Download Automated Master of Form 16 for the Financial Year 2014-15 [ This Excel Utility can prepare at a time 100 employees Form 16 for the FY 2014-15]

How to Save Tax on Salary Income? This question is popping up in the mind of every salaried employee. Since March is fast approaching, HR department has started buzzing employees about the tax savings investment he has made.

Tax Savings investments have to be made before 31^st March to claim the tax benefit and maximize savings. But before rushing to invest, one needs to and plan out his investment keeping in mind the changes made in the Budget 2014 to maximize his tax savings.

Tax Savings does not necessarily means acknowledging various sections of Income Tax Act, few sections along with your salary slip can very well accomplish the peculiar task of tax planning for you. In this article we will discuss the additional tax benefit and marginal reliefs offered by budget 2014.

The Tax Slab has already Raised up to Rs. 2.5 Lakh by the Budget 2014 and the deduction limit of U/s 80C has also raised up to Rs.1.5 Lakh.

Enhanced limit of Section 80C

Budget 2014 has augmented the limit of section 80C from Rs.1 lakh to Rs.1.5 lakhs. This enhanced limit gives additional tax relief of Rs.15,450 for the person falling in the tax slab of 30%, similarly Rs.10,300 to person falling in the tax bracket of 20% and Rs.5,150 to the person falling in the lowest tax bracket of 10%.

Maximize tax savings from increased limit of section 80C:

Home Loan Benefit

Budget 2014 has also enhanced the limit of deduction for Home Loan Principal u/s 80C and Home Loan Interest u/s 24.

Tax Benefits on Home Loan – Principal Repayment

Principal Repayment of the Home Loan taken from Financial Institutions is eligible for deductions u/s 80C but restricted to the maximum of Rs.1.5 lakhs per annum. Remember this limit of Rs.1.5 lakhs includes all deduction u/s 80C i.e. PPF, Tax Savings Bank FD, NSC, EPF, LIC etc.

Reintroduce Kissan Vikas Patra ( K.V.P.) :-

Amount invested in Kissan Vikas Patra (KVP) doubles in 100 months at the present rates. The certificates can be purchased by an adult for himself or on behalf of a minor or to a minor. It can also be purchased jointly by two adults.

A certificate may be transferred from one person to another with consent in writing to an officer of the Post Office or Bank. Under the scheme the transferee has to be eligible to purchase the certificate. The certificate may be prematurely encashed any time after two years and a half from the date of purchase, in the event of death of holder or any holder in case of joint holder, on order of court of Law and forfeiture by a pledge. 

The Government has no proposal to separately tax benefit on KVP. However, income on KVP would be taxable as per existing provisions. Investor will have to undergo Know Your Customer (KYC) modalities at the time of application. In the case of transfer of KVP from one customer to another, a request has to be made in writing to an officer of the Post Office or Bank and the transferee has to be eligible to purchase KVP certification in the first instance. 

Kissan Vikas Patra (KYP) has been reintroduced and is available in Post Offices. In future, KVP will be available in banks which are/will be authorized for handling small savings schemes.

Download Automated Form 16 Part B for the Financial Year 2014-15 [ This Excel Utility can prepare at a time 100 employees Form 16 Part B]

Tax Benefits on Home Loan – Interest Component

Threshold limit of deduction of Interest on the home loan u/s 24 is also increased in budget 2014 by Rs.50,000. Now you can get maximum of Rs.2 lakhs deduction on the accrued interest on Home Loan per annum.

Remember section 24 is applicable for self-occupied house only i.e. capping limit of Rs.2 lakh applies when you hold a self-occupied house. In case the house is not self-occupied than you can claim the actual amount of interest paid which can even exceed Rs.2 lakhs.

Contribution towards Provident Funds

Section 80C comprises for various instruments but contributions towards Provident Fund i.e. Employees Provident Fund or Public Provident Fund are best amongst them. Being EEE scheme (Exempt, Exempt, Exempt) these provide best solution for accumulating corpus for retirement. Point to note is that provident fund is a long term investment scheme, so opt this scheme considering it for post-retirement life.

National Savings Certificate (NSC) and Tax Savings Bank FD

Both National Savings Certificate (NSC) and Tax Savings Bank FD offers same rate of interest and same tax treatment. The only things that makes NSC more lucrative than tax savings bank FD is the method of interest calculation. The interest is compounded annually in case of tax savings bank FD while the interest is compounded half-yearly in case of NSC.

