What is HRA (House Rent Allowance ) :-
House Rent Allowance (HRA) is best tax saving tools available to employees. With these you can save upto 50% of your salary if you reside in Metro (40% of your salary if you reside in non-metro).
Showing posts with label How to calculate HRA Exemption U/s 10(13A). Show all posts
Showing posts with label How to calculate HRA Exemption U/s 10(13A). Show all posts
Tuesday 7 June 2016
Saturday 23 January 2016
As per the new Finance Budget 2015-16 the some Income Tax Section limit has raised.Given below the all of Income Tax Deduction Under Chapter VI A including the 80C as per the Finance Budget 2015-16.
Here is a unique Income Tax Preparation Excel Based Software which can prepare at a time Tax Compute sheet + Individual Salary Structure + Automatic House Rent Exemption Calculation + Automated Form 16 Part A&B and Form 16 Pat B for the all of State Govt Employees for Financial Year 2015-16.[Click here to Download the Excel Utility]
DEDUCTIONS UNDER CHAPTER VI A FOR F.Y.2015-16
| |||
No.
|
Section
|
Particulars
|
Deduction Limit
|
1
|
80C
|
Deduction in respect of Investment in specifies assets
|
150000/-
|
2
|
80CCC
|
Deduction in respect of contribution to certain pension funds
|
150000/-
|
3
|
80CCD
|
Deduction in respect of contribution to pension scheme of Central Govt.
|
150000/-
|
4
|
80CCE
|
Limit on deduction under sections 80C,80CCC,80CCD(1)
|
150000/-
|
5
|
80D
|
Deduction in respect of medical insurance premium
|
Individual:25000/-
Senior Citizen:30000/-
|
6
|
80DD
|
Deduction in respect of maintenance including medical treatment of a
disabled person
|
Severe Disability:100000/-
Others:60000/-
|
7
|
80DDB
|
Deduction in respect of medical treatment
|
Individual:60000/-
Senior Citizen:80000/-
|
8
|
80E
|
Deduction in respect of interest on loan taken for higher education
|
Actual Interest
|
9
|
80EE
|
Additional deduction in respect of interest on loan taken for residential
house property
|
Rs. 100000/-
|
10
|
80G
|
Deduction in respect of Donations to Certain Funds, Charitable Institutions
|
50% or 100%
|
11
|
80GG
|
Deduction in respect of Rent paid
|
Lower of the following:
i)Actual Rent paid-10%
of the total income
ii)25% of total income
iii)2000 per month
|
12
|
80U
|
Deductions in the case of a person with disability
|
Severe Disability:125000/-
Others:75000/-
|
13
|
80TTA
|
Deduction in respect of interest on deposits in savings account
|
Rs.10000
|
14
|
87A
|
Tax Rebate Rs. 2000/- who's taxable income below Rs. 5 Lakh
|
Rs.2000/-
|
Wednesday 16 December 2015
As per the new Finance Budget 2015-16 the some Income Tax Section limit has raised.Given below the all of Income Tax Deduction Under Chapter VI A including the 80C as per the Finance Budget 2015-16.
Here is a unique Income Tax Preparation Excel Based Software which can prepare at a time Tax Compute sheet + Individual Salary Structure + Automatic House Rent Exemption Calculation + Automated Form 16 Part A&B and Form 16 Pat B for the all of State Govt Employees for Financial Year 2015-16.[Click here to Download the Excel Utility]
DEDUCTIONS UNDER CHAPTER VI A FOR F.Y.2015-16
| |||
No.
|
Section
|
Particulars
|
Deduction Limit
|
1
|
80C
|
Deduction in respect of Investment in specifies assets
|
150000/-
|
2
|
80CCC
|
Deduction in respect of contribution to certain pension funds
|
150000/-
|
3
|
80CCD
|
Deduction in respect of contribution to pension scheme of Central Govt.
