The deduction is available for (below 60 years old) max  Rs. 25,000 /- to a tax payer of premium paid for Medical insurance of self, spouse and dependent children. If individual or spouse is above 60 years old or more the deduction available is Rs 30,000.

For claiming deduction, it is mandatory that the above payments should be made by any mode other than cash (e.g. cheque, credit card, debit card, etc.)

Download & Prepare AutomatedIncome Tax Form 16 Part B for Financial Year 2016-17 & Ass Year 2017-18 [ This Excel Utility can prepare at a time 100 employees Form 16 Part B]

Section 80D: Deduction for Preventive Health Check-Up

A deduction of Rs. 5000 will be allowed under this section for payment of preventive health check-up of either the individual himself or his family members which include spouse, parents and dependent children.

This deduction is not in addition to the deduction of Rs.25000/30000 stated above but is included in the above deduction.

It is important to note that Rs.5000 is the maximum total deduction allowed. This deduction is not per person but in total. So if a person pays an amount for preventive health check up for himself + spouse + dependent children + parents, the gross total deduction allowed would be Rs. 5000.

For preventive health, check-up payment can be made by any mode (including cash) for claiming the deduction.

Therefore, the maximum deduction available under this entire Section 80D is to the extent of Rs. 60,000.

On April 30, 2017 by www.taxexcel.net

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Click here to Download Automated new amended Format of Form 16 Part B for the Financial Year 2016-17( This Excel Based Software can prepare at a time 50 employees Form 16 Part B)

At a Glance Under Section 80DDB for Medical Treatment as per the Income Tax Rules 11DD:-

The deduction u/s 80DDB is available if the expenses for the medical treatment of specified disease or ailment is incurred by the assessee on himself or on dependent. The specified disease for the purpose of section 80DDB is prescribed in Rule 11DD as under    11DD. (1) For the purposes of section 80DDB, the following shall be the eligible diseases or ailments :   

(i) Neurological Diseases where the disability level has been certified to be of 40% and above,   

(a) Dementia ;    

(b) Dystonia Musculorum Deformans ;    

 (c) Motor Neuron Disease ;    

(d) Ataxia ;    

(e) Chorea ;    

(f) Hemiballismus ;    

(g) Aphasia ;    

(h) Parkinsons Disease ;    

(i) Malignant Cancers;    

(ii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;    

 (iii) Chronic Renal failure ;    

(iv) Hematological disorders :    

(v) Hemophilia ;    

(vi) Thalassaemia.

The amount of deduction allowable under section 80DDB is the expenditure actually incurred or Rs. 40,000/- (Rs. 80,000/- for senior citizen) whichever is lower. 

Click here to download the Automated Form 16 Part A&B F.Y.2016-17( This Utility can prepare at a time 50 employees Form 16 Part A&B)

On April 18, 2017 by www.taxexcel.net

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Leave Travel Concession (LTC) is nothing but a type of salary component where your employer is providing some yearly benefit to travel with your family. Usually, it is mentioned as a yearly component but will be paid on monthly wise. This facility will be availed to only “Family” members. Family meaning for this purpose includes spouse and children. The point to be noted that if you have more than two children then you can claim for up to only two children, not more than that. It also includes brothers, sisters, and parents who are wholly or mainly dependent upon the employee. Below are the few features which you must understand it.

Download Automated Master of Form 16 Part B for F.Y.2016-17 [ This Excel Based Software can prepare at a time 50 employees Form 16 Part B with all latest amended by the Finance Bill 2016-17]

Taxability-

Suppose Mr.X is entitled to the yearly LTC of Rs.50,000 and he joined the company on 1st June 2012 (Financial Year 2012-13) and he took a journey in the month of December 2012. But according to LTC yearly applicability, this journey will be considered for the year 2012 but not for 2013. Because LTC will be considered on yearly base starting from 1st January of a year to 31st December of a year ending. It is not same like Financial Year (1st April to 31st March). Usually, LTC can be availed twice in a block of four calendar years. The current block of years will be as below.

2002-2005 (From 1st January 2002 to 31st December 2005)

2006-2009 (From 1st January 2006 to 31st December 2009)

2010-2013 (From 1st January 2010 to 31st December 2013)

2014-2017 (From 1st January 2014 to 31st December 2017).

