Tax Changes on P|F Contributions for Government Employees as per Finance Bill 2021| The EPFO 

has amended the provisions of Section 10 (11) and Section 109(12) of the Finance Act, 2021 to bring

 interest on the Statutory Provident Fund (MPF) and Employees Provident Fund (EPF) to the

 employees of the companies covered by the EPFO. Tax net 

Currently, the entire interest on GPF and EPF is exempt from tax. However, up to AIY 2021-22, the amount of interest on taxes on employees in PF accounts is more than the amount of Rs 250,000 tax in a financial year. For employees contribution in PF account only Rs. There will be a tax deduction of Rs 250,000 in a financial year. The same was introduced in the Lok Sabha on February 1, 2021, as per the original amendment proposed in the Finance Bill.

 

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When the Finance Bill was passed in the Lok Sabha on 23.03.2021, it was proposed to amend the provisions of Section 10 (11) and Section 10 (12) to provide an increased limit for more employees to contribute such PF to the PF account. Contributions ranging from Rs. 2,5 Lakh to Rs. 5,00,000 only in cases where the employer makes no contribution to the PF account of the employees.

 

According to the EPF rules, an employer is required to contribute to the employee's EPF account at the rate of 12% of the employee's initial salary and DA. Under no circumstances can an employer be exempted from the mandatory requirement to deposit in an EPF account. Therefore there can be no situation when an employee can enjoy the advanced limit of Rs. 5,00,000 under section 10 (12)

 

Similarly, in the case of PPF accounts, the employer has no contribution. In fact, the PPF account is not in the model of the employer-employee relationship. Therefore, no contribution to the PPF account is attracted by these amendments. Anyone including a self-employed person can open a PPF account.

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Even if a person opens a PPF account, whether he is an employee elsewhere, in government service or not, it is not because of an employer-employee relationship, but because he is open to his own ability. Being an employee is not a prerequisite for opening a PPF account. PPF can also hold a minor. Earlier, HUF was also allowed to keep PPF accounts.

 

Further, there is a limit to the annual contribution. 1,50,000 in the PPF account, therefore, the proposed revised provisions of duty on interest on additional deposits in the PPF account will not be applicable.

 

 

The finance minister has also made this clear in Parliament. In response to a question about the imposition of interest tax on PF amount and Rs. 5,00,000/- within the increased limit, FM replied,  Often, both the employee and the employer contribute, but in cases where there is only one

contribution from the employee and no contribution from the employer, the amount is increased to Rs 2,000.

 

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Similarly, in the case of PPF accounts, the employer has no contribution. In fact, the PPF account is not in the model of the employer-employee relationship. Therefore, no contribution to the PPF account is attracted by these amendments. Anyone including a self-employed person can open a PPF account.

 

 

Even if a person opens a PPF account, whether he is an employee elsewhere, in government service or not, it is not because of an employer-employee relationship, but because he is open in his own capacity. Being an employee is not a prerequisite for opening a PPF account. PPF can also hold a minor. Earlier, HUF was also allowed to keep PPF accounts.

 

Further, there is a limit to the annual contribution. 1,50,000 in the PPF account, therefore, the proposed revised provisions of duty on interest on additional deposits in the PPF account will not be applicable.

 

In short, the government amendments proposed in Section (11) and Section (12) of Section 10 to increase the tax-free limit of the contribution of employees to Rs. 5,00,000 /- in a fiscal year for government employees alone. It does not affect contributions to any PPF account. The duty-free limit for employee contribution to any EPF account is Rs. 2,50,000 only. The benefit of the extended limit of Rs. 5,00,000/- not extended to private-sector workers

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On August 28, 2021 by www.taxexcel.net

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Budget 2021 - What is the new tax rules for ULIPs and especially after the 2021 budget? Although ULIPs were equity products, they enjoyed the same tax benefits as other endowment products under section 10 (10D). 

However, in order to bring balance between ULIPs and mutual funds, during the 2021 budget, the finance minister proposed a change in the taxation of ULIPs. Let's take a look at the new tax rules for ULIPs.

 

All about the tax on ULIPs

 

There are three tax aspects to consider when investing in ULIPs. The first is the time of investment, the second is when it matures or surrenders and the third is the time of death. Now watch each one in detail.