|
150000/-
|
4
|
80CCE
|
Limit on deduction under sections 80C,80CCC,80CCD(1)
|
150000/-
|
5
|
80D
|
Deduction in respect of medical insurance premium
|
Individual:25000/-
Senior Citizen:30000/-
|
6
|
80DD
|
Deduction in respect of maintenance including medical treatment of a
disabled person
|
Severe Disability:100000/-
Others:60000/-
|
7
|
80DDB
|
Deduction in respect of medical treatment
|
Individual:60000/-
Senior Citizen:80000/-
|
8
|
80E
|
Deduction in respect of interest on loan taken for higher education
|
Actual Interest
|
9
|
80EE
|
Additional deduction in respect of interest on loan taken for residential
house property
|
Rs. 100000/-
|
10
|
80G
|
Deduction in respect of Donations to Certain Funds, Charitable Institutions
|
50% or 100%
|
11
|
80GG
|
Deduction in respect of Rent paid
|
Lower of the following:
i)Actual Rent paid-10%
of the total income
ii)25% of total income
iii)2000 per month
|
12
|
80U
|
Deductions in the case of a person with disability
|
Severe Disability:125000/-
Others:75000/-
|
13
|
80TTA
|
Deduction in respect of interest on deposits in savings account
|
Rs.10000
|
14
|
87A
|
Tax Rebate Rs. 2000/- who's taxable income below Rs. 5 Lakh
|
Rs.2000/-
|
Sunday 11 January 2015
HOUSE RENT ALLOWANCE Sec.10 (13A)
Objective: To claim exemption for House Rent Allowance under Sec.10 (13A).
Definition as per Income Tax Act, 1961:
any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee, to such extent as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations.]
[Explanation.—for the removal of doubts, it is hereby declared that nothing contained in this clause shall apply in a case where—
(a) The residential accommodation occupied by the assessee is owned by him; or
(b) The assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him]
Rule: Under Sec. 10(13A), an employee who is in receipt of House Rent Allowance (HRA) can claim exemption, if he does not live in his own house, and pays rent in excess of 10% of his salary for his residential accommodation.
The assesse is not entitled to receive HRA in the following cases:
a) When the assesse stays in his own house, i.e. the property is in Assesse name.
b) When the assesse does not pay any rent or incur any expenditure towards rent,
c) When the assesse rent paid is less than 10% of salary.
1.The exemption shall be calculated on the basis of where the accommodation is situated.
2.If place of employment is the same for the whole year, then exemption shall be calculated for the whole year.
3.If there is a change in place during the previous year, then it shall be calculated on monthly basis.
4.Exemption should be calculated in respect of the period during which rental accommodation is occupied by the employee during the previous year.
Computation of taxable HRA:
Step 1: - Salary= Basic Salary + DA considered for Retirement Benefits + Commission forming part of Salary as a Fixed Percentage of Turnover of the Employee.
Step 2: - Taxable HRA:
Amount received during the financial year towards HRA
Less: Exemption u/s 10(13A) is the least of the following
Actual amount of HRA received
50% (for Chennai, Mumbai, Kolkata and Delhi)/40% (for other places) of the Salary for the relevant period
Rent paid Less 10% of Salary for the relevant period.
Click here to Download the HRA Calculator in Excel
Saturday 6 December 2014
Calculate and Prepare at a time your Income Tax Calculation with Tax Compute sheet + Automated HRA Calculation + Arrears Relief Calculation + Form 10E + Form 16 Part A&B and Part B for the Financial Year 2014-15. This Excel Based Software can use all State Govt employees for preparation of Income Tax as per the Finance Budget 2014-15.
All are well known that the Income Tax Slab has already changed from 2 Lakh to 2.5 Lakh and the Section 80C has also raised up to Rs. 1.5 Lakh.
Feature of this Excel Utility:-- Automated Calculate Income Tax liability as per the new tax slab FY 2014-15
- Automated Calculate House Rent Exemption Calculation U/s 10(13A)
- Automated Calculate Arrears Relief Calculation with Form 10E
- Automated Form 16 Part A&B for FY 2014-15
- Automated Form 16 Part B for FY 2014-15
- Automatic Convert the Amount in to the In-Words
- All Income Tax Section have in this Section as per New Finance Budget 2014
Download this All in One TDS on Salary for all State Govt employees for FY 2014-15
Thursday 20 November 2014
As you are aware, the
Union Budget for FY 2014-15 was tabled in the Parliament by the Finance
Minister of India
on 10-Jul-2014. There are some changes to the computation of tax on salary
which payroll managers need to consider for FY 2014-15.
1. Changes in tax rates
The
revised tax rates for salaried employees (aged 60 years and below) for FY
2014-15 are as follows.