Equity Linked Savings Scheme

ELSS is also enjoys EEE tax treatment as EPF and PPF but it comes with a high degree of risk. Since ELSS is exposed to market the risk involved is similar to any other mutual fund but the quantum is increased due to lock-in period of 3 years.

You can choose any of the four for maximize your tax savings. No need to see any other investment scheme u/s 80C.

Continuation of Section 87A

Last year budget has introduced tax credit system under which person having gross salary up to Rs.5,00,000 can get additional tax rebate of Rs.2,000 from the income tax payable. This year budget did not drop this section and thus letting taxpayer to get benefitted this year also.

Click to download All in One TDS on Salary for Govt and Non-Govt employees for the Financial Year 2014-15

On March 18, 2015 by www.taxexcel.net

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Free download Automated Income Tax Form 16 Part B for the Financial Year 2014-15 [ This Excel Based Software can prepare at a time 100 employees Form 16 Part B for the Financial Year 2014-15]

What is Form 16?

Every year your employer will issue this document. It is a certificate under section 203 of the Income-Tax Act, 1961, which gives information on the tax deducted at source (TDS) from income chargeable under the head “salaries”. Simply put, it gives details of the tax deducted by the employer. If you have not received your Form 16, you can use the worksheet that the income tax (I-T) department provides to calculate and declare the amount.

Form 16 is useful in filing your income tax return (ITR). What’s inside it? Understanding the content of Form 16 helps you file your I-T returns; you may be able to do it yourself, without help from a chartered accountant or a financial planner, especially if your income comes entirely from your salary, and you have no other source of income.

Click here to download Automatic Form 16 Part B [ Prepare at a time 50 employees Form 16 Part B for the Financial Year 2014-15]

Form 16 has two sections—part A and part B. Part A consists of your personal details such as your name and address, your employer’s name and address, Permanent Account Number (PAN) of both, the employer’s Tax Deduction Account Number (TAN), and others.

These details help the I-T department track the flow of money from your and your employer’s accounts. Part A also gives details such as the assessment year (AY)—the year in which your tax liability is calculated for the income earned the previous year. For example, for income earned between 1 April 2013 and 31 March 2014, AY will be 2014-15. This year’s Form 16 will show 2014-15. This portion of the form also gives details of your period of employment with the current employer. For instance, if in the last financial year, you have worked from 1 April 2013 to 31 March 2014, it will be mentioned in the form. Next, it gives a summary of the TDS by the employer on behalf of the employee.

Click here to Download Master of Form 16 Part A&B For Financial Year 2014-15 [ This Excel Based Software can prepare at a time 100 employees Form 16 Part A&B] 

This is the amount that the employer deducts from your salary as tax periodically and credits it to the I-T department. For instance, if every month your employer deducts Rs.3,000 as tax from your salary, it will be shown in the Form 16 as deposited by your employer to the government. The summary space will be divided based on the periodicity of how your employer credits the tax to the I-T department. Part B of Form 16 is the one that gives most of the details that you need to file I-T return, such as salary paid, other income, tax deducted, and more.

Click here to download Automatic Form 16 Part B with Form 12 BA [ This Excel Based Software can prepare at a time 50 employees Form 16 Part B with 12 BA for the Financial Year 2014-15 with all Tax Section]

Your gross income is mentioned first. Those who need to pay professional tax should note that the tax is not considered on the gross income. Next, deductions are mentioned.

These include those under sections 80C, 80CCC and 80CCD (contributions towards Public Provident Fund, life insurance policies, pension, among others). Remember, the aggregate amount deductible under these three sections should not exceed Rs.1.5 lakh.

Then come the deductions under other sections such as 80D (health insurance premium), 80E (interest on education loan), 80G (donations), and others. The total deductions are reduced from the gross income to arrive at the taxable income.

Tax is calculated on this amount based on your tax slab. How to use it? Form 16 is one of the documents that you need to keep handy before or while filing your ITR, which has to be done till 31 July. While all deduction related details are mentioned in Form 16.

Click here to download All in One Master of Form 16 Part B for Financial Year 2014-15 [This Excel Based Software can prepare at a time 50 employees Form 16 Part B with Individual Salary Sheet + Individual Salary Structure]

On November 15, 2014 by www.taxexcel.net

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Click here to Download Master of Form 16 Part B ( 100 employees) for the Govt & Non Govt Employees for the Assessment Year 2015-16 ( This Excel Utility can prepare at a time 100 employees Tax Compute + Form 16 Part B )

As per the Income Tax Act and further amended Income Tax Department's time to time Notification and amended Section Under Section 80C is given below:-

The total limit under this section is Rs 1.5 lakh from the financial Year 2014-15. Included under this heading are many small savings schemes like NSC, PPF and other pension plans. Payment of life insurance premiums and investment in specified government infrastructure bonds are also eligible for deduction under Section 80C Max Limit Rs. 1,50,000/-

Most of the Income Tax payee try to save tax by saving under Section 80C of the Income Tax Act.  However, it is important to know the Section in to so that one can make best use of the options available for exemption under income tax Act.   One important point to note here is that one can not only save tax by undertaking the specified investments, but some expenditure which you normally incur can also give you the tax exemptions.

