What is Form 26AS?

Form 26AS (also called the annual statement) gives you the following details for the associated PAN card:

•                     Salary Credited and the corresponding TDS
•                     Interest Credited and corresponding TDS by banks and companies
•                     Advance tax or self-assessment tax paid
•                     TDS deducted in case of selling/buying of property of more than 50 lakhs value
•                     Any high-value transaction done in the year like buying property, shares, mutual funds, etc
•                     Income tax refund paid if any

How to view 26AS?

There are two ways to view your 26AS

1.                 You can do it directly from Income tax Website – incometaxindiaefiling.gov.in

2.                 You can do it through your net banking of authorized banks (with PAN card correctly linked to the account)

How to view information in Form 26AS?

Once the Form is opened, you have the option to select the Assessment year and the format “View as”. Select the relevant Assessment year and the format and click view.

Select ‘HTML” to view it online and “PDF” to download it.

Password for opening downloaded Form 26AS is the date of birth of PAN holder in the ddmmyyyy format as mentioned in PAN Card. So if your date of birth is January 2, 1975, then your password would be 02011975.

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Tax Slab Rate for FY 2017-18 as given below:-

Interpreting From 26AS:

The 26AS is divided into 7 broad sections (A to G). Following are the details for each section.

PART A – Details of Tax Deducted at Source.

This section is most common and has details of Tax deducted by your employer or TDS deducted by banks on interest on Fixed Deposits, etc. TDS deducted by each source is shown in a separate table.

PART A1 – Details of Tax Deducted at Source for 15G / 15H

This section shows details of the income where the tax was not deducted as you had submitted form 15G or 15H. The TDS will always show “0” because you have submitted Form 15G/H for not deducting TDS. It helps in tracking the interest you received.

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PART A2 – Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA (For Seller of Property)

PART B – Details of Tax Collected at Source

This is the tax that is collected by the seller from the buyer on sale of certain goods like liquor, timber, minerals, etc. This would be mainly populated by people involved in such trades.

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PART C – Details of Tax Paid (other than TDS or TCS)

This part shows any “Advance Tax or Self Assessment Tax” paid during the financial year. The banks generally upload this information after clearing of the cheque.

Part D – Details of Paid Refund

This part shows any refund paid to you by Income tax department in that financial year

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Part E: Details of AIR Transaction

It shows the details of any high-value transactions such as a purchase of property etc. These high-value transactions are reported to income tax department by banks/ Registrar/ Mutual Funds/ companies etc through Annual Information Return (AIR)

PART F – Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA (For Buyer of Property)

PART G – TDS Defaults (Processing of Statements)

What should be verified from 26AS?

As you can see it’s a long form but is visually easy to understand. The question is what should be verified in this form? The answer is EVERYTHING. Yes, you should verify all the numbers and relevant details present there.

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1            Check the name, TAN of the deductor from FORM 16 (salary)/16A (banks)

                    Check the section for each entry 192 is for salary and 194A is for interest income

                    Check the status of booking. It should be ‘F’ which means Final. This means that the TDS amount deposited to income tax authorities match with the TDS statement filed by the deductor. In case it's “U” meaning Unmatched, it means there is some issue either with the TDS statement or the amount deposited. You will need to check with the concerned deductor in this case.

What if entries do not match?

As stated above in case someone has deducted TDS but has not submitted or updated it wrongly to the income tax authorities, you might see wrong or missing entries. In that case, you will need to contact that person/company.

•                     In case your advance tax or self-assessment tax paid does not match, check with your bank.
•                     In case your Form 16 details do not match consult your employer.
•                     In case you find some entries missing consult with the relevant entities.

Why you should check 26AS before filing ITR?

Form 26AS can be compared to your resume while applying for any job. The interviewer knows everything mentioned in your resume – Similarly, income tax authorities know about all the information present in 26AS. And as you would not mess up in an interview by not preparing what’s on your resume, similarly you can mess your income tax returns by not verifying the entries in 26AS.

On July 25, 2017 by www.taxexcel.net

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What is a joint home loan?

A home loan where there is more than one borrower termed as a joint home loan. These co-borrowers can be spouses, parents, children etc.  Co-borrowers in joint home loan has to be in blood relation.  No two friends can be co-borrowers. In fact, banks sometimes avoid giving the loan to siblings unless they are co-owners in the property. This also happens in the case where the loan is taken with parents as co-borrowers.  It is only in the case of spouses where banks don’t demand the co-ownership on the said property of co-borrowers.

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Having a joint home loan is advantageous when both the co-borrowers are taxpayers. But do keep in mind that to claim income tax benefits in joint home loan all the co-borrowers should be the co-owners. Tax benefits can be claimed in the same ratio as the loan taken by co-owners.

