Income Tax

Salaried peoples expectations from Budget 2017-18

Salaried peoples expectations from Budget 2017-18

New Delhi: Finance Minister Arun Jaitley unveils the budget on 1 February. The salaried class has a lot of expectations from the Budget. Increase in the personal income tax exemption limit and a higher deduction limit on home loan interest are among the common ones, say analysts.

The following salaried people’s expectations from FM Jaitley’s Budget 2017-18:

1. Raise minimum limit for taxable income

Considering the increase in cost of living, the current basic exemption limit of 2.5 lakh should be raised to Rs. 3 lakh. If the minimum limit is increased, it will not only benefit taxpayers at the bottom but also salaried class youth who are starting out as employees.

2. Change in tax slabs

A Change in of tax slabs will be a big balm for the salaried class. Currently, 10 per cent tax is charged on annual income of Rs 2.5 lakh to Rs 5 lakh, 20 per cent on Rs 5 lakh to Rs 10 lakh and 30 per cent on income above Rs 10 lakh. The first two slabs can be widened or taxed at a lower rate.

3. Raise exemption limit on allowances

Salaried employees enjoy exemption from tax on several allowances/benefits that the employer provides such as children’s education, conveyance, medical reimbursement, house rent and leave travel. The allowance limits were fixed a long time ago and need to be revised in view of inflation.

4. Increase deduction under Section 80C

Currently, deduction under Section 80C of the Income-tax Act is allowed from Rs 150,000 to Rs 300,000. If Jaitley increases the limit, he can boost household savings which can ultimately get invested and power growth.

5. Bring back deduction on infrastructure bonds

The government may reintroduce deduction of Rs 20,000 or actual amount invested, whichever is lower, for investments made in infrastructure bonds. This will also boost spending, spur growth and create more jobs.

6. Offer more incentives for NPS investment

Jaitley can offer more incentives for taxpayers to invest in the National Pension System (NPS). He can increase the deduction under Section 80CCD (1B) to Rs 100,000 from the existing Rs 50,000. He can also being NPS on par with the Employees Provident Fund or Public Provident Fund with respect to exemption of 100 per cent of the accumulated balance on withdrawal, subject to certain conditions.

7. Offer interest subvention on home loans

Prime Minister Narendra Modi has already offered interest subvention of 3 per cent and 4 per cent for loans of up to Rs 12 lakh and Rs 9 lakh, respectively, under the Pradhan Mantri Awas Yojana. However, these subventions are targeted at buyers in Tier 3 cities. Budget 2017 has scope of offering interest subvention on larger amounts of loan which will benefit buyers in big cities and other urban areas.

8. Allow higher deduction on home loan EMIs

Currently, the deduction available on interest on home loan is up to Rs 2,00,000. The deduction can be claimed on the principal repayment for up to Rs 1.50 lakh. There is a large scope in both cases to raise the deduction limits.

9. Allow early deduction on home loan EMIs

Deduction for interest on home loan is currently available only after the buyer gets the possession of the property. This means the benefit begins several years after the buyer gets the home loan and begins paying the EMIs. This deduction can be given right from the payment of the first EMI.

10. Raise exemption limit for senior citizens

The existing exemption limit of Rs 300,000 for senior citizens (60 years to less than 80 years) and Rs 500,000 for super senior citizens (80 years and above) could be enhanced to Rs 400,000 and Rs 600,000 respectively.

TST

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CBDT issues clarification on indirect transfer provision under the IT Act, 1961

CBDT issues clarification on indirect transfer provision under the IT Act, 1961

New Delih: The Central Board of Direct Taxation (CBDT) on Wednesday issued clarification on Indirect Transfer provisions in respect to circular no. 41/2016, which was issued on December 21, 2016.

After the issue of the aforementioned circular, representations have been received from various FPIs, FIIs, VCFs and other stakeholders.
The stakeholders have presented their concerns stating that the circular does not address the issue of possible multiple taxation of the same income.

The representations made by the stakeholders are currently under consideration and examination.

Pending a decision in the matter the operation of the above mentioned circular is kept in abeyance fourth time being.

ANI

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Pan or Form No 60 mandatory for all bank accounts – Submit to the bank by 28.2.2017

Income-tax Rules amended to provide that bank shall obtain and link PAN or Form No. 60 (where PAN is not available) in all existing bank accounts (other than BSBDA) by 28.02.2017.

Press Information Bureau
Government of India
Ministry of Finance

08-January-2017 18:17 IST

Income-tax Rules amended to provide that bank shall obtain and link PAN or Form No. 60 (where PAN is not available) in all existing bank accounts (other than BSBDA) by 28.02.2017.

Income-tax Rules have been amended to provide that bank shall obtain and link PAN or Form No. 60 (where PAN is not available) in all existing bank accounts (other than BSBDA) by 28.02.2017, if not already done. In this connection, it may be mentioned that RBI vide circular dated 15.12.2016 has mandated that no withdrawal shall be allowed from the accounts having substantial credit balance/deposits if PAN or Form No.60 is not provided in respect of such accounts. Therefore, persons who are having bank account but have not submitted PAN or Form No.60 are advised to submit the PAN or Form No. 60 to the bank by 28.2.2017.

The banks and post offices have also been mandated to submit information in respect of cash deposits from 1.4.2016 to 8.11.2016 in accounts where the cash deposits during the period 9.11.2016 to 30.12.2016 exceeds the specified limits.

It has also been provided that person who is required to obtain PAN or Form No.60 shall record the PAN/Form.No.60 in all the documents and quote the same in all the reports submitted to the Income-tax Department.

