Download Automatic House Rent Exemption Calculator

Under Section 80GG, an Individual can claim the deduction for the rent paid even if he does not get House Rent Allowances. Not many people are aware of this deduction.

Section 80GG allows the Individuals to a deduction in respect of house rent paid by him for his own residence.
Such deduction is permissible subject to the following conditions:-

• The Individual has not been in receipt of any House Rent Allowance from his employer specifically granted to him which qualifies for exemption under section 10(13A) of the Act;
• The Individual files the declaration in Form No. 10BA. Download Excel Based Form 10 BA
• The employee does not own:

1.  A)  any residential accommodation himself or by his spouse or minor child or where such Individual is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or

B ) at any other place, any residential accommodation being accommodation in the occupation of the Individual, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

• He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income, subject to a ceiling of 25% thereof or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG. In other words, eligibility will be the least amount of the following:-

2)

1. Rent paid minus 10 percent the adjusted total income.
2. Rs 2,000 per month.
3. 25 percent of the adjusted total income.

• The deduction will also not be available to an assessee if any residential accommodation is owned by the assessee at any other place, which he is occupying, and the concessions in respect of self-occupied house are claimed by him for that property. In such a case, no deduction will be allowed in respect of the rent paid, even if the person does not own any residential accommodation at the place where he ordinarily resides.

On September 01, 2018 by www.taxexcel.net

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Download Automated All in One TDS on Salary for Non-Govt (Private) Employees for F.Y.2017-18 & A.Y.2018-19 [ This Excel Utility can prepare at a time your Individual Tax Compute Sheet + Individual Salary Structure + Automatic H.R.A. Exemption U/s 10(13A) + Automatic Form 16 Part B + Automatic Form 16 Part A&B + Automatic Form 12 BA]

If you don’t get HRA

What if you don’t get HRA in your salary from your employer? Well, even if you don’t get such allowance, Income Tax Act has still got you covered. There is less known provision under the Act which allows employed individuals who do not get HRA to claim tax benefit. Section 80GG of the Income Tax Act, 1961 has provisions for such individuals to claim the tax deduction if the house to rent for their accommodation. To claim benefits under this section, one must satisfy the following conditions:

·                  The individual, who is an employee, should not receive HRA or any equivalent allowance from his employer as salary.

·                  The employee, his wife or his minor child should not have the ownership of the property where he resides.

·                  If the employee is part of a HUF, he or his family should not own the place of his residence.

·                  In case the employee owns a place other than his rented place of accommodation then he should not be claiming tax benefit on such property as self-occupied property. Such property would be deemed to be let-out.

Documents Required

·                  Employee needs to furnish documents like rent agreement and rent receipts.

·                  If your annual rental payment exceeds Rs. 1 lakh then you also need to furnish PAN details of your landlord.

·                  To claim deduction under section 80GG, he also needs to file Form 10BA. This form proves that the employee is not claiming the benefit of self-occupied property in any other location or the location where he is employed.

Amount of Deduction Available

Under section 80GG, you can claim least of the following as tax benefit:

·                  Rs. 60,000 per year (i.e. Rs. 5,000 per month)

·                  An amount equal to the total rent paid minus 10% of the total income

·                  25% of adjusted total income of employee

So, the least of the above-mentioned amount is available as tax deduction irrespective of whether the house is furnished or semi-furnished.

Income Tax deduction under section 80GG is a less known and less claimed deduction. The main reason behind this is that most of the employers give HRA as part of the salary to their employees.

We can understand its calculation with the help of an example. Let’s assume that Mr. Arjun gets an annual salary of Rs. 3,00,000 after all deductions out of which he pays an annual rent of Rs. 1,50,000. In this case, the tax deduction allowed to him would be least of the following:-

·                  Rs. 5,000 per month i.e. Rs. 60,000 per annum

·                  Rent paid i.e. Rs. 1,50,000 minus 10% of total income i.e. Rs. 30,000 = Rs. 1,20,000

·                  25% of total income i.e. Rs. 75,000

The least of the above can be claimed by him as a tax deduction. So, Rs. 60,000 would be allowed as a deduction under section 80GG for the complete Financial Year. Remember that filing Form 10BA is also needed to avail this deduction.

