Check out the Section 87A rebate for FY 2017-18 in the following section. The Income Tax Rebate under Section 87A for AY 2018-19 is allowed as per the following schedule for different Financial Years.
Showing posts with label Income Tax Form 16 for F.Y.2017-18. Show all posts
Showing posts with label Income Tax Form 16 for F.Y.2017-18. Show all posts
Monday 11 June 2018
Thursday 22 February 2018
Some of these exemptions/ deductions are discussed below as per the Income Tax Rules
House Rent Allowance (HRA) U/s 10(13A) - Supporting documents for rent payments to the landlord are required to be submitted to claim the tax exemption on HRA. However, if the HRA received per month is Rs 3,000 or less, the employee need produce any supporting documents for such rent payments, at the time of assessment/ inquiry, shall still have the right to call for the supporting documents.
Tuesday 13 February 2018
Sunday 1 October 2017
The Central Finance Budget has already passed by the Parliament for the Financial Year 2017-18 and also some changes have made in this Finance Budge, The Section 87A will be continue and reduce Tax Rebate From Rs. 5,000/ to 2,500 and U/s 80 TTA (the Savings Bank Interest also entitled in this Financial Year 2017-18), K.V.P. has introduce , P.P.F. Limit has increase up to Rs. 1,50,000/- & Pension Fund U/S 80CC Max Rs.1.5 Lakh.
Saturday 16 September 2017
Before planning your taxes one should be aware of the total income and tax liability in order to be smart tax saver. The government has provided with many plans using which individuals can make better investment decision along with tax saving options. Individuals often get stuck with 80C tax benefits only during tax planning. While there is little doubt 80C investments are best for tax saving purposes, there are other investment options which can help you save tax if invested smartly.
Saturday 9 September 2017
Some Important Things Salaried Individuals Must Know
Salary slip is a document that is received every month by the employee from the employer. It shows everything from gross salary to deductions to your net takes home pay.
Salary slip will be sent every month once the salary is credited. When individuals change their jobs, it becomes vital to understand their salary slip so that they can negotiate a better salary.
Monday 26 June 2017
A majority of us are aware of the Sec.80c options. But are you aware of the Tax Savings options other than Sec.80C for FY 2017-18?
Download Automated All in One TDS on Salary for Govt & Non-Govt Employees for F.Y.2017-18 & Ass year 2018-19 [ This Excel Based Software can prepare at a time Individual Tax Computed Sheet + Individual Salary Structure for Govt & Non-Govt Employees Salary Pattern + Individual Salary Sheet + Automated Arrears Relief Calculator U/s 89(1) with Form 10E w.e.f. 2000-01 to F.Y.2017-18 + Automated H.R.A. Exemption Calculation + Automated Form 16 Part A&B and Form 16 Part B for F.Y.2017-418, with all amended Income Tax Slab and all amended Tax Section as per the Finance Budget 2017]
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Deductor's Details
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Salary Structure for Govt & Non-Govt Employees
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Tax Computed Sheet
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Automated Form 16 Part A&B
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Automated Form 16 Part B
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Automated Arrears Relief Calculator with Form 10E
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Tax Savings options other than Sec.80C for FY 2017-18-Allowances
1. Medical Allowance-This is the allowance provided to the employee to meet the treatment cost to him or his family. The maximum limit per year is Rs.15,000. Anything more than that will be taxable income to the employee.
2. Leave Travel Allowance-The bills for your travel against LTA can be claimed for exemption. It is allowed to be claimed twice in a block of four years. The current block is 2014 to 2017. You can carry forward your unclaimed LTA to the next year. You can request your employer to not deduct tax on it and allow you to claim it next year.
3. Entertainment Allowances-You may be getting this allowance. However, the exemption is available only for Government employees. The amount of exemption is least of the following.
a) Rs 5,000
b) 1/5th of salary (excluding any allowance, benefits or other perquisites)
c) Actual entertainment allowance received
4. House Rent Allowance (HRA)-This is the famous exemption which is used by many salaried individuals. However, the wrong belief is that whatever the rent they pay is actually exempted from their income. The reality is different. The amount of exemption is least of the following.
a) Actual HRA Received
b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)
c) Rent paid minus 10% of salary
(Salary= Basic + DA (if part of retirement benefit) + Turnover based Commission)
Note: -HRA will be fully taxable if an employee who is living in his own house or if he does not pay any rent. Also, it is mandatory for the employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000.