The notification amending the relevant rules is available on the official website of the Income-tax Department i.e. www.incometaxindia.gov.in

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Tax collection figures for the period April -December 2016 show a positive trend

Tax collection figures for the period April -December 2016 show a positive trend as Direct Taxes grow by 12.01% and Indirect Taxes grow by 25% over the corresponding period last year i.e. April-December 2015
Direct Tax and Indirect tax collection figures for the period April 2016 to December 2016 have shown a positive trend as Direct Taxes grow by 12.01% and Indirect Taxes grow by 25% over the corresponding period last year i.e. April-December 2015.
The details in this regard are as follows:

Direct Taxes

The figures for Direct Tax collections up to December, 2016 show that net collections are at Rs. 5.53 lakh crore which is 12.01% more than the net collections for the corresponding period last year. This collection is 65.3% of the total Budget Estimates of Direct Taxes for F.Y. 2016-17.

As regards the growth rates for Corporate Income Tax (CIT) and Personal Income Tax (PIT), in terms of gross revenue collections, the growth rate under CIT is 10.7% while that under PIT (including STT) is 21.7%. However, after adjusting for refunds, the net growth in CIT collections is 4.4% while that in PIT collections is 24.6%. Refunds amounting to Rs.1,26,371 crore have been issued during April-December, 2016, which is 30.5% higher than the refunds issued during the corresponding period last year.

After accounting for the third instalment of advance tax received in December, 2016, the collections under advance tax stand at Rs.2.82 lakh crore, which is 14.4% higher than the figures for the corresponding period of last year. CIT advance tax is growing at 10.6% while PIT advance tax has registered a growth of 38.2%.

Indirect Taxes

The figures for indirect tax collections (Central Excise, Service Tax and Customs) up to December 2016 show that net revenue collections are at Rs 6.30 lakh crore, which is 25% more than the net collections for the corresponding period last year. Till December 2016, about 81% of the Budget Estimates of indirect taxes for Financial Year 2016-17 has been achieved.

As regards Central Excise, net tax collections stood at Rs. 2.79 lakh crore during April-December, 2016 as compared to Rs.1.95 lakh crore during the corresponding period in the previous Financial Year, thereby registering a growth of 43%.

Net Tax collections on account of Service Tax during April-December, 2016 stood at Rs. 1.83 lakh crore as compared to Rs.1.48 lakh crore during the corresponding period in the previous Financial Year, thereby registering a growth of 23.9%.

Net Tax collections on account of Customs during April-December 2016 stood at Rs. 1.67 lakh crore as compared to Rs. 1.60 lakh crore during the same period in the previous Financial Year, thereby registering a growth of 4.1%.

During December 2016, the net indirect tax (with ARM) grew at the rate of 14.2% compared to corresponding month last year. The growth rate in net collection for Customs, Central Excise and Service Tax was -6.3%, 31.6% and 12.4% respectively during the month of December, 2016, compared to the corresponding month last year. The de-growth in customs collections appear to be on account of a decline of gold imports by about 46% (in volume terms) in December 2016 over December 2015.

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Government asks banks to obtain PAN from account holders

Government asks banks to obtain PAN from account holders

 

New Delh: Tightening the noose around tax evaders, the government has asked banks to obtain permanent account number (PAN) or Form-60 if PAN is not available, from all bank account holders by February 28, 2017.

“Income-tax Rules have been amended to provide that bank shall obtain and link PAN or Form No. 60 (where PAN is not available) in all existing bank accounts (other than BSBDA) by February 28, 2017, if not already done,” a notification by the Central Board of Direct Taxes (CBDT) stated today.

The persons who are having bank accounts but have not submitted PAN or Form No 60 are advised to submit the PAN or Form No 60 to the bank by February 28, 2017, the notification stated.

However, this rule will not apply to Basic Savings Bank Deposit Accounts (BSBDA), which are zero balance savings accounts, including Jandhan accounts.

The BSBDA were introduced to take care of simple banking needs of people, which come with free ATM card, monthly statement and cheque book.

Last month, RBI had mandated that no withdrawal shall be allowed from the accounts having substantial credit balance/deposits if PAN or Form No.60 is not provided in respect of such accounts.

It further said that the banks and post offices had also been mandated to submit information in respect of cash deposits from April 1, 2016 to November 8, 2016 in accounts where the cash deposits during the period November 9, 2016 to December 30, 2016 exceeds the specified limits.

It has also been provided under the new rules that person who is required to obtain PAN or Form No.60 shall record the PAN/Form.No.60 in all the documents and quote the same in all the reports submitted to the Income-tax Department.

PTI

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Reporting Cash Transactions under Rule 114E of Income Tax Rules, 1962

Reporting Cash Transactions under Rule 114E of Income Tax Rules, 1962

Rule 114E of Income-Tax Rules, 1962, for furnishing Statement of Financial Transactions (SFT) came into force with effect from 1st April, 2016. Any person who is liable for audit under section 44AB of the Income-Tax Act, 1961 is required to furnish a statement in respect of transaction at serial no. 11 of Rule 114E(2) relating to receipt of cash payment exceeding Rupees 2,00,000/- (Rupees Two Lakh) for sale of goods or service. Doubts were raised if such transactions are required to be aggregated for reporting.

The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT’s Notification No. 91/2016 dated 6th October, 2016; clearly indicating that the said transactions did not require aggregation and the reporting requirement under SFT for this purpose is on receipt of cash payment exceeding Rupees Two Lakh for sale of goods or services per transaction.

PIB

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Government decides to reduce the existing rate of deemed profit under section 44AD of the Income Tax Act in respect of amounts/receipts through banking channel/digital means

Government decides to reduce the existing rate of deemed profit under section 44AD of the Income Tax Act in respect of amounts/receipts through banking channel/digital means

Under the existing provisions of section 44AD of the Income-tax Act, 1961 (the Act), in case of certain assesses (i.e. an individual, HUF or a partnership firm other than LLP) carrying on any business (other than transportation, agency, brokerage and commission) and having a turnover of Rupees Two Crore or less, the profit is deemed to be 8% of the total turnover.