Here is a sample format of Form 10BA for your reference in case you want to claim this deduction.

On January 21, 2018 by www.taxexcel.net

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On July 16, 2017 by www.taxexcel.net

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A new financial year started on April 1. The rules of last year are not applicable now. The new financial regulations announced by Arun Jaitley in Budget 2017 will be valid from April 1, 2017. The Finance Bill was passed by the Lok Sabha on Wednesday, completing the budgetary exercise for 2017-18. Make a note of the following changes in Tax law that come into effect from 1-4-2017: 

Download Automated All in One TDS on Salary for Non-Govt Employees for the Financial Year 2017-18 & Assessment Year 2018-19 [ This Excel Utility can prepare at a time Individual Salary Sheet + Individual Tax Computed Sheet + Automatic H.R.A. Calculation + Automated Form 16 Part A&B and Form 16 Part B + Automated Form 12 BA]

Limit for payment by cash Limit for payment of expenses by cash (both, capital and revenue expenditure) reduced from Rs 20,000 to Rs 10,000 per day in aggregate per person. Capital expenses paid in cash beyond the said limit will not be taken into account for depreciation purposes. However, the cash payment limit for lorry freight etc. remains the same at Rs 35,000.

Conditions No person shall receive an amount of two lakh rupees or more, by cash (Sec. 269ST) - in aggregate from a person in a day; or in respect of a single transaction; or in respect of transactions relating to one event or occasion. The penalty for violation of above is to be a sum equal to the amount of such receipt.

Tax exemption limit Tax Exemption limit is Rs2,50,000/- (same as earlier). After that, up to Rs 5 lakh, Tax Rate is 5% (earlier it was 10%). A tax rebate of maximum Rs 2,500 will be allowed, for total income up to Rs 3.50 lakhs.

Surcharge Individuals having total income exceeding Rs 50 lakhs but below Rs.1 crore, are to pay surcharge @ 10% of the tax. Those having total income exceeding Rs 1 crore shall continue to pay surcharge @ 15%.

Payment of Rent Rs 50,000 per month by any Individual or HUF (not subject to Tax Audit requirements) - deduct TDS @ 5%

Donations made exceeding Rs 2,000 will not be eligible for deduction under section 80G unless these are made using modes other than cash. Consequently, trusts accepting 80G donations may advise their donors to give donations exceeding Rs 2,000 vide cheque / RTGS / digital modes.

Late fee From the financial year 2017-18, if Return is not filed within due date, the late fee of Rs 5000 for delay up to 31st December, and Rs 10000 after that.

Aadhaar mandatory Every person who is eligible to obtain AADHAR number should quote such number, on or after 1 July 2017, in the Return of income. Furthermore, every person who has been allotted PAN as on 1st July 2017 must intimate the AADHAR number to the Tax Authority, failing which, PAN allotted to such person shall be deemed to be invalid. Kindly note that linking of AADHAR with PAN is not possible unless name as per AADHAR and PAN match perfectly. Hence, please take steps to rectify your name as per AADHAR to match as per PAN. Where Sec.12AA registered trusts modify their objects clause, they need to apply within 30 days to CIT for approval of the modified clauses.

Source from Goodreturns.in

On April 12, 2017 by www.taxexcel.net

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Download All in One Income Tax Preparation Excel Bases 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 Structure + Automatic H.R.A. Exemption Calculation + Automated Form 12 BA + Automated Form 16 Part A&B and Form 16 Part B as per the latest amended by the Finance Budget 2016]

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 the case of EPF income tax would be applicable on 60% of the corpus in maturity.

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

1. Section 80C/80CCC/80CCD

These 3 are the most popular sections for tax saving and have a 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 2015 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.

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

The interest paid up to Rs 2 lakhs on home loan for a 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 the 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 the amount invested) is allowed if you make an investment in preapproved 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 the tax deduction up to Rs 60,000 by paying the medical insurance premium for self, your dependents, and your parents. There is also sub-limit of Rs 5,000 for the 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

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. Donations to Charitable Institutions (Section 80G)

Deduction up to Rs 40,000 is allowed for Donation to certain charitable funds, charitable institutions, etc.

