After budget 2017, there are many doubts in respect of changes in individual taxation which affects the individual tax liability. In news & social media they are writing that there is no tax on annual income of Rs. 3.5 Lakh. People are taking that tax slab has changed from Rs. 3.5 Lakh to 5 Lakh.
Showing posts with label H.R.A.Calculator. Show all posts
Showing posts with label H.R.A.Calculator. Show all posts
Friday 1 December 2017
Saturday 12 August 2017
Deduction under section 80C for A.Y.2018-19. We know that you are very much interested to know the deduction from gross total income to calculate net income tax. As we will discuss only here deduction under section 80C in detail for the Financial Year 2017-18 as per the Finance Budget 2017-18
Thursday 4 May 2017
Click to download All in One TDS on Salary for Govt & Non-Govt employees for the Financial Year 2017-18 & Assessment Year 2018-19 with all amended Tax Section and Slab as per Budget 2017-18 [ This Excel Utility can prepare at a time Tax Compute Sheet + Individual Salary Sheet + Automatic Arrears Relief Calculation + Form 10E + HRA Calculation + Form 16 Part A&B and Part B for F.Y 2017-18 & A.Y. 2018-19]
Finance Act 2013, has introduced the new section, namely Section 87A. This newly inserted section gives rebate up to a maximum of Rs. 2500/- to the assessee having Net Total Income Less than Rs. 3,50,000/-(Rs. Three lakes Fifty Thousand ). The rebate under this section is available to the resident Individuals for the A.Y. 2018-19. ( As per the Finance Budget 2017-18)
Finance Act 2013, has introduced the new section, namely Section 87A. This newly inserted section gives rebate up to a maximum of Rs. 2500/- to the assessee having Net Total Income Less than Rs. 3,50,000/-(Rs. Three lakes Fifty Thousand ). The rebate under this section is available to the resident Individuals for the A.Y. 2018-19. ( As per the Finance Budget 2017-18)
“87A An assessee, being an individual resident in India, whose total income does not exceed Three Lacs & Fifty Thousand rupees(3.5 Lakh), shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deduction under this chapter i.e. Chapter VIA) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred percent of income-tax or an amount of two thousand & Five Hundred (2.500/-) rupees, whichever is less.”
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Conditions required to be fulfilled:
· The rebate is allowed only to the individual assesses (not to HUF/Firm/AOP/BOI)
· The individual should be resident in India
· Total income should be up to or less than Rs. 3,50,000/-. Total Income here means Income under all heads of Income (Salary, House property, Business & Profession, Capital Gain and Other sources) after deducting the deduction under chapter VI i.e. deduction from 80C to 80U.
· No deduction is available to Super Senior Citizens whose age is more than 80 years.
Quantum of Rebate:
The rebate will be the lower of
· 100% of the tax payable on Total Income; or
· Rs. 2,500/-
Click to download Automatic Master of Form 16 Part A&B and Part B for the Financial Year 2017-18 & A.Y. 2018-19[ This Excel utility can prepare One by One Form 16 Part A&B and Part B for F.Y.2017-18 & A.Y. 2018-19 ]
Thursday 24 November 2016
Experts are divided over how taxpayers can claim the additional tax deduction for NPS contributions announced in last year's Budget. Some tax experts claim that employees covered by NPS can claim the deduction for their mandatory contributions under the new Sec 80CCD(1b). "An employee's mandatory contribution to NPS the is eligible for deduction under Section 80CCD (1b).
This means taxpayers covered by NPS will not have to make additional investments to claim the new deduction. Other tax-saving investments and expenses, such as home loan principal, children's tuition fees, life insurance premium, NSCs and ELSS funds, can be claimed under Section 80C while the mandatory contribution to NPS can be claimed under Section 80CCD (1b).
If you have contributed Rs 50,000 or more towards NPS via salary deductions, maximise the tax benefits under both Section 80C and Section 80CCD(1b). Claim the full Rs 50,000 under the new section first and then adjust the residual to achieve total tax deduction of Rs 2 lakh.
