Income Tax

Amendments in the income-tax act proposed to notify a new scheme for assessment in electronic mode

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Government of India
Ministry of Finance

01-February-2018 13:20 IST

Amendments in the income-tax act proposed to notify a new scheme for assessment in electronic mode.

E-assessment to be rolled-out across the country to transform age-old assessment procedure

In the General Budget 2018-19 presented in Parliament today, the Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley proposed to amend the Income-tax Act to notify a new scheme for assessment. Shri Jaitley said the assessment will be done in electronic mode which will almost eliminate person to person contact leading to greater efficiency and transparency. The Finance Minister added that the e-assessment system was introduced in 2016 on a pilot basis. In 2017, it was extended to 102 cities with the objective of reducing the interface between the department and the taxpayers. “With the experience gained so far, we are now ready to roll out the E-assessment across the country, which will transform the age-old assessment procedure of the income tax department and the manner in which they interact with taxpayers and other stakeholders” Shri Jaitley said.

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Be the first to comment - What do you think?  Posted by admin - February 1, 2018 at 10:18 pm

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Relief to Senior Citizens: Exemption of Interest Income on deposits increased to Rs 50,000

Ministry of Finance
Relief to Senior Citizens: Exemption of Interest Income on deposits increased to Rs 50,000

Pradhan Mantri Vaya Vandana Yojana extended up to March 2020

Existed limit on investment under PMVVY enhanced to Rs 15 lakhs

With the objective of providing a dignified life to senior citizens, the Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley, announced significant incentives for senior citizens.

Presenting the General Budget 2018-19 in Parliament here today, the Finance Minister said that the exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000/- to Rs. 50,000/- and TDS shall not be required to be deducted on such income, under section 194A. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.

The Finance Minister also announced raising the limit of deduction for health insurance premium and/ or medical expenditure from Rs. 30,000/- to Rs. 50,000/-, under section 80D. All senior citizens will now be able to claim benefit of deduction up to Rs. 50,000/- per annum in respect of any health insurance premium and/or any general medical expenditure incurred.

Further, the Finance Minister proposed raising the limit of deduction for medical expenditure in respect of certain critical illness from Rs. 60,000/- in case of senior citizens and from Rs. 80,000/- in case of very senior citizens, to Rs. 1 lakh in respect of all senior citizens, under section 80DDB.

These concessions will give extra tax benefit of Rs. 4,000 crores to senior citizens.

In addition to tax concessions, the Finance Minister proposed to extend the Pradhan Mantri Vaya Vandana Yojana up to March 2020 under which an assured return of 8% is given by Life Insurance Corporation of India. The existing limit on investment of Rs. 7.5 lakh per senior citizen under this scheme is also being enhanced to Rs. 15 lakh.

PIB

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Tax Return Preparer (Amendment) Scheme, 2018

Amendment in Eligibility Qualification, Age, Fee and Remuneration for Tax Return Preparer (TRP)

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 19th January, 2018

 

G.S.R. 44(E). In exercise of the powers conferred by sub-section (1) of Section 139B of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following further amendments in the Tax Return Preparer Scheme, 2006, namely:-

Short title, commencement and application.
1. (1) This Scheme may be called the Tax Return Preparer (Amendment) Scheme, 2018.

(2) It shall come into force from the date of its publication in the Official Gazette.

 

2. In the Tax Return Preparer Scheme, 2006 (hereinafter referred to as the said Scheme), for paragraph 3, the following paragraph shall be substituted, namely:-

“3. An individual, who holds a bachelor degree from a recognised Indian University or institution, or has passed the intermediate level examination conducted by the Institute of Chartered Accountants of India or the Institute of Company Secretaries of India or the Institute of Certified Management Accountants of India, shall be eligible to act as Tax Return Preparer”.

 

3. In the said Scheme, in paragraph 4,
(1) for clause (i), the following clauses shall be substituted, namely:-

“(i) It shall invite application from persons,-

(a) having requisite educational qualifications specified in paragraph 3 or having appeared in the final year examination of the qualifying examination; and

(b) who is not below the age of twenty one years or more than forty-five years as on the 1st day of October of the year immediately preceding the date on which applications are invited.

(ia) It shall require that the application under clause (i) shall be accompanied by a fee of two hundred and fifty rupees, and failing which the application shall be invalid.”.

 

(2) for clause (v), the following clauses shall be substituted, namely

“(v) It shall enrol the persons who qualify the test for enrolment for each training centre separately.

(va) It shall not enrol any person under clause (v), unless –

(a) he makes a deposit of an amount of seven hundred and fifty rupees, which shall be nonrefundable; and

(b) he produces a proof of having passed the qualifying examination as specified in paragraph 3″.

 

(3) clause (ix) shall be omitted.”.

 

4. In the said Scheme, in paragraph 9, for sub-paragraph (1), the following sub-paragraphs shall be substituted,
namely:-

 

“(1) The Board may authorise the Resource Centre or the Partner Organisation to disburse to a Tax Return preparer, the following amount, namely:-

 

(a) five per cent. of the tax paid on the income declared in the return of income for First Eligible Assessment Year which has been prepared and furnished by him;

 

(b) three per cent. of the tax paid on the income declared in the return of income for the Second Eligible Assessment Year which has been prepared and furnished by him;

 

(c) two per cent. of the tax paid on the income declared in the return of income for the Third Eligible Assessment Year which has been prepared and furnished by him.

 

(1A) The amount of disbursement for any eligible person in relation to an eligible year shall not exceed,-

 

(a) five thousand rupees in case of First Eligible Assessment Year;
(b) three thousand rupees in case of Second Eligible Assessment Year; and
(c) two thousand rupees in case of Third Eligible Assessment Year.”.

 

[Notification No. 04/2018/F.No. 142/16/2010 (SO)-TPL(Part)]

Dr T.S.MAPWAL, Under Secy.

 

Note : The Tax Return Preparer Scheme, 2006 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide notification number S.O. 2039(E), dated the 28th November, 2006 and last amended vide notification number S.O. 2819(E), dated the 22nd November, 2010.