On July 18, 2016 by www.taxexcel.net

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For person earning income from Salary , documents Form 16, and Form 12BA provided by employer are needed. We looked into details of Form 16. Form 12BA give details of Perquisites given by the employer to employee in the financial year. Before we look at Form 12BA lets try to understand Perquisites, also known as perks.

Download All in One TDS on Salary for Govt & Non-Govt employees for F.Y.2015-16 and A.Y.2016-17 [ This Excel Utility can prepare at a time Tax Compute Sheet + Automatic Arrears Relief Calculation with Form 10E + Automatic HRA Exemption Calculation + Automatic Form 12 BA + Automatic Form 16 Part A&B and Form 16 Part B + Individual Salary Structure for Govt and Non-Govt employees]

What are Perquisites?

Perquisites are benefits provided by the employers in addition to the normal salary at a free of cost or concession rates. Income tax act defines Perquisite as any casual emolument or benefit attached to an office or position in addition to salary or wages. Value of these perquisites is added to the income of employees. Hence Perquisites are taxable. There are rules for valuation of perquisites.  Some of the perquisites are given below:

1	Accommodation  [Download Accommodation Value Calculator]
2	Cars/Other automotive [ Download Value of other Perquisite Calculator]
3	Sweeper, gardener, watchman or personal attendant
4	Gas, electricity, water [ Download Value of Perquisite of Other calculator]
5	Interest free or concessional loans[ Download Loan Value Calculator]
6	Holiday expenses
7	Free or concessional travel [ Download Travel Value Perquisite Calculator]
8	Free meals  [ Download Value of Perquisite of meal calculator]
9	Free Education [ Download Value of Perquisite of education calculator]
10	Gifts, vouchers etc. [ Download Value of Perquisite of Gift calculator]
11	Credit card expenses [ Download Value of Perquisite of calculator]
12	Club expenses [ Download Value of Perquisite of l calculator]
13	Use of movable assets by employees [ Download Value of Perquisite of l calculator]
14	Transfer of assets to employees [ Download Value of Perquisite of meal calculator]
15	Value of any other benefit/amenity/service/privilege [ Download Value of Perquisite of  calculator]

A  perquisite can be provided both by way as:-

·                                 Monetary payment : Employer either reimburses the expenses incurred by the employee for such facilities or pays on behalf of the employee. Ex:personal gas bills of the employee are in the name of employee and the employer reimburses the amount of such gas bills to him or pays on his behalf to the gas agency, it is in monetary terms and taxable in case of all employees; on the other hand, if such bills are in the name of employer, it will be perquisite in case of specified employee only.

 OR

·                                 Non-monetary payment/benefit : Payments which can be called non-monetary payments are car facility,  benefit on account of interest-free loans, rent-free accommodation, furniture provided to employees etc.

As defined earlier, Perquisite as any casual emolument or benefit attached to an office or position in addition to salary or wages, Mostly perquisites are associated with position or office. Often distinction is made between employees and specified employees. A Specified employee is the one who satisfies any of the following cases:

·                                 He is a director of the company,

·                               He has a substantial interest in the company, ie he is the beneficial owner of equity shares carrying 20% of voting power in the employer company.

·                     His monetary income under the head “Salaries” for the year exceeds Rs.24,000. The amount considered here includes amounts due from, paid or allowed by one or more employers. It excludes all non-monetary benefits.

The perquisites and allowances, as aforesaid, shall include accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance allowance together with reimbursement of expenses and / or allowances for utilisation of gas, electricity, water, furnishing and repairs; medical reimbursement; leave travel concession for self and family including dependents; medical insurance and such other perquisites and / or allowances.

Perquisites and Indian Income tax Act

Definition of Perquisites: Perquisites are defined in the section 17(2) of the Indian Income-tax Act of 1961.

Section 10(10CC) – Exemption on Non monetary perquisites: With effect from 01.06.2002, employer has given a option to deposit the tax on non monetary perquisites on behalf of employee without deducting the same from the employee {section 192(1A) &192(1b)} As per section 10(10CC), the amount of tax actually paid by an employer, at his option, on non-monetary perquisites on behalf of an employee, is not taxable in the hands of the employee. Such tax paid by the employer shall not be treated as an allowable expenditure in the hands of the employer under section 40. The tax so paid by the employer shall be deemed to be TDS made from the salary of the employee.

