Tax Computation for Asstt. Year 2021-22

Sec 115BAC – New Regime for Tax Computation

The government has been looking at avenues to make income tax provisions simplified and lessen dependencies on consultants. A step towards it came through the introduction of Sec 115BAC- Tax on Income of Individual/ HUF in the Budget of 2020, as an alternate to the existing regime.

Effective AY21-22 (FY 20-21), every individual and HUF has the option to either continue with existing tax rate where exemptions and deductions can be claimed or opt for the “new tax regime”; where the rates are lower but there are no exemptions or deduction. With some cost-benefit analysis taxpayers can now decide their avenue of savings and investments, i.e. whether to opt for taxable but highly rewarding schemes or tax-saving schemes with nominal return options.

Following are the tax rates applicable for AY 21-22:

 The Assessee opting for New Scheme shall not be able to claim the following:

In case of a salaried employee:

• Standard Deduction
• Professional tax paid
• Entertainment allowance (in case of govt employees)
• Leave travel Concession
• House Rent Allowance
• Special Allowances provided u/s 10(14) except:
• Transport allowance granted to a handicapped employee
• Conveyance allowance
• Any allowance granted to meet the cost of travel on tour or on transfer
• Daily allowance

If Assessee has Income from Business and Profession:

• Exemption to SEZ u/s. 10AA
• Deductions u/s. 32AD, 33AB, 33ABA, 35(1)(ii),35(1)(iia), 35(1)(iii), 35(2AA), 35AD and 35CCC
• Additional depreciation u/s. 32(iia)
• Carried forward or unabsorbed depreciation of earlier years

All Taxpayers:

• Interest paid on home loan on self-occupied house
• All deductions provided under Chapter VIA (except 80CCD(2) and 80JJAA)

Benefits still available under new regime:

• Interest received on post office saving account u/s 10(15)(i) Max Rs. 3,500
• Gratuity received from employer Maximum Rs. 20 Lacs
• Amount received from LIP on maturity u/s 10(10D)
• Interest on PPF under Sec 10(11)
• Employer contribution in NPS or EPF upto 12% of salary & Interest on EPF upto 9.5% P.A.
• Interest and maturity amount of PPF or Sukanya Smriddhi Yojna
• Pension commutation

How to choose whether to opt for Old or New Regime?

A comparison needs to be done on case to case basis, in order to decide which regime to opt for. The following table is an attempt to broadly classify which regime should be opted based on the income of the assessee:

Tax Payable (in Rs.)

Annual Income Old Scheme

(with exemptions)* Old Scheme

(without exemptions) New Scheme

Up to Rs. 2.5L –

Rs. 5L –

Rs. 7.5L – 65,000 39,000

Rs. 10L 65,000 117,000 78,000

Rs. 12.5L 117,000 195,000 130,000

Rs. 15L 195,000 273,000 195,000

*Considering exemption under Sec 80C, 80CCD(1B), Sec 80D and HRA of ~ Rs. 2.6L

Well the applicability of “new regime” may intuit dilemma and confusion amongst the Assessee; but with our next article, we shall endeavor to break down the section into simplified questions/ answers for better understanding.

Source : TDSMan

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e-Book on Income Tax Computation.

This e-book on Income Computation and Disclosure Standards published by Mr. CA. Tejas K. Andharia. This e-book is an attempt to summarize the relevant provisions of Income Computation and Disclosure Standards in comparison with provisions of Accounting Standards. Relevant sections of  Income Tax Act, 1961 are also discussed at appropriate places.  This e-book will be helpful not only to practicing CAs and  Income  Tax Practitioners, but also to students of professional courses like CA/CS/CWA.

Regarding this e-Book your valuable suggestions, criticism and guidance are most welcome from readers and for this you can write on email tejasinvites@gmail.com

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Easy Tax Calculator for All Salaried Employee for A.Y. 2017-18 with Tax Slab.

As per the Finance Act, 2016, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2016-17 (i.e. Assessment Year 2017-18)

Method of Tax Calculation:

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 2016-17. The income-tax is required to be calculated on the basis of the rates given above, subject to the provisions related to requirement to furnish PAN as per sec. 206AA of the Act, and shall be deducted at the time of each payment. No tax, however, will be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs. 2,50,000/- or Rs.3,00,000/- or Rs. 5,00,000/-, as the case may be, depending upon the age of the employee.

Payment of Tax on Perquisites by Employer:

An option has been given to the employer to pay the tax on non-monetary perquisites given to an employee. The employer may, at its option, make payment of the tax on such perquisites himself without making any TDS from the salary of the employee.  However, the employer will have to pay the tax at the time when such tax was otherwise deductible i.e. at the time of payment of income chargeable under the head “salaries” to the employee.

Computation of Average Income Tax:

For the purpose of making the payment of tax mentioned in Payment of Tax on Perquisites by Employer above, tax is to be determined at the average of income tax computed on the basis of rate in force for the financial year, on the income chargeable under the head "salaries", including the value of perquisites for which tax has been paid by the employer himself.

Rates of tax - Normal Rates of tax:

Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year:

In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year:

Surcharge on Income tax:The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, having a total income exceeding one crore rupees, be increased by a surcharge for the purpose of the Union calculated at the rate of twelve per cent of such income-tax:

Provided that in the case of persons mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Education Cess on Income tax:
The amount of income-tax including the surcharge if any, shall be increased by Education Cess on Income Tax at the rate of two percent of the income-tax.

Secondary and Higher Education Cess on Income-tax:
An additional education cess is chargeable at the rate of one percent of income-tax including the surcharge if any, but not including the Education Cess on income tax.

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Updated Income Tax Slab for All Salaried Employee (Taxpayee) for Fin. Year 2016-17 and Asstt. Year 2017-18

INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2016-17 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961.

Salaried Employee (Taxpayee) can calculate actual Income Tax by this New Notification issued on 2nd Jan, 2017 by CBDT only for Employee for the year 2016-17 assessment Year 2017-18 in the Month of February-2017 to prepare salary bill.

Reference is invited to Circular No.20/2015 dated 02.12.2015 whereby the rates of deduction of income-tax from the payment of income under the head "Salaries" under Section 192 of the Income-tax Act, 1961 (hereinafter ‘the Act’), during the financial year 2015-16, were intimated. The present Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head "Salaries" during the financial year 2016-17 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in.

RATES OF INCOME-TAX AS PER FINANCE ACT, 2016:

As per the Finance Act, 2016, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2016-17 (i.e. Assessment Year 2017-18) at the following rates:

Rates of tax

A. Normal Rates of tax:

B. Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year:

C. In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year:

Surcharge on Income tax:

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, having a total income exceeding one crore rupees, be increased by a surcharge for the purpose of the Union calculated at the rate of fifteen per cent of such income-tax:

Provided that in the case of persons mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Education Cess on Income tax:

The amount of income-tax including the surcharge if any, shall be increased by Education Cess on Income Tax at the rate of two percent of the income-tax.