As said above you can claim only twice in a block of 4 years period. If you claimed twice in a block then the remaining concession will be taxable income as per your slab. But if not at all claimed on a block or claimed only once then you can carry forward the remaining facility to immediate next block. In such a case excluding the previous carry forward you are again entitled to travel twice in a block of that presiding year. Suppose Mr.X claimed only once in the block of 2010-13 then he can carry forward the remaining one travel to immediate next block i.e. 2014-017. So in the block of 2014-17, he will be totally entitled to 3 travels.

Conditions to allow LTC–

1) If a journey is performed by Air-Amount of economy class air fare of the national carrier by the shortest route or the amount spent, whichever is less.

This is where PSU’s few employees manipulated. Instead of claiming for the shortest route they claimed as per their wish. Which cost Government exchequer a lot.

2) If a journey is performed by Rail-Amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less.

3) If the origin of journey and destination are connected by rail but journey is performed by any other mode of transport-Amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less.

4) If origin of journey and destination are not connected by rail-

• Where recognized public transport system exists-First class or deluxe class fare by the shortest route or the amount spent, whichever is less.
• Where no recognized public transport system exists-A amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less.

5) The exemption will be based on the actual expenses-Suppose Mr.X is entitled to Rs.50,000 LTC but if he claimed Rs.40,000 as expenses then he will be entitled to Rs.40,000 LTC. Also at the same time if he claimed LTC for Rs.60,000 then he will be entitled only for Rs.50,000.

6) The exemption is available on in respect of fare-It strictly includes only air fare, rail fare or bus fare. It will not include such expenses like boarding or lodging expenses or taxi charges.

7) The fare for more than 2 children-If kids are born before 1st October 1998 then they are all eligible for travel irrespective of the number. But kids who born after 1st October 1998 then only two kids will be allowed to travel. So if Mr.X has 3 kids born before 1st October 1998 and 3 kids after 1st October 1998 then he can claim expenses for all kids born before 1st October 1998 but only for two kids who born after 1st October 1998.

8) If you travel two times in a single year then you can claim both in the same year.

9) You must be on earned/annual leave during the period of travel. So your travel during holidays will not be considered as LTC.

10) If husband and wife both are working and entitled for LTA then both can’t claim for the same travel.

Proof of travel-It is not obligatory part to submit proof !!! Yes, recent judgments on this issue clearly mentioned that it is employer’s wish to ask for proof and verify it. But your employer has right to ask for the proof. Remember when your employer files LTC to income tax department then the assessing officer can ask the proof, not to the employer but to the employee .

Hence it is always advisable to have proper proof before going to submit LTC (whether your employer asking for it or not). Because at the end you are answerable to Income Tax Department but not your employer.

On November 16, 2016 by www.taxexcel.net

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Leave Travel Concession (LTC) is nothing but a type of salary component where your employer is providing some yearly benefit to travel with your family. Usually, it is mentioned as a yearly component but will be paid on monthly wise. This facility will be availed to only “Family” members. Family meaning for this purpose includes spouse and children. The point to be noted that if you have more than two children then you can claim for up to only two children, not more than that. It also includes brothers, sisters, and parents who are wholly or mainly dependent upon the employee. Below are the few features which you must understand it.

Download Automated Master of Form 16 Part B for F.Y.2016-17 [ This Excel Based Software can prepare at a time 50 employees Form 16 Part B with all latest amended by the Finance Bill 2016-17]

Taxability-

Suppose Mr.X is entitled to the yearly LTC of Rs.50,000 and he joined the company on 1st June 2012 (Financial Year 2012-13) and he took a journey in the month of December 2012. But according to LTC yearly applicability, this journey will be considered for the year 2012 but not for 2013. Because LTC will be considered on yearly base starting from 1st January of a year to 31st December of a year ending. It is not same like Financial Year (1st April to 31st March). Usually, LTC can be availed twice in a block of four calendar years. The current block of years will be as below.

2002-2005 (From 1st January 2002 to 31st December 2005)

2006-2009 (From 1st January 2006 to 31st December 2009)

2010-2013 (From 1st January 2010 to 31st December 2013)

2014-2017 (From 1st January 2014 to 31st December 2017).

