Changes to EPF and ULIP tax rules from the F.Y.2021 |The Union Budget 2021 is hailed as the best budget in recent history. And for a good reason. With its focus on growth and a clear roadmap on how this growth will be achieved and financed, the government seems to have enacted a well-balanced law.

 

  

The budget sighed for the taxpayers as there was no risk with the tax slab or tax rate. However, there was a change in the tax situation. Although the finance minister did not mention this in his speech, there is a budget proposal that will change the tax status of two very famous investment options - EPF and ULIP.

You may also, like- AutomatedIncome Tax Revised Form 16 Part B for the F.Y.2020-21 which can prepare at a time 50 Employees Form 16 Part B for the F.Y.2020-21

In this article, we tell you what these changes are and how they can affect you.

 

Changes to PF Tax Rules: Cap on Interest-Free Returns

In the last budget, the government reduced the amount of tax exemptions on employer contributions in the case of PF, NPS, and support funds. 5.5 lakhs. Since April 1, 2020, Spiritual Employees have earned Rs. For EFF contribution (EPF + VPF). Two and a half lakh will be added to the taxable income and tax will be collected according to the income tax rate of the person. This will not apply to employer contributions.

 

In other words, if your total annual contribution to the Provident Fund exceeds Rs. 2.5 lakh, interest income has exceeded Rs. 2,000. Two and a half lakhs will be taxable. This margin means less than or equal to your monthly contribution to the PF. 20,833, your returns will be tax-free.

 

This change in the rules has changed the tax status of PF from EEE (discount-discount-discount) to E-T-E (discount-taxable-discount). This is the second attempt by the government to pay taxes to the PF (the first was in 2016, but the proposal was withdrawn after a huge slogan). This change, as a government, will affect less than 1% of PF customers.

You may also, like- Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21 which can prepare at a time 50 Employees Form 16 Part A&B for the F.Y.2020-21

 

However, as soon as the new Wage Code Bill comes into force, many people will see their contribution to the PF. This is because, from April 2021, the basic salary must be at least 50% of the total salary. So the actual effect of this change in the PF rule will only be known at a later date.

 

Ulips: Tax equivalent with equity mutual funds

 

Despite being a market-linked product, the unit has levied favourable taxes compared to other investment opportunities such as Linked In plans (ULIPs), mutual funds. Under the current rules, under Section 10 (10D), Premiums from insurance policies, including ULIPs, are tax-free if they are 10 times the premium.

 

As per budget 2021 for ULIPs whose premium is above Rs. 2.5 lakh a year. For these ULIPs, the amount of maturity will be taxed equal to the equity mutual fund. This change will take effect on February 1, 2020, and only applies to new ULIP purchases.

 

Conclusion:

The purpose of this rule change is to plug specific loopholes used by HNIs to obtain tax-free returns. ULIPs are in terms of points. ULIPs became opaque when spent and despite this had a tax advantage over other investment products. So HNIs used to buy ULIPs with big premiums to earn tax-free returns. With the new rules, if someone invests more than Rs 10,000, this tax benefit will no longer exist. 20 thousand per month. More importantly, however, we believe this is just the beginning and that this limit will be further reduced for ULIPs in the future.

Download Autofill Income Tax Calculator All in One for the Government & Private Employees for the F.Y.2021-22 & Ass Year 2022-23 as per Budget 2021

Main feature of this Excel Utility are:-

1) Auto fills your Income Tax Computed sheet as per your option New or Old tax regime U/s 115 BAC

 

2) Salary Structure for the Government and Private Employees Salary Pattern

 

3) Automated Income Tax House Rent Exemption Calculation U/s 10(13A)

 

4) Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10 E for the F.Y.2021-22

 

5) Automated Income Tax Form 16 Part A&B for the F.Y.2021-22

 

6) Automated Income Tax Form 15 Part B for the F.Y.2021-22

On June 12, 2021 by www.taxexcel.net

Share It

No Comments

Read More

 

Exemptions U/s 80 E –Vs- EEA on Home Loan interest which is benefited

In this post, we will dive deeper into exemptions under the 80EEA of the Income Tax Department.

 

What is Section 80EEA?

 

Section 80EEA Additional Discount for Individuals for Paying Interest on Home Loans However, HUF, AOP, BOI, partnership firm or any other taxpayer is not eligible for exemption under section 80EEA.

 

Section 80EEA has been introduced to increase the benefits approved under Section 80EE for low-cost housing. Exemption / 80EEA can be claimed till the home loan is not repaid.

 

The maximum discount under Section 80EEA is up to Rs.1,50,000. This discount is more than the 24 discounts of the department (maximum Rs. 2 lakhs). Therefore, taxpayers can simultaneously claim both Section 80EEA and Section 24 (discount of 3.5% of the total). If you claim 80EEA, you cannot claim a waiver under section 80EE.