Secondary and Higher Education Cess on Income-tax:

An additional education cess is chargeable at the rate of one percent of income-tax including the surcharge if any, but not including the Education Cess on income tax as in Education Cess on Income tax.

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Most Important 10 Things on Salary TDS Deduction SMS Alert

10 Things about SMS alerts on Salary TDS Deduction

Here are 10 things to know about sms alerts on Salary TDS Deduction:

1) As many as 2.5 crore salaried taxpayers will now receive SMS alerts from the Income Tax Department regarding their quarterly TDS deductions. The tax department plans to offer this facility on a monthly basis and extend the service to 4.4 crore non-salaried tax payers. 

2) The tax department has asked taxpayers to update their mobile numbers in their tax e-filing accounts so that they can receive this service.

3) Tax experts have welcomed this initiative, saying that it will help increase transparency. “A common case is when TDS is deducted from your salary but deposited with an incorrect PAN. Or employer fails to deposit TDS and hence the employee cannot take credit of it. Many a times when people switch jobs, TDS deducted by two employers falls short of their actual tax liability,” said Preeti Khurana, chief editor of portal ClearTax.

4) TDS mismatch is one of the most common reasons for incorrect tax returns being filed, say tax experts.

5) “The new service will benefit the employees as any such inconsistency can be traced well in advance and the employee can approach the employer to rectify those. Earlier, the employee would have to wait till the year end to get the Form 16 and check if all the TDS credits are duly recorded particularly when the employees are not aware that they could view the Form 26AS on a real time basis,” said Sandeep Sehgal, director tax and regulatory at Ashok Maheshwary & Associates LLP.

6) TDS deducted on your salary as well as other payments can also be viewed by downloading Form 26AS from the tax department’s website.

7) Under TDS, tax is deducted at the origin of income. For the salaried class, the tax is deducted by the employer and is remitted to the government on behalf of the employee.

8) The provisions of deduction of tax at source are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc.

9) The employer is required to compute at the beginning of the financial year, the total salary income payable to an employee during the financial year. After considering the exempted incomes, deductions and relief, the tax liability of the employee is determined on the basis of tax rates in force for the financial year. Every month, 1/12th of this net tax liability as computed above is required to be deducted as part of TDS.

10) The responsibility to deduct tax from salaries arises only at the time of payment. Thus, when advance salary and arrears of salary are paid, the employer has to take the same into account while computing the tax deductible. Similarly, if the employee makes certain investments which qualify for deduction or rebate and furnishes the required proof which reduces the tax liability, the employer can accordingly reduce the quantum of TDS. From this year, the tax department has introduced a new form – Form 12BB – which will be used by employees to declare their investments and claim tax deductions.

Sourse: TDS Man

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Tax Impact on Unaccounted Cash Deposit

Recently, Government introduced Demonetization whereby currency notes of Rs. 500 and Rs. 1000/- have been declared as invalid legal tender with effect from 9.11.2016 is most likely to witness huge cash deposits in bank accounts within the window period expiring on 30.12.2016. Media reports have appeared attributed to Government sources that in case substantial amount of cash is deposited in banks declaring it as current year’s unaccounted income and applicable tax @ 30% plus surcharge etc. is paid, still penalty @ 200% of the tax can be imposed as per provisions of section 270A of the Income Tax Act, 1961.

When any person deposits some cash amount in his bank account and it is established that such deposit is an unaccounted money (black money), then the entire deposit shall be charged to tax without providing the benefit of slab rates.  The impart of Tax on unaccounted money are as under :

Unaccounted Money Rs. 10,00,000/-

Tax on Income at 30%        = 3,00,000
Add: Surcharge at 12%       = NIL
Add: Education cess at 3%   =    9,000
Total Tax                   = 3,09,000
Penalty at the rate of 200% = 6,18,000
Total Tax and Penalty       = 9,27,000
Benefit Amount              =   73,000

Interest u/sec. 234B and 234C will also be charged and after that one may end up paying more than the amount deposited in the bank account.

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Process of tax reform will continue says - FM

FM: Process of Tax Reforms will continue and pending GST issues will be resolved soon. 

FM: No Harassment of Small Depositors of Demonetised High Value Notes; 

Finance Minister Shri Arun Jaitley inaugurates the Two Day Economic Editors Conference in New Delhi 

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley said that the Government has endeavoured its best to take a number of decisions through a consensus route for the overall growth of the economy during the last two and half years. He said that the present NDA government took over under adverse global circumstances and its challenge was to re-establish the credibility of economic decision making process. But, the Government did not shy away from it and in the larger interest of the country, it tried its best to take as much decisions as possible even at risk but in the overall public interest and to speed-up the growth of the economy. The Finance Minister Shri Jaitley was delivering the Inaugural Address after inaugurating the two day Economic Editors Conference (EEC)-2016, here today.

Referring to the recent decisions taken by the Government, the Union Finance Minister Shri Jaitley said that the different sections of the economy have been opened-up for foreign investment, procedures were simplified and every effort was made to ease the environment for doing business in India. The Finance Minister said that the Government recognises the role of market forces in the economy that is why the role of Government discretion in decision making process,whether in case of auction of coal blocks or spectrum etc., was deliberately minimized.

Shri Jaitley said that the Government is working on tax reforms including Goods and Services Tax (GST). Shri Jaitley further said that the Government has initiated a series of measures to ensure that the State subsidies reach the most deserving. He said that the major issues have been resolved and GST will be implemented by April 1st 2017, besides this, parallel reforms are also in the pipe line in direct tax structure. He said tax collection this year is reasonably good, there is spurt in public expenditure and local demand is increasing. Hence there will be positive impact of recent decision of demonetising of higher value currency notes. He assured that people making small deposits for exchanging old currency notes will not be harassed. 

Appreciating Press Information Bureau’s efforts for providing an opportunity to Regional Editors for direct interaction with the decision makers in the Government, Shri Jaitley said that Press Information Bureau has been extremely effective in handling the Government’s communication.

Earlier welcoming the Union Finance Minister, Senior officers and Editors from across the country and other participants, the Director General of Press Information Bureau(PIB), Shri Frank Noronha said that the main objective of the Conference is to provide a platform for interaction between the Senior Finance Journalists from different regions of the country and the Ministers and senior functionaries of the Government of India on key economic issues.  He expressed hope that the Conference would also help in acquiring different perspectives of the relevant context and background behind a particular initiative of the Government. He further said that this exercise of media outreach will pave the way for better and informed perceptions which in turn will benefit and empower people through various columns and reports of the participating media delegates.