 

Authority: http://www.incometaxindia.gov.in/

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Budget 2018 – Will income tax limit raise to Rs 3 or 5 lakh?

Budget 2018 – Will income tax limit raise to Rs 3 or 5 lakh?

“The tax slab is expected to be raised in favour of government employees”

According to information available, the annual budget, to be presented by Finance Minister Arun Jaitley on February 1, could have some sops for the middle-class families.

Post the Seventh Pay Commission, most government servants now find themselves within the tax slab. For a number of years now, government servants have been demanding that the tax-exemption slab be raised to Rs. 5 lakhs. The current exemption stands at Rs. 2.5 lakhs. There is a five percent tax on the income in the Rs. 2.5 lakhs to 5 lakhs bracket.

There are prevalent talks that the government could revise the slabs. This could come as a big boon for middle income groups, especially the salaried class who are suffering due to acute inflation. No changes were made in the tax slab last year, but the tax of 10 percent on the Rs. 2.5 lakhs to 5 lakhs slab was brought down to five percent.

The budget, to be presented next month, is expected to reduce the tax on the Rs. 5 lakhs to Rs. 10 lakhs slab to 10 percent (it currently stands at 20 percent). This could spell huge relief to the salaried class.

Similarly, the tax on the Rs. 10 lakhs to Rs. 20 lakhs slab could be reduced to 20 percent (currently stands at 30 percent). A tax of 30 percent is collected on the amount exceeding Rs. 20 lakhs. Tax rate on this slab is the lowest in India when compared to most other countries.

There is currently no exclusive tax slab for those earning between Rs. 10 lakhs and 20 lakhs, and those earning more than Rs. 10 lakhs automatically end up paying 30 percent in taxes.

The income tax department could raise the tax slab in order to provide relief to the salaried class that continues to suffer from the rise in prices of essential commodities due to inflation.

There are, however, some unconfirmed reports that claim that the tax slab is not likely to be raised to Rs. 5 lakhs.

Be the first to comment - What do you think?  Posted by admin - January 10, 2018 at 9:47 pm

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Government announced 8% GOI Savings (Taxable) Bonds

Government announced 8% GOI Savings (Taxable) Bonds

The Government of India (GoI) announced here today that 8% GOI Savings (Taxable) Bonds, 2003 shall cease for subscription with effect from the close of banking business on Tuesday, the 02nd January, 2018.

The Government of India (GoI) announced here today that 8% GOI Savings (Taxable) Bonds, 2003 shall cease for subscription with effect from the close of banking business on Tuesday, the 02nd January, 2018.

PIB

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No Proposal to Amend Income Tax Rates -Lok Sabha Q&A

Government says No Proposal to Revise Income Tax Rates this year

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE

LOK SABHA
UNSTARRED QUESTION No. 1355
TO BE ANSWERED ON FRIDAY, THE 22ND DECEMBER, 2017
01, PAUSHA, 1939 (SAKA)

AMEND INCOME TAX RATES

1355. SHRI DEVENDRA SINGH BHOLE:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government proposes to amend the present rates of income tax so that more people may pay income tax;

(b) if so, the details thereof and the benefits likely to accrue to common man and the Government by this step; and

(c) if not, the reasons therefor?

ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI SHIV PRATAP SHUKLA)

(a) to (b) No Madam. Currently, there is no such proposal under consideration.

(c) The rates of income tax are prescribed through the Finance Act every year

Be the first to comment - What do you think?  Posted by admin - December 27, 2017 at 11:11 am

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Income Tax : List of Taxable Elements of Pay – PCDA

Income Tax : List of Taxable Elements of Pay – PCDA Pune
1. Taxable Element of Pay –

Sl. No. Taxable Elements of Pay
1. Pay in the Pay Band
2. Grade Pay
3. Military Service Pay
4. Dearness Allowance
5. Non-Practicing Allowance (if any)
6. Hazard/Special Hazard Pay
7. Para Allowance / Para Reserve Allowance/Special Commando Allowance
8. City Compensatory Allowance
9. Deputation (Duty) Alllowance (If any)
10. Reimbursement of Furniture
11. Reimbursement of Water
12. Reimbursement of Electricity
13. Technical Allowance
14. Qualification Pay
15. Special Action Group Allowance (on posting to National Security Guard)
16. Technical Pay
17. Language Allowance
18. Qualification Grant
19. Language Award
20. Flying Allowance
21. Leave Encashment on LTC
22. Specialist Allowance
23. Test Pilot Allowance
24. Instructor Allowance
25. Flight Test Allowance
26. Security Allowance
27. Strategic Force Allowance

Note: Provisions are applicable equally for monthly payment of Allowances as well as arrears for the said head of Pay/Allowances.
2.    Non-Taxable Elements of Pay 

Sl No. Non-Taxable element of Pay Authority Limit of Exemption
1. Gallantary Award A.O. 46/79; U/S 10 (18) (i) of IT Acts w.e.f. 1947 Fully Exempt
2. Entertainment Allowance U/S 16 (ii) of IT Act w.e.f. 01/04/81 A sums equal to 1/5th  of salary (excluding any allowance/benefit)

or Rs.5000/- per annum whichever is less

3. Leave Travel Concession (LTC) U/S 10 (5) of IT Act w.e.f. 01/04/89 Actual Expenditure upto the limit of entitlement
4. Foreign Allowance U/S 10 (7) of IT Act Fully Exempt
5. Bhutan Compensatory Allowance (BCA) AO 395/74 and U/S 10 (7) of IT Act Fully Exempt
6. Servant Wages Allowance alongwith BCA AO 395/74 and U/S 10 (7) of IT Act Fully Exempt
7. Purchase of Crockery/Cutlery/ Glassware U/S 10 (7) of IT Act Fully Exempt
8. Outfit allowance on posting to Embassy U/S 10 (7) of IT Act Fully Exempt
9. Arrears of Cash Grant – Foreign Allowance (Nepal) U/S 10 (7) of IT Act Fully Exempt
10. Myanmar Allowance U/S 10 (7) of IT Act Fully Exempt
11. Representation Grant for use of crockery set U/S 10 (7) of IT Act Fully Exempt
12 Encashment of Leave on retirement whether on

superannuation/voluntary retirement/release/invalidment etc.

