One of the main responsibilities that a responsible citizen of a country requires to follow is filing income tax on time. Deadline for income tax declaration usually ends by the end of April every year. Where this is a generalised info, there are certain numbers of investors unknown of LCA and LCI to be a part of IR or an exemption.
Here are few details explained in brief regarding income tax and its essential elements.
What are LCA and LCI?
Both are a type of fixed income security that banks issue. Another factor that is involved in such securities issue is mean comprising of 2 sections (bonds).
• Agribusiness Letter of Credit
• Real Estate Credit Letter
As per this, any investor buying any of the above bonds lends to financial firms. Those companies direct that amount to either agricultural section or in real estates.
How can an investor in income tax declare LCA and LCI?
As a generalised info,
1. The first step is to select the option ‘Goods and Rights’
2. If previous year’s declaration data is already in the list, option to select is ‘Edit’. If not, the option will be “New.’
3. Next steps involve filling up of fields like:
• Location and others
Method to compare LCA and LCI with CBD
The calculation is simple. Here the first step involves income deduction. The value as per given CDB rate should be equivalent to either LCA or LCB. It then follows with a formula where the resultant of division of LCI rate with LCA rate is (1 – income tax), multiplied by CBD rate.
As a simple explanation, an investor can understand CBD rate as CDI percentage offered by a bank with income tax (percentage).
Aside to all these info about LCI, LCA, and CBD, one can get detailed information on income LCA and LCI, their profitability, taxation, risks and definitely info on yields from professionals. With the help of spreadsheets and explanatory texts, a person easily gets a better idea of their investments.