The two day conference is being organised by Press Information Bureau in collaboration with the Ministry of Finance. The Main objective of the Economic Editors Conference is to apprise the media persons about the major policy initiatives, achievements and future roadmaps of different core Economic Ministries of the Government of India.  Economic Editors from different parts of the country, along with Bureau Chiefs and Business Correspondents from Delhi are participating in this conference. Besides the Ministry of Finance, Ministries of Commerce & Industry, Railways, Road Transport and Highways, Petroleum and Natural Gas, Urban Development, Information Technology and Niti Aayog, among others are participating. 

The Directorate of Advertising and Audio-Visual Publicity (DAVP) has also put an exhibition on the occasion on “70 years of India’s Independence’’.

Source: CA Club India

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If Cash Deposit mismatch as Declared Income would attract 90% Tax & Penalty - FM

Any mismatch between cash deposited and declared income would attract 90% tax & penalty: FinMin

The Govt. has decided to discontinue the legal tender character of high denomination bank notes of Rs 500 and Rs 1000. In other words, such notes will not be a legal tenders from midnight of November 8, 2016. This decision is being taken to curb financing of terrorism through the proceeds of Fake Indian Currency Notes and for eliminating Black Money.

The restriction has been placed on withdrawal and exchange of old currency notes but there is no limit on deposit of cash into bank account. However, people should refrain from depositing cash into their bank account if they are unable to explain source of such deposit. If the income is not explained they will have to pay penalty.

The income-tax department will check for mismatch of cash deposited by people with the income disclosed by them in their return of income. Any mismatch between deposited sum and declared income would attract 30% tax and 200% of tax liability as penalty, said Revenue Secretary, HasmukhAdia.

"We would be getting reports of all cash deposited during 10th November to 30th December, 2016 above threshold of Rs 2.5 lakhs in each account", Revenue Secretary, HasmukhAdhia Tweeted.

He further said that businessmen, housewives and workers need not to worry about small deposit of old currency up to Rs 1.5 lacs or Rs 2 lacs. Since it would be below the taxable limit. There will be no harassment by Income Tax department for such small deposits made.

This ban will impact the black money hoarders as now their existing bank notes will be a worthless pieces of paper.

Source: Taxmann

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All Taxpayers Tax Calculations for Asstt. Year 2017-18

No.30011/1/2016-­Cash

Government of India

Ministry of Corporate Affairs

*******

Shastri Bhawan, 5th Floor,

‘A’ Wing, New Delhi

Dated 13th October, 2016

CIRCULAR

Subject:­ Income Tax calculations for the financial year 2016­17.

Cash Section is in the process of calculation of Income Tax for the financial year 2016­17. In view of this, all the officers/members of the staff, whose annual income exceeds Rs.2,50,000/­ are requested to furnish the information in the enclosed proforma (Annexure­I,II &III) relating to the investments/savings proposed to be made during the current financial year 2016­17 (any individual who attains the age of 60 during the current financial year is considered as Senior Citizen and the exemption limit is Rs.3,00,000/­). The required information may please be furnished to Cash Section as early as possible but in any case not later than 25th October, 2016. In case no information is received by the due date, it would be presumed that the officer has no savings other than GPF, CGEGIS and CGHS available in this Section.

Only on the basis of the above details Cash Section will be in a position to compute the correct income tax liability for effecting TDS from the salary for the remaining months of the current financial year. For availing the rebate on LIC/NSCS/BANK TERM DEPOSIT SCHEME/ TUITION FEE etc. photocopy of the receipts may please be submitted to this Section positively by 31′ December, 2016. Rebate on savings made after 31.12.2016, if any, may be obtained from the Income Tax Department directly through their returns.

2. Quoting of PAN is mandatory u/s 139A of the Income Tax Act. The same may be provided in the Annexure­I. If the PAN is not provided, the TDS shall be deducted @20% or at the applicable rate, whichever is higher (section 206AA).

(Deen Dayal Singh)

Drawing & Disbursing Officer

Tel No. 23385382

To,
1. All Officers/Staff– Office of CAM, MOS
2. All Officers/Staff of MCA, HQ, Shastri Bhawan (5th Floor, 4th Floor & 3rd Floor)
3. All Officers/Staff of Cost Audit Branch, MCA, Paryavaran Bhawan, CGO Complex.
4. All Officers/Staff of R&A Division, MCA Paryavaran Bhawan, CGO Complex.
5. Cash Section (50 spare copies)

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Short Notes on Tax Free Income - Section-wise for all Taxpayee - Free Download

As per the Finance (No.2) Act, 2014,  Income Tax Free Income level is very high.  Apart from this we all known that Income is payable on all types of Incomes earned by Taxpayee in India even-though, there are some exceptions to avoid this rule and some Incomes have been specially exemption from Income Tax.  Such Income is referred to as Income Tax Free Income.  The most popular Tax Free Income is namely :-