U/S 10 (10AA) (i) of IT Act w.e.f. 01/04/78 Fully Exempt
13. House Rent Allowance/House Rent Reimbursement

(HRA/HRR)

U/S 10 (13A) of IT Act w.e.f. 06/10/1964; Limit of

exemption as per Rule 2A of IT Rules

*Quantum of exemption is least of the following –
a) For Bombay/Kolkata/ Delhi Chennai
i) Allowance actually received.
ii) Rent paid

in excess of 10% of salary
iii) 50% of

salary
b) For other cities
i) Allowance actually received.
ii) Rent paid

in excess of 10% of salary.
iii) 40% of salary

14. Children Education Allowance U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl No.5 of the IT Rules

Rs.100/- per month per child upto a maximum of 2

children.

15. Hostel Subsidy U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl No.6 of the IT Rules

Rs.300/- per month per child upto a maximum of 2

children

16. Siachen Allowance U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl No.1 (II) of the IT Rules

Rs.7000/ per month w.e.f. 01/08/1997
17. Special Compensatory (Remote Locality) Allowance U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl.No.2 of the IT Rules

Category I – SCA ‘A’ – Rs.1300/- per month Category

III – SCA ‘B’ – Rs.1050/- per month. Category IV – SCA ‘C’
– Rs.750/- per month. Category VI – SCA ‘D’
– Rs.200/-

per month.

18. Compensatory Field Area Allowance (CFAA) U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl No.7 of the IT Rules

Rs.2600/- per month w.e.f. 01/05/1999
19. Compensatory Modified Field Area Allowance (CMFAA) U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl No.8 of the IT Rules

Rs.1000/- per month w.e.f. 01/05/1999
20. Any Special Allowance in the nature of Counter

Insurgency Allowance (SCCIA)

U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl.No.9 of the IT Rules

Rs.3900/- per month w.e.f. 01/05/1999
21. Transport Allowance granted to meet expenditure for

the purpose of commuting between place of residence and duty

U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl.No.10 of the IT Rules

For whole of India – Rs.1600/- per month
22. Transport Allowance granted to a blind or

orthopedically handicapped employee with disability of lower extremities, to

meet expenditure for the purpose of commuting between place of residence and

duty

U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl.No.11 of the IT Rules

For Whole of India – Rs.3200/- per month
23. High Altitude Uncongenial Climate Allowance (HAUCA) U/S 10 (14) (ii) of IT Act and Rule 2BB (2) Table

Sl.No.13 of the IT Rules

For areas of
(a)Altitude of 9000 to 15000 feet (HAUCA ‘I) –

Rs.1060/- per month w.e.f. 01/05/1999. (b)Altitude above 15000 feet (HAUCA

‘II’ & ‘III) – Rs.1600/- per month w.e.f. 01/05/1999.

24. Highly Active Field Area Allowance (HAFA) U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl.No.14 of the IT Rules

Rs.4200/- per month
25. Island (duty) Allowance granted to the members of

Armed Forces

U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table

Sl.No.15 of the IT Rules.

For Andaman & Nicobar and Lakshadweep group of

islands – Rs.3250/- per month inserted w.e.f. 29/02/2000.

26. Outfit Allowance
(Initial/Renewal)
U/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of IT

Rules.

Fully Exempt
27. Compensation for the change of uniform U/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of

the IT Rules

Fully Exempt
28. Kit Maintenance Allowance U/S 10 (14) (i) of IT Act and Rule 2 BB (1) (f) of

the IT Rules

Fully Exempt
29. Uniform Allowance (MNS) U/S 10 (14) (i) of IT Act and Rule 2 BB (1) (f) of

the IT Rules

Fully Exempt
30. Special Winter Uniform Allowance U/S 10 (14) (i) of IT Act and Rule 2 BB (1) (f) of

the IT Rules

Fully Exempt
31. Reimbursement of Medical Expenses U/S 17 (2) (viii) (v) of IT Act Actual expenditure upto Rs.15000/- per annum.
32. Any payment from Provident Fund U/S 10 (11) of IT Act Fully Exempt
33. Payment of Compensation – Disability Pension CBDT F.No. 200/51/99- ITA1 dated 02 Jul 2001 Fully Exempt

Note:
1. Provisions are applicable equally for monthly payment of Allowances as well as arrears for the said head of Pay/ Allowances.

2. *Salary for this purpose includes Pay in Pay Band + Grade Pay + MSP (w.e.f. 01 Sep 08) + DA + NPA (if any).

DISCLAIMER: The above provisions are with the understanding and interpretation of IT Act 1961/IT Rules as amended and instructions issued by CBDT from time to time. Rules, provisions, further amendments and clarifications are issued by IT department/CBDT only and this office does not have any role in framing the same except IT deductions at source with reference to them.

Authority: https://pcdaopune.gov.in/

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7th Pay Commission: New allowances to come under income tax

7th Pay Commission: New allowances to come under income tax

7thPayCommission_allowances_income_ tax

New Delhi: A Senior Finance Ministry official said income tax will be imposed on the New allowances of central government employees under 7th Pay Commission recommendations from financial year 2017-18.

The Finance Bill 2017 proposed tax treatment on basic salary, bonus and allowances etc for both government and non-government salaried employees.

If all allowances excluding basic salary of central government employees are made tax free which will shows discrimination to others, he said.

The central government employees unions demanded many times that all new allowances under 7th Pay Commission recommendations should be income tax exempted.

The government implemented the new pay structure from January, 2016 for central government employees excluding allowances, the compensatory perks for all employees, which has been implemented from July 1, 2017.

The unions demanded for implementation of the allowances with retrospective effect from January 2016. However, there is a usual practice to pay the allowances from the date of implementation.

