Taxexcel: All in One TDS on Salary for Non-Govt (Private) employees for F.Y.2016-17

Section 87A Rebate Limit Increased to Rs. 5000, Changes in Section 87A by Finance bill 2016,Hi Friends in union budget 2016 Section 87A Rebate Limit Raised to Rs. 5000. Rebate under Sec 87A: With the objective of providing relief to resident individuals in the lower income slab i.e. total income not exceeding Rs. 5,00,000, section 87A is proposed to be amended so as to increase the maximum amount of rebate available from existing limit of Rs.2,000 to Rs.5,000. Earlier this limit is only available for Rs 2000 now this limit is increased by Rs 3000 and now the total limit for Section 87A for AY 2017-18 is Rs 5000. Check more details regarding “Section 87A Rebate Limit Increased to Rs. 5000 – Budget 2016” from below…..

Download Automated All in One Income Tax Preparation Excel Based Software for Non-Govt Employees for F.Y. 2016-17 & A.Y.2017-18.

[This Excel Utility can prepare at a time Individual Tax Compute Sheet + Individual Salary Sheet + Individual Salary Structure as per Non-Govt employees Salary Pattern + Automatic H.R.A. Calculation + Automatic Form 12 BA + Automatic Form 16 Part A&B and Form 16 Part B for F.Y. 2016-17 with all amended Income Tax Section as per Finance Bill 2016-17]

Section 87A Rebate Limit Increased to Rs. 5000 from F.Y.2016-17

The existing provisions of section 87A of Income-tax Act, provide for a rebate of an amount equal to hundred per cent of such income-tax or an amount of two thousand rupees, whichever is less, from the amount of income-tax to an individual resident in India whose total income does not exceed five hundred thousand rupees.

With the objective to provide relief to resident individuals in the lower income slab, it is proposed to amend section 87A so as to increase the maximum amount of rebate available under this provision from existing Rs.2,000 to Rs.5,000.

This amendment will take effect from 1^stApril 2017 and will accordingly apply in relation to the assessment year 2017-18 and subsequent assessment years.Clause 45 To Finance Bill 2016

Clause 45 of the Bill seeks to amend section 87A of the Income-tax Act relating to the rebate of income-tax in case of certain individuals.

The aforesaid section provides that an individual resident, whose total income does not exceed five hundred thousand rupees, is eligible for the rebate in income-tax equal to hundred per cent. of such income-tax or two thousand rupees, whichever is less.

It is proposed to increase the amount of rebate allowable under the said section from the existing two thousand rupees to five thousand rupees.

This amendment will take effect from 1st April 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years.

Amendment of section 87A.

In section 87A of the Income-tax Act, for the words “two thousand rupees”, the words “five thousand rupees” shall be substituted with effect from the 1st day of April 2017.

Share It

No Comments

Changes in Income Tax Rules:

1. There has been no change in the income tax slabs.

2. For people with net taxable income below Rs 5 lakh, the tax rebate has been increased from Rs 2,000 to Rs 5,000 u/s 87A. This would benefit people who have net taxable income between Rs 2.7 Lakhs to Rs 5 Lakhs.

3. Additional exemption for first time home buyer up to Rs. 50,000 on interest paid on housing loans. This would be applicable where the property cost is below Rs 50 Lakhs and the home loan is below Rs 35 lakhs. The loan should be sanctioned on or after April 1, 2016.

4. Tax Exemption u/s 80GG (for rent expenses who do have HRA component in salary) has been increased from Rs 24,000 to Rs 60,000 per annum. This is a good move to align the exemption amount with today’s rent and keep the section relevant.

5. For people with net taxable income above Rs 1 crore, the surcharge has been increased from 12% to 15%

6. Dividend Income in excess of Rs. 10 lakh per annum to be taxed at 10%

7. 40% of lump sum withdrawal on NPS at maturity would be exempted from Tax. This rule now also applies to EPF. So now in case of EPF income tax would be applicable on 60% of the corpus on maturity.

8. Presumptive taxation scheme introduced for professionals with receipts up to Rs. 50 lakhs. The presumptive income would be 50% of the revenues.

Download Automated ArrearsRelief Calculator U/s 89(1) with Form 10E from F.Y. 2001-02 to F.Y. 2016-17 [ Up to date Version]

1. Section 80C/80CCC/80CCD

These 3 are the most popular sections for tax saving and have lot of options to save tax. The maximum exemption combining all the above sections is Rs 1.5 lakhs. 80CCC deals with the pension products while 80CCD includes Central Government Employee Pension Scheme.

You can choose from the following for tax saving investments:

1. Employee/ Voluntary Provident Fund (EPF/VPF)

2. PPF (Public Provident fund)

3. Sukanya Samriddhi Account

4. National Saving Certificate (NSC)

5. Senior Citizen’s Saving Scheme (SCSS)

6. 5 years Tax Saving Fixed Deposit in banks/post offices

7. Life Insurance Premium

8. Pension Plans from Life Insurance or Mutual Funds

9. NPS (New Pension Scheme)

10. Equity Linked Saving Scheme (ELSS – popularly known as Tax Saving Mutual Funds)

11. Central Government Employee Pension Scheme

12. Principal Payment on Home Loan

13. Stamp Duty and registration of the House

14. Tuition Fee for 2 children

2. Section 80CCD(1B) – Investment in NPS

Budget 2016 has allowed additional exemption of Rs 50,000 for investment in NPS. We have done a complete analysis and concluded that it would be beneficial for you to discard this benefit and invest after tax money in a good equity mutual fund.

Download Automated House Rent Exemption Calculator U/s 10(13A) [ Excel Based Software]

3. Payment of interest on Home Loan (Section 24/80EE)

The interest paid up to Rs 2 lakhs on home loan for self-occupied home is exempted u/s 24. There is no limit for home given on rent.

Budget 2016 has provided additional exemption up to Rs 50,000 for payment of home loan interest for first time home buyers. To avail this benefit the value of home should not exceed Rs 50 lakhs and loan should not be more than Rs 35 lakhs.

4. Payment of Interest on Education Loan (Section 80E)

The total interest paid on education loan can be claimed as tax exemption. There is no upper limit for the same.

5. Investment in RGESS-(Section 80CCG)

Deduction Up to Rs 25,000 (50% of amount invested) is allowed if you make investment in pre approved stocks and mutual funds in Rajiv Gandhi Equity Savings Scheme (RGESS). This is available to first time equity investors subject to certain conditions.

6. Medical insurance for Self and Parents (Section 80D)

You can get tax deduction up to Rs 60,000 by paying medical insurance premium for self, your dependents and your parents. There is also sub limit of Rs 5,000 for preventive medical checkup.

7. Treatment of Serious disease (Section 80DDB)

You can claim deduction up to Rs 80,000 for treatment of certain diseases like AIDS, renal failure, etc for self or dependents

8. Physically Disabled Tax payer (Section 80U)

Physically Disabled Tax payer can get tax exemption up to Rs 1.25 lakhs u/s 80U for above 801% and Rs.75,000/- for below 80% of physically Disabled Tax payer

9. Physically Disabled Dependent (Section 80DD)

You can claim deduction up to Rs 1.25 lakhs for maintenance and medical treatment of Physically Disabled dependent

10. Rebate Rs.5,000/- U/s 87A

Please give us your feedback and help us improve!