• Agricultural Income (Section 10(1)).
• Amount received by a member of the HUF from the income of the HUF, or in case of impartible estate out of income of family estate [Section 10(2)]
• Share of profit received by a partner from the firm [Section 10(2A)]
• Certain interest to non-residents [Section 10(4)]
• Interest on notified savings certificates [Section 10(4B)]
• Leave travel concession [Section 10(5)]
• Remuneration received by specified diplomats and their staff [Section 10(6)(ii)]
• Salary of a foreign employee and non-resident member of crew [Section 10(6)(vi),(viii)]
• Remuneration of a foreign trainee [Section 10(6)(xi)]
• Tax paid on behalf of foreign company deriving income by way of royalty or fees for technical services [Section 10(6A)]
• Tax paid on behalf of foreign company or non-resident in respect of other income [Section 10(6B)]
• Tax paid on behalf of foreign Government or foreign enterprise deriving income by way of lease of aircraft or aircraft engine [Section 10(6BB)]
• Technical fees received by a notified foreign company [Section 10(6C)]
• Allowance/perquisites to Government employee outside India [Section 10(7)]
• Income of foreign Government employee under co-operative technical assistance programme [Section 10(8)]
• Remuneration or fees received by a non-resident consultant/its foreign employees [Section 10(8A),(8B)]
• Income of a family member of an employee serving under co-operative technical assistance programme [Section 10(9)]
• Death-cum-retirement gratuity received by Government servants [Section 10(10)(i)]
• Gratuity received by a non-Government employee covered by Payment of Gratuity Act, 1972 [Section 10(10)(ii)]
• Gratuity received by a non-Government employee not covered by Payment of Gratuity Act, 1972 [Section 10(10)(iii)]
• Pension [Section 10(10A)]
• Leave salary [Section 10(10AA)]
• Retrenchment compensation [Section 10(10B)]
• Compensation for Bhopal Gas Leak Disaster [Section 10(10BB)]
• Compensation on account of any disaster [Section 10(10BC)]
• Payment at the time of voluntary retirement [Section 10(10C)]
• Tax on perquisites paid by the employer [Section 10(10CC)]
• Amount paid on life insurance policy [Section 10(10D)]
• Exemption in respect of amount received from public provident fund/statutory provident fund/recognised provident fund/un-recognised provident fund [Section 10(11)/(12)]
• Payment from approved superannuation fund in specified circumstances and subject to certain limits [Section 10(13)]
• House rent allowance [Section 10(13A)] 
• Prescribed allowances or benefits [Section 10(14)]
• Interest on securities [Section 10(15)]
• Lease rent of an aircraft [Section 10(15A)]
• Educational scholarship [Section 10(16)]
• Daily allowance to a Member of Parliament [Section 10(17)]
• Awards [Section 10(17A)]
• Pension to gallantry award winner [Section 10(18)]
• Family pension received by the family members of armed forces [Section 10(19)]
• Annual value of one palace [Section 10(19A)]
• Income of local authority [Section 10(20)]
• Income of research association [Section 10(21)]
• Income of a news agency [Section 10(22B)]
• Income of a professional association [Section 10(23A)]
• Income received on behalf of Regimental Fund [Section 10(23AA)]
• Income of a fund established for welfare of employees [Section 10(23AAA)]
• Income of pension fund [Section 10(23AAB)]
• Income from Khadi or village industry [Section 10(23B)]
• Income of Khadi and Village Industries Boards [Section 10(23BB)] 
• Incomes of statutory bodies for the administration of public charitable trust [Section 10(23BBA)] 
• Income of European Economic Community [Section 10(23BBB)]
• Income of SAARC fund [Section 10(23BBC)]
• Income of Secretariat of Asian Organisation of Supreme Audit Institutions [Section 10(23BBD)]
• Income of Insurance Regulatory and Development Authority [Section 10(23BBE)]
• Income of North - Eastern Development Financial Corporation Limited [Section 10(23BBF)]
• Income of Central Electricity Regulatory Commission [Section 10(23BBG)] 
• Income of the Prasar Bharati [Section 10(23BBH)]
• Income of certain national funds [Section 10(23C)(i)/(ii)/(iii)]
• Income of National Foundation for Communal Harmony [Section 10(23C)(iiia)], Section 10(23C)(iiiad), Section 10(23C)(vi)
• Income of Hospital [Section 10(23C)(iiiac)/(iiiae)/(via)]
• Income of Charitable Institution or Fund [Section 10(23C)(iv)]
• Income of religious/charitable trust [Section 10(23C)(v)]
• Income of mutual fund [Section 10(23D)]
• Income of a securitisation trust [Section 10(23DA)]
• Income of notified investor protection fund [Section 10(23EA)]
• Income of Credit Guarantee Fund Trust [Section 10(23EB)]
• Income of the notified investor protection fund set - up by commodity exchange [Section 10(23EC)]
• Income of Investor Protection Fund set by a depository [Section 10(23ED)]
• Income of a venture capital fund or a venture capital company from investment in a venture capital undertaking [Section 10(23FB)]
• Income of a of a Business Trust [Section 10(23FC)]
• Distributed Income of a Unit Holder from the Business Trust [Section 10(23FD)]
• Income of a registered trade union [Section 10(24)]
• Income of provident fund [Section 10(25)]
• Income of the Employees’ State Insurance Fund [Section 10(25A)]
• Income of a member of a Scheduled Tribe [Section 10(26)]
• Income of a “Sikkimese” individual [Section 10(26AAA)]
• Income of an Agricultural Produce Marketing Committee/Board [Section 10(26AAB)]
• Income of corporation or other body or institution or association established for promoting the interest of members of Scheduled Caste, etc. [Section 10(26B)]
• Income of corporation established for promoting interest of minority caste [Section 10(26BB)]
• Income of corporation established for ex-servicemen [Section 10(26BBB)]
• Income of a co-operative society formed for promoting the interests of the members of Scheduled Castes or Scheduled Tribes [Section 10(27)]
• Income of coffee board, rubber board, etc. [Section 10(29A)]
• Subsidy from the Tea Board [Section 10(30)]
• Income of minor [Section 10(32)]
• Capital gains on transfer of US 64 [Section 10(33)]
• Dividends and interest on units [Section 10(34)/(35)]
• Income of a shareholder on account of buy back of shares by the company [Section 10(34A)]
• Income of an investor received from a securitisation trust [Section 10(35A)]
• Capital gains in case of compulsory acquisition of urban agricultural land [Section 10(37)]
• Long - term capital gains on transfer of equity shares or units of an equity oriented mutual fund or a unit of a business trust covered by securities transaction tax [Section 10(38)]
• Income from international sporting event [Section 10(39)]
• Grants received by specified subsidiary company [Section 10(40)]
• Income of certain non - profit body or authority [Section 10(42)]
• Loan in the case of reverse mortgage [Section 10(43)]
• Income of New Pension System Trust [Section 10(44)]
• Any notified allowance or perquisite paid to the Chairman/retired Chairman or any other member/retired member of the UPSC [Section 10(45)]
• Exemption of specified income of notified body/ authority/trust/board/commission [Section 10(46)]
• Any income of a notified infrastructure debt fund set-up in accordance with prescribed guidelines [Section 10(47)]
• Income received by certain foreign companies in Indian currency for import of crude oil etc. [Section 10(48)]
• Tax exemption to National Financial Holdings Company Limited [Section 10(49)]

Other important exemptions 

Apart from above discussed exemption of section 10 following is the list of other important exemptions:

• Section 10A provides for exemption in respect of income of newly established undertakings in free trade zone or electronic hardware technology park or electronic software technology park.
• Section 10AA provides for exemption in respect of income of newly established units in Special Economic Zones. 
• Section 11 and 12 provide exemption in respect of income of a public charitable or religious trust.
• Section 13A provides exemption in respect of income of a political party.
• Section 13B provides exemption in respect of income of an electoral trust. 

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Updated Easy Tax Calculation Utility for All Salaried Employee for A.Y. 2016-17

It is time to calculate Income Tax for Salaried Employee either they are Central Government Employee or State Government Employee, that's why the Salaried employee wants to perfect calculation about Income Tax to pay for the Asstt. Year 2016-17 after all relevant deductions effected.

This is Updated Tax Calculation Utility. It is very easy to Calculate actual net Payable or Refundable Tax after input all relevant data regarding tax calculations.

To find out your Taxable Salary, look up your CTC. Include all fixed components - Basic Salary, HRA (exclude exemption), all fixed allowances. Include bonus payment (if you don't have actual numbers take an estimate). Do not include reimbursements like telephone bills or medical bills. Also exclude retirement benefits which are not paid to you with your salary, like PF and Gratuity.