5. Children Education Allowance-If your employer providing this allowance, then you can take exemption up to Rs.100 per month per child (maximum of up to 2 children). Therefore, monthly you can save Rs.200 from this allowance. The exemption may seem so low. But why to pay the tax?
6. Hostel Expenditure Allowance-If your employer providing this allowance, then you can take exemption Up to Rs. 300 per month per child up to a maximum of 2 children is exempt. Therefore, you can save around maximum of Rs.600 from this allowance.
7. Transport Allowance-This allowance is provided to you to meet expenditure on commuting between place of residence and place of duty. The extent of exemption is Rs.1,600 per month. For blind and handicapped employees is Rs.3,200 per month.
8. Conveyance Allowance-This is the different allowance than transport allowance. It is the expenditure granted to an employee to meet the expenses on conveyance in performing of his official duties. There is no limit for this. If such conveyance allowance is Rs.5,000 a month, then the whole allowance is exempt. Hence, you may this may be exempt to the extent of expenditure incurred for official purposes.
9. Any Allowance to meet the cost of travel on tour or on transfer-Here also no limit. The employee can claim exempt to the extent of expenditure incurred for official purposes.
10. Allowance to meet the cost of travel on tour or on transfer-Here also no limit. The employee can claim exempt to the extent of expenditure incurred for official purposes.
11. Daily Allowance-If you are not placed in normal duty place, then your employer may provide you such allowance. The employee can claim exempt to the extent of expenditure incurred for official purposes.
These are the major allowances, which can be utilized to save tax on salary income. There are few other allowances also to claim the exemption. But many of such allowances are not so famous. Hence, I left them to list.
Tax Savings options other than Sec.80C for FY 2017-18
Above we discussed few allowances, which you can use wisely to save tax. Now let us move on and discuss more the alternatives to Tax Savings options other than Sec.80C for FY 2017-18.
Note-Effective from FY 2017-18, the limit under Sec.24B for both self-occupied and let out the property was Rs.2,00,000. Earlier there was no such limit for let out properties.
1. Sec.80CCC
Deduction under Sec.80CCC is available only for individuals. Contribution to an annuity plan of the LIC of India or any other insurer for receiving the pension. Do remember that the amount should be paid or deposited out of income chargeable to tax.
The maximum amount deductible under Sec.80CCC is Rs.1.5 lakh. Do remember that this is also the part of combined limit of Rs.1.5 lakh available under Sec.80C, Sec.80CCC, and Sec.80CCD(1).
2. Sec.80CCD
This is all about your investment in NPS. I explained the same in my earlier post “NPS Tax Benefits – Sec. 80CCD(1), 80CCD(2) and 80CCD(1B)“. But I will recap the same here as below.
NPS Tax Benefits under Sec.80CCD (1)
- The maximum benefit available is Rs.1.5 lakh (including Sec.80C limit).
- An individual’s maximum 20% of annual income (Earlier it was 10% but after Budget 2017, it increased to 20%) or an employees (10% of Basic+DA) contribution will be eligible for deduction.
- As I said above, this section will form the part of Sec.80C limit.
NPS Tax Benefits under Sec.80CCD (2)
- There is a misconception among many that there is no upper limit for this section. However, the limit is least of 3 conditions. 1) Amount contributed by an employer, 2) 10% of Basic+DA and 3) Gross Total Income.
- This is additional deduction which will not form the part of Sec.80C limit.
- The deduction under this section will not be eligible for self-employed.
NPS Tax Benefits under Sec.80CCD (1B)
- This is the additional tax benefit of up to Rs.50,000 eligible for income tax deduction and was introduced in the Badger 2015
- Introduced in Budget 2015. One can avail the benefit of this Sect.80CCD (1B) from FY 2015-16.
- Both self-employed and employees are eligible for availing this deduction.
- This is over and above Sec.80CCD (1).
Note-Under Sec.80CCD(1), now the limit for an individual’s limit is increased to maximum 20% of annual income (Earlier it was 10% but after Budget 2017, it increased to 20%) or an employees (10% of Basic + DA) contribution will be eligible for deduction.
3. Sec.80D
Deduction under this section is available if you satisfy the following conditions.
- The taxpayer should be an individual (resident, NRI or Foreign Citizen) or HUF.
- Payment should be made out of income chargeable to tax.
- Payment should be in NON-CASH mode (for preventive health check up, you can pay either through cash or non-cash mode).