 

# Tax rate on ULIPs at the time of investment

 

There is no change in the rules regarding tax benefits when investing in ULIPs. Therefore, exemptions under Section 80C is allowed for investment in ULIPs (up to a maximum of Rs. Can and can claim a discount for investment for any member of the HUF.

You may also like- Download and Prepare at a time 50 Employees Form 16 Part A&B for the F.Y.2020-21 in Excel as per new and old tax regime U/s 115 BAC

The exemption under section 80C is limited to 10% of the sum insured. This means the sum insured is Rs. 1.5 Lakh, then the premium you pay under ULIP should be up to a maximum of Rs. 1,50,000. If the premium is outside 10%, it is not eligible for a discount under Sec 80. Any amount of premium payable above this limit is not deductible under section 80C.

 

Another important point to understand here is that if you stop paying premium before the expiry of the five-year term or you stop your participation with notice of that part, the total amount of discount allowed to you in previous years will be treated as income and your income tax slab Accordingly the tax is charged in the year in which such national termination occurs.

 

So, closing the ULIPs is like a double-edged sword. ULIPs charge you in one way with a hefty separation charge and in another way, the opposite of the tax benefit you receive under Sec.80C.

 

Remember that you can pay as much premium as possible. However, the benefit of Sec.60C is limited to Rs.1,50,000 per annum and the premium must be 10% of the insured.

 

# Tax rate of ULIPs on maturity

The proposal to change the budget for 2021 was given here. Let us first try to understand the old rules that exist.

 

Tax on ULIPs (before 2021 budget)

Section 10 (10D) provides for a rebate on any money received under the ULP, including money allocated through bonuses on such policies. However, if the premium payable for any year during the term of the policy exceeds 10% of the actual insured, no discount will be allowed.

You may also like- Download and Prepare at a time 50 Employees Form 16 Part B for the F.Y.2020-21 in Excel as per new and old tax regime U/s 115 BAC

 Tax on ULIPs (after 2021 budget)

Effective from 1st February 2021, no waiver will be allowed under Sec.10 (10D) if the amount of premium payable for any of the preceding policies exceeds Rs. 2,50,000.

However, if the total premium paid for a financial year is less than Rs.250,000 (including all multiple policies), you will enjoy duty-free maturity under Sec.10 (10D).

 

The Finance Bill, 2021 proposes to insert a new sub-section (1B) in section 45 so that a person can receive any amount under any ULIP at any time during the previous year so that no exemption is given under section 10 (10D).

You may also like- Download and Prepare at a time 100 Employees Form 16 Part A&B for the F.Y.2020-21 in Excel as per new and old tax regime U/s 115 BAC

 

Apply to the account of the Fourth and Fifth Provisions, including the money allocated through bonuses in the policy of providing, then, any profit or gain from such person receiving such amount will be applicable for tax under the heading "Capital Gain" in the previous year where such amount was received. . Moreover, income tax under this head will be calculated in the prescribed manner. Thus, the method of calculating income will be informed later.

 

Section 112A proposes to amend the definition of 'Equity-Oriented Fund' by the Finance Bill, 2021. It is proposed to cover the cover of the exemption under serial (10D) which will not be applicable due to the application of the fourth. And of the fifth Proviso. Even if a portion of the fund is invested in the O-based project, higher premium ULIPs will be considered as equity-oriented funds.

 

Thus, long-term capital gains are Rs. 1,00,000 will be taxable at the rate of 10% without index under the section 112A. Although the full amount of short-term capital gains will be taxable at the rate of 15% under section 111A. ULIPs will be considered as long-term capital assets if they hold short-term capital assets for more than 12 months and for 12 months or less.

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5) Automated Income Tax Revised Form 16 Part B for the F.Y.2022-23

 

On June 19, 2021 by www.taxexcel.net

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Download Automated Income Tax Software in Excel for the Govt & Non-Govt Employees F.Y.2021-22 as per Budget 2021 with how to save income tax 

Are you someone who likes Bollywood a lot? Do you think Bollywood life is glamorous? The lives of celebrities always seem exciting and full of glamour. They are always ahead when it comes to clothing, travel, or lifestyle. You must know that these actors are always given a jaw drop, they are paid a lot of money for everything they do, be it movies, music albums, commercials, or performances.