Updated Tax Calculation Utility Facilities :

It Calculate Income Tax, Generate Month-wise Salary Statement and Form 16 with Annexure "A" and "B" as per CBDT norms. This utility saves personal Data yearwise. All the deductions taken  under Chapter -VIA and others are also applicable.

Deduction of Chapter-VIA and other applicable Deductions i.e. u/s. 80G, 80E, 80D as well as u/s. 89(i) it Calculate accurate Income Tax and surcharge there on.  It suggest to Salaried Employee (Taxpayee) whether he is Tax payable or Refundable.

Physical Requirements:

• OS required Windows-2000, XP, Vista, Windows-7, Windows-8 etc.
• MS Office-7 or Above Version is required.
• Printing Facility Provides on Inkjet, Ledger Printer and other printers.
  
• Required Standard A4 Size Paper Sheets.

Data Entry:

• Only  "White" Cells are provide for input data.
• Press Mouse Buttons for applications which you want to operate.

Key Features:

• It maintain Each Employee Data.
• It Calculate Gross Income as per current D.A. Rates automatically as per Government D.A. Rates.
• It Provides Facility to Enter Data Manually along with all Arrears etc.
• It Calculate Tax Liability.
• It Display Month-wise Salary Statement for Asstt. Year 2016-17.
• It Generate TDS Certificate (Form 16) Automatically with Annexure "B".

Easy Tax Calculation Utility Download (CLICK HERE)

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Form 16 for Salaried Employees and Monthwise report for Asstt. Year 2015-16 - Download Free.

As per circular issued by Income Tax Department for Salaried Employee to calculate Income Tax for Asstt. Year 2016-17, the Tax Calculation Utility with all types of head of income i.e. Income under head of Salary, House Property Income, Other source of Income, Capital Gain Income and Income From others are here under.  Salaried Employee can't calculate actual  Income Tax on their Income because there is no any provision of monthly salary Statement and salary deductions restated to income tax exemptions.  This difficulty solved this utility.   This utility calculates Annual Income Tax Liability including Month-wise Salary Statement and suggest to deduct as TDS from salary.

Tax Calculation Method for Salaried Employee:

What are the Income Tax Exemption Limit for Asstt. Year 2016-17, Click Here.

HRA exemption = Least of (40% (50% for metros) of Basic+DA or HRA or rent paid - 10% of Basic+DA)

Transport allowance is exempt up to Rs.800/- per month during the month. (Expenditure incurred for covering journey between office and residence.)  For people having permanent physical disability, the exemption is 1,600/- per month.

Reimbursement of Medical bills are exempt for self and dependent family, up to Rs.15,000/- per annum u/s(5) LTA is exempt to the tune of economy class Train/ Air /Recognised public Transport fare for the family to any destination in India, by the shortest route.

LTA can be claimed twice in a block of 4 calendar years. The current block is from 01.01.2010 to 31.12.2013. For claim, it is must to provide originals tickets etc.

U/s 24 There is an Exemption for interest on housing loan. (for Self occupied Residence). If the loan was taken before Apr 1, 1999 exemption is limited to Rs. 30,000/- per year. If the loan was taken after Apr 1, 1999 exemption is limited to Rs. 2,00,000/- per year if the house is self-occupied; There is no limit if the house is rented out.

This exemption is available on accrual basis, which means if interest has accrued, you can claim exemption, irrespective of whether you've paid it or not..                            "

If you have rented out your house, enter the total income / loss from the house (after deducting property tax and standard maintenance expenses).

U/s 80CCE- Maximum Exemption up to  Rs. 150000/-  Investments up to Rs. 1.5 lac in PF, VPF, PPF, Employee contribution in NPS,Insurance Premium, Housing loan principal repayment, NSC, ELSS, long term bank Fixed Deposit, Post Office Term Deposit, etc. are deductible from the taxable income. There is no limit on individual items, (for example) all 1 lac can be invested in NSC or PPF etc.

U/s 80CCD -The Finance Act, 2011 provides that contribution made by the Central Government or any other employer to NPS (up to 10 per cent of the salary of the employee in the previous year)shall be excluded while computing the limit of Rs. 1,50,000.The contribution by the employee to the NPS will be subject to the limit of Rs. 1,00,000.

U/s 80CCG - Rajiv Gandhi Equity Savings Scheme is a new exemption available for investment in stock markets (direct equity). Avaialble only for those with gross income less than 12 lacs and only for first time investors in stock market. Exemption available at 50% of investment subject to maximum of Rs.50,000/- invested. Investments are locked-in for three years

U/s 80D Medical Insurance Premium (such as Mediclaim & Critical illness Cover)& Health Check up Upto Rs. 5000, premium is exempt up to Rs. 30,000/ per year (Rs.15,000/- for self,spouse and children ) (Rs. 15000/- for Parents. If the premium includes for a dependent who is (Senior Citizen) above 60 years of age, an extra Rs. 5,000//- can be claimed.

U/s 80DD Deduction in respect of medical treatment of handicapped dependents is limited to Rs. 50,000/- per year if the disability is less than 80% and Rs. 1,00,000/- per year if the disability is more than 80%

U/s 80DDB Deduction in respect of medical treatment for specified ailments or diseases for the assesse or dependent can be claimed up to Rs. 40,000/- per year. If the person being treated is a senior citizen, the exemption can go up to Rs. 60,000/-. but any amount received under Medical Insurance Policy will be reduced from the amount of deduction allowed. The Diseases and ailments specified under rule 11DD are.

1. neurological diseases being demetia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and parkisons disease,
2. cancer,
3. AIDS,
4. Chronic renal failure,
5. hemophilia, and 
6. thalassaemia.

U/s 80E Interest repayment on education loan (taken for higher education from a university of self & dependents) is completely tax exempt

U/s 80G Donations given for certain charities are tax exempt. Some(NGO,Trust etc.) are exempt to the tune of 50%, whereas Govt funds are 100%.

U/s 80GG If you are not getting  HRA, but living in rented house, an exemption is available. This will be calculated as minimum of (25% of total income or rent paid - 10% of total income or Rs. 24,000/- per year)

U/s 80U who suffers from not less than 40 per cent of any disability is eligible for deduction to the extent of Rs. 50,000/- and in case of severe disability to the extent of Rs. 100,000/-

U/s 80TTA introduced through Finance Act, 2012. Section 80TTA provides a deduction of up to Rs. 10,000 on your income from interest on saving bank accounts.

DEDUCTION u/s. 80C and chapter VIA

U/s. 80C of the Income Tax Act allows certain investments and expenditure to be deduct from total income. One must plan investments well and spread it out across the various instruments specified under this section to avail maximum tax benefit. There are no sub-limits and is irrespective of how much you earn and under which tax bracket you fall. Most of the Income Tax payee try to save tax by saving under Section 80C of the Income Tax Act.  However, it is important to know the Section in total. so that one can make best use of the options available for deduction under income tax Act. One important point to note that one can not only save tax by undertaking the specified investments, but some expenditure which you normally incur can also give you the tax exemptions.