In order to achieve the Government’s mission of moving towards a less cash economy and to incentivise small traders / businesses to proactively accept payments by digital means, it has been decided to reduce the existing rate of deemed profit of 8% under section 44AD of the Act to 6% in respect of the amount of total turnover or gross receipts received through banking channel / digital means for the financial year 2016-17. However, the existing rate of deemed profit of 8% referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash.

Legislative amendment in this regard shall be carried out through the Finance Bill, 2017.

PIB

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Finance Minister conveys Government’s Appreciation to tax payers for their contribution towards Nation building

Finance Minister conveys Government’s Appreciation to tax payers for their contribution towards Nation building

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, 19th September, 2016.

Press Release

Sub: Finance Minister conveys Government’s Appreciation to tax payers for their contribution towards Nation building.

The Government acknowledges the contribution of individual tax payers in paying taxes within the prescribed time and prompt filing of Income Tax Returns. The Honourable Finance Minister, Shri Arun Jaitley today handed over certificates of appreciation issued by CBDT honoring select tax payers for such contribution. While it is widely acknowledged that the Nation meets its obligations towards spending in various social sector and welfare schemes and infrastructure development out of revenues mobilized through tax payments by millions of honest tax payers, this step marks the first effort by the Government to directly communicate to the tax payer its appreciation for that contribution.

CBDT will be sending out such certificates of appreciation to individual tax payers by e-mail in various categories on the basis of the level of taxes paid by them for the current Assessment Year 2016-17 where taxes have been paid in full and tax payers have no outstanding tax liabilities and where the return is e-filed within the prescribed due date. The tax payers may display these certificates in their homes / offices.

The categories for individual taxpayers and the number of certificates being issued in the first round are:

1 Platinum Tax  contributed Rs. 1 Crore and above
2 Gold Tax contributed Rs. 50Lakh to Rs. 1 Crore
3 Silver Tax contributed Rs. 10Lakh to Rs.50 Lakh
4 Bronze Tax contributed Rs. 1Lakh to Rs.10 Lakh

The CBDT urges taxpayers to e-file their returns in time and verify their return by submitting the Electronic Verification Code online or sending their ITR-V within the 120 day period so that they can be also acknowledged for their contribution.

The Department is committed to continuous improvement of taxpayer services and seeks the cooperation of all taxpayers in contributing their fair share of taxes voluntarily.

 

sd/-
(Meenakshi J Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
Official Spokesperson, CBDT.

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

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Income Tax Department lists Transactions where PAN will be Mandatory

Income Tax Department lists Transactions where PAN will be Mandatory

The Income Tax Department prescribes a list of transactions for which quoting of Permanent Account Number (PAN) is mandatory. These are listed in Rule 114B of the Income Tax Rules, 1962 which were first inserted with effect from 1st November, 1998 and have been amended from time to time. The list under Rule 114B (read the rule here –  as on date requiring PAN to be quoted includes the following banking transactions :

  • Deposit with a banking company or a co-operative bank in cash exceeding fifty thousand rupees during any one day.
  • Purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank in cash for an amount exceeding fifty thousand rupees during any one day.
  • A time deposit with a banking company or a co-operative bank or a Post Office
  • Opening an account [other than a time-deposit referred to above or a Jandhan / Basic Bank Deposit Account] with a banking company or a co-operative bank.

In addition to the existing requirement of quoting of PAN in respect of cash deposits in excess of Rupees fifty thousand in a day, quoting of PAN will now also be mandatory in respect of cash deposits aggregating to Rupees two lakh fifty thousand or more during the period 09th November, 2016 to 30th December, 2016 as per an amendment notified by CBDT on 15-11-2016. 

The Department has already issued close to 25 crore PAN till date. The persons requiring a PAN for complying with the above requirement may do so by applying to the NSDL in a prescribed format with the necessary documentary proof. The link to the NSDL site  and the instructions for making the application are available on the official website of the Income-tax Department  www.incometaxindia.gov.in  under the ‘Important Links’ head  in  the lower left hand corner of the homepage.

Open Income Tax Rules 114B here

Be the first to comment - What do you think?  Posted by admin - November 18, 2016 at 9:57 pm

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Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees

Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees under Section 10, Section 24, Section 89(1), Chapter VIA, and Section 87A

Income Tax Rate 2016-17

TAXABLE INCOME RANGE RATE OF INCOME TAX
Up to RS.2,50,000 NIL
Rs.2,50,001 to Rs.5,00,000 10% of the amount by which the income exceeds Rs.2,50,000
Rs.5,00,001 to Rs.10,00,000 Rs.25,000 plus 20% of the amount by which the income exceeds Rs.5,00,000
Above Rs.10,00,001 Rs.1,25,000 plus 30% of the amount by which the income exceeds Rs.10,00,000
 

Education Cess

3% on Total Income Tax Payble

Section 10 (13A) – Exemption in respect of HRA:

Under Sec. 10(13A), an employee who is in receipt of House Rent Allowance (HRA) can claim exemption, if he does not live in his own house, and pays rent in excess of 10% of his salary for his residential accommodation.

Exemption u/s 10(13A) is the least of the following

1. Actual amount of HRA received

2. 50% (for Chennai, Mumbai, Kolkata and Delhi) / 40% (for other places) of the Salary for the relevant period

3. Rent paid Less 10% of Salary for the relevant period.

Section 87A – Rebate of Income Tax for Taxable income up to Rs. 5 Lakh 

Finance Act 2016 provides for rebate of Income up to Rs. 5000/- in respect of Persons who have Taxable not exceeding Rs. 5 lakh.

Section 10(14) – Transport Allowance and Children Education Allowance (CEA)

Under Section 10(14), the Budget FY 2016-17 lets you claim Rs. 19,200 tax exemption as transport allowance and Rs. 2,400 tax exemption as Children Education Allowance (CEA) in a financial year.