Another interpretation says that the mandatory contribution can be claimed under the new section only if it exceeds the Rs 1.5 lakh limit under Section 80CCD(1). High-income earners covered by NPS stand to benefit from this interpretation. If the taxpayer contributes more than Rs 1.5 lakh to the NPS in a year, the amount in excess of Rs 1.5 lakh can be treated as the voluntary investment and claimed as a deduction under the new Section 80CCD(1b).
Download Automatic Income Tax Preparation Excel Based Software All in One for Govt & Non-Govt Employees for F.Y.2016-17.
[This Excel utility can prepare at a time your Individual Tax Compute Sheet + Individual Salary Sheet + Individual Salary Structure for both of Govt & Non-Govt employees Salary Pattern + Automatic Arrears Relief Calculation U/s 89(1) with Form 10E + Automatic H.R.A. Calculation + Automated Form 16 Part A&B and Form 16 Part B for F.Y.2016-17 with all amended Income Tax Section by the Finance Bill 2016-17]
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Salary Structure
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Tax Compute Sheet
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Arrears Relief Calculation with Form 10E
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Form 16 Part B
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"Taxpayers have the flexibility to choose the sub-sections under which they want to claim the deduction. All they have to specify is that the deduction claimed is for their own contributions and there is no duplication in these claims.
However, others believe that the mandatory contribution to retirement savings made by an individual will not make him eligible for the new deduction. For that, the taxpayer must make an additional 'voluntary' or 'self' contribution to the NPS.
Income tax laws allow the tax deduction for contributions to NPS under three sections. First, the employee's contribution under Section 80CCD(1). This deduction is under the overall Rs 1.5 lakh limit under Section 80C. Second, up to 10% of the basic salary put into the NPS by the company on behalf of the employee is deductible without any limit. The third is the new Section 80CCD(1B) under which a taxpayer can claim the deduction for the voluntary contribution of up to Rs 50,000.
The new tax return forms have done little to dispel the confusion. While the deductions under different sub-sections of 80CCD have to be shown separately in the forms, there is no clarity regarding whether 'employee contributions' can be treated as 'self-contribution'. Tax experts say the department should clarify how this deduction can be availed of.
Tuesday 15 November 2016
Tax saving and Tax Planning are important aspects for the salaried person. As it allows you to save more money. If as a salaried person you are earning Rs 10 Lac per year, you have very little scope to avoid tax. At the most, you can invest in tax saving scheme and get a tax benefit of few thousand rupees.
In any case, you have to pay income taxes, but with little tax planning, you can optimize your tax outgo. So, here is Tax Saving Tips for a Salaried person to maximize tax saving.
Download Automated All in One for Govt& Non-Govt employees for F.Y.2016-17.
Feature of this Excel Utility :-
- Automatic Prepare Tax Compute Sheet
- Individual Salary Structure for Govt & Non-Govt Employees as per Govt & Non-Govt Employees Salary Pattern
- Automatic Individual Salary Sheet
- Automatic House Rent Exemption Calculation U/s 10(13A)
- Automatic Arrears Relief Calculation with Form 10E from F.Y.2001-02 to up to F.Y.2016-17
- Automated Form 16 Part A and B for F.Y. 2016-17
- Automated Form 16 Part B for F.Y. 2016-17
- All the updated Income Tax Section have in this Excel Utility as per Finance Bill 2016-17
How Salaried Person can maximize tax saving?
Income Tax Exemption for Salaried Person
The first thing you should do as a salaried person is to take maximum advantage of available tax exempted allowance/reimbursements. In order to take this benefit, you must be aware of such allowances. So, here is a detail of all applicable tax exempted allowances.
House Rent Allowance U/s 10(13A) [Download Automatic H.R.A. Calculator]
Most of the employer gives a benefit of HRA to their employees. Under House Rent allowance a minimum of a following is exempted from the income tax.