Qualifying Investments u/s 80CCE

• Provident Fund (PF) & Voluntary Provident Fund (VPF) PF is automatically deducted from your salary. your contribution [12% of Basic] (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF). Current rate of interest is 8.5% per annum (p.a.) and is tax-free.
• Life Insurance Premiums: Any amount that you pay towards life insurance premium in Life Insurance Corporation (LIC) or any other Insurance CO.for yourself, your spouse or your children can also be included in Section 80C deduction. If you are paying premium for more than one insurance policy, all the premiums will be included. also premium paid for ULIP will also be treated as Premium paid for Life Insurance Policies.
• Unit linked Insurance Plan : ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments.They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term.

IMP : Total Amount Received at Maturity, Survival Benefits, Withdrawal in Insurance Policies is Tax Free and fully exempted u/s 10(10D).

• Public Provident Fund (PPF): Among all the assured returns small saving schemes, 
• Public Provident Fund (PPF) is one of the best. Current rate of interest is 8% tax-free and the normal maturity period is 15 years. Minimum amount of contribution is Rs. 500 and maximum is Rs. 1,50,000.(New Change) from Budget 2014
• National Savings Certificate (NSC): National Savings Certificate (NSC) is a 5-Yr small savings instrument eligible for section 80C tax benefit. Rate of interest is  8.58% compounded half-yearly, i.e. If you invest Rs.100, it becomes Rs.150.90 after five years. The interest accrued every year is liable to tax (i.e. to be included in your taxable income) but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.
• Home Loan Principal Repayment & Stamp Duty and Registration Charges for a home Loan The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.The principal component of the EMI qualifies for deduction under Sec 80C. Even the interest component can save you significant income tax – but that would be under Section 24 of the Income Tax Act. The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.
• Tuition  fees  for 2 children  Apart form the above major investments expenses for children’s education (Only Tution Fee (for which you need receipts)), can be claimed as deductions under Sec 80C.
• Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C.
• 5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.
• 5-Yr post office time deposit (POTD) scheme: POTDs are similar to bank fixed deposits. Although available for varying time duration like one year, two year, three year and five year, only 5-Yr post-office time deposit (POTD) – which currently offers 7.5 per cent rate of interest –qualifies for tax saving under section 80C. Effective rate works out to be 7.71% per annum (p.a.) as the rate of interest is compounded quarterly but paid annually. The Interest is entirely taxable.
• Pension Funds or Pension Policies – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it means that the total deduction available for 80CCC and 80C is Rs 1.5 Lakh.This also means that your investment in pension funds upto Rs.1.5 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed  Rs.1.5 Lakh.
• Infrastructure Bonds: These are also popularly called Infra Bonds. These are issued by infrastructure companies, and not the government. The amount that you invest in these bonds can also be included in Sec 80C deductions.
• NABARD rural bonds: There are two types of Bonds issued by NABARD (National Bank for Agriculture and Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB). Out of these two, only NABARD Rural Bonds qualify under section 80C.
• Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. Current rate of interest is 9% per annum payable quarterly. Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax.

Know, How to calculate Income Tax for Asstt. Year 2016-17 with all exemption limits i.e. 80C, Deduction under Chapter -VIA and many more, Click Here.

Latest TDS amendments effected from 01.10.2015 & TDS Rate for Asstt. Year 2016-17.

Download Latest TDS / TAX Calculation Utility for

Asstt. Year 2016-17

What are the Penalties and prosecution, Click Here. 

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Income Tax Deductions from Salaries for Fin.Year 2015-16 & Asstt. Year 2016-17 & Tax Calculator Free Download.

Before, a week Government of India Ministry of Finance, Department of Revenue, Central Board of Direct Taxes had issued a circular No. 20/2015 dated 2nd December, 2015 regarding Income Tax Deductions from Salaries during the Financial Year 2015-16 under section 192 of the Income Tax, 1961.

This circulars the rate of deductions of Income Tax from the payment of Income under the head "Salaries" which is as under:

RATES OF INCOME-TAX AS PER FINANCE ACT, 2015:
As per the Finance Act, 2015, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2015-16 (i.e. Assessment Year 2016-17) at the following rates:

Rates of tax - Normal Rates of tax:

Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year:

In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year:


Surcharge on Income tax:
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, having a total income exceeding one crore rupees, be increased by a surcharge for the purpose of the Union calculated at the rate of twelve per cent of such income-tax:

Provided that in the case of persons mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Education Cess on Income tax:
The amount of income-tax including the surcharge if any, shall be increased by Education Cess on Income Tax at the rate of two percent of the income-tax.


Secondary and Higher Education Cess on Income-tax:
An additional education cess is chargeable at the rate of one percent of income-tax including the surcharge if any, but not including the Education Cess on income tax as in 2.3.1.

Download Income Tax Calculator For Asstt. Year 2016-17 (Click Here)

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Download Salaried Employee Income Tax Calculator software with Final Updates for Asstt. Year 2015-16

INCOME TAX CALCULATION SOFTWARE FOR SALARIED EMPLOYEE

FOR ASSTT. YEAR 2015-16

There is no-doubt a short period is in hand of Taxpayee to save tax by saving little investments for Asstt. Year 2015-16.  Salaried employee wants to calculate tax before submitting salary bill for the month of February-2015 therefore, this is the Income Tax Calculation utility with final updates for Asstt. Year 2015-16.  This updated Tax Calculation utility give the facility to generate Form-16 automatically.  It provides Month-wise Salary Statement etc. as per notification issued by the Income Tax Department for Salaried Employee for the Asstt. Year 2015-16.

Facility of this software:

It is easy wat to Calculate Income Tax including Month-wise Salary Statement and Form 16 (Annexure "A" and "B") in TRACE format. This utility helps to employee to calculate tax liability with all applicable deductions, exemptions etc.

This utility covered by Deduction of Chapter-VIA and other Deductions as per circular of Income Tax Department for Salaried Employee.

This Software is based on Income Tax circular issued by Income Tax Department for Salaried Employee for Assessment Year 2015-16.

Physical Requirements:

• OS required Windows-2000, XP, Vista, Windows-7, Windows-8 etc.
  
• MS Office-7 or Above Version is required.
• Printing Facility Provides on Inkjet, Ledger Printer and other printers.
• Required Standard A4 Size Paper Sheets.

Data Entry:

• Only  "White" Cells are provide for input data.
• Press Mouse Buttons for applications which you want to operate.

