Monday, 17 May 2021

Auto Fill Arrears Relief Calculator U/s 89(1) with Form 10 E for the F.Y.2021-22 in Excel as per Budget 2021

If you got any advance or arrears salary received from the department as well as your employer that affects your taxes and is reflected in the year of receipt. To alleviate the additional burden, the Income Tax Act allows tax exemption on arrears under Section 89 of the Act.

Some conditions to get relief under this section. To start with, the department or your employer can claim any of the following during a particular as per U/s 89(1).

Receives arrears or advance pay

Premature withdrawal from provident fund

Gratuity

Pension the modified value of the pension

Family arrears of family pension

Tax Compensation for termination of employment

Claims relief under Section 89(1)

Any employee entitled to claim relief under section 89 must submit Form 10E. You have to file online in the e-filing portal of the income tax department. Pursuant to section 69 (1), tax exemption is given on a recurring basis for the year in which the arrears are received and in the year in which the arrears are collected; And the taxes for the year they were due to have been adjusted.

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Note: Form 10E must be filed before filing an income tax return.

Features of Form 10E:

Form 10 E contains details of the employee's total income and arrears.

The 10 E form is easy to submit and is fully digital, available on the e-portal of the Income Tax Department. One must go to the portal and login into your account or create an account if you are a new user

You must select the relevant addition and fill it out (Figure I for the increased amount, Attachment-2 for the gratuity, and Attachment III for the compensation received after completion of the job).

Relief Claims Mandatory Requirement 89(1). When you claim relief online, your payslip serves as proof of receipt of arrears.

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How the relief is calculated U/s 89(1)?

1) Calculate the tax payable on the total income including additional salary, arrears, or compensation per annum.

2) Calculate the tax payable on the total income excluding any additional salary in a year.

3) Subtract the total salary calculation from step 1 from the salary calculation obtained from step 2.

4) Calculate the tax payable on the total income excluding the total arrears.

5) Calculate the tax payable on the total income including the arrears with the year related to the arrears.

6) Calculate subtract between step 4 and step 5.

You will be allowed a tax deduction if the amount of step at step over is more than the amount of step over, but no relief will be allowed if the amount of steps is more than the number of steps.

You may also, like- Automated Income Tax Preparation Excel Based Form 16 Part A&B for the F.Y.2020-21 [ This Excel Utility can prepare at a time 100 Employees Form 16 Part A&B as per new and old tax regime]

Alternatively, you can follow the steps of the Income Tax website.

Things to keep in mind when claiming relief on arrears:

Form 10E must be filed online. Any Taxpayers who have claimed relief in the last financial year but did not file Form 10E will receive a notice from the Income Tax Department not to consent, but your return will not be processed until the form is submitted.

Due pay is usually taxable when it is due or when it is available, but in case of arrears, it is usually declared from their back-date, hence when they are not properly paid.

A copy of Tax Form 10E does not need to be attached to your tax return. However, you must submit the file and keep all the documents in your record.

Employers can ask your employer to confirm the submission of Form 10E; however, this form does not need to be submitted to the employer.

Download Automated Income Tax Arrears Relief Calculator U/s 89(1) along with Form 10E from the Financial the Year 2000-01 to Financial Year 2021-22 (Up-to-date Version)

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Saturday, 15 May 2021

Income Tax Calculator All in One for the Private Employees for FY2021-22 with a comprehensive list of Budgets 2021

Union Finance Minister Nirmala Sitharaman presented the Union Budget in Parliament on Monday (2^nd February 2021).

The Finance Minister gave a big boost to the healthcare and infrastructure sector in the 2021 Union Budget. There has been no change in income tax slab this year.

However, some important proposals have been made, which can affect a person's personal finances and tax aspects.

In this post, we have tried to put the important budget 2021-22 proposals in one place.

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A detailed list of the proposed budget 2021-22 for F.Y 2021-22 / A.Y 2022-23

1) The latest income tax slab rate is 2020-22 April

Below is the income tax slab structure as per the new tax discipline. People who are reluctant to pay taxes under the new minimum personal income tax will have to cancel almost all the tax breaks that you are claiming in the old tax structure.

Income tax slab for the financial year 2022-23

2) Collection of interest tax of EPF

Until now (F.Y 2020-21), interest earned on employee-generated EPF contributions is completely tax-free.

However, with effect from 1 April 2021, the tax-free interest of more than Rs.5 Lacks. This also applies to private PF trusts.

As of 1^st April 2021, Rs. 5 lakh in the Provident Fund recognized by an employee is taxable under the provisions of Bill 2021.

Employee If the contribution of the employee is more than Rs.5 lakhs, the interest earned on the extra money from 1st April 2021 is taxable.

Note that additional interest of this amount (Rs. 2 lakhs) is not taxable in subsequent assessment years.

3) Maturity tax goes beyond ULIPs

Maturity obtained from the ULIP policy (taken after February 1, 2021) will be tax-free only if the total annual premium on them does not exceed Rs. 2.5 lakhs.

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Thus, gains in ULIP equity funds (e.g. for exempt ULIPs) will be taxed at 15% (short term) or 10% (long term). If it is a ULIP debt fund (for exempt ULIPs), the profits will be taxed at your applicable slab rate (short term) and the index for long-term profits.

There will still be a tax deduction for UTIP from ULIP regardless of the amount of premium paid. The proposal does not affect the tax treatment of death benefits.

4) There is no ITR filing for senior citizens

Senior citizens aged 60 years and above who have only pension/interest income from bank/post office are not required to file income tax returns. Although banks will waive the applicable duty. The criteria for exemption from filing ITR from 1st April 2021, are:

Senior Citizen should be a resident and must be 75 years of age or older for the financial year for which tax must be paid.

He/she must get a pension and interest income from the same bank.

Your banker will deduct the taxes applicable to your income.

Only some banks are accepted for this purpose.

Bank In this case the bank has to make an announcement.

5) IT Exemption for Paying Interest on Home Interest (Sector 80EEA)

An additional income tax exemption of Rs 2.5 lakh on affordable loans will be extended for one more year, u / s 80EEA. The Interest exemption of Rs 1.5 lack (US 80 EEA) may be increased for the loan is taken up to March 31, 2022. This Exemption cannot be claimed if you choose a new tax slab.

Additional tax exemption of Rs. 1.5 Lacks only for first-time homeowners. In that case, if you have an existing residential property, you cannot claim the tax benefit U / S 80EEA.

Note that your property should have a maximum stamp duty value of Rs. 45 lakhs (stamp duty value). Only such property falls under the category of ‘affordable housing. Note that this is the standard of registration and not the "standard of contract". Most property deals will have white and black money ratios (although this is not legally allowed).

Download Automated Income Tax Preparation Excel Based Software All in One for the Non-Government (Private) Employees for the Financial Year 2021-22 and Assessment Year 2022-23U/s 115BAC