4. Sec.80DD
A resident individual or HUF is allowed to claim the deduction under Sec.80DD. You can claim the deduction if you incurred an expenditure for medical treatment, training, and rehabilitation of dependent relative (being a person with a disability).
A deduction can also be claimed if an individual or HUF deposited or paid for any approved scheme of LIC (or any other insurance) or UTI for the maintenance of such dependent relative.
Here, dependent means spouse, children, parents, brothers, and sisters, who are wholly and mainly dependent upon the individual.
You can claim a fixed deduction of Rs.75,000 under this section. A higher deduction of Rs.1,35,000 is available if such dependent relative is suffering from severe disability.
5. Sec.80DDB
An Individual’s of HUFs expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions can be claimed under this section.
The maximum deduction is Rs. 40,000 (Rs. 60,000 where expenditure is incurred for a senior citizen and Rs. 80,000 in case of very senior citizen[w.e.f assessment year 2016-17]).
With effect from the assessment year 2016-17, the taxpayer shall be required to obtain a prescription from a specialist doctor (not necessarily from a doctor working in a Government hospital) for availing this deduction.
You can claim the deduction for the medical treatment of self, spouse, children, parents brothers, and sisters of the individual.
The ailments covered under this section are as below.
6. 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
(i) Malignant Cancers
(j) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS);
(k) Chronic Renal Failure
(l) Hematological disorders
a) Hemophilia
b) Thalassaemia
7. Sec.80E
An individual can claim deduction under Sec.80E. If the loan is taken by an individual for any study in India or outside India, then they can claim the deduction. The interesting part of the loan on such education loan can be claimed for deduction for pursuing individual’s own education or for the education of his relatives (Spouse, children or any student for whom the individual is legal guardian).
The entire interest is deductible in the year in which the individual starts to pay interest on the loan and subsequent 7 years or until interest is paid in full (i.e for total 8 years). But do remember that interest should be paid out of the income of chargeable to tax.
8. Sec.80EE
First time Home Buyers can claim an additional Tax deduction of up to Rs.50,000 on home loan interest payments under this section. Below are the few conditions for this.
- He must be an individual (Resident or Non-Resident).
- The loan must be taken for the acquisition of the property.
- The loan should be sanctioned in FY FY 2016-17.
- Loan amount should not exceed 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 during the sanction of loan.
Do remember that if you claimed the interest under this section, then the same can’t be claimed under other sections for deductions.
9. Sec.80G
Donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, etc can be claimed as a deduction under this section. This deduction can only be claimed when the contribution made by cheque or draft or in cash. In-kind contributions like food material, clothes, medicines etc. do not qualify for deduction under this section.
The donations made to any Political party can be claimed under section 80GGC.
From FY 2017-18, the limit of deduction under section 80G / 80GGC for donations made in cash is reduced from current Rs 10,000 to Rs 2,000 only.
10. Sec.80GG
I have written a complete post on this section. Refer “Section 80GG Deduction-Get Tax Benefit on rent paid if not getting HRA !!!“. I will give you the brief about this section as below.
This section only applies to those who have not availed HRA in their salary or not claiming the deduction on their rent in any of the other sections of income tax. Below are a few conditions to avail the deduction under this section.
- This section is only applicable to Individual or HUF.
- Tax Payer may be either salaried or a self-employed. However, must not be getting HRA.
- Tax Payer himself or spouse/Minor Child/HUF of which he is a member should not own any accommodation at a place where he is doing a job or business.
- If Tax Payer owns a house at a place other than the place noted above, then the concession in respect of self-occupied property is not claimed by him [Under Section 23 (2) (a) or 23 (4) (a)].
- Tax Payer has to file a declaration in Form No.10BA regarding the expenditure incurred by him towards the payment of rent.
How much amount of deduction one can avail under Sec, 80GG?
If the above five conditions are satisfied, the amount deductible under Section 80GG is LEAST OF THE FOLLOWING.
- Rs.5, 000 per month;
- 25% of total income of taxpayer for the year; or
- Rent Paid less 10% of total income (Rent Paid-10% of Total Income).
11. Sec.80TTA
A deduction of up to Rs.10,000 can be claimed by an individual or HUB in respect of any income by the way of interest on deposits (not on FDs) in a savings account with a bank, co-operative society or post office.
12. Sec.80U
To claim tax benefits under Sec.80U, the taxpayer should be an individual and resident of India. If he is suffering from 40% or more than 40% of any disability, then he can claim a tax deduction.