Key Features:

• It maintain Each Employee Data.
• It Calculate Gross Income as per current D.A. Rates automatically as per Government D.A. Rates.
• It Provides Facility to Enter Data Manually along with all Arrears etc.
• It Calculate Tax Liability.
• It Display Month-wise Salary Statement for Asstt. Year 2013-14.
• It Generate TDS Certificate (Form 16) Automatically with Annexure "B".

Income Tax Slab for Asstt. Year 2015-15 (Click Here)

Deduction for Salaried Employee under Chapter VI-A for Asstt. Year 2015-16 - Part-I

Details of deductions u/s. 80CCC, 80CCD, 80CCG for Salaried Employee for Asstt. Year 2015-16 - Part-II

Deduction for Salaried Employee, who are elligible for Sec. 80D, 80DD, 80U, 80DDB etc. for Asstt. Year 2015-16 - Part-III

DOWNLOAD TAX CALCULATION SOFTWARE (CLICK HERE)

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Salaried Employee caclulate Tax Liability to deduct as TDS from Monthly Salary, How?

Salaried Employee after Union Budget 2014-15 project their saving and calculate tax to deduct as TDS from his monthly salary. For this many website has published free tax calculation utility but, apart from this here is simple and easy method to calculate Income Tax for Fin. Year 2014-15 i.s. Asstt. Year 2015-16 for specially Salaried Employee with Monthwise Salary Statement.  This utility calculates Annual Income Tax Liability and suggest to deduct TDS from August-2014.

TDS / TAX CALCULATION UTILITY

Download Latest TDS / TAX Calculation Utility for
Asstt. Year 2015-16

Exemption Limit of Income Tax for Asstt. Year 2015-16, Click Here.

Simple Method for Calculation of Income Tax with all exemptions  Click Here.

Latest TDS amendments applicable w.e.f. 01.10.2014 & TDS Rate for Asstt. Year 2015-16.

Penalties and prosecution, Click Here.

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Online Income Tax Calculator for All Taxpayee for Asstt. Year 2015-16 & More.

Finance Minister announced Union Budget-2014 with little changes in Income Tax Exemption regarding Allowances & Perquisites, Deductions u/s. 80C & Others. Income Tax Department has developed Income Tax Calculator for Asstt. Year 2015-16 for all Taxpayee.

To provide relief to small and marginal tax payers, personal income tax exemption limit is being raised from Rs. 2 lakh to Rs. 2.5 lakh. For senior citizens, the exemption limit will be Rs. 3 lakh. Further, the investment limit under Section 80C of the Income-tax Act is being raised from Rs. 1 lakh to Rs. 1.5 lakh. Deduction limit for interest on housing loan (for self-occupied house property) goes up from Rs. 1.5 lakh to Rs. 2 lakh.  These changes is applicable for Fin. Year 2014-15 & Asstt. Year 2015-16.  The Online Income Tax Calculator for Asstt. Year 2015-16 for all Taxpayers is as under :

ONLINE INCOME TAX CALCULATOR FOR ALL TAXPAYEE

Free Download Updated Income Tax Calculator with Income Tax Slab for A.Y. 2015-16 (Click Here)

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Tax Calculation Method with exemption Allowances & Perquisites, Deductions u/s. 80C & Others for Asstt. Year 2015-16

After Indian Union Budget-2014, Income Tax Exemption regarding Allowances & Perquisites, Deductions u/s. 80C & Others with Tax Calculations for Asstt. Year 2015-16 for Individual Taxpayers are as under :

Some  Exempted Receipts /Special allowances &  Perquisite which are not chargeable to tax are 

Exempted Receipts -

1. Medical Reimbursement (Max Rs. 15000/- Per annum)
2. L.T.A (as per Rule)

Special allowances Exempted u/s 10(14)

1. Uniform Allowance (granted to meet the expenditure incurred on purchase or maintenance of uniform to be worn during performance of Official Duty)
2. Helper Allowance (granted to meet exependiture incurred on helper for performance of official duty)
3. Academic Allowance (granted for encouraging academic, research & training pursuits) including Newspaper, Generals etc.)
4. Children Education Allowance (Rs. 100/- P.M. Per Child / (Rs. 300/- for Hostel Expenditure) Max of 2 Children)
5. Conveyance allowance ( granted to meet the expenditure incurred on conveyance, while performing official duty. ( Expenditure incurred for covering journey between office and residence is not treated as expenditure in performance of official duty. )

Deduction available u/s -16

1. Entertainment allowance (for Govt Employees) Max  Rs. 5000/-
2. Professional tax - Professional tax paid by employee is deducted. If employee pays the professional tax on behalf of employee, It is first added in gross salary as taxable perquisite and thereafter deduction is provided from gross salary

Perquisite not chargable to tax  Free food and beverage

1. Food and non-alcoholic beverages provided in working hours in remote area or an off shore installation are exempted to tax.
2. Tea, coffee or non-alcoholic beverages and snaks in working hours are tax free perquisites.
3. Meals (Lunch and / or dinner) in office hours is not taxable. If cost to the employeris  * 50 (or Less) per meal. 

Some Exempted Income are ( to be shown while Return filing)

1. Withdrawal / Maturity received from PF,PPF,Insurance Co., Agriculture. (Max up to 5000/-)
2. Long Term Capital Gain From Shares
3. Dividend on shares in companies
4. Interest on Saving Bank & Post Office A/c up to  Rs. 10,000/- ( Sec-80TTE)

Please Note :

• Interest earned from all sources is to be included. All interest (including saving Bank A/C (above Rs. 10,000) (FD) income is fully taxable.
• As per clarification from IT department, all perquisites such as rent-free accommodation, company provided car, free or concessional education facilities, employee stock option plan, free club membership, company provided credit card, gift vouchers, meal coupons, hotel stay beyond 15 days, are fully taxable.

Tax Calculation Method:

HRA exemption = Least of (40% (50% for metros) of Basic+DA or HRA or rent paid - 10% of Basic+DA)

Transport allowance is exempt up to Rs.800/- per month during the month. (Expenditure incurred for covering journey between office and residence.)  For people having permanent physical disability, the exemption is 1,600/- per month.

Reimbursement of Medical bills are exempt for self and dependent family, up to Rs.15,000/- per annum u/s(5) LTA is exempt to the tune of economy class Train/ Air /Recognised public Transport fare for the family to any destination in India, by the shortest route.

LTA can be claimed twice in a block of 4 calendar years. The current block is from 01.01.2010 to 31.12.2013. For claim, it is must to provide originals tickets etc.

U/s 24 There is an Exemption for interest on housing loan. (for Self occupied Residence). If the loan was taken before Apr 1, 1999 exemption is limited to Rs. 30,000/- per year. If the loan was taken after Apr 1, 1999 exemption is limited to Rs. 2,00,000/- per year if the house is self-occupied; There is no limit if the house is rented out.