The officer also informed our reporter that the government had no plan since begaining to give allowances in arrears.

Keeping salaries and allowances hikes in mind, the Finance Minister Arun Jaitley allocated Rs 1.02 lakh crore in the 2016-17 Union budget for paying the central government employees.

The delay in the implementation of allowances is chiefly because of the financial gains of the government, while financial condition of the government is very sound.

The delayed implementation of allowances have saved the government nearly Rs 40,000 crore.

The central government employees are deeply annoyed at little allowances hike without arrears.

The bone of contention between central government employees’unions and government, the House Rent Allowance (HRA), which unions demanded at the rate of 30 per cent, 20 per cent and 10 percent of basic pay with arrears.

While the government approved 7th Pay Commission recommendations for reduction in the HRA rates to 24 per cent for X, 16 per cent for Y and 8 per cent for Z category of cities, which came into effect from July 1, 2017 and no arrears were paid.

Accordingly, The huge resentment among the central government employees over little allowances hike without arrears and the central government employees unions are threatening to strike over their growing anger about little allowances hike without arrears.

TST

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Income Tax Offices to remain open on Saturday,5th August, 2017 for filing of income tax returns

Income Tax Offices to remain open on Saturday,5th August, 2017 for filing of income tax returns

In view of the difficulties faced by taxpayers, the due date for filing of Income Tax Returns for F.Y. 2016-2017 i.e. Assessment Year A.Y. 2017-2018 was extended to 5th August, 2017(for certain categories of taxpayers).

In order to facilitate manual filing of returns (of aforesaid categories) on 5th August, 2017, being a Saturday, the Central Board of Direct Taxes (CBDT) has directed that necessary arrangements be made for receiving Income Tax Returns up to midnight in all Income Tax Offices throughout the country.

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Extension of date for filing of Income Tax Returns extended for five days up to 5th August, 2017

Extension of date for filing of Income Tax Returns extended for five days up to 5th August, 2017

There are some complaints that the taxpayers are not being able to log on to the e-filing website of Income Tax Department or not being able to link Aadhaar with PAN because of different names reflected in PAN and Aadhaar database. While technical snags have been removed already, the main reason for failure of people to log in is because of last minute rush and panic in which those who have already logged in want to continue for the entire period for fear of losing it.

In order to ease-out the panic situation, the Government has decided to take the following steps:

  • For the purpose of e-filing return, it would be sufficient as of now to quote Aadhaar or acknowledgement No. for having applied for Aadhaar in e-filing website. The actual linking of PAN with Aadhaar can be done subsequently, but any time before 31st August, 2017. However, the returns will not be processed until the linkage of Aadhaar with PAN is done.
  • In order to facilitate the e-filing of return, it is also decided to give extension of five days for e-filing of return. The return can be filed upto 5th August, 2017.

PIB

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CBDT notifies new scrutiny notices with e-facility for taxpayers

CBDT notifies new scrutiny notices with e-facility for taxpayers

New Delhi: The CBDT has notified revised income tax scrutiny notices that will allow taxpayers to conduct their business with the taxman over the Internet without needing to visit the I-T office, hence reducing physical interface between them.

The new format pertains to three types of notices that are issued by the taxman under section 143(2) of the Income Tax Act (scrutiny of tax return) and the Central Board of Direct Taxes, the policy-making body of the department, has told all field I-T offices in the country that “all scrutiny notices..

., shall henceforth, be issued in these revised formats only”.

“This has become necessary in view of board’s (CBDT) decision to utilise e-proceeding facility for electronic conduct of assessment proceedings in a widespread manner from this financial year,” the CBDT order, issued yesterday, said.

The three revised notices have been accessed by PTI and are meant for procedures of limited, complete and compulsory manual scrutiny.

A scrutiny procedure in the income tax system pertains to a case where a taxpayer is required to provide a number of documents and testimonials to the assessing officer (AO) after his or her case is picked up for a threadbare examination after study of their tax returns.

The department has said in the past that it only picks less than one per cent of the total I-T returns (ITRs) filed for examination under the long-drawn scrutiny process but this has still been a issue of grievance for many assessees.

Each of the three, one-page notices, will bear the name of the assessing officer, their designation, telephone and fax number and now, their email id too.

A taxpayer can use their account on the official e-filing website of the department (https://incometaxindiaefiling.gov.in/) or their personal email id to conduct their scrutiny assessment dealings with the AO.

“The department wants itself to be seen as a facilitator for the honest tax paying public without him or her requiring to visit the tax office and conducting their dealing with the AO with ease of the click of a computer mouse.The e-proceeding is aimed to curb complaints of harassment and corruption in tax related issues,” a senior officer of the department said.

The new notices will also carry a five-point explanation about the new changes being made for the taxpayer with the ushering in of the Internet-based e-proceeding regime in the Income Tax Department.

“As part of the e-governance initiative to facilitate conduct of assessment proceedings electronically, I-T department has launched e-proceeding facility.

“It is a simple way of communication between the department and assessee, through electronic means, without the necessity to visit the income tax office for conduct of assessment proceedings. This taxpayer friendly measure would substantially reduce the compliance burden for the assessee,” the note says.

However, the AO will have discretionary powers to call for additional documents and records and seek personal appearance of the taxpayer if there is a reason for him to delve deeper into the case and such a thing is not possible over the e-proceeding communication link.

The CBDT is also expected to soon implement the system of conducting the limited scrutiny cases via the ‘e-proceeding’ system through the official e-filing website.

PTI

Be the first to comment - What do you think?  Posted by admin - June 24, 2017 at 1:49 pm

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CBDT Notifies Rule 10CB for Secondary Adjustments under Section 92CE of IT Act, 1961

CBDT Notifies Rule 10CB for Secondary Adjustments under Section 92CE of IT Act, 1961.