You can claim the fixed deduction of Rs.75,000. a higher deduction of Rs.1,25,000 is allowed in respect of a person with a severe disability (i.e. having a disability of 80% or above).
13. Sec.24 (B)
The interesting part of your home loan EMI will be claimed under this section. The maximum limit for the self-occupied and let out property is Rs.2,00,000 per year. For let-out property, earlier the entire interest payment of home loan can be claimed for deduction. However, from FY 2017-18 the limit of Rs.2,00,000 was also capped for let out property.
14. Rebate under Sec.87A
The tax rebate of Rs.2,500/- for individuals with income of up to Rs 3.5 Lakh as per Finance Budget 2017-18.
To avail this benefit, there are certain conditions and they are as below.
- The taxpayer must be a resident individual.
- Your Total Income (Fewer Deductions from 80C to 80U) is equal to or less than Rs.3,50,000.
- The rebate is the 100% of income tax on such income or Rs.2,500/- (whichever is less).
Thursday 8 June 2017
1) DEDUCTION IN RESPECT OF INVESTMENTS IN SPECIFIED ASSETS (SECTION 80C)
Section 80C provides for a deduction of savings in specified modes of Investments from gross total income. It is available only to an Individual or HUF. The Maximum permissible deduction is Rs.1.5 lakh along with deduction u/s 80CCC & 80CCD, & Additional deduction will be allowed U/s 80CCD(2) And U/s 80CCD(1B) out of Max Rs. 1.5 Lakh U/s 80C.
Download Master of Form 16 Part A&B for F.Y.2017-18 & A.Y.2018-19 [ This Excel Utility can prepare at a time 100 employees Form 16 Part A&B for F.Y.2017-18 and A.Y.2018-19 with New Tax Slab & all amended Section as per the new Budget 2017-18]
Admissible Deductions:-
a) A sum paid to Life Insurance Premium paid Max Rs. 1.5 lakh.
b) Sum paid under the contract for deferred on a life of the Assessee or his/her spouse or children.
c) Sum deducted by the government from the salary of an employee for securing a deferred annuity for self, spouse or children.
d) Contribution to any PPF.
e) Contribution by an employee to RPF.
f) Contribution by an employee to an Approved Superannuation Fund.
g) A contribution made to any PPF set up by the Central Government.
h) Subscription to any deposit scheme or contribution to any Pension fund set up by the National Housing Bank.
i) Payment of Tuition fees by an Individual Assessee at the time of admission to any university, college, school or other educational institutions within India for the purpose of full-time education of any two children.
j Subscription to deposit scheme of Public Sector, engaged in providing housing finance.
k) Subscription to units of Mutual funds notified u/s 10(23D).
l) Sum deposited in Fixed Deposits (FDs) with tenure of five years.
m) Sum deposited in 5 yrs Post Office Time Deposit (POTD) scheme.
2. DEDUCTION IN RESPECT OF CONTRIBUTION TO CERTAIN PENSION FUNDS (SECTION 80CCC)
Deduction in respect of Payment of premium for annuity plan of LIC or any other Insurer is provided. The Premium must be deposited to keep in force a contract for annuity plan of LIC or any other insurer for receiving a pension from the fund. For this purpose, the Interest or Bonus accrued or credited to the Assessee’s Account shall not be reckoned as Contribution. The Maximum Deduction allowed is Rs.1.5 lakh.
3. DEDUCTION IN RESPECT OF CONTRIBUTION TO PENSION SCHEME OF CENTRAL GOVERNMENT (SECTION 80CCD)
Contribution towards NPS by Employee [80CCD(1)]: Taxpayer is an individual and he is employed by the central government (on or after January 1, 2004), or employed by any other person or self-employed. He has in the previous year deposited any amount in his account under NPS. Under this, Employee is to contribute 10% of their salary or more and deduction is available under section 80CCD(1) which is restricted to 10% of the salary and for a person other than employee deduction is restricted to 10% of GTI. For the A.Y 2015-16 amount of deductible under section 80CCD(1) cannot exceed Rs. 1 Lacs.
Contribution towards NPS by Employer [80CCD(2)]: Contribution by the employer to NPS is deductible under section 80CCD(2) in the hands of the concerned employee in the year in which contribution is made. However, no deduction is available in respect of employer’s contribution which is in excess of 10 percent of the salary of the employee.
4. LIMIT ON DEDUCTION U/S 80C, 80CCC, 80CCD ,80CCD(2),80CCD(1B)
The Limit for maximum deduction available u/s 80C, 80CCC, 80CCD (combined together) is Rs.1.5 Lakh only.