As said above you can claim only twice in a block of 4 years period. If you claimed twice in a block then the remaining concession will be taxable income as per your slab. But if not at all claimed on a block or claimed only once then you can carry forward the remaining facility to immediate next block. In such a case excluding the previous carry forward you are again entitled to travel twice in a block of that presiding year. Suppose Mr.X claimed only once in the block of 2010-13 then he can carry forward the remaining one travel to immediate next block i.e. 2014-017. So in the block of 2014-17, he will be totally entitled to 3 travels.

Conditions to allow LTC–

1) If a journey is performed by Air-Amount of economy class air fare of the national carrier by the shortest route or the amount spent, whichever is less.

This is where PSU’s few employees manipulated. Instead of claiming for the shortest route they claimed as per their wish. Which cost Government exchequer a lot.

2) If a journey is performed by Rail-Amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less.

3) If the origin of journey and destination are connected by rail but journey is performed by any other mode of transport-Amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less.

4) If origin of journey and destination are not connected by rail-

• Where recognized public transport system exists-First class or deluxe class fare by the shortest route or the amount spent, whichever is less.
• Where no recognized public transport system exists-A amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less.

5) The exemption will be based on the actual expenses-Suppose Mr.X is entitled to Rs.50,000 LTC but if he claimed Rs.40,000 as expenses then he will be entitled to Rs.40,000 LTC. Also at the same time if he claimed LTC for Rs.60,000 then he will be entitled only for Rs.50,000.

6) The exemption is available on in respect of fare-It strictly includes only air fare, rail fare or bus fare. It will not include such expenses like boarding or lodging expenses or taxi charges.

7) The fare for more than 2 children-If kids are born before 1st October 1998 then they are all eligible for travel irrespective of the number. But kids who born after 1st October 1998 then only two kids will be allowed to travel. So if Mr.X has 3 kids born before 1st October 1998 and 3 kids after 1st October 1998 then he can claim expenses for all kids born before 1st October 1998 but only for two kids who born after 1st October 1998.

8) If you travel two times in a single year then you can claim both in the same year.

9) You must be on earned/annual leave during the period of travel. So your travel during holidays will not be considered as LTC.

10) If husband and wife both are working and entitled for LTA then both can’t claim for the same travel.

Proof of travel-It is not obligatory part to submit proof !!! Yes, recent judgments on this issue clearly mentioned that it is employer’s wish to ask for proof and verify it. But your employer has right to ask for the proof. Remember when your employer files LTC to income tax department then the assessing officer can ask the proof, not to the employer but to the employee !!!

Hence it is always advisable to have proper proof before going to submit LTC (whether your employer asking for it or not). Because at the end you are answerable to Income Tax Department but not your employer.

On November 07, 2016 by www.taxexcel.net

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Individuals who are looking for investments should consider tax and TDS along with risk and return of an investment. This is because returns may differ depending on the taxation of financial instruments. Income earned from most of the investments are subject to TDS. Say, for example, salary income, interest earned on debentures attract TDS. So one should be aware of tax and TDS applicability and how it can be avoided.

Download Automatic 100 employees Master of Form 16 Part B for F.Y.2016-17 & A.Y.2017-18.[ This Excel Based utility can prepare at a time 100 employees Form 16 part B for the Financial Year 2016-17, This Utility can use both of Govt and Non-Govt Concerned.]

Below mentioned some income and investments where TDS is applicable:

TDS on Salary Individuals who have income above the taxable limit will see the employer deduct TDS on total income, including income other than salary after considering all deductions and exemptions. TDS is applicable as per his income slab. The same can be avoided if investments are made under 80C, 80D of Income Tax Act by providing investment proof of the same. The company will issue a TDS certificate also known as Form 16A at the end of the financial year.

TDS on Interest Income Banks deducts TDS on interest income earned above Rs 10,000 in a year. Taxpayers who fall in higher tax bracket need to pay tax as per liability. Individuals with lower income can claim for the TDS by submitting form 15G or H, whichever is applicable. Also, one can avoid TDS by opening a fixed deposit in the different banks where interest earned in a single bank should not exceed Rs 10,000. Note that the TDS will be applicable on the complete amount not only of the exceeded amount. TDS is applicable at 10 per cent if PAN is not submitted with the bank, 20 percent TDS will be applied.