Rule 10CB for operationalising the provisions of secondary adjustment has been notified by the Central Board of Direct Taxes on 15th June, 2017. It prescribes the time limit for repatriation of excess money and the rate of interest to be applied for computing the income in case of failure to repatriate the excess money within the prescribed time limit. Separate rates of interest have been provided for international transactions denominated in Indian currency and in foreign currency. The rates of interest are applicable on an annual basis.

The time limit of 90 days for repatriation of excess money shall begin only when the primary adjustments exceeding Rupees One Crore made in respect of Assessment Year 2017-18 or later, attains finality. Where the transfer pricing order is appealed against by the taxpayer, the time limit for repatriation shall commence only after the appeal is finalised by the appellate authority.

The rule is available on the website of the Income-tax Department (www.incometaxindia.gov.in)

The Finance Act, 2017 inserted section 92CE in the Income-tax Act, 1961 with effect from 1st April, 2018 to provide for secondary adjustment by attributing income to the excess money lying in the hands of the associated enterprise, in order to make the actual allocation of funds consistent with that of the primary transfer pricing adjustment.  The provision shall apply to primary adjustments exceeding Rupees One Crore made in respect of Assessment Year 2017-18 onwards.

PIB

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Requirement of tax deduction at source in case of entities whose income is exempted under Section 10 of the Income-tax Act, 1961-Exemption thereof

Requirement of tax deduction at source in case of entities whose income is exempted under Section 10 of the Income-tax Act, 1961-Exemption thereof

CIRCULAR No. 18/2017

F. No. 385/01/2015-IT (B)

Government of India/भारत सरकार
Ministry of Finance/वित्‍त मंत्रालय
Department of Revenue(राजस्‍व व‍िभाग)
Central Board of Direct Taxes(केन्‍द्रीय प्रत्‍यक्ष कर बोर्ड)

North Block, New Delhi
29th May, 2017

Subject: Requirement of tax deduction at source in case of entities whose income is exempted under Section 10 of the Income-tax Act, 1961 – Exemption thereof.

The Central Board of Direct Taxes (the Board) had earlier issued Circular No. 4/2002 dated 16.07.2002 and Circular No. 7/2015 dated 23.04.2015 which laid down that in case of such entities, whose income is unconditionally exempt under Section 10 of the Income-tax Act (the Act) and who are also statutorily not required to tile return of income as per Section 139 of the Act, there would be no requirement for tax deduction at source (TDS) from the payments made to them since their income is anyway exempted from tax under the Act. The issue of whether exemption from TDS can be extended to more entities on these principles and whether the exemption is needed to be withdrawn in respect of some of the exempted entities was examined by the Board.

2. Examination of the eligibility of entities for exemption from TDS on the principle of unconditional exemption and no requirement to file return revealed that Circulars No. 4/2002 and 7/2015 are required to be updated to make the following changes:

Entities that meet both the above mentioned conditions but are not mentioned in the aforesaid Circulars need to be included in the list of exempted entities.

Entities that are mentioned in Circular No. 4/2002 but their exemption from income tax has since been withdrawn need to be removed from the list of exempted entities.

Entities that are mentioned in Circular No. 4/2002 but because of subsequent amendment they are now required to mandatorily the their returns of income u/s 139 need to be removed from the list of exempted entities.

3. In view of the above, a revised list of entities exempted from TDS has been drawn by adding entities in the first category listed above to the entities mentioned in Circular No. 4/2002 and Circular No. 7/2015 and removing entities in second and third categories from the list of existing entities eligible for exemption from TDS.

4. Accordingly, it has been decided that in case of below mentioned funds or authorities or Boards or bodies, by whatever name called, referred to in section 10 of the Income-tax Act, whose income is unconditionally exempt under that section and who are also statutorily not required to tile return of income as per section 139 of the Income-tax Act, there would be no requirement for tax deduction at source, since their income is anyway exempt under the Income-tax Act –

(i) “local authority”, as referred to in the Explanation to clause (20);

(ii) Regimental Fund or Non-public Fund established by the armed forces of the Union referred to in clause (23AA);

(iii) Fund. by whatever name called, set up by the Life Insurance Corporation of India on or after 1st August, 1996, or by any other insurer referred to in clause (23AAB);

(iv) Authority (whether known as the Khadi and Village Industries Board or by any other name) referred to in clause (23BB);

(v) Body or authority referred to in clause (23BBA);

(vi) SAARC Fund for Regional Projects set up by Colombo Declaration referred to in clause (23BBC);

(vii) Insurance Regulatory and Development Authority referred to in clause (23BBE):

(viii) Central Electricity Regulatory Commission referred to in clause (23BBG);

(ix) Prasar Bharati referred to in clause (23BBH);

(x) Prime Minister’s National Relief Fund referred to in sub-clause (i), Prime Minister’s Fund (Promotion of Folk Art) referred to in sub-clause (it), Prime Minister’s Aid to Students Fund referred to in sub-clause (iii), National Foundation for Communal Harmony referred to in sub-clause (ilia), Swachh Bharat Kosh referred to in sub-clause (iiiaa), Clean Ganga Fund referred to in sub-clause (iiiaaa) of clause (23C);

(xi) Provident fund to which the Provident Funds Act, 1925 (19 of 1925) referred to in sub-clause (i), recognized provident fund referred to in sub-clause (ii), approved superannuation funds referred to in sub-clause (iii), approved gratuity fund referred to in sub-clause (iv) and funds referred to in sub-clause (v) of Clause (25);

(xii) Employees’ State Insurance Fund referred to in clause (25A);

(xiii) Agricultural Produce Marketing Committee referred to in clause (26AAB);

(xiv) Corporation. body, institution or association established for promoting interests of members of Scheduled Castes or Scheduled Tribes or backward classes referred to in clause (26B);

(xv) Corporation established for promoting interests of members of a minority community referred to in clause (26BB);

(xvi) Corporation established for welfare and economic upliftment of ex-servicemen referred to in clause (26BBB);

(xvii) New Pension System Trust referred to in clause (44).