Section 24(b) – Home Loan

If you have taken a Home Loan, then you can claim a tax deduction on the interest component of the loan under Section 24(b). For self-occupied properties, you can benefit from deductions of up to Rs. 2,00,000.

Section 89(1) – Income Tax relief in respect of Arrears of Salary pertaining to previous years

If arrears of salary has been received in Financial year 2016-17 related to previous years then Relief of Income Tax can be claimed u/s 89(1) by accounting income from arrears in respective years on notional basis.

Deductions allowed under Chapter VI A of Income Tax Act

Deduction Limit – Sec 80CCE. As per Section 80CCE, deduction can be claimed upto Rs. 1,50,000 for the payments / contributions made under Sections 80C, 80CCC and 80CCD

Section 80C – Subject to overall limit of Rs. 1,50,000 under Section 80CCE

For investments in specified schemes, saving instruments etc.

  1. Life insurance premium for policy:

    a) in case of individual, on life of assessee, assessee’s spouse and any child of assessee

    b) in case of HUF, on life of any member of the HUF

  2. Sum paid under a contract for a deferred annuity:

    a) in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)

    b) in case of HUF, on life of any member of the HU

  3. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]
  4. Contributions by an individual made under Employees’ Provident Fund Scheme
  5. Contribution to Public Provident Fund Account in the name of:

    a) in case of individual, such individual or his spouse or any child of such individual

    b) in case of HUF, in the name of any member there of

  6. Contribution by an employee to a recognized provident fund
  7. Contribution by an employee to an approved superannuation fund
  8. Subscription to any notified security or notified deposit scheme of the Central Government.

    For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction. Amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.

  9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
  10. Contribution for participation in unit-linked Insurance Plan of UTI:

    a) in case of an individual, in the name of the individual, his spouse or any child of such individual

    b) in case of a HUF, in the name of any member thereof

  11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:

    a) in the case of an individual, in the name of the individual, his spouse or any child of such individual

    b) in the case of a HUF, in the name of any member thereof

  12. Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
  13. Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children
  14. Certain payments for purchase/construction of residential house property
  15. Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both
  16. Sum paid towards notified annuity plan of LIC or other insurer
  17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
  18. Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
  19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
  20. Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above. 21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.
  21. Subscription to notified bonds issued by the NABARD.
  22. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
  23. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)

 

Section 80CCC – Subject to overall limit of Rs. 1,50,000 under Section 80CCE

Contribution to certain specified Pension Funds such as LIC or other authorised Insurance Companies

Section 80CCD(1) – Subject to overall limit of Rs. 1,50,000 under Section 80CCE

Deduction in respect of contributions to National Pension Scheme / System (NPS) notified by Central Government

Limit : 10% of salary in case of employees, 10% of gross total income in case of others

Section 80CCD(1B)

Deduction in respect of the deposit under a pension scheme notified by Central Government (NPS) up to Rs. 50,000/-

Section 80CCD(2)

Deduction in respect of employer contributions to NPS – National Pension Scheme / System – This deduction is available over and above the Rs. 1.5 lakh limit

Section 80 CCG

Amount invested in listed shares covered by Rajiv Gandhi Equity Equity Saving Scheme. Deduction of 50% of total investment subject to maximum of Rs. 25,000 is allowed for 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired

Section 80D

Amount invested in Health Insurance

In case of Individual, amount paid: a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen) b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 30,000 if parent is a senior citizen or very super senior citizen) In case of HUF, up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen).

The aggregate amount of deduction cannot exceed Rs. 60,000/- in case of an individual.

Section 80DD

Expenditure incurred for the medical treatment of a dependent (spouse, children, parents, brothers and sisters of the individual) up to Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Section 80DDB

Expenditure incurred for medical treatment of specified diseases for self, or wholly dependent spouse, children, parents, brothers and sisters up to Rs. 40,000 (Rs. 60,000 in case of senior citizen and Rs. 80,000 in case of very senior citizen)

Section 80E

Interest paid on Educational Loan with no limit

Section 80EE

Interest on loan for acquiring residential house property, sanctioned during the financial year 2016-17. The Housing Loan availed should be up to Rs. 35 lakh and should have been availed in the year 2016-17

Section 80G

Deduction in respect of donations to certain funds, charitable institutions, etc.

Section 80GG

Rent paid for residential accommodation from the income of Tax Payer / assessee who is not in receipt of HRA

Least of the following shall be exempt from tax: a) Rent paid in excess of 10% of total income*;

b) 25% of the Total Income; or

c) Rs. 5,000 per month.

Section 80 TTA

Interest on Savings Bank accounts subject to maximum of Rs. 10,000

Section 80U

Exemption of income tax for an income up Rs. 75,000 for persons with disability (Rs. 1,25,000 in case of persons with severe disability)

Source: Incometaxindia.gov.in

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Income Tax 2016-17 : All Salaried Employees to declare deductions and savings under Form 12BB

Income Tax 2016-17 : All Salaried Employees to declare deductions and savings under Form 12BB : Download Form 12BB as a Word, Excel or PDF file- All Employees to file Declaration under Form 12BB to claim deduction for savings under Section 80 C, payment of house loan interest under Section 24, and HRA exemption under Section 10

The Finance Act, 2015 had introduced section 192(2D) of the Income-tax Act, 1961 (the Act) wherein the person responsible for making payment of salary (employer) was obliged to collect the necessary evidence or proof in the prescribed form and manner to allow any claim for any deduction and/or tax saving investments. However, the relevant rules and form were yet to be prescribed. The Central Board of Direct Taxes (CBDT) has come out with the relevant rules1 and also prescribed the form i.e. Form 12BB, in which salaried employees would now be required to furnish evidence of claims and tax saving investments to the employer.

