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Sunday, 20 June 2021

Home Rent Allowance Accounting and Tax-ability. Calculation and tax-ability of house rent allowance (HRA). Today we are providing a premium guide on the calculation and tax-ability of house rent allowance (HRA). Now you can find the best notes for calculating home rent allowance. Calculation of house rent allowance [Section 10 (13A) and Rule 2A] and tax liability. How to calculate house rent allowance. We are providing a full calculation for the calculation of house rent allowance. Now you can scroll down and check out the full details about "House Rent Allowance Account and Tax-ability (HRA)"

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Home Rent Allowance Accounting and Tax-ability (HRA)

The house rent allowance is paid by the employing authority to the employee to cover any expenses related to the rent of the accommodation which the employee may have to take. The amount of exemption not given under Section 10 (13A) of the Act, the house rent allowance is taxable according to the basic salary?

H.R.A. Exemption

The minimum amount of the following three amounts have been read along with Rule 2A The house rent allowance will be waived under section 10 (13A):

(A) Actual HRA obtained by the employee relating to the “relevant period”

(B) Rent for rent acquired by him under 10% of the "relevant period" salary (rent-payable - 10% salary)

(C) Housing located in Mumbai, Kolkata, Delhi or Chennai where 50% of the salary and 40% of the salary located in the house "for the relevant period" elsewhere.

The above three amounts will be exempted from the minimum tax and the balance will be taxable and thus will be included in the total salary of the employee.

Important information

Conditions: Under section 10 (13a), an employee can claim a waiver on receipt of house rent allowance if he does not live in his own house, and pays excess of 10% of salary for residential accommodation.

There is no discount entitlement: HRA discount is not available to the employee in the following cases: -

(A) When an employee is in his own home.

(B) When an employee does not pay any rent or incur any expenses for rent.

Relevant Period: Relevant period means the period occupied by the employees in the previous year.

Salary Money: Total

Basic Salary

Value Added Allowance (if it forms part of retirement benefits)

Commission on turnover.

Download Automated Income Tax House Rent Exemption Calculator U/s 10(13A) in Excel

Reasons for affecting the discount: The issue of HRA discount depends on the following factors:

(A) Salary of the employee (b) Receipt of HRA (c) Payment of rent (d) Place of residence

Where these four factors remain the same throughout the year, the exemption u / s 10 (13A) should be calculated

"On an annual basis". However, if there is any change in the above issues, the calculation should be done on a "monthly basis"

HRA. This means:

A	Actual H.R.A. received	******
B	Rent Paid – 10% of Salary	******
C	40% and 50% of Salary	******
	Which ever is less	******

If an allowance is paid for rent, it is called HRA.

H.R.A. Exemption under Section 10 (13A) and Rule 2A: - If the employee has HRA. It will then be taxable under Section 10 (13A) and as per Under Rule 2A

Note-1, 40% and 50% are for rent, not for service

Note-2, 50% of salary where accommodation is in Mumbai, Kolkata, Delhi or Chennai and 40% of salary where the house is located elsewhere.

Download Automated Income Tax Arrears Relief Calculator U/s89(1) along with Form 10 E from the F.Y.2000-01 to F.Y.2021-22 (Updated Version)

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Saturday, 19 June 2021

Budget 2021 - What is the new tax rules for ULIPs and especially after the 2021 budget? Although ULIPs were equity products, they enjoyed the same tax benefits as other endowment products under section 10 (10D).

However, in order to bring balance between ULIPs and mutual funds, during the 2021 budget, the finance minister proposed a change in the taxation of ULIPs. Let's take a look at the new tax rules for ULIPs.

All about the tax on ULIPs

There are three tax aspects to consider when investing in ULIPs. The first is the time of investment, the second is when it matures or surrenders and the third is the time of death. Now watch each one in detail.

# Tax rate on ULIPs at the time of investment

There is no change in the rules regarding tax benefits when investing in ULIPs. Therefore, exemptions under Section 80C is allowed for