Total Income for the Year in Rs.
|
Tax Rate in %
|
Up to
2,50,000
|
Nil
|
2,50,001
to 5,00,000
|
10
|
5,00,001
to 10,00,000
|
20
|
Above
10,00,000
|
30
|
The
revised tax rates for salaried employees (aged above 60 years but below 80
years) for FY 2014-15 are as follows.
Total Income for the Year in Rs.
|
Tax Rate in %
|
Up to
3,00,000
|
Nil
|
3,00,001
to 5,00,000
|
10
|
5,00,001
to 10,00,000
|
20
|
Above
10,00,000
|
30
|
2. Increase in deduction under Section 80C [Click to view total list of U/s 80C]
The
deduction under 80C (Life insurance premium, PPF, investment in National
Savings Certificate, interest from notified bank deposits, principal repayment
on housing loan, etc.) was restricted to Rs.1 lakh in 2013-14. The same has
been increased to Rs. 1.5 lakh for 2014-15.
Consequent
to the change in section 80C, section 80CCE has been amended so as to raise the limit of aggregate deduction under sections 80C, 80CCC and 80CCD from Rs. 1
lakh to Rs.1.5 lakh.
3. Increase in deduction under Section 24 – Interest on housing loan[View Section 24B what says as tax Rules)
The
tax deduction on housing loan interest payment (for a self occupied property)
was restricted to Rs. 1.5 lakh per annum in FY 2013-14. For the year 2014-15,
the limit has been increased to Rs. 2 lakh.
There
is no reference to Section 80EE in the Finance Bill for FY 2014-15. Hence, the
carry forward of unutilized tax deduction for first time owners of residential
property, if applicable, is available for FY 2014-15.
Note:
1. The Education Cess stays at 3%.
2. In case the total taxable income goes beyond Rs. 1 crore in the year, a surcharge of 10% (subject to marginal relief) is to be deducted – as it was in FY 2013-14.
1. The Education Cess stays at 3%.
2. In case the total taxable income goes beyond Rs. 1 crore in the year, a surcharge of 10% (subject to marginal relief) is to be deducted – as it was in FY 2013-14.
What about the tax credit of up to Rs. 2,000?[View Section 87A]
We
have received queries from payroll managers regarding the availability of Rs.
2,000 tax credit in FY 2014-15. The Financial Bill tabled in the Parliament
does not provide for the removal of tax credit under Section 87A. Hence, the
tax credit of Rs. 2,000 is available for FY 2014-15 as long as the total income
does not exceed Rs. 5 lakh for the year.
Wednesday 29 October 2014
Download HRA Calculator with Income Tax Calculator for the Financial Year 2014-15
Click above to Download HRA Calculator U/s 10(13A)
The Central Board of Direct Taxes has now made it mandatory for employees to submit PAN of the landlord to the employer if the annual rent exceeds Rs. 1,00,000 per annum and such an employee is claiming House rent exemption (HRA) under section 10 (13A) of Income Tax Act.
Snapshot of HRA Calculator
HRA exemption of over Rs 8,333 a month will need the landlord`s PAN card details as per the new circular issued by Central Board of Direct Taxes (CBDT). What does the new circular mean?
As per new circular of CBDT vide its Circlular No. 08/2013 F.No. 275/192/2013-IT(B) dated 10.10.2013 if you are a salaried and claiming HRA (House Rent Allowance exemption and the rent paid by you is more than Rs.1 Lakh per year then it is compulsory to provide PAN (Permanent Account Number) of your Landlord. Earlier the limit was capped Rs.15,000 per month as against the current limit of Rs.8,333 per month.
Can the new CBDT circular really tighten its grip around tax evaders?
This move has been taken by CBDT to consider those who are living in their own houses and claiming benefits of HRA. It’ll also bring those landlords under income tax net who have multiple tenants but don’t declare his/her income correctly.
The new law will be troublesome for the people whose landlords are reluctant to provide pan card details. How can these people find an alternative?
In case a landlord doesn’t have a PAN, then a declaration needs to be filed by the employee by declaring the name, address & details of landlord. It should be duly signed by landlord. In case a landlord’s rental income is assessed in Income Tax then he’ll not refuse to provide PAN. But in case he wants to evade tax by not giving PAN that cannot be allowed as per Income Tax Act. One has following options:a) Provide PANb) Provide Declarationc) Pay Rent but do not claim exemptiond) Find out a new landlord who provides PAN
There might be cases where employees pay their rent in cash and landlord refuses to provide any rent receipts. In order to avail tax benefits, employees prepare rent receipts themselves and do forge signatures. Also there might be cases where employees actually do not pay any rent but still prepares rent receipts. These all are covered under forgery cases and offences under giving false evidence and fabricating false evidence of IPC (Section 191 & 192). As per judgement by Delhi High Court in such case, an employer can also dismiss the employee for forging the rent receipts.