You may also, like- Automated Income Tax Revised Form 16 Part B which can prepare at a time 50 Employees Form 16 Part B for the F.Y.2020-21

How to claim U / S 80EEA discount?

There are several conditions for a US / S80EEA discount:

 

 A housing loan should only be taken to buy a residential home property.

 

Financial should also be taken from a "financial institution".

 

 She should be a first-time domestic worker. He should not have any home property on the date of sanction.

 

The stamp duty value of Rs. 45 lakhs or less.

 

The approval should be between 01-04-2019 to 31-03-2020.

 

The appraiser is not claiming any exemption under section 80EE.

You may also, like- Automated Income Tax Revised Form 16 Part B which can prepare at a time 100 Employees Form 16 Part B for the F.Y.2020-21

 

The "carpet area" has one additional condition:

The carpet area of the Met property should not exceed 60 square meters (645 sq ft) in the metropolitan city including Bangalore, Chennai, Delhi NCR (Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad, Faridabad, Faridabad, Hyderabad, Faridabad, Hyderabad). Mumbai Metropolitan Region).

 

Met In cities or towns except for metropolitan cities it should not be above 90 square meters (968 square feet).

 

This applies to affordable housing projects approved on or after September 1, 2019.

 

Section 80EEA does not specify if you must be a resident to claim this benefit. Thus, both resident and non-resident Indians can claim it.

You may also, like- Automated Income Tax Revised Form 16 Part A&B which can prepare at a time 50 Employees Form 16 Part A&B for the F.Y.2020-21

 

Section 80EEA also does not specify whether residential homes should be self-occupied to claim this benefit so, people living in rented homes can also claim it.

 

Individuals who have bought a home jointly or individually can claim this discount. If a person jointly owns the house with his / her spouse and both of them have paid the loan, then both of them can claim this discount.

 

Conclusion:

What is a “financial institution” in 80EEA?

Reg is a banking company that enforces the Banking Regulation Act

 

 Any banking institution mentioned in Section 51 of the Act or

 

Housing is a real estate finance company

 

What is the “stamp duty value” at 80EEA?

Price accepted/evaluated/ evaluated by:

 

Government No authority of the Central Government or

 

The state is a state government

 

For the purpose of paying stamp duty on immovable property

You may also, like- Automated Income Tax Revised Form 16 Part A&B which can prepare at a time 100 Employees Form 16 Part B for the F.Y.2020-21

 

What is the "carpet zone" of the 80EEA?

 

Price accepted/evaluated/ evaluated by:

 

Government No authority of the Central Government or

 

The state is a state government

 

For the purpose of paying stamp duty on immovable property

The disparity among the  Section 80EEA and Section 80EE

 

Now let’s look at some of the differences between the 80EEA category and the 80EE category.

Category 80EEA-

 

1) The stamp duty value of the house should be Rs 45 lakh or less.

 

2) Approved term from 01-April-2018 to 31-March-2020,

 

3) The maximum discount amount is Rs. 1,50,000

 

4) Limitless value of the land.

 

Section 80EE

 

1) The value of a house should be 50 lakhs or less.

 

2) Sanan Approved Term 01-April-2016 to 31-March-2017.

 

3) The maximum discount amount is Rs. 50,000

 

4) The value of land should not be more than 35 lakhs.

 

The difference between section 80EEA and paragraph 24

 

The table below shows the differences between 80EEA and Section 24.

 

 Section 80EEA

 

1) You can claim a deduction as soon as you start paying your interest. It does not impose any occupation requirement.

At the same time, we have come to the end of this post on exemptions under section 80EEA.

 

2) Only loans from banks and financial institutions are allowed.

 

3) The maximum discount amount is Rs. 1,50,000

 

4) There are certain conditions for claiming a discount.

 

Section 24

 

1) You must be at home to claim a discount.

 

2) Allows loan taken from any institution

 

3) The maximum discount amount is Rs. 200,000

 

4) There is no condition to claim a discount.

 

At the same time, we have come to the end of this post on exemptions under section 80EEA.

Download Automated Income Tax Salary Arrears Relief Calculator U/s 89(1) with Form 10-E from the F.Y.2000-01 to the F.Y.2021-22 (Updated Version)

 

On June 11, 2021 by www.taxexcel.net

Share It

No Comments

Read More

  

Chapter VI-A Exemptions for tax savings as per Budget 2021

 

Today, in this article we are going to discuss all the exceptions of Chapter VI-A. This will clear up your doubts regarding the exemption under Section VI-A. This will be helpful for many of you because if you want to save tax on your total salary, it is important to have an idea about discounts.

 

Download Automated Income Tax Preparation Excel Based Software All  in One for the Bihar State Employees for the F.Y.2021-22 [This Excel Utility can prepare at a time your Tax Computed Sheet + Salary Structure as per the Bihar State Employees Salary Pattern + Automated House Rent Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part B + Automated Income Tax Form 16 Part A&B]

What is Chapter VI-A?