TDS on EPF Withdrawal TDS will be applicable if Employee Provident Fund is withdrawn before five years of contribution. However, TDS will not be deducted for an amount below Rs 50,000 from June1, 2016. TDS is not applicable when individuals transfer Provident Fund from one account to another Provident Fund Account. TDS will be deducted at 10 per cent if Form-15G or 15H is not submitted provided PAN is submitted. In absence of PAN, it is 20 percent of the amount.

On October 24, 2016 by www.taxexcel.net

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On May 24, 2016 by www.taxexcel.net

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Budget 2016-17 has been presented in Parliament. The Finance Minister has kept the Personal Income Tax slab rates unchanged for the Financial Year 2016-17 (Assessment Year 2017-2018).

Income Tax Deductions FY 2016-17 As per Budget 2016

Section 80C

Click here to Download All in One TDS on Salary for Govt & Non-Govt employees for Financial Year 2016-17 & Assessment Year 2017-18 [ This Excel Utility can prepare at a time your Tax Compute Sheet + Individual Salary Sheet + Individual Salary Structure + Automatic H.R.A. Calculation + Automated Arrears Relief Calculation with Form 10e U/s 89(1) + Automated Form 16 Part A&B and Form 16 Part B]

The maximum tax exemption limit under Section 80C has been retained as Rs 1.5 Lakh only. The various investment avenues or expenses that can be claimed as tax deductions under section 80c are as below;

• PPF (Public Provident Fund)
• EPF (Employees’ Provident Fund)
• Five year Bank or Post office Tax saving Deposits
• NSC (National Savings Certificates)
• ELSS Mutual Funds (Equity Linked Saving Schemes)
• Kid’s Tuition Fees
• SCSS (Post office Senior Citizen Savings Scheme)
• Principal repayment of Home Loan
• NPS (National Pension System)
• Life Insurance Premium
• Sukanya Samriddhi Account Deposit Scheme

Section 80CCC

Click here to Download Automated Arrears Relief Calculator U/s (891) with Form 10E From the Financial Year 2001-02 to Financial Year 2016-17 ( Up to date version)

Contribution to annuity plan of LIC (Life Insurance Corporation of India) or any other Life Insurance Company for receiving pension from the fund is considered for tax benefit. The maximum allowable Tax deduction under this section is Rs 1.5 Lakh.

Section 80CCD

Employee can contribute to Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be upto 10% of the salary (or) Gross Income and Rs 50,000 additional tax benefit u/s 80CCD (1b) was proposed in Budget 2015.

To claim this deduction, the employee has to contribute to Govt recognized Pension schemes like NPS. The 10% of salary limit is applicable for salaried individuals and Gross income is applicable for non-salaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to Pension Scheme, the whole contribution amount (10% of salary)can be claimed as tax deduction under Section 80CCD (2).

Kindly note that the Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2016-17. The additional tax deduction of Rs 50,000 u/s 80CCD (1b) is over and above this Rs 1.5 Lakh limit.

Section 80D

Click here to Download All in One TDS on Salary for Non-Govt Employees for Financial Year 2016-17 & Assessment Year 2017-18 [This Excel Utility can prepare at a time Tax Compute Sheet + Individual Salary Structure + Automated H.R.A.Calculation + Automated Form 16 Part A&B and Part B ]

Deduction u/s 80D on health insurance premium is Rs 25,000. For Senior Citizens it is Rs 30,000. For very senior citizen above the age of 80 years who are not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure.

reventive health checkup (Medical checkups) expenses to the extent of Rs 5,000/- per family can be claimed as tax deductions. Remember, this is not over and above the individual limits as explained above. (Family includes: Self, spouse, dependent children and parents).

Section 80DD 

Click here to Download Automated TDS on Salary for Central Govt Employees for F.Y.2016-17 & A.Y. 2017-18 [ This Excel Utility can prepare at a time Tax Compute Sheet + Individual Salary Structure as per Central Govt Salary Pattern + Automated H.R.A. Calculation + Automated Form 16 Part A&B and Part B]

You can claim up to Rs 75,000 for spending on medical treatments of your dependents(spouse, parents, kids or siblings) who have 40% disability. The tax deduction limit of upto Rs 1.25 lakh in case of severe disability can be availed.

