org if you have any questions. We’ll look at whether you need to maintain accounting records in our next post.