Calculate your Tax rate for the year 2008-09

LIC's FY08 profit up 10%

Public sector insurer Life Insurance Corporation of India (LIC) has generated Rs 16,600-crore valuation surplus, or profit, in 2007-08, a 10 per cent rise over 2006-07 figures, sources familiar with the development said.

A formal announcement is expected soon. Of this, the insurance behemoth will pay 5 per cent, or Rs 830 crore, to the government as dividend and will distribute the balance among its policy-holders as bonus.
In the previous year, the dividend was Rs 760 crore. Private insurers pay 10 per cent of their valuation surplus to shareholders. Though LIC is yet to arrive at a figure regarding the bonus, “It will not be less than last year’s,” a source said.
In 2006-07, LIC had declared a bonus of Rs 70 rupees per Rs 1,000 sum assured. In 2007-08, LIC’s solvency margin has also increased to 152 per cent or Rs 42,250 crore as compared with 150 per cent in the previous financial year.
New business premium stood at around Rs 58,000 crore. LIC is aiming for a 30 per cent increase in its new business premium in 2008-09.

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LIC Starts e-Documentation

Life Insurance Corporation (LIC), one of the largest insurance organizations in the country with more than 180 million customers, has started a process of electronic document management. The project, to be completed by 2010, will enable policy holders with multiple options for instant e-services. As the electronic implementation of policy documents gets underway, LIC is all set to facilitate more than 180 million existing customers with an array of services. The policy documents will be made available online and consumers can avail medical, loan, and claim facilities irrespective of geography. As it transforms more than 180 million policy documents into electronic format, the process will enable the organization to turn paperless. LIC, is investing nearly Rs. 600 crore on electronic document management system (EDMS) that will enable it to digitalize all the policy documents by 2010.
The service will help policyholders to make informed decisions for various queries and changes, including verification of signatures, without being physically present at the place of policy allocation. This is being deemed as one of the biggest projects of its kind. "It is a good move and the policyholders will be able to access services and file requests through any branch that will eventually save time and money," said Dhirendra Pratap Singh, an executive at LIC. LIC introduced basic computing in 1964, which was replaced by Microprocessors-based computers in branch and divisional offices for back office operations in 1980s'. In addition, the organization commenced standardization of hardware and software in 1990's. Today, it maintains nearly 2100 fully-computerized branch offices, as well as more than 100 divisional and eight zonal offices. Insurance industry experts said that once the project goes live, there will be an instant monetary savings in transaction cost, as well as help in reduction of process-management time that will benefit both- organization and policyholders. The service will also help customers to access insurance documents instantly and can apply online for educational, personal and home loans. In addition, the customers can visit any branch office in order to make; modifications in the nomination status and address; and related queries. The organization had already introduced satellite offices which allows its customers to pay insurance premium anywhere in India in 2005. Rakesh Kumar, senior manager with LIC, Delhi said that the process is underway but however, he refused to divulge details.

Tax Information 2008

INCOME TAX INFORMATION 2008

According to the Finance Act, 2005 income-tax is required to be deducted under section 192 of the Income-tax Act, 1961, from income chargeable under the head "Salaries" for the financial year 2008-2009 (i.e. assessment year 2009-2010) at the following rates:I) In case of every individual other than the individual referred to in item II and III below

I) In case of every individual (Men) other than the individual referred to in item II and III below
Total Income (Rs.) --------------------------- Rate
Up to Rs 1,50,000 ------------------------------Nil
Rs 1,50,001/- to 3,00,000/ -----------------10%
Rs 3,00,001/- to Rs 5,00,000/- -------------20%
Above Rs 5,00,000/- ------------------------30%

(II) In case of women employees below 65 years of age
Total Income (Rs.) ----------------------------Rate
Up to Rs.180,000 -------------------------------Nil
Rs.180,001 to Rs.300,000 --------------------10%
Rs.300,001 to Rs.500,000 --------------------20%
Rs.500,001 and above ------------------------30%


A) Surcharge on Income-tax: Surcharge on income tax on all firms and companies with a taxable income of Rs. one crore or less has been removed.

B) Surcharge on T.D.S. on the payment other than salaries: The amount of income tax deducted in accordance with the provision of Chapter XVII B shall be increased by a surcharge calculated,

• In the case of every individual, HUF, association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent of such tax where the income or the aggregate of such income paid or likely to be paid and subject to the deduction, exceeds rupees ten lakh.
• In the case of every firm, artificial judicial person & domestic company, at the rate of ten percent of such tax.
• In the case of every company other than domestic company, at the rate of two and half per cent of such tax

C) Education Cess: An additional surcharge called as ‘Education cess’ shall be levied at the rate of three percent on the amount of tax deducted inclusive of surcharge as stated in paras ‘A’ and ‘B’ above.

3. Section 192 of the income-tax Act, 1961: Broad scheme of tax. Deduction at source from "salaries" etc.3.1 Every person who is responsible for paying any income chargeable under the head "salaries" shall deduct income-tax on the estimated income of the assessee under the head "salaries" for the financial year 2007-2008. The income-tax is required to be calculated on the basis of the rates given above and SHALL BE DEDUCTED ON AVERAGE AT THE TIME OF EACH PAYMENTS e.g. FROM SALARY EVERY MONTH. Any income falling within any of the following clauses shall not be included in computing the income from salaries for the purpose of section 192 of the Act:-Any sum received under a life insurance policy, including the sum allotted by way of bonus on such policy other than,

• Any sum received under sub- section(3) of section 80DD.
• Any sum received under a Keyman insurance policy.
• Any sum received under an insurance policy affected on or after 1-4-2003 in respect of which the premium paid in any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured.

"Deduction" U/S 80C :

In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year out of his Income chargeable to tax being the aggregate of the sums given below not exceeding one lakh rupees.

• Payment of insurance premium to effect or to keep in force insurance on the life of the individual, the wife or husband or any child of the individual; provided the premium paid is not in excess of twenty per cent of the actual capital sum assured.
• Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan of the Life Insurance Corporation of India or any other insurer as the Central government may by notification in the official gazette specify on the life of the individual, the wife, the husband or any child of the individual provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity.
• i) for participation in the Unit-Linked Insurance Plan, 1971, of the Unit Trust of India; specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002.ii) for participation in any Unit-Linked Insurance Plan of the LIC Mutual Fund notified by the Central Government under clause (23D) of section 10, as the Central Government may, by notification in the Official Gazzette, specify in this behalf
• Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation as the Central Government may by notification in the Official Gazette, specify.

NOTE: Section 80 CCE.The aggregate amount of deduction under section 80C, section 80CCC, and shall not, in any case exceed one lakh rupees.Under This section, a deduction up to Rs 10,000 (Rs 15,000 in case of senior citizens) is allowed in respect of premium paid by cheque towards health insurance policy, like "Mediclaim". Such premium can be paid towards health insurance of spouse, dependent parents as well as dependent children of the assessee provided that such insurance is in accordance with the scheme framed by,

• The General Insurance Corporation of India as approved by the Central Government in this behalf or
• any other insurer and approved by the Insurance Regulatory and Development Authority.