Guidelines for submission of Income Tax Proofs FY 2013-14

Presented by: Team Payroll

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Tax Rates for FY 2013 14

Income Level Where the total income does not exceed Rs.2,00,000/-. Income Tax Rate Nil

Where the income exceeds Rs.2,00,000/-but does not 10% of amount by which the total income exceeds exceed Rs.5,00,000/-. Rs. 2,00,000/-

Where total income exceeds Rs.5,00,000/- but does not Rs. 30,000/- + 20% of the amount by which the total exceed Rs.10,00,000/-. income exceeds Rs.5,00,000/-.

Where the income exceeds Rs.10,00,000/-.

Rs. 1,30,000/- + 30% of the amount by which the total income exceeds Rs.10,00,000/-.

Tax credit of Rs 2,000 for income up to Rs 5 lakhs u/s 87A

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Exemption towards House rent Allowance

An employee is entitled to claim the exemption towards HRA U/s.10(13A) when all the following conditions are fulfilled: The allowance from the employer must be specific to meet expenditure on payment of rent.

The residential accommodation occupied by the employee is not owned by him.

If annual rent paid by the employee exceeds Rs. 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer," (per CBDT circular).

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Exemption towards reimbursement of Medical expenses

The reimbursement by employer of actual expenditure incurred by an employee for Medical treatment of himself or any of his dependent family members is exempt subject to a maximum ceiling of Rs.15000/p.a. Family in relation to an employee means : The Spouse and children of the employee Parents, brothers and sisters of the employee who are wholly or mainly dependent on him Bills in original for the current financial year need to submitted

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Deductions available from Salary

After computing the net salary as mentioned in the previous provisions an individual is entitled to claim deductions under various other sections of the Income Tax Act, which are mentioned here under: Deduction U/s.80C: Amount invested in specified savings like Life Insurance Premium, PF, PPF, NSC, ELSS Mutual Fund & Housing Loan principal repayment. Deduction U/s.80CCC: Contribution towards pension plans subject to a maximum payment of Rs.100000/-It may however be noted that the overall ceiling for investment U/s.80C & 80CCC is restricted to Rs.1.00 Lac p.a.

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80 D (Medical insurance)

Deduction for preventive health check-up Under Section 80D, a deduction of Rs 5,000 is allowed for expenditure incurred during the year by a tax payer on account of preventive health check-up . the above deduction to be within the overall limits of Rs 15,000 / Rs 20,000 prescribed under the said Section of the Act. Medical Insurance Premium paid for Mediclaim/ Health Insurance for Self, Spouse, Children and Parents qualify for deduction u/s 80D, You can claim maximum deduction of Rs 15,000 in case you are below 60 years of age and Rs 20,000 above 60 years of age. An additional deduction of Rs 15,000 can be claimed for buying health insurance for your parents (Rs20,000 in case of either parents being senior citizen) Payroll Team

Deduction U/s 80DD:

Medical treatment for dependent Handicap (If Disability is more than 40% but less than 80%) - Max Limit - 50,000 . Medical treatment for dependent Handicap (If Disability is more than or equal to 80%) - Max Limit - 1,00,000 Dependent can be parents, spouse, children or siblings. Also the dependent should not have claimed any deduction for self 40% or more. Individuals would need disability certificate issued by state or central government medical board to claim deduction Any expenditure for Medical, Nursing & Rehabilitation incurred on dependant suffering from permanent disability including blindness, mental retardation, autism, cerebral palsy or multiple disabilities.

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80DDB

(a) Actual expenditure incurred on Medical treatment of Self or dependant or a member of HUF suffering from terminal diseases like Cancer, AIDS, Renal failure etc. Max Limit 40000 / (b) For Senior Citizens(self or dependant on whom expenditure on medical treatment is taken) .Max Limit is Rs.60000/ In order to claim this deduction, however, you will have to submit Form 10-1 from a specialist doctor working in a government hospital in India, confirming the treatment of the disease.

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80 U Physically Disabled Assesse

Tax Payer can claim deduction u/s 80u in case he/she suffers from certain disabilities or diseases. The Deduction is Rs. 50000 in case of normal disability (40% or more disability ) and Rs. 1 lakh for several disability (80% or more disability). Disabilities Covered: Blindness and vision problems. Leprosycured.Hearing impairment-, Loco motor disability-, mental retardation or illness, Certificate from neurologist or Civil Surgeon or Chief Medical Officer of Government Hospital would be required as proof for the ailment.

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Deduction U/s.80E:
The Entire interest paid on education loan in a financial year is eligible for deduction u/s 80 E There is no deduction on principle paid for the education loan. The loan should be for education of self ,spouce or children only. The loan should be taken for pursuing full time courses only. Loan has to be taken from approved charitable trust or financial institution only Loan should be in the name of Individual: - Deductions on education loan can only be claimed if the loan has been taken in your own name. If your parents, spouse or sibling has taken the loan for your studies, then you are not entitled to get tax benefit.
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Deduction for Housing Loan Repayment

One of the important deduction available under the Income Tax Act is repayment of your housing loan.

Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 150,000 or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house) The principal component is deductible with a upper limit of Rs.1.00 Lac p.a. (together with other specified savings) /s.80C
In cases where the house is owned by more than one person and is also self-occupied by each co-owner, each co-owner shall be entitled to the deduction individually on account of interest on borrowed money up to a maximum amount of Rs. 1.5 lakh. If the house is given on rent, there is no restriction on this amount. Both co-owners can claim deductions in the ratio of ownership.
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DEDUCTION U/S 80EE OF THE IT ACT, 1961 INTEREST ON HOUSING LOAN

An individual is allowed a deduction upto a limit of Rs 1,00,000 being paid as interest on a loan taken from a Financial Institution, sanctioned during the period 01-04-2013 to 31-03-2014 (loan not to exceed Rs 25 lakhs) for acquisition of a residential house whose value does not exceed Rs 40 lakhs. However the deduction is available if the assessee does not own any residential house property on the date of sanction of the loan.

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Previous Employer Salary

When an individual changes jobs, the new employer too calculates salary income for the year in a similar way. In such a situation, if the individual does not declare to the new employer salary income from the previous one, the new employer would calculate TDS liability only on the basis of the salary in the new company. Provisions in the IT Act. As per Section 192 of the IT Act, a person may furnish to the new employer details of his income/taxes in Income tax computation sheet or Form 16 and the current employer is required to deposit tax on salary paid by the previous employer if no taxes were paid.
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Exemption towards Leave Travel concession

Leave travel concession / allowance received by an employee for himself and his family in connection with his proceeding on leave to any place in India is exempt U/s.10(5) subject to the following conditions framed under Rule 2B: Where the journey is performed by Air an amount not exceeding the economy air fare of the National carrier and where the journey is performed by Rail or any other mode of transport an amount not exceeding the First Class A.C rail fare by the shortest route to the place of destination. The said exemption is available in respect of two journeys performed in a block of 4 calendar years. It is important to understand that the LTA is exempted only towards the expenses incurred for the mode of transport and excluding hotel, food, entertainment and sideseeing expenses etc.
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