Statement of Perquisites: 192 (2C) lays down employer, shall furnish to employee  a statement giving correct and complete particulars of perquisites or profits in lieu of salary provided to him and the value thereof in form no. 12BA. The form and manner of such particulars are prescribed in Rule 26A, Form 12BA and Form 16 of the Income-tax Rules . Information relating to the nature and value of perquisites is to be provided by the employer in Form no. 12BA in case of salary paid or payable is above Rs.1,80,000/-. In other cases, the information would have to be provided by the employer in Form 16 itself.

Type of perquisites, valuation of perquisites are defined in every Finance Act (popularly known as Budget presented by Finance Minister).

Valuation of Perquisites

Perquisites are taxable in the hands of employees. There are rules for valuation of perquisites. Let’s look at some of the rules. Please note that these rules keeps changing and are notified by Central Board of Direct Taxes (CBDT). For the financial year 2011-12 or Assessment Year 2012-13 Circular No.08/2010 dated 13.12.2010 . Valuation of some of the perquisites are discussed below:

Accommodation :- For purpose of valuation of the perquisite accomdation is divided into various categories like: Rent free Unfurnished Accommodation, Rent-Free Furnished Accommodation, Concession in Rent etc.  is explained below:

Description	Perquisite Value
Where Government provides the accommodation to a person holding an office or post in connection with the affairs of the Union or State or serving with any body or undertaking under the control of such Government on deputation.	Licence fee determined by Union or State Government in respect of accommodation in accordance with the rules framed by that Government.
Where any other employer provides such accommodation.	Where accommodation is owned by employer. Perquisite Value is - ·                                 15% of the salary in cities having population more than 25 lakhs as per 2001 census. ·                                 10% of the salary in cities having population more than 10 lakhs but up to 25 lakhs as per 2001 census. ·                                 7.5% of salary in other cities. Where accommodation is taken on lease or rent by the employer. Perquisite Value is least of the following - ·                                 Actual amount of lease rental paid or payable by the employer ·                                 15% of the salary.

Interested readers can find about more about Taxable value of Rent-Free Furnished Accommodation, Taxable value of Concession in Rent

Gift or Voucher or Token: [Rule 3(7)(iv)]: The value of any gift or voucher or token in lieu of which such gift may be received by the employee or by member of his household on ceremonial occasions or otherwise shall determined as equal to the amount of such gift.

However, where the value of such gift, voucher or token, as the case may be, is below Rs.5,000 in the aggregate during the previous year, the value of perquisite shall be taken as Rs.Nil.

Medical Reimbursement by the employer exceeding Rs. 15,000/- p.a. u/s. 17(2)(v) is to be taken as perquisites.

·                                 Links to details about  other perquisites from website accounting-n-taxation are given

 Exempted Perquisites:- Some of the perquisites are exempted from income tax (free) such as:

·                                 Tea, coffee(non-alcoholic beverages), snacks provided during working hours.

·                                 Free Meals provided at the office or business premises during office hours or through paid non-transferable vouchers usable only at eating joints. If the value is up to Rs.50 per meal, it is not taxable. Otherwise, taxable.  Assuming 2 meals per day and 22 working days in a month, it works out to Rs. 2200/- p.m which at times is given in form  food coupons  or Sodexo coupons.

·                                 Recreational facilities provided.

·                                 Good manufactured by employer and sold by him to employees at the concessional (not free) rates. Ex: Motorola providing his employees Motorola mobiles at less than market value or Hindustan Lever giving its products(Surf, Knorr soup) at lesser than market value.

·                                 Amount spent on training of employee including the boarding and lodging expenses of the employees on such a training.

·                                 Telephone and mobile phone facility.

·                                 Computer or laptop whether to use at home or office (ownership is not transferred to employee)

·                                 Loan given at nil or concessional rate of interest by the employer provided the aggregate amount of loan does not exceed 20,000.

·                                 Health club, sports facility.

On September 08, 2015 by www.taxexcel.net

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