Even if an employee pays rent below Rs. 8,333 per month, he/she has to produce the rent receipts for availing deduction under HRA. In the absence of such receipts what can be done?
PAN of landlord is not necessary if assessee is paying rent below Rs.8,333/- per month. However, in that case it is always recommended that rent is paid either by cheque or bank transfer which will be a record for the assessee. Also, in case the Assessing Officer demands proofs, bank entries will prove to be a better substitute than rent receipts.
Those people who are living in a rented accommodation but paying pre-EMI for the soon-to-be possession of their new home, how can they calculate the exemption?
Those who have booked house and have taken home loans from various financial institution must be paying monthly EMI (Equated Monthly Instalments) to their respective financial institutions. They’ll get the deduction as per the normal category which is:a) HRA Received) Rent paid Less 10% of Salary) 40% of salary (50% for Metro Cities)
Click above to Download HRA Calculator U/s 10(13A)
The Central Board of Direct Taxes has now made it mandatory for employees to submit PAN of the landlord to the employer if the annual rent exceeds Rs. 1,00,000 per annum and such an employee is claiming House rent exemption (HRA) under section 10 (13A) of Income Tax Act.
Snapshot of HRA Calculator
Snapshot of HRA Calculation ProcessHRA exemption of over Rs 8,333 a month will need the landlord`s PAN card details as per the new circular issued by Central Board of Direct Taxes (CBDT). What does the new circular mean?
As per new circular of CBDT vide its Circlular No. 08/2013 F.No. 275/192/2013-IT(B) dated 10.10.2013 if you are a salaried and claiming HRA (House Rent Allowance exemption and the rent paid by you is more than Rs.1 Lakh per year then it is compulsory to provide PAN (Permanent Account Number) of your Landlord. Earlier the limit was capped Rs.15,000 per month as against the current limit of Rs.8,333 per month.
Can the new CBDT circular really tighten its grip around tax evaders?
This move has been taken by CBDT to consider those who are living in their own houses and claiming benefits of HRA. It’ll also bring those landlords under income tax net who have multiple tenants but don’t declare his/her income correctly.
The new law will be troublesome for the people whose landlords are reluctant to provide pan card details. How can these people find an alternative?
In case a landlord doesn’t have a PAN, then a declaration needs to be filed by the employee by declaring the name, address & details of landlord. It should be duly signed by landlord. In case a landlord’s rental income is assessed in Income Tax then he’ll not refuse to provide PAN. But in case he wants to evade tax by not giving PAN that cannot be allowed as per Income Tax Act. One has following options:a) Provide PANb) Provide Declarationc) Pay Rent but do not claim exemptiond) Find out a new landlord who provides PAN
There might be cases where employees pay their rent in cash and landlord refuses to provide any rent receipts. In order to avail tax benefits, employees prepare rent receipts themselves and do forge signatures. Also there might be cases where employees actually do not pay any rent but still prepares rent receipts. These all are covered under forgery cases and offences under giving false evidence and fabricating false evidence of IPC (Section 191 & 192). As per judgement by Delhi High Court in such case, an employer can also dismiss the employee for forging the rent receipts.
Even if an employee pays rent below Rs. 8,333 per month, he/she has to produce the rent receipts for availing deduction under HRA. In the absence of such receipts what can be done?
PAN of landlord is not necessary if assessee is paying rent below Rs.8,333/- per month. However, in that case it is always recommended that rent is paid either by cheque or bank transfer which will be a record for the assessee. Also, in case the Assessing Officer demands proofs, bank entries will prove to be a better substitute than rent receipts.
Those people who are living in a rented accommodation but paying pre-EMI for the soon-to-be possession of their new home, how can they calculate the exemption?
Those who have booked house and have taken home loans from various financial institution must be paying monthly EMI (Equated Monthly Instalments) to their respective financial institutions. They’ll get the deduction as per the normal category which is:a) HRA Received) Rent paid Less 10% of Salary) 40% of salary (50% for Metro Cities)
Click below HRA Calculator
Download Calculator
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