This exemption is available on accrual basis, which means if interest has accrued, you can claim exemption, irrespective of whether you've paid it or not..                            "

If you have rented out your house, enter the total income / loss from the house (after deducting property tax and standard maintenance expenses).

U/s 80CCE- Maximum Exemption up to  Rs. 150000/-  Investments up to Rs. 1.5 lac in PF, VPF, PPF, Employee contribution in NPS,Insurance Premium, Housing loan principal repayment, NSC, ELSS, long term bank Fixed Deposit, Post Office Term Deposit, etc. are deductible from the taxable income. There is no limit on individual items, (for example) all 1 lac can be invested in NSC or PPF etc.

 

U/s 80CCD -The Finance Act, 2011 provides that contribution made by the Central Government or any other employer to NPS (up to 10 per cent of the salary of the employee in the previous year)shall be excluded while computing the limit of Rs. 1,50,000.The contribution by the employee to the NPS will be subject to the limit of Rs. 1,00,000.

U/s 80CCG - Rajiv Gandhi Equity Savings Scheme is a new exemption available for investment in stock markets (direct equity). Avaialble only for those with gross income less than 12 lacs and only for first time investors in stock market. Exemption available at 50% of investment subject to maximum of Rs.50,000/- invested. Investments are locked-in for three years

U/s 80D Medical Insurance Premium (such as Mediclaim & Critical illness Cover)& Health Check up Upto Rs. 5000, premium is exempt up to Rs. 30,000/ per year (Rs.15,000/- for self,spouse and children ) (Rs. 15000/- for Parents. If the premium includes for a dependent who is (Senior Citizen) above 60 years of age, an extra Rs. 5,000//- can be claimed.

U/s 80DD Deduction in respect of medical treatment of handicapped dependents is limited to Rs. 50,000/- per year if the disability is less than 80% and Rs. 1,00,000/- per year if the disability is more than 80%

U/s 80DDB Deduction in respect of medical treatment for specified ailments or diseases for the assesse or dependent can be claimed up to Rs. 40,000/- per year. If the person being treated is a senior citizen, the exemption can go up to Rs. 60,000/-. but any amount received under Medical Insurance Policy will be reduced from the amount of deduction allowed. The Diseases and ailments specified under rule 11DD are.

1. neurological diseases being demetia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and parkisons disease,
2. cancer,
3. AIDS,
4. Chronic renal failure,
5. hemophilia, and 
6. thalassaemia.

U/s 80E Interest repayment on education loan (taken for higher education from a university of self & dependents) is completely tax exempt

U/s 80G Donations given for certain charities are tax exempt. Some(NGO,Trust etc.) are exempt to the tune of 50%, whereas Govt funds are 100%.

U/s 80GG If you are not getting  HRA, but living in rented house, an exemption is available. This will be calculated as minimum of (25% of total income or rent paid - 10% of total income or Rs. 24,000/- per year)

U/s 80U who suffers from not less than 40 per cent of any disability is eligible for deduction to the extent of Rs. 50,000/- and in case of severe disability to the extent of Rs. 100,000/-

U/s 80TTA introduced through Finance Act, 2012. Section 80TTA provides a deduction of up to Rs. 10,000 on your income from interest on saving bank accounts.

DEDUCTION u/s. 80C and chapter VIA

U/s. 80C of the Income Tax Act allows certain investments and expenditure to be deduct from total income. One must plan investments well and spread it out across the various instruments specified under this section to avail maximum tax benefit. There are no sub-limits and is irrespective of how much you earn and under which tax bracket you fall. Most of the Income Tax payee try to save tax by saving under Section 80C of the Income Tax Act.  However, it is important to know the Section in total. so that one can make best use of the options available for deduction under income tax Act. One important point to note that one can not only save tax by undertaking the specified investments, but some expenditure which you normally incur can also give you the tax exemptions.

Qualifying Investments u/s 80CCE

• Provident Fund (PF) & Voluntary Provident Fund (VPF) PF is automatically deducted from your salary. your contribution [12% of Basic] (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF). Current rate of interest is 8.5% per annum (p.a.) and is tax-free.
• Life Insurance Premiums: Any amount that you pay towards life insurance premium in Life Insurance Corporation (LIC) or any other Insurance CO.for yourself, your spouse or your children can also be included in Section 80C deduction. If you are paying premium for more than one insurance policy, all the premiums will be included. also premium paid for ULIP will also be treated as Premium paid for Life Insurance Policies.
• Unit linked Insurance Plan : ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments.They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term.

IMP : Total Amount Received at Maturity, Survival Benefits, Withdrawal in Insurance Policies is Tax Free and fully exempted u/s 10(10D).

• Public Provident Fund (PPF): Among all the assured returns small saving schemes, 
• Public Provident Fund (PPF) is one of the best. Current rate of interest is 8% tax-free and the normal maturity period is 15 years. Minimum amount of contribution is Rs. 500 and maximum is Rs. 1,50,000.(New Change) from Budget 2014
• National Savings Certificate (NSC): National Savings Certificate (NSC) is a 5-Yr small savings instrument eligible for section 80C tax benefit. Rate of interest is  8.58% compounded half-yearly, i.e. If you invest Rs.100, it becomes Rs.150.90 after five years. The interest accrued every year is liable to tax (i.e. to be included in your taxable income) but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.
• Home Loan Principal Repayment & Stamp Duty and Registration Charges for a home Loan The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.The principal component of the EMI qualifies for deduction under Sec 80C. Even the interest component can save you significant income tax – but that would be under Section 24 of the Income Tax Act. The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.
• Tuition  fees  for 2 children  Apart form the above major investments expenses for children’s education (Only Tution Fee (for which you need receipts)), can be claimed as deductions under Sec 80C.
• Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C.
• 5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.
• 5-Yr post office time deposit (POTD) scheme: POTDs are similar to bank fixed deposits. Although available for varying time duration like one year, two year, three year and five year, only 5-Yr post-office time deposit (POTD) – which currently offers 7.5 per cent rate of interest –qualifies for tax saving under section 80C. Effective rate works out to be 7.71% per annum (p.a.) as the rate of interest is compounded quarterly but paid annually. The Interest is entirely taxable.
• Pension Funds or Pension Policies – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it means that the total deduction available for 80CCC and 80C is Rs 1.5 Lakh.This also means that your investment in pension funds upto Rs.1.5 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed  Rs.1.5 Lakh.
• Infrastructure Bonds: These are also popularly called Infra Bonds. These are issued by infrastructure companies, and not the government. The amount that you invest in these bonds can also be included in Sec 80C deductions.
• NABARD rural bonds: There are two types of Bonds issued by NABARD (National Bank for Agriculture and Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB). Out of these two, only NABARD Rural Bonds qualify under section 80C.
• Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. Current rate of interest is 9% per annum payable quarterly. Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax.

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