Download Form 12BB as a PDF file for declaring your deductions and savings to your Employer

Download Form 12BB as a Word File

Download Form 12BB as Excel File

Till Finance Act 2016, there was no standard format for salaried employees for filing declaration with their employer to claim deduction for savings under Section 80 C, payment of house loan interest under Section 24, and HRA exemption under Section 10. In the absense of single declaration form, employees had to submit proof for each investment made in the year.

As a relief to employees and also to employer, Income Tax Department has introduced a new Form 12BB. This form, applicable from June 1, 2016, will act as a single entity that you can use to declare your to claim deduction for savings under Section 80 C, payment of house loan interest under Section 24, and HRA exemption under Section 10.

Deductions that can be declared under Form 12BB:

The standard Form 12BB is for all salaried Employees to claim tax deductions. You use can use it to claim deductions for leave travel allowance (LTA/LTC), house rent allowance (HRA), interest paid on home loans, and all other tax deductions pertaining to Chapter VI-A of the Income Tax Act.

House Rent Allowance (HRA):

With form 12BB, you can claim any HRA tax deductions under Section 10 (13A) of the Income Tax Act. Along with 12BB you will need to provide the relevant rent receipts for this deduction. You will also need to submit the name and address of the landlord. In the event the aggregate rent paid by you exceeds Rs 1 lakh, you will also need to submit the Permanent Account Number (PAN) of your landlord.

Amount claimed under Leave travel Concession (LTC)

With Form 12BB, you need to furnish amount and provide evidence of expenses made towards your travel. Unlike in the past, it is now mandatory to provide proof of all travel expenses in the form of receipts for your claim.

Interest on home loan under Section 24:

Earlier to claim deduction for interest paid on home loan, we have to submit interest certificate from the concerned bank. Now, in addtion to the same we will have to fill up Form 12BB to claim deductions under Section 24 of the Income Tax Act.

Savings / deductions under Chapter VI-A:

All tax deductions under Section 80C, Section 80CCC, and Section 80CCD, as well as other sections like 80E, 80G, and 80TTA come under Chapter VI-A of the IT Act. For deductions, fill up Form 12BB and provide details and proof of your investments and expenditures incurred related to the relevant section you are seeking deductions under.

Be the first to comment - What do you think?  Posted by admin - October 31, 2016 at 1:39 pm

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Government reduces interest rate on GPF to 8 percent

Government reduces interest rate on GPF to 8 percent

New Delhi: In a move which will hurt millions of employees, the government has reduced interest rate on contributions to General Provident Fund (GPF) and other similar funds to 8% from October 1 to December 31 for fiscal 2016-17.

The interest rate on such funds was 8.1% from April, 2016, while it was at 8.7 per cent for the previous fiscal.

It is announced … that during the year 2016-2017, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8.0% (Eight per cent) w.e.f. 1st October, 2016 to 31st December, 2016, the Finance Ministry Resolution said today.

The reduction of increased interest rate will be available to subscribers of Contributory Provident Fund (India), All India Services Provident Fund, State Railway Provident Fund and General Provident Fund (Defence Services).

Contributors to Indian Ordnance Department Provident Fund, Indian Ordnance Factories Workmen’s Provident Fund, Indian Naval Dockyard Workmen’s Provident Fund, Defence Services Officers Provident Fund and Armed Forces Personnel Provident Fund will also hurt from the move.

Rate of interest on GPF is generally fixed after taking into consideration the average secondary market yields on government securities of similar maturity.

Be the first to comment - What do you think?  Posted by admin - October 4, 2016 at 11:40 am

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In order to facilitate the declarants, counters for receiving declarations under the Income Declaration Scheme 2016 to remain functional till 12:00 midnight on 30th September, 2016

In order to facilitate the declarants, counters for receiving declarations under the Income Declaration Scheme 2016 to remain functional till 12:00 midnight on 30th September, 2016.

In order to facilitate the declarants who would like to file the declaration in paper form under the Income Declaration Scheme, 2016, the Central Board of Direct Taxes (CBDT) has issued instructions to all Principal Chief Commissioners of Income Tax across India to ensure that arrangements are made for receiving such declarations till midnight of 30.09.2016.

Declarations can also be made online as well as in printed copies of the prescribed form upto midnight on 30th September, 2016.

Accordingly, the counters for receiving declarations under the Income Declaration Scheme 2016 shall be functional till 12:00 midnight on 30th September, 2016.

The Income Declaration Scheme, 2016 came into effect from 1st June, 2016. It provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets.

PIB

Be the first to comment - What do you think?  Posted by admin - September 27, 2016 at 7:08 pm

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Government reiterates that information contained in a valid declaration under the Income Declaration Scheme, 2016 is confidential and shall not be shared with any authority.

Government reiterates that information contained in a valid declaration under the Income Declaration Scheme, 2016 is confidential and shall not be shared with any authority.

The Income Declaration Scheme, 2016 (the Scheme) provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets. The Scheme is open for declarations up to 30.9.2016.

As regards, concerns regarding confidentiality of the information filed under the Scheme, it is reiterated that information contained in a valid declaration is confidential and shall not be shared. In respect of declarations filed with the Commissioner of Income-tax, Centralised Processing Centre, Bengaluru [CIT (CPC)], the declaration shall not be shared even with the jurisdictional Principal Commissioner / Commissioner and payments made under the Scheme shall not be visible to the jurisdictional officers. Form-2 and Form-4 required to be issued in such cases shall be system generated by the CPC.

Similarly, the declaration filed with jurisdictional Principal Commissioner/Commissioner shall not be shared with any authority within or outside the department including the jurisdictional Assessing Officer. Further, the payments under the Scheme shall neither be reflected in 26AS statement nor can be viewed by the Assessing Officer in the Online Tax Accounting System (OLTAS) of the Department in the interest of confidentiality.

PIB

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The Income Declaration Scheme, 2016

The Income Declaration Scheme, 2016 – Reserve Bank of India(RBI) requested to issue instructions to banks to allow payment of tax under the Scheme in cash and to allow deposit of cash over the counter.
The Income Declaration Scheme, 2016 provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets. The Scheme has come into effect from 1.6.2016 and is open for declarations upto 30.9.2016.