To claim this deduction, you have to submit Form no 10-IA.

Section 80DDB

Click here to Download Automated TDS on Salary for All State Employees for the F.Y.2016-17 & A.Y.2017-18 [ This Excel Utility can prepare at a time Tax Compute Sheet + Individual Salary Structure as per State Govt Salary Pattern + Automated H.R.A. Calculation + Automated Form 16 Part A&B and Part B]

An individual (less than 60 years of age) can claim upto Rs 40,000 for the treatment of specified critical ailments. This can also be claimed on behalf of the dependents. The tax deduction limit under this section for Senior Citizens is Rs 60,000 and for very Senior Citizens(above 80 years) the limit is Rs 80,000.

To claim Tax deductions under Section 80DDB, it is mandatory for an individual to obtain ‘Doctor Certificate’ or ‘Prescription’ from a specialist working in a Govt or Private hospital.

For the purposes of section 80DDB, the following shall be the eligible diseases or ailments:

• Neurological Diseases where the disability level has been certified to be of 40% and above;

(a) Dementia

(b) Dystonia Musculorum Deformans

(c) Motor Neuron Disease

(d) Ataxia

(e) Chorea

(f) Hemiballismus

(g) Aphasia

(h) Parkinson’s Disease

• Malignant Cancers
• Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;
• Chronic Renal failure
• Hematological disorders

• Hemophilia
• Thalassaemia

 Section 24 (B)

The interest component of home loans is allowed as deduction under Section 24B for up to Rs 2 lakh in case of a self-occupied house. If your property is a let-out one then the entire interest amount can be claimed as tax deduction. 

 Section 80EE

This is a new proposal which has been made in Budget 2016-17. First time Home Buyers can claim an additional Tax deduction of up to Rs 50,000 on home loan interest payments u/s 80EE. The below criteria has to be met for claiming tax deduction under section 80EE.

• The home loan should have been sanctioned in FY 2016-17.
• Loan amount should be less than Rs 35 Lakh.
• The value of the house should not be more than Rs 50 Lakh &
• The home buyer should not have any other existing residential house in his name.

Section 80U

This is similar to Section 80DD. Tax deduction is allowed for the tax assessee who is physically and mentally challenged.

Section 80GG

As per the budget 2016 proposal, the Tax Deduction amount under 80GG has been increased from Rs 24,000 per annum to Rs 60,000 per annum. Section 80GG is applicable for all those individuals who do not own a residential house & do not receive HRA (House Rent Allowance).

The extent of tax deduction will be limited to the least amount of the following;

• Rent paid minus 10 percent the adjusted total income.
• Rs 5,000 per month.
• 25 % of the total income.

Section 80G

Contributions made to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act. This deduction can only be claimed when the contribution has been made via cheque or draft or in cash. But deduction is not allowed for donations made in cash exceeding Rs 10,000. In-kind contributions such as food material, clothes, medicines etc do not qualify for deduction under section 80G.

Section 80E

If you take any loan for higher studies (after completing Senior Secondary Exam), tax deduction can be claimed under Section 80E for interest that you pay towards your Education Loan. This loan should have been taken for higher education for you, your spouse or your children or for a student for whom you are a legal guardian. Principal Repayment on educational loan cannot be claimed as tax deduction.

There is no limit on the amount of interest you can claim as deduction under section 80E. The deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier.

Section 87A Rebate

If you are earning below Rs 5 lakh, you can save an additional Rs 3,000 in taxes. Tax rebate under Section 87A has been raised from Rs 2,000 to Rs 5,000 for FY 2016-17 (AY 2017-18).

In case if your tax liability is less than Rs 5,000 for FY 2016-17, the rebate u/s 87A will be restricted up to income tax liability only.

Section 80 TTA

Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account with a bank, co-operative society or post office can be claimed under this section. Section 80TTA deduction is not available on interest income from fixed deposits

On April 15, 2016 by www.taxexcel.net

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