 

However, people are usually so blinded by these glamorous shows that they often forget that the higher the income, the higher the income tax.

You may also, like- Prepare at a time 50 Employees Form 16 Part B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC

 

Now, are you wondering how much land you will have to pay income tax this year? The following list shows the different tax rates for different categories of taxable income for the fiscal year 2020-2021.           

Section 80C-   Investments in PPF, PF, insurance, NPS, ELSS, etc. Max Rs.150,000

Section 80CCD-NPS investments 50,000

Section 80D-   Investment in medical insurance for self or parents   25,000/50,000

Section 80EE- Interest on Home loan Rs. 50,000

Section 80EEA-Interest on Home loan Rs.1,50,000

Section 80EEB-Interest on electric vehicle loan 1,50,000

Section 80E-Interest on education loan Full amount

Section 24-Interest paid on the home loan 200,000

Section 10(13A)-House Rent Allowance (HRA) as per salary structures

 

Income tax-saving tips

The Government of India also provides certain ways to reduce the income tax of taxpayers. The Income Tax Act, 1961 covers some tax savers including mutual funds, insurance premiums, NPS, medical insurance, home loans, and many more.

 

There are some departments that act as relief for taxpayers, as under these main departments, they can save taxes. These categories are 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80CCG, 80G G

They can certainly be helpful for income tax by many taxpayers, especially salaried employees. Exemptions and allowances for income tax are of utmost importance in the financial planning of any person or entity.

Therefore, the following table shows the categories and discount limits for each.

You may also, like- Prepare at a time 50 Employees Form 16 Part A&B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC

 

How to save income tax under section 80C?

Under Section 80C, there are a various investment and expense options through which you can claim a discount within the rupee limit. One and a half lakh rupees in the financial year. These options are as follows:

 

Equity Linked Savings Scheme (ELSS)

The Equity Linked Savings Scheme is the only mutual fund division that provides tax exemption under the Income Tax Act.

 

ELSS returns are higher than other income tax saving schemes in the long run because investments are made in the equity market but two things to keep in mind with ELSS are that it cannot be withdrawn for 3 years before the lock-in period and there is high risk because the investment Is in the equity market.

You may also, like- Prepare at a time 100 Employees Form 16 Part B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC

 

Certificate of National Conservation (NSC)

The NSC is another income tax protection strategy that comes with a 5-year term with the National Conservation Certificate providing a fixed rate of interest, which is currently 6.8% per annum.

The interest earned from this income tax protection strategy is a duty-saving option and under Section 80C, Rs. 1.5 lakh can be taken as a discount.

 

Public Provident Fund (PPF)

PPF One of the strategies to save income tax in India sought In PPF, long-term investment can be made with a term of 15 years. One can open a PPF account with minimum cash at banks and post offices.

 

PPF rates change quarterly, which is currently .1.1%. The funny thing about PPF is that PPF is interest-free.

Employees Provident Fund (EPF)

 

12% of the salaries of employees covered by the Employees Provident Fund are tax-free. So it is a beneficial income tax saving scheme for people in the service line.

Senior Citizens Protection Project (SCSS)

 

The current rate of interest is 7.4% (taxable). However, the discount limit is Rs 2,000. One and a half lakh rupees. This means that this limit can be taken under this scheme of tax exemption.

You may also, like- Prepare at a time 100 Employees Form 16 Part A&B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC

 

Tax exemptions do not depend on the child's class or level of education. This income tax saving scheme is for all types of parents including divorced, single parents, or those who have adopted children.

Home payment

 

In order not to hinder income tax in the process of buying their own house, Section 60 comes up with a scheme where these people, who are already paying EMI for their home loan, are exempted from paying income tax on interest.

 

They can claim tax exemption under section 80C.

 

What are the other income tax saving options?

Apart from Section 80C, there are other sections (mentioned earlier) that provide for income tax exemption. Here is some of the income tax saving options:

 

There are tax exemptions for contributions to the National Pension System (NPS). The discount limit is 1.5 lakh.

 

Exemption for medical insurance premiums U/s 80D. It's up to the rupee. 25,000, and Rs. 50,000 for senior citizens.

There is also a tax deduction on home loan interest; You have Rs. 60,000 under Section 80EE.

 

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On June 09, 2021 by www.taxexcel.net

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