In respect of the issue of deposit of cash declared under the Scheme, the Central Board of Direct Taxes (CBDT) vide Circular No.29 of 2016 dated 18.8.2016 clarified that Reserve Bank of India (RBI) has been requested to issue instructions to banks to allow payment of tax under the Scheme in cash and to allow deposit of cash over the counter.

The RBI has vide its circular dated 08.09.2016 instructed the banks to invariably accept cash deposits from all the declarants under the Scheme and to accept cash deposits, irrespective of amount, over the counters, for making payment under the Scheme through challan ITNS-286.

The relevant circular of RBI is available on the departmental website www.incometaxindia.gov.in

Be the first to comment - What do you think?  Posted by admin - September 9, 2016 at 6:40 pm

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Income Declaration Scheme 2016 – Government issues Clarifications in the form of Sixth Set of Frequently Asked Questions (FAQs)

Income Declaration Scheme 2016 – Government issues Clarifications in the form of Sixth Set of Frequently Asked Questions (FAQs)

The Income Declaration Scheme, 2016 (the Scheme) provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets. The Scheme has come into effect from 1.6.2016 and is open for declarations up to 30.9.2016. The Income Declaration Scheme, 2016 Rules (the Rules) have been notified on 19.5.2016. The amount payable under the Scheme can be paid in instalments viz. 25% of the total amount payable by 30.11.2016; another 25% by 31.3.2017 and balance 50% by 30.9.2017.

In order to address concerns of the stakeholders and to clarify the queries relating to the provisions of the Scheme, the Rules have been amended from time to time and six set of circulars (FAQs) have been issued. The following major issues addressed through Rules and FAQs are as under:

• The information in respect of a valid declaration is confidential and shall neither be shared with any law enforcement agency nor shall be enquired into by the Income-tax Department.

• The assets declared under the Scheme are to be valued at cost of acquisition or at fair market price as on 1.6.2016 as determined by the registered valuer, whichever is higher. However, an option for valuation of registered immovable property on the basis of stamp duty value of acquisition adjusted with the Cost Inflation Index has also been provided.

• Credit for unclaimed TDS made on declared income shall be allowed.

• Neither any capital gains tax nor any TDS shall be levied on transfer of declared benami property from benamidar to the declarant without consideration.

• The amount of fictitious liabilities recorded in audited balance sheet and not linked to acquisition of an asset can be disclosed under the Scheme as such.

• The period of holding of declared registered immovable assets shall be taken on the basis of the actual date of registration.

• The valuation report obtained by the declarant from a registered valuer shall not be questioned by the department. However, valuer’s accountability will remain.

• No adverse action shall be taken by FIU or the income-tax department solely on the basis of the information regarding cash deposit made consequent to the declaration under the Scheme.

• No enquiry/investigation shall be made in respect of the undisclosed income and assets declared under the Scheme even if the evidence of same is found subsequently during course of search or survey proceedings (circular No.32 dated 01.09.2016).

Further, vide Circular No. 31 dated 30.8.2016 an option has been provided to the declarants to file the declaration under the Scheme electronically under digital signature with the Commissioner of Income-tax, Centralised Processing Centre, Bengaluru [CIT(CPC)]. In case the declarant exercises the said option the declaration shall not be shared with the jurisdictional Principal Commissioner/Commissioner under the Income-tax Act.

In view of the fact that all the major queries and concerns of stakeholders have already been addressed by issue of circulars (FAQs) and also to provide stability and certainty to the Scheme, it is envisaged that no further clarifications on the Scheme shall be issued.

It is reiterated that the Scheme closes on 30.09.2016. The extension of the scheme is out of question.

PIB

Be the first to comment - What do you think?  Posted by admin - September 6, 2016 at 11:38 am

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Clarification regarding the Income Declaration Scheme 2016

Clarification regarding the Income Declaration Scheme 2016

Fifth Set of Frequently Asked Questions (FAQs) was issued yesterday clarifying certain issues relating to Income Declaration Scheme,2016 (the Scheme). Clarification has been sought as to whether the answer number 4 of the said FAQ shall apply to all assets declared under the Scheme or it is limited to only immovable property. As explained in the said answer, the clarification was issued considering the fact that investment in an immovable property may be funded partially from undisclosed and partially from disclosed sources. In such cases, if the property is sold in near future, gains from part of the property may be long term and the balance may be short term. This shall cause undue hardship to the declarant. Therefore, the clarification issued relates only for determination of holding period of immovable property.

In view of the above, it is again clarified that answer number 4 of the said FAQ shall only be applicable for determining holding period of an immovable property for which the date of acquisition is evidenced by a deed registered with any authority of the State Government. However, for assets other than immovable property declared under the Scheme, the holding period shall start from 01.06.2016 for purpose of computation of capital gains.

Source : PIB

Be the first to comment - What do you think?  Posted by admin - August 19, 2016 at 7:16 pm

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Income Declaration Scheme: Government assures complete confidentiality

Income Declaration Scheme: Government assures complete confidentiality

Scheme not be extended beyond September 30 : Revenue Secretary

The Government has assured complete confidentiality to those declaring their income under the Income Declaration Scheme 2016. Addressing a press conference in Mumbai today, the Revenue Secretary, Government of India Shri Hasmukh Adhia said “no source will be asked and no further proceedings will be initiated against those availing of the opportunity to declare their hitherto undisclosed income under the scheme”. Shri Adhia also reassured that the information contained in the declaration will not be shared with any other law enforcement agency.

The Income Declaration Scheme (IDS) 2016, which was announced by the Finance Minister Shri Arun Jaitley in the Union Budget 2016-17, opened from June 1. The IDS provides a four month compliance window up to September 30, to people with undisclosed income in the country to come clean by paying tax, penalty and surcharge of 45 per cent of fair market value latest by November 30, 2016.