But the deduction U/s 80CCD(2) & U/s 80CCD(1B) may additional exemption out of Max limit of 80C Rs.13.5 Lakh.
5. DEDUCTION IN RESPECT OF MEDICAL INSURANCE PREMIUM (SECTION 80D)
This Section provides for a deduction of Rs. 25,000 in respect of premium paid towards a health insurance policy for the Assessee or his family (spouse and dependent children) or any contribution made to the Central Government Health Scheme in aggregate and a further deduction of Rs. 30,000 is allowed of premium paid in respect of health insurance policy for parents.
7. DEDUCTION IN RESPECT OF REHABILITATION OF HANDICAPPED DEPENDENT RELATIVE (SECTION 80DD)
It provides for a deduction to an Assessee being an individual or HUF who is a resident in India. Deduction of Rs. 75,000 (Rs. 50,000 up to the assessment year 2015-16) is available in respect of any Amount paid for the medical treatment (including nursing), training and rehabilitation of a dependent, or any amount paid or deposited under a scheme framed in this behalf.
In a case of severe disability (i.e. a person with 80% or more disability), the deduction of Rs. 1,25,000 (Rs. 1,00,000 for the assessment year 2010 -11 to 2015-16 Rs. 75,000 up to the assessment year 2009-10) shall be available.
Dependent means In the case of an Individual the spouse, children, parents, brothers, sisters, of the individual and in the case of HUF, any member who is wholly dependent on the assessee.
8. DEDUCTION IN RESPECT OF MEDICAL TREATMENT (SECTION 80DDB)
The deduction of Rs. 40000 or Amount actually paid whichever is less shall be allowed to an Assessee who is resident in India being an Individual or HUF. A deduction shall be allowed of any amount paid for the medical treatment of such disease or ailment as may be specified in the rules. In case the Amount is paid in respect of a senior citizen (i.e. of age 60 years or above) then the deduction would be Rs.80,000 or the Amount actually paid whichever is less.
9. DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR HIGHER EDUCATION (SECTION 80E)
This section provides deduction to an Individual in respect of any interest paid on loan taken for the purpose of pursuing his higher education or the for the purpose of higher education [i.e all fields of studies (including vocational studies)pursued after passing the senior secondary examination] of his/her relative i.e. spouse or children of the Individual or the student for whom the Individual is the legal guardian. The loan must have been taken from any financial institution or approved charitable institution. The amount of deduction is amount is paid by the individual during the previous year and such amount is paid out of his income chargeable to income tax.
10. DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR RESIDENTIAL HOUSE PROPERTY APPLICABLE FORM a.y 2017-18 (SECTION 80EE)
The following conditions should be satisfied in order to claim deduction under section 80EE:-
- The assessee is an individual. He may be a resident or non-resident.
- He has taken a loan and loan is taken for acquisition of residential house property. The loan is taken from the bank or a housing finance company and loan has been sanctioned during April 1, 2016, and march 31, 2017.
- The amount of loan sanctioned for residential house property does not exceed Rs. 35 lakhs and value of residential house property does not exceed Rs. 50 lakhs.
- Assessee does not own any residential house property on the date of sanction of loan.
- This deduction is over and above the Rs, 2 lakhs limit under section 24 of the income tax act.
If above conditions are satisfied, the assets can claim deduction under section 80EE of the interest payable on the above loan or Rs. 50,000 whichever is less. This deduction is available for the assessment year 2017-18 and subsequent assessment years.
12. DEDUCTION IN RESPECT OF RENT PAID (SECTION 80GG), WHO ARE NOT GET HOUSE RENT ALLOWANCES:-
Admissible deduction:-
The deduction will be least of the following:-
· Actual Rent paid less 10% of the total income before allowing such deduction, or
· 25% of such total income or
· Rs. 5000 per month (Rs. 2000 per month, up to the assessment year 2016-17)
Total income will not include long-term capital gains and any income referred to in sections 115A to 115D.
Conditions to be satisfied:-
· Assessee should not be in receipt of House Rent Allowance.
· The expenditure incurred by him on rent of any furnished or unfurnished accommodation should exceed 10% of his total income arrived at after all deductions under Chapter VI-A except section 80GG.
· The Accommodation should be occupied by the Assessee for the purpose of his own residence.
· The Assessee should not have self-occupied residential premises in any other place.
· Assessee should file a declaration in form 10BA, confirming the details of rent paid.
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