INCOME TAX RULES APPLICABLE FOR FY 2016-17AS PER BUDGET 2016:-

Download the All in One TDS on Salary for Govt and Non-Govt employees for Financial Year 2016-17 & Assessment Year 2017-18 [ This Excel Based Software can prepare at a time Tax Compute Sheet + Individual Salary Sheet + Individual Salary Structure for Govt & Non-Govt employees Salary Pattern + Automatic Arrears Relief Calculator U/s 89(1) with Form 10E up to F.Y.2016-17 + Automatic H.R.A. Exemption Calculation + Automated Form 16 Part A&B and Form 16 Part B for F.Y.2016-17 as per Finance Budget 2016]

1.               No change in income tax slab for FY 2016-17. Basic exemption limit is same    Rs.2,50,000 for non-senior citizen and Rs.3,00,000 for senior citizen.

2.               There is no change in income tax rate for fy 2016-17.

3.               Additional deduction of Rs.3000 is available u/s 87A. Now,  Section 87A will provide Rs.5000.

4.               The rate of surcharge is increased from 12% to 15% for income more than Rs. 1 crore.

5.               Additional Rs.50000 income tax deduction for interest on housing loan is available for the first-time buyer of the house. The loan should not be more Rs.35 lakhs and cost of the house should not be more than Rs.50 Lakhs.

6.               Section 80GG deduction is increased from Rs. 24,000 to Rs.60,000.

7.               Withdrawal from national pension scheme at the time of retirement is exempt subject to 40% of withdrawal.

8.               Similarly, 40% withdrawal from supper annotation fund is also exempt.

9.               Any payment received from sukanya samriddhi scheme is exempt.

10.          For deduction under section 80DDB, the limit is increased from Rs. 60,000 to Rs.80,000.

11.          Deduction limit for Section 80D is increased by Rs.10,000 for nonsenior citizen and senior citizen. For the nonsenior citizen, the limit is Rs. 25,000 and for the senior citizen, the limit is Rs. 30,000.

12.          Deduction limit for section 80DD has been increased from Rs. 50,000 to Rs.75,000. For severe disability, the limit is increased from Rs. 1 Lakhs to Rs.1.25 Lakhs.

13.          For contribution to NPS ( National Pension Scheme) under section 80CCD, the limit is increased from Rs. 1.5 Lakhs. Additional deduction up to Rs. 50,000 is allowed for contribution above Rs. 1.5 Lakhs in the national pension scheme.

14.          Dividend income will be taxed at 10%- applicable to individual and HUF receiving dividend income more than Rs. 10 Lakhs.

15.          If the assessee has made the investment in certain categories, the capital gain will not be taxed.

16.          Transport allowance exemption limit has been increased from Rs. 800 to Rs.1,600 p.m. for salary income.

On June 30, 2016 by www.taxexcel.net

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Usually salary income is chargeable to tax either on due basis or on receipt basis. For the purpose of changeability salary consist of;

On May 31, 2016 by www.taxexcel.net

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RELIEF UNDER SECTION 89(1) with Form 10E From F.Y.2001-2002 to F.Y.2017-18

Where by reason of any portion of an assessee’s salary being paid in arrears or in advance or by reason of his having received in any one financial year, salary for more than twelve months or a payment of profit in lieu of salary under section 17(3), his income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as prescribed. The procedure for computing the relief is given in rule 21A. This relief is called relief u/s 89(1).

On April 29, 2016 by www.taxexcel.net

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Finance Minister Arun Jaitley’s third Union Budget focused on continuing the present course of fiscal consolidation as well as bring about equity to tax system. While previous budget had a lot to offer to the middle class, this year’s budget was more inclined towards low-income households. Government’s proposal to increase tax rebate, waive off service tax on homes and increase deductions on rent paid etc. are clearly meant to benefit economically weaker segment of our society. However, the biggest jolt to salaried section was the tax levied on the interest earned on EPF; this will mainly hit the middle class and people with comparatively higher salaries. Let’s look at some of the important implications of this year’s budget on salaried class: 

Extension of time period for availing Rs.2 lakh deduction: Earlier, a borrower had to complete the possession/construction of the property within three years of taking the home loan, failing which the borrower could only claim a deduction of just Rs.30000. As most of the developers failed to deliver the project within the three years’ time period, borrowers were deprived from claiming the entire Rs.2 lakh limit under Section 24(b). The decision to increase the time period from 3 years to 5 years is a good move as it will allow more people to avail the entire deductions. However, the government should have spared the borrower for cases where the delay in possession is caused at the developer’s end.

Increase in tax rebate for individuals with net income less than Rs.5 lakh: The biggest gift for small tax payers in this years’ budget is the proposal to increase the tax rebate for individuals with net income of Rs.5 lakh or less. At present, the tax rebate for such individuals under Section 87A is Rs.2000, which has been increased to Rs.5000 in this year’s budget. Thus, if your taxable income is Rs.5 lakh in the next financial year, you will additionally save Rs.3090 in taxes. This is a welcome move as the proposal is expected to benefit more than 2 crore tax payers. 

Additional deduction of Rs.50000 for interest paid on home loans lower than Rs.35 lakh: Another welcome move in this year’s budget is the introduction of an additional deduction of Rs.50000 for interest paid on home loans, over and above the existing Rs.2 lakh deduction available under Section 24b. However, this additional deduction can only be claimed by first time home buyers availing home loans of Rs.35 lakh or less and for homes valuing Rs.50 lakh or less. This move will encourage people to buy homes and infuse much-needed demand in the housing sector. 

Tax deduction on house rent paid increased: The proposal to increase the tax deduction allowed on house rent paid from Rs.24000 to Rs.60000 gives the self-employed classes a reason to cheer. This deduction can also be availed by employees who do not receive HRA as part of their salary component. 

Download Automated All in One TDS on Salary for Govt & Non-Govt Employees for the Financial Year 2016-17 & Assessment Year 2017-18 [ This Excel Utility can prepare at a time your Tax Computed Sheet + Individual Salary Structure + Individual Salary Sheet + Automated H.R.A. Exemption Calculation + Automated Arrears Relief Calculator with Form 10E up to F.Y.2016-17 + Automated Form 16 Part A&B and Form 16 Part B]

On March 27, 2016 by www.taxexcel.net

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On March 09, 2016 by www.taxexcel.net

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