4. This circular supersedes earlier Circulars on this issue e.g. Circular No. 4/2002 dated 16.07.2002 and Circular No. 7/2015 dated 23.04.2015 with effect from the date of issue of this Circular.

5. Hindi version shall follow.

(Sandeep Singh)
Under Secretary to the Govt. of India

Source: CBDT Circular

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Central Government notifies Exemption from Quoting Aadhaar / Enrolment ID to certain individuals

Central Government notifies Exemption from Quoting Aadhaar / Enrolment ID to certain individuals

The Central Government vide notification dated 11th May, 2017 has notified that the requirement of quoting of Aadhaar / Enrolment ID shall not apply to the following individuals if they do not possess the Aadhaar / Enrolment ID:

  • An individual who is residing in the state of Assam, Jammu and Kashmir and Meghalaya.
  • An individual who is a non-resident as per the Income-tax Act, 1961.
  • An individual of the age of eighty years or more at any time during the previous year.
  • An individual who is not a citizen of India.

The notification is available on the Income Tax website www.incometaxindia.gov.in.

Section 139AA of the Income-tax Act, 1961, as inserted by the Finance Act, 2017 provides for mandatory quoting of Aadhaar / Enrolment ID of Aadhaar application form for filing of return of income and for making an application for allotment of Permanent Account Number with effect from 1st July, 2017. Section 139AA (3) of the Act empowers the Central Government to notify the person(s) or State(s) to which the requirement of quoting of Aadhaar / Enrolment ID shall not apply.

PIB

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Income Tax department launches new facility to link Aadhaar with PAN

Income Tax department launches new facility to link Aadhaar with PAN

New Delhi: The Income Tax department has launched a new e-facility to link a person’s Aadhaar with the Permanent Account Number (PAN), a mandatory procedure for filing IT returns now.

The department’s e-filing website https://incometaxindiaefiling.gov.in/ has created a new link on its homepage making it easy” to link the two unique identities of an individual.

The link requires a person to punch in his PAN number, Aadhaar number and the exact name as given in the Aadhaar card”.

After verification from the UIDAI (Unique Identification Authority of India), the linking will be confirmed. In case of any minor mismatch in Aadhaar name provided, Aadhaar OTP (one time password) will be required,” the department said in its advisory to taxpayers and individuals.

The OTP will be sent on the registered mobile number and email of the individual.

It urged them to ensure that the date of birth and gender in PAN and Aadhaar are exactly the same, to ensure linking without failure.

There is no need to login or be registered on e-filing website (of the I-T department). This facility can be used by anyone to link their Aadhaar with PAN,” it said.

The government, under the Finance Act 2017, has made it mandatory for taxpayers to quote Aadhaar or enrolment ID of Aadhaar application form for filing of income tax returns (ITR).

Also, Aadhaar has been made mandatory for applying for permanent account number with effect from July 1, 2017.

The department, till now, has linked over 1.18 Aadhaar with its PAN database.

While Aadhaar is issued by the UIDAI to a resident of India, PAN is a ten-digit alphanumeric number issued in the form of a laminated card by the IT department to any person, firm or entity.

PTI

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General Provident Fund Interest Rate for 1st April to 30th June 2017 – Finmin Orders

General Provident Fund Interest Rate for 1st April to 30th June 2017 – Finmin Orders

GPF Interest Rate for 1st April to 30th June 2017 – Finmin Orders

(PUBLISHED IN PART I SECTION 1 OF GAZETTE OF INDIA)
F.NO. 5(1)-B(PD)/2017
Government of India
Ministry of Finance
Department of Economic Affairs
(Budget Division)

New Delhi, the 18th April, 2017

RESOLUTION

It is announced for general information that during the year 2017-2018, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 7.9% (Seven point nine per cent) w.e.f. 1st April, 2017 to 30th June, 2017. This rate will be in force w.e.f. 1st April, 2017. The funds concerned are:

1. The General Provident Fund (Central Services).
2. The Contributory Provident Fund (India).
3. The All India Services Provident Fund.
4. The State Railway Provident Fund.
5. The General Provident Fund (Defence Services).
6. The Indian Ordnance Department Provident Fund.
7. The Indian Ordnance Factories Workmen’s Provident Fund.
8. The Indian Naval Dockyard Workmen’s Provident Fund.
9. The Defence Services Officers Provident Fund.
10. The Armed Forces Personnel Provident Fund.

2. Ordered that the Resolution be published in Gazette of India.

(Navin Agarwal)
Director

Authority : GPFResolution2017

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Centre introduces provision of taxation on NPS in Income Tax Act

Centre introduces provision of taxation on NPS in Income Tax Act

Press Information Bureau
Government Of India
Ministry Of Defence

Dated: 11-04-2017

Tax on NPS

The provision that the withdrawal from National Pension Scheme is taxed to the extent of 60 per cent has been introduced into the Income Tax Act, 1961 (‘Act’) vide Finance Act, 2016 by inserting clause (12A) in Section 10 of the Act.

Prior to Finance Act, 2016, National Pension Scheme (NPS), referred to in section 80CCD, was under Exempt, Exempt and Tax (EET) regime i.e., the monthly/periodic contributions during the pension accumulation phase were allowed as deduction from income for tax purposes; the returns generated on these contributions during the accumulation phase were also exempt from tax but the terminal benefits on exit or superannuation, in the form of lump sum withdrawals, were taxable in the hands of the individual subscribed or his nominee in the year of receipt of such amounts unlike PPF and EPF which have been enjoying EEE regime i.e. Exempt, Exempt, Exempt.
In order to rationalize the taxability of receipts from pension plans, vide Finance Act, 2016, section 10 of the Act was amended to provide that any payment from National Pension Scheme to an employee on account of closure or his opting out of the NPS shall also be exempt from tax, to the extent it does not exceed forty percent of the total amount payable to him at the time of closure or his opting out of the scheme. Further, Finance Act, 2017 has amended section 10 of the Income-tax Act to exempt partial withdrawals by employees (to the extent of 25% of the employee’s contribution) from their NPS accounts in accordance with the guidelines prescribed under Pension Fund Regulatory and Development Authority Act, 2013.