Shri Adhia made it amply clear that this is a one time opportunity and the window will not be extended beyond the four month period , ending on September 30. He said this is a last chance for people to declare their unaccounted income, following which, the Income Tax Department would initiate its own action.

The Secretary informed that the Government has received many requests and suggestions with respect to the scheme including a demand to extend the deadline for paying tax and a provision to pay tax in instalments. “These suggestions are being examined by the government and an appropriate decision would be taken in due course of time” Shri Adhia added.

To a query on whether undisclosed income can be passed on as current income and tax paid at a lower 33% rate, the Revenue Secretary replied that it would amount to false verification and the assessee would be required to explain the source of income.

Shri Adhia said that the Central Board of Direct Taxes, CBDT has posted a fresh set of FAQs (Frequently Asked Questions) on the disclosure scheme on its website www.incometaxindia.gov.in He said CBDT has also launched a massive outreach programme to create awareness about the scheme.

Replying to a query on Indian black money in the Swiss banks, Shri Adhia said India and Switzerland have agreed to conclude a pact on automatic exchange of information by the end of this year. Once the agreement is signed, it will enable India to receive all financial information about its residents, including bank accounts and balances, dividends and interest income from Switzerland from 2018.

PIB

Be the first to comment - What do you think?  Posted by admin - July 2, 2016 at 4:37 pm

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No TDS on Disability Pension to Armed Forces Personnel

No TDS on Disability Pension to Armed Forces Personnel
By Prashant Thakur -February 3, 2016

The tax exemption of disability pension received by Armed Force Personnel are among those exemptions under Income Tax Act for which you may not get a direct reference in the Income Tax Act.

However , such tax exemption are allowed by the executive instruction issued by either Finance Ministry notification or under the delegated powers to CBDT . Armed Forces personnel get the disability pension which is basically aggregate of two components-disability pension and service pension. Previously , this website had posted earlier 3 Types of Pension to Armed Forces Completely Tax Free!

Disability Pension to Armed Forces : What is it ? Update :

The below portion is modified as the government, has issued new circular for minimum disability pension .

The circular is applicable to all Pre-2006 Armed Forces Disability/War Injury Pensioners who were/ are in receipt of Disability Pension/ Liberalized Disability Pension/ War Injury Pension as on 24th September 2012.

Download the Circular 542 dated 27/05/2015

As per the website of Principal Controller of Defence Accounts (Pension), where an Armed Forces Personnel is invalided out of service, which is accepted as attributable to or aggravated by military service, he shall be entitled to disability pension consisting of Service Element & Disability Element as follows:-

Service Element The amount of service element shall be determined as 50% of less emoluments drawn as given in para 6 of MOD letter dt- 12.11.2008 which is subject to minimum Rs 3500/- p.m.

Disability Element The rates of disability elements for 100% disability for various ranks shall be 30% of emolument last drawn subject to Rs. 3510/- per month. Disability lower than 100% shall be computed by reducing proportionately.

Disability Element on Invalidment Where an Armed Force personnel is invalided out of service under circumstances mentioned in para 4.1 of Govt. letter dt. 31.01.01, the extent of disability shall be determined as follows for the purpose of computing the DE :- Percentage as finally assessed by Competent AuthorityPercentage to be reckoned for computing DE Between 1 to 4950 Between 50 & 7575 Between 76 &100100 Disability Element on Retirement/Discharge Where an Armed Forces personnel is retained in service despite disability and subsequently retired/ discharged on completion of tenure or on attaining the age of retirement, he shall be entitled to Disability Entitlement at the rate prescribed for 100% disablement. For disablement less than 100% but not below 20%, the rates shall be reduced proportionately.
No disability element shall be payable for disability less than 20% .

Is Disability Pension to Armed Forces Tax Free ?

Yes, although there is nothing in section 10 of the Income Tax Act , which is a general exemption section under Income tax Act , the disability pension has been made tax free through Finance Ministry notification No 878-F (Income Tax) dated 21-3-1922 .

The following instruction from CBDT explains that the entire disability pension is exempt

INSTRUCTION NO 136F.NO. 34/3/68-IT(AI)GOVT OF INDIA CENTRAL BOARD OF DIRECT TAXES NEW DELHI, DATED THE 14TH JAN 1970
FROM :SHRI S N NAUTIALSECRETARY, CBDT

TO:ALL COMMISSIONERS OF INCOME TAX

SUBJECT : EXEMPTION – SERVICE AND DISABILITY ELEMENT OF DISABILITY PENSION GRANTED TO A DISABLED OFFICER OF THE INDIAN ARMY –

WHETHER EXEMPTED FROM INCOME TAX. REFERENCE IS INVITED TO THE BOARD’S LETTER F NO 42/9/59-IT(AI), DATED THE 5TH SEPT 1960 ON THE ABOVE SUBJECT WHEREIN IT WAS MENTIONED THAT IN THE CASES FALLING UNDER ITEM (29) OF FINANCE DEPTT NOTIFICATION NO 878-F (INCOME TAX) DATED 21-3-1922, THE‘DISABILITY ELEMENT’ OF THE DISABILITY PENSION RECEIVED BY AN OFFICER OF THE ARMY WILL ONLY BE EXEMPTED FROM TAX AND THAT THE ‘SERVICE ELEMENT’ WILL BE SUBJECTED TO TAX.

2. ON RECONSIDERATION OF THE MATTER, IN CONSULTATION WITH THE MINISTRY OF LAW, THE BOARD ARE ADVISED THAT ITEM 29 OF THE NOTIFICATION DOES NOT DIFFERENTIATE BETWEEN TYPES OF PENSIONS. ACCORDINGLY IN THE CASES FALLING UNDER ITEM 29 OF THE ABOVE NOTIFICATION, ENTIRE DISABILITY PENSION WILL BE EXEMPTED FROM INCOME-TAX.