According to the Income-tax Act, Chapter VI includes various sub-sections of Section 80 of the Income-tax Act which allows an assessor to claim a deduction from the total income for various tax-saving transactions, approved expenses, and grants. Let's do it.

The following sections are found in Chapter VI-A of the Income Tax Act:

 

80C:

The maximum used and maximum exemption limits of 80C include life insurance premiums, late annuities, PF grants, subscriptions to some equity shares or debentures, and much more. With Section 80cc and Section 80ccd, the exemption limit is Rs. 1.5 lakhs (1).

Download Automated Income Tax Preparation Excel Based Software All in One for the Andhra Pradesh State Employees for the F.Y.2021-22 [This Excel Utility can prepare at a time your Tax Computed Sheet + Salary Structure as per the Andhra Pradesh State Employees Salary Pattern + Automated House Rent Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part B + Automated Income Tax Form 16 Part A&B]

 

80CCC:

Exemption in case of contribution to the fixed pension fund. Exemption limit with Section 80C and Section 80CCD (1) is Rs 1.5 lakh.

 

80 CCD (1):

Exemption for contribution to the Central Government Pension Scheme - In the case of an employee, 10 % salary and in any other case, 20 % of his total income in any financial year will be tax-free. The combined limit of 60C and 80cc together is Rs 1.5 lakh.

 

80 CCD (1B):

Deduction up to Rs 50,000 for contribution to Central Government Pension Scheme (NPS)

 

80 CCD (2):

In case of contribution to the pension scheme of the Central Government by the employer, the tax benefit is given on 14 %t contribution by the employer, where the Central Government makes such contribution and where any other employer makes this contribution, the tax benefit is given at 10%.

Download Automated Income Tax Preparation Excel Based Software All in One for the Jharkhand State Employees for the F.Y.2021-22 [This Excel Utility can prepare at a time your Tax Computed Sheet + Automated House Rent Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part B + Automated Income Tax Form 16 Part A&B]

 

80D:

In the case of health insurance premium, the premium paid up to Rs 25,000 is eligible for an exemption for persons other than senior citizens. For senior citizens, the limit is Rs 50,000 and the overall limit U / s 80D is Rs 1 lakh.

 

80 DD:

Decreases in maintenance, including the treatment of a dependent person with a disability. The maximum discount limit under this section is Rs 75,000.

 

80DDB:

Discount on expenses up to Rs. 40,000 for treatment of a specific disease from a neurologist, an oncologist, urologist, a haematologist, immunologist, or such specialist

 

80E:

Exemption in case of interest on a loan is taken for higher education without any higher limit.

Download Automated Income Tax Preparation Excel Based Software All in One for the Non-Govt(Private) Employees for the F.Y.2021-22 [This Excel Utility can prepare at a time your Tax Computed Sheet + Salary Structure as per the Non-Govt (Private) State Employees Salary Pattern + Automated Form 12 BA + Automated House Rent Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part B + Automated Income Tax Form 16 Part A&B]

 

80EE:

Exemption on interest up to Rs. 50,000 taken on residential home property

 

80EEA:

Exemption on interest up to Rs. 1.5 lakhs on loan taken for fixed house property (for affordable housing)

 

80EE:

Exemption on interest on loans up to Rs 1.5 lakh for buying an electric car.

 

80G:

Depending on the nature of the grant, such as grants to specific funds, charities, etc., the limit varies from 50% of grants with a cap of 100%  of total grants, 50 % of total grants, or 10%  of total income.

 

80 GG:

Amount of Exemption in case of rent paid by salaried persons who do not get HRA benefit. The discount limit is Rs 5,000 per month or 25 % of the total income in one year, whichever is less.

 

80 GGA: Full waiver for specific grants for scientific research or rural development U/s 80 GGA: Full waiver for grants to political parties, such as non-cash grants.

 

80 TTA: Exemption amount up to Rs.10,000 in case of interest on savings bank account in case of assessment other than residential senior citizens.

 

80TTB: Exemption for interest on deposits up to Rs. 50,000 in case of resident senior citizens.

 

80U: Exemption for persons with disabilities. The maximum amount of exemption is Rs.1.5 Lakh for above 80% disable employee and Rs.75,000/- for 50% to 80% disable employee

Download Automated Income Tax Preparation Excel Based Software All in One for the Govt and Non-Govt Employees for the F.Y.2021-22 [This Excel Utility can prepare at a time your Tax Computed Sheet + Salary Structure as per the Govt & Private Employees Salary Pattern + Automated House Rent Exemption Calculation U/s 10(13A) + Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10 E + Automated Income Tax Form 16 Part B + Automated Income Tax Form 16 Part A&B]

On June 10, 2021 by www.taxexcel.net

Share It

No Comments

Read More