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha today.

Source: PIB

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New Benefits announced for NPS Subscribers: Budget 2017

Budget 2017 – New Benefits announced for NPS Subscribers

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

PRESS RELEASE

In a bid to provide further impetus to the National Pension System (NPS), the following provisions have teen introduced in the Finance bill 2017 laid down in the Parliament today.

1. Tax-exemption to partial withdrawal from National Pension System (NPS)

The existing provision of section 10(12A) of the Income Tax Act. 1961 provides payment from National Pension System (NPS) to a Subscriber on closure of his account or opting out shall be exempt up to 40% of total corpus at the time of withdrawl . The amount utilized for purchase of annuity is also tax exempt. At the time of normal exit. 40% of the total corpus is mandatorily required to be purchased for annuity. The subscriber has the option to use higher amount for purchase Of annuity.

In order to provide further relief to the subscriber of NPS, it has been proposed to Insert a new clause (12B) in the section 10 of Income Tax Act, 1961 to provide exemption on partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act. 2013 and regulations made there under.

This benefit will be effective on partial withdrawal made by the subscriber after 1st April 2017.

2. Further, Contribution up to 20% of the Gross Income of the Self-employed Individual ( Individual other than salaried class) will be deductible from the taxable income under Section 8OCCD(1) of the Income Tax Act.1961, as against 10% earlier.

This is with a view to provide parity between a salaried employee and a self-employed.

This benefit will be available on contribution made by the self employed persons on or after 1st April 2017.

This increased limit tor tax benefit will help the self-employed individuals, to save taxes on higher contribution in NPS and thereby properly plan for their old age income security.

Additional tax deduction on investment upto Rs. 50000/- under Section 80CCD(1B) will continue to remain the same for all NPS subscribers whether salaried or self-employed.

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New Income Tax Rates And Deductions Applicable From April 1, 2017

New Income Tax Rates And Deductions Applicable From April 1, 2017

With some tinkering in the income tax rates for 2017-18, Finance Minister Arun Jaitley reduced the tax rate for income between Rs. 2.5 lakh and Rs. 5 lakh to 5 per cent in the Union Budget, while adding a surcharge of 10 per cent on tax for income between Rs. 50 lakh and Rs. 1 crore.

Although the basic income tax exemption limit remains the same at Rs. 2.5 lakh, there are many exemptions available in the Income Tax Act, which can substantially reduce your tax liability.

One needs to plan from the beginning of the next financial year to take maximum benefit of the income tax deductions available.

Here are the new income tax slabs for taxpayers:

General category Senior citizens Super senior citizens
(Up to 60 years of age) (60-80 years) (Above 80 years)
Income Tax Income Tax Income Tax
Up to Rs. 2.5 lakh Nil Up to Rs. 3 lakh Nil Up to Rs. 5 lakh Nil
Rs. 2,50,001-Rs. 5 lakh 5% Rs. 3,00,001-Rs. 5 lakh 5% Rs. 5,00,001-Rs. 10 lakh 20%
Rs. 500,001-Rs. 10 lakh 20% Rs. 5,00,001-Rs. 10 lakh 20% Above Rs. 10 lakh 30%
Above Rs. 10 lakh 30% Above Rs. 10 lakh 30%
# Surcharge of 10% for income between Rs. 50 lakh and Rs. 1 crore
# Surcharge of 15% for income above Rs. 1 crore
# Rebate of up to Rs. 2,500 for taxable salary up to Rs. 3.5 lakh
# Education and higher education cess of 3%

Here are the some of the deductions available for FY2017-18: 

House Rent Allowance under Section 10 (13A) of the Income Tax Act

House Rent Allowance, commonly known as HRA, makes up a major chunk of a salaried individual’s total pay. HRA is partly exempted from tax. If you are staying in your own house or not paying any rent, your HRA will be completely taxable. However, those who stay with their parents can also claim HRA benefits by paying rent to their parents.

The amount which is allowed for exemption under HRA is calculated as minimum of:

1) Rent paid annually minus 10 per cent of basic salary plus dearness allowance

2) Actual HRA received

3) 40 per cent of basic and dearness allowance (50 per cent in case of metro cities)

Deductions under Section 80C

Section 80C of the Income Tax Act provides various provisions under which an individual can get deduction benefits up to Rs. 1.5 lakh. Employees’ Provident Fund (EPF), Public Provident Fund (PPF), Sukanya Samriddhi Account, National Savings Certificate and tax-saving fixed deposits are some of the investment options that offer benefits under Section 80C. The premium paid for life insurance plans, National Pension Scheme (NPS) and tax-saving mutual funds (ELSS) also qualify for deduction under Section 80C.

Further, one can claim tuition fees paid for up to two children, principal repayment on home loan, stamp duty and registration cost on the house bought as deduction under Section 80C.

Deductions under Section 80CCD(1B)

Introduced in Budget 2015-16, Section 80CCD (1B) provides deduction up to Rs. 50,000 for investment in NPS Tier 1 account. This deduction is over and above the deduction available in Section 80C. An individual in 30 per cent tax bracket can save up to Rs. 15,450 of tax by investing Rs. 50,000 in NPS.

Deduction of interest on housing loan (Section 24B)

Buying a house is among several other things an individual wants to do during his or her lifetime. The income tax rules also incentivise the same. Under Section 24B of the Income Tax Act, interest paid up to Rs. 2 lakh on housing loan and up to Rs. 30,000 on home improvement loan is allowable as deduction from your taxable income.

The government has however cut down tax benefits borrowers enjoyed on properties let out on rent. As per current tax laws, for properties rented out, a borrower could deduct the entire interest paid on home loan after adjusting for the rental income. On the other hand, borrowers of self-occupied properties get Rs. 2 lakh deduction on interest repayment on home loan.

However, according to the proposed change in Budget 2017, on rented properties, the borrower can only claim deduction of up to Rs. 2 lakh per year after adjusting for the rental income. And the amount above Rs. 2 lakh can be carried forward for eight assessment years.