3.THE ABOVE INSTRUCTIONS MAY BE BROUGHT TO THE NOTICE OF ALL ASSESSING OFFICERS INYOUR CHARGE. YOURS FAITHFULLY,
SD/- (S N NAUTIAL) SECRETARY ,CBDT

Confusion on Exemption Disability Pension & Service Element As the disability pension is aggregate of two elements- disability element and service element- a confusion was created in filed formation of tax authorities , whether the disability element only is tax free and not the service element. CBDT , therefore , in order to wipe out any confusion , issued another instruction

F. No. 200/51/00-ITA-1 dt. 02.7.2001 to stress that both element of disability pension is tax exempt.
Read the instruction below :

[F. NO. 200/51/00-ITA-1 DT. 02.7.2001 FROM MINISTRY OF FINANCE DEPTT. OF REVENUE CENTRAL BOARD OF DIRECT TAXES, NEW DELHI.]

SUBJECT: EXEMPTION FROM INCOME TAX TO DISABILITY PENSION, I.E. ” DISABILITY ELEMENT” AND “SERVICE ELEMENT” OF A DISABLED OFFICER OF THE INDIAN ARMED FORCES- INSTRUCTIONS REGARDING.

REFERENCE HAVE BEEN RECEIVED IN THE BOARD REGARDING EXEMPTION FROM INCOME TAX TO DISABILITY PENSION, I.E. “DISABILITY ELEMENT” AND “SERVICE ELEMENT” OF A DISABLED OFFICER OF THE INDIAN ARMED FORCES.

2. IT APPEARS THAT FIELD FORMATIONS IN CERTAIN CASES ARE NOT UNIFORMLY ALLOWING DISABILITY, PENSION IN SPITE OF BOARD’S INSTRUCTION NO.136 DATED 14TH JANUARY, 970 (F.NO.34/3/68-IT(A.1)).

3. THE MATTER HAS BEEN RE-EXAMINED IN THE BOARD AND IT HAS BEEN DECIDED TO REITERATE THAT THE ENTIRE DISABILITY PENSION, I.E. ” DISABILITY ELEMENT” AND “SERVICE ELEMENT” OF A DISABLED OFFICER OF THE INDIAN ARMED FORCES CONTINUES TO BE EXEMPT FROM INCOME TAX.

4. THIS MAY BE BOUGHT TO THE NOTICE OF ALL THE OFFICERS WORKING UNDER YOU.
SD/- B.L. SAHU OFFICER ON SPECIAL DUTY (ITA .1)

No TDS on Disability Pension to Army Personnel
As it happens in India, everyone becomes the super authorities against the common man. The government received complaint that certain banks are deducting the tax on the disability pension .

So , government issued a press release that no TDS is required on the said disability pension paid to Armed Forces personnel.
Read below the excerpt. PRESS RELEASE, DATED 20-12-2007

IT HAS BEEN REPORTED IN THE PRESS THAT SOME BANKS WERE DEDUCTING TAX FROM PENSION OF DISABLED EX-SERVICEMEN IN VIOLATION OF GOVERNMENT INSTRUCTIONS.

RBI WAS REQUESTED TO HAVE THE MATTER INVESTIGATED AND REMEDIAL ACTION TAKEN. AFTER EXAMINATION, RBI DISCOVERED THAT IN ONE SPECIFIC INSTANCE, DUE TO OVERSIGHT, THE PENSIONER’S DISABILITY PENSION WAS WRONGLY TAKEN INTO ACCOUNT WHILE CALCULATING INCOME-TAX.

RBI HAS ISSUED INSTRUCTIONS TO ALL AGENCY BANKS TO STRICTLY ADHERE TO THE PROVISIONS OF PARA 88.3 OF DEFENCE PENSION PAYMENT INSTRUCTIONS, 2005, REGARDING EXEMPTION OF INCOME-TAX OF THE DISABILITY PENSION OF THE PENSIONERS OF ARMED FORCES.

BANKS HAVE BEEN ADVISED TO ISSUE SUITABLE INSTRUCTIONS TO ALL THEIR PENSION DISBURSING BRANCHES THAT INCOME-TAX SHOULD NOT BE DEDUCTED FROM THE DISABILITY PENSION PAID TO THE PENSIONERS OF THE ARMED FORCES.

Conclusion

The disability pension given to Armed Forces Personnel are having two components-disability element & service element. Both are tax free vide Ministry of Finance notification read with clarification from CBDT and also there can not eb any TDS as the amount is fully tax free.

Be the first to comment - What do you think?  Posted by admin - May 30, 2016 at 9:08 am

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Tax benefit available under National Pension System (NPS) – AIRF

Tax benefit available under National Pension System (NPS) – AIRF

GOVERNMENT OF INDIA (BHARAT SARKAR)
MINISTRY OF RAILWAYS (RAIL MANTRALAYA)
(RAILWAY BOARD)

RBE No. 31/2016

No 2012/F(E)III/1(1)/4

Dated: 07.04.2016

The GMs/FA&CAOs,
All Indian Railways/Production Units/RDSO.
(As per mailing list)

Subject: Tax benefit available under National Pension System (NPS)

A copy of Pension Fund Regulatory & Development Authority (PFRDA)’s letter No.PFRDA/23/CORP/20/5 dated 25.02.2016 on the above subject is enclosed for information and compliance. The contents of the letter regarding opening of e-NPS account shall apply mutatis mutandis on the Railways also. ·

2. Please acknowledge receipt.

(Sanjay Prashar)
Deputy Director Finance, (Estt.)lll,
Railway Board.

Source: AIRF

Click to view the PFRDA Letter dt:25.2.2016

Be the first to comment - What do you think?  Posted by admin - April 15, 2016 at 12:03 pm

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