A co-owner who is not a co-borrower is not entitled to income tax benefits. Similarly, a co-borrower who is not a co-owner cannot claim tax benefits. Below are few examples which will make this concept clear.

Flat value – Rs 75 lakhs

Loan amount – Rs 60 lakh

EMI for 20 years @ 10% p.a (reducing) – Rs  57901/- p.m

Case 1 – Husband (H) and Wife (W), both are working and taxpayers. H purchases a flat in his own name and to manage the burden of EMI takes a home loan with W as a co-borrower. In this case, though W is the co-borrower and contributes in the EMI, still she would not be eligible to claim any tax benefit u/s 80C or section 24. i.e. in all years, only H can claim up to Rs 1.50 lakh in interest payment and 100% of principal or Rs 1 lakh whichever is less.

Case 2 –   H and W, both purchases a house with co-ownership of 50:50 and also took home loan jointly in the same proportion. In this case, both H and W can claim the income tax benefit of Section 80C and Section 24 in equal proportion. i.e The complete interest payment and principal will be divided equally in H &W and both can claim separately Rs 1.50 lakh u/s 24 and Rs 1 lakh or 50% of principal whichever is less

Case 3 – H and W both purchase a house with a co-ownership of 75:25 and also took home loan jointly in the ratio of 50:50. In this case, both H and W can claim income tax benefit of Section 80C and Section 24 in the ratio of borrowing. i.e The interest and principal payment will be divided in the ratio of 50:50 and both H&W can claim income tax benefit in this ratio only, up to the maximum limit allowed.

Please note that in all the above cases the tax benefits that have discussed are on the self-occupied house. In the case of letting out or deemed to be let out the house, No principal payment but 100% of interest payment can be claimed under section 24 by both the co-owners in the ratio of their borrowing.

Advantages of having a Joint home loan

1.     One major advantage is the income tax benefit that gets divided in co-owners.

2.     The second advantage is the increases in chances of getting the loan and also increase in the loan eligibility.

Disadvantages of having Joint home loan

1. The self-occupied property is the one which is occupied by the owner for self-residence, and if there’s any other property purchased will be treated as “Deemed to let out” and taxed accordingly. So in the case of joint home ownership, if any of the co-owner purchases some other property in the same city will be treated as “deemed to let out”.

2. If any of the co-borrowers has bad credit behaviors due to which repayment of the home loan goes irregular, this will affect the credit score of other co-borrower too.

3. If due to any dispute, any of the co-borrowers refuses to repay the loan, please be warned that as per loan schedule the liability to repay the loan is joint and several on the part of each co-borrower. This means all the co-borrowers are liable to pay up to as much as all repayments. A lender may also sue both the co-applicants to recover the dues.

4. We all are emotional beings. Under the lure of getting access to high credit eligibility which may help in buying a big house, we tend to forget how the EMI burden will going to affect the other goals

Though Banks provides loans to spouses with no compulsion on having co-ownership, it is advisable for both spouses to have some ownership. Before becoming a co-applicant make sure that you have some percentage of ownership in the property. Also, if you are co-borrower, you could perhaps draw up and sign an agreement with your spouse on splitting the liability. This is to avoid any dispute in future.

On June 27, 2017 by www.taxexcel.net

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All salaries are very much familiar with HRA and how to get the benefit of the rent they pay. However, what about those who not get HRA in their salary or for self-employed? Will they still get rent benefit? The answer to both the questions is Section 80GG of Income Tax.

As per the Finance Budget 2016 enhance the maximum limit of U/s 80GG to Rs. 60,000/- from the F.Y.2016-17 and A.Y.2017-18

This section only applies to those who have not availed HRA in their salary or not claiming the deduction on their rent in any of the other sections of income tax.  Below are a few conditions to avail the deduction under this section.

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1. This section is only applicable to Individual or HUF.
2. Tax Payer may be either salaried or a self-employed. However, must not be getting HRA.
3. Tax Payer himself or spouse/Minor Child/HUF of which he is a member should not own any accommodation at a place where he is doing a job or business.
4. If Tax Payer owns a house at a place other than the place noted above, then the concession in respect of self-occupied property is not claimed by him [Under Section 23 (2) (a) or 23 (4) (a)].
5. Tax Payer has to file a declaration in Form No.10BA regarding the expenditure incurred by him towards the payment of rent.

How much amount of deduction one can avail under Sec. 80GG?

If the above five conditions are satisfied, the amount deductible under Section 80GG is LEAST OF THE FOLLOWING.

• Rs.5, 000 per month;
• 25% of total income of taxpayer for the year; or
• Rent Paid less 10% of total income (Rent Paid-10% of Total Income).

On August 04, 2016 by www.taxexcel.net

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