Besides these investments, the payments towards the principal amount of your home loan are also eligible for an income deduction. Education expense of children is increasing by the day. Under this section, there is provision that makes payments towards the education fees for children eligible for an income deduction

Sec 80C of the Income Tax Act is the section that deals with these tax breaks. It states that qualifying investments, up to a maximum of Rs. 1.5 Lakh, are deductible from your income. This means that your income gets reduced by this investment amount (up to Rs. 1.5 Lakh), and you end up paying no tax on it at all!

This benefit is available to everyone, irrespective of their income levels. Thus, if you are in the highest tax bracket of 30%, and you invest the full Rs. 1 Lakh, you save tax of Rs. 30,000. Isn’t this great? So, let’s understand the qualifying investments first.

Qualifying Investments

Provident Fund (PF) & Voluntary Provident Fund (VPF)and (PF) is automatically deducted from your salary. Both you and your employer contribute to it. While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF). Current rate of interest is 8.5% per annum (p.a.) and is tax-free.

Public Provident Fund (PPF): Among all the assured returns small saving schemes, Public Provident Fund (PPF) is one of the best. Current rate of interest is 8% tax-free and the normal maturity period is 15 years. Minimum amount of contribution is Rs 500 and maximum is Rs 1,50,000/-. A point worth noting is that interest rate is assured but not fixed. Interest on PPF  is proposed to increase to 8.60% and Investment Limit is also expected to increase to Rs. 1,50,000/- very soon.

Life Insurance Premiums: Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. Please note that life insurance premium paid by you for your parents (father / mother / both) or your in-laws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) – even insurance bought from private players can be considered here.

Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C.

Home Loan Principal Repayment: The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.The principal component of the EMI qualifies for deduction under Sec 80C. Even the interest component can save you significant income tax – but that would be under Section 24 of the Income Tax Act. Please read “Income Tax (IT) Benefits of a Home Loan / Housing Loan / Mortgage”, which presents a full analysis of how you can save income tax through a home loan.

Stamp Duty and Registration Charges for a home: The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.

National Savings Certificate (NSC): National Savings Certificate (NSC) is a 6-Yr small savings instrument eligible for section 80C tax benefit. Rate of interest is eight per cent compounded half-yearly, i.e., the effective annual rate of interest is 8.16%. If you invest Rs 1,000, it becomes Rs 1601 after six years. The interest accrued every year is liable to tax (i.e., to be included in your taxable income) but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.

Pension Funds – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it maeans that the total deduction available for 80CCC and 80C is Rs. 1 Lakh.This also means that your investment in pension funds upto Rs. 1 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed Rs. 1 Lakh.

5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.

Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. Current rate of interest is 9% per annum payable quarterly. Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax.

5-Yr post office time deposit (POTD) scheme: POTDs are similar to bank fixed deposits. Although available for varying time duration like one year, two year, three year and five year, only 5-Yr post-office time deposit (POTD) – which currently offers 7.5 per cent rate of interest –qualifies for tax saving under section 80C. Effective rate works out to be 7.71% per annum (p.a.) as the rate of interest is compounded quarterly but paid annually. The Interest is entirely taxable.

NABARD rural bonds: There are two types of Bonds issued by NABARD (National Bank for Agriculture and Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB). Out of these two, only NABARD Rural Bonds qualify under section 80C.

Unit linked Insurance Plan : ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments.They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term.

Children Education Fees :- children’s education expense (for which you need receipts), that can be claimed as deductions under Sec 80C max Rs. 1,50,000/- p.a.

Kissan Vikas Patra ( K.V.P.):- Newly introduce this Kissan Vikas Patra by the Finance Budget 2014-15

Click here to Download Master of Form 16 Part B ( 100 employees) for the Govt & Non Govt Employees for the Assessment Year 2015-16 ( This Excel Utility can prepare at a time 100 employees Tax Compute + Form 16 Part B )

    

On August 14, 2014 by www.taxexcel.net

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