· Actual HRA
· Actual Rent Paid minus 10% of salary
· 50% of Basic for Metro City or 40% of Basic for Non-Metro City
House Rent Allowance U/s 80GG ( Who have not get H.R.A. from employer):-
Max limit Rs. 5000/- P.M. or 60 thousand P.A. from the F.Y.2016-17
Leave Travel Allowance
LTA or Leave Travel Allowance is given by the employer to their employee in order to reimburse the cost incurred on the vacation. This allowance is exempted from income of the salaried people provided employee actually goes on the vacation and produced the valid proof of travel. Two such trips in the block of four years are allowed under LTA. The amount payable should not exceed Economy Air Ticket or First class AC Rail Fare for the shortest distance to a single destination.
Leave Encashment
You must be getting several leaves in the year. In case if you don’t claim these leaves employer gives the option to encash these leaves. The amount received by a salaried person as a leave encashment can be claimed for tax exemption up to certain extent.
Travel and Fuel Reimbursement
Travel and Fuel Reimbursement allowance is also exempted from the tax up to some extent. Let us say If an employer provides you a car for the official purpose and employer also gives you fuel reimbursement you can avail tax exemption. You need to maintain the record that car is used for official purpose only. The maximum amount that can be exempted from tax via this allowance is Rs 2400 per month. If the small car less than 1600 CC is used amount exempted would be Rs 1800 per month.
Uniform Allowance U/s 10
Uniform allowance paid by your employer to you as a part of your salary is fully exempted from the tax. It should be uniform, not a civil dress.
Children Education Allowance U/s 10
Allowance namely children education allowance given by an employer to the salaried person is exempted from the income tax. The amount of exemption is very low it is Rs 1200 per year for maximum two children.
Medical Reimbursement U/s 10
Medical reimbursement is actual amount paid to an employee by an employer on producing bills of medical treatment availed. The maximum tax exemption limit for this medical bill reimbursement is Rs 15000 year.
Transport Allowance U/s 10
If you are getting transport allowance in your salary you can avail tax exemption benefit of the same. Transport allowance is given to meet the expense of traveling between your house and office. A maximum exemption limit for this allowance is Rs 1600 per month for general employee and Rs. 3200/- P.M. for Phy.disable persons.
Income Tax Saving Investment/Deductions
Apart from tax exemption in various allowances salaried person can also make an investment in various tax saving instrument and maximize tax saving. The list of various sections and tax saving investment option is given below.
Section 80 C
Under section 80 C you can make an investment up to 1.5 Lac and avail tax benefit. Some of the best tax saving investment options under 80 C are ELSS, PF,PPF,Sukanya Smariddhi Scheme etc. You can also claim home loan principal and children’s school fees under this section.
Section 80 CCD(2):-
Exemption amount which contributes to the employee’s New Pension Fund by the Employer [ This amount excluded the max Rs 1.5 Lakh U/s 80C
Section 80 CCD(1b):-
Additional amount exemption u/s 80CCD(1B) Max Rs. 50,000/- for New Pension Scheme.[ This amount also exempts out of Max Rs. 1.5 Lakh U/s 80C
Home Loan Interest U/s 24b:-
If you have taken a home loan, you can avail additional benefit up to 2 Lac on the interest component of the home loan under section 24 B.
Home Loan Interest U/s 80EE:-
Max Rs. 1.5 Lakh additional amount can get benefits for Home Loan Interest out of U/s 24B
Section 80 E
If you have taken education loan you can take benefit of income tax exemption on repayment of interest on the education loan. The entire amount paid for the interest on education loan can be claimed under this section.
Section 80 D Health Insurance U/s 80D
Health Insurance premium can bring you additional tax saving of Rs. 25000 per year under section 80 D. it includes health insurance premium payment of self, family, and parents. Along with this payment made for the preventive health checkup up to Rs 5000 can also be claimed as the tax deduction.
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