Since the interest component of home loan repaid in initial years is higher, experts say that the borrower may not be able to fully adjust the interest paid as deduction even in subsequent years.

Deduction under Section 80EE

Under Section 80EE, an additional deduction of Rs. 50,000 is available over and above the limit of Section 24B on interest paid on home loans if the person is buying a house for the first time (the person must not own any other residential property on the date of sanction of loan). However, to avail the benefit of this section the value of the property must be below Rs. 50 lakh and the loan amount should not exceed Rs. 35 lakh. Further, the property must be bought after April 1, 2016.
Deduction under Section 80D

Premium paid for medical/health insurance for self, spouse, children and parents qualify for deduction under this Section. On can claim deduction of Rs. 25,000, if he is below 60 years of age, and Rs. 30,000 if he is above 60 years of age, towards medical insurance premium paid for self, spouse and children. Further, additional deduction of Rs. 25,000 is available if one has bought medical insurance for his parents. This deduction can go up to Rs. 30,000 if parents are above the age of 60 years.
Deduction under Section 80DD

If a tax payer has dependent parents, spouse, children or siblings who are differently-abled, then he can claim deductions up to Rs. 75,000 for expenses on their maintenance and medical treatment under this section. This deduction can increase to Rs. 1.25 lakh in case of severe disability.
Deduction under Section 80DDB

Under this section, one can claim deduction of Rs. 40,000 for treatment of certain diseases for self and dependents. The deduction can go up to Rs. 60,000 if the tax payer is above 60 years of age and if he is above 80 years of age, then the deduction amount is up to Rs. 80,000.
Deduction under Section 80E

According to the provisions of Section 80E, a taxpayer can claim deduction for interest paid on education loan for him, spouse or children. There is no upper limit on the amount of deduction. However, the loan must have been taken from a financial institutional or approved charitable institution and for full-time higher education.

Source: NDTV

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INCOME TAX FAQ : What are allowances? Are all allowances taxable?

INCOME TAX FAQ : What are allowances? Are all allowances taxable?

​What is considered as salary income?
​​​ section 17​​ of the Income-tax Act defines the term ‘salary’. However, not going into the technical definition, generally whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as salary.

​What are allowances? Are all allowances taxable?
Allowances are fixed periodic amounts, apart from salary, which are paid by an employer for the purpose of meeting some particular requirements of the employee. E.g., Tiffin allowance, transport allowance, uniform allowance, etc.
There are generally three types of allowances for the purpose of Income-tax Act – taxable allowances, fully exempted allowances and partially exempted allowances.​

My employer reimburses to me all my expenses on grocery and children’s education. Would these be considered as my income?
​Yes, these are in the nature of perquisites and should be valued as per the rules prescribed in this behalf.​​

During the year I had worked with three different employers and none of them deducted any tax from salary paid to me. If all these amounts are clubbed together, my income will exceed the basic exemption limit. Do I have to pay taxes on my own?
​Yes, you will have to pay self-assessment tax and file the return of income.​

Even if no taxes have been deducted from salary, is there any need for my employer to issue Form-16 to me?
​​Form-16 is a certificate of TDS. In your case it will not apply. However, your employer can issue a salary statement.​

​Is pension income taxed as salary income?
​Yes. However, pension received from the United Nations Organisation is exempt.​​

Is Family pension taxed as salary income?
​No, it is taxable as income from other sources.​

​If I receive my pension through a bank who will issue Form-16 or pension statement to me- the bank or my former employer?
​​The bank.​

Are retirement benefits like PF and Gratuity taxable?
​​In the hands of a Government employee Gratuity and PF receipts on retirement are exempt from tax. In the hands of non-Government employee, gratuity is exempt subject to the limits prescribed in this regard and PF receipts are exempt from tax, if the same are received from a recognised PF after rendering continuous service of not less than 5 years.​

Are arrears of salary taxable?
​​​​Yes. However, the benefit of spread over of income to the years to which it relates to can be availed for lower incidence of tax. This is called as relief u/s 89​ of the Income-tax Act.​​

​Can my employer consider relief u/s 89 for the purposes of calculating the TDS from salary?
​​Yes, if you are a Government employee or an employee of a PSU or company or co-operative society or local authority or university or institution or association or body. In such a case you need to furnish Form No. 10E to your employer. ​​

​My income from let out house property is negative. Can I ask my employer to consider this loss against my salary income while computing the TDS on my salary?
​Yes, however, losses other than losses under the head ‘Income from house property’ cannot be set-off while determining the TDS from salary.​​

​Is leave encashment taxable as salary?
​​It is taxable if received while in service. Leave encashment received at the time of retirement is exempt in the hands of the Government employee. In the hands of non-Government employee leave encashment will be exempt subject to the limit prescribed in this behalf under the Income-tax Law.​

​Are receipts from life insurance policies on maturity along with bonus taxable?​
As per section 10(10D), any amount received under a life insurance policy, including bonus is exempt from tax. However, following receipts would be subject to tax:
Any sum received under sub-section (3) of section 80DD; or
Any sum received under Keyman insurance policy; or
Any sum received in respect of policies issued on or after April 1st, 2003, in respect of which the amount of premium paid on such policy in any financial year exceeds 20% (10% in respect of policy taken on or after 1st April, 2012) of the actual capital sum assured; or
Any sum received for insurance on life of *specified person (issued on or after April 1st 2013) in respect of which the amount of premium exceeds 15% of the actual capital sum assured.

* Any person who is –

i) A person with disability or severe disability specified under section 80U​; or

ii) suffering from disease or ailment as specified in the rule made under section 80DDB.

Following points should be noted in this regard:
Exemption is available only in respect of amount received from life insurance policy.
Exemption under section 10(10D)​ is unconditionally available in respect of sum received for a policy which is issued on or before March 31, 2003.
Amount received on the death of the person will continue to be exempt without any condition.​

Authority: http://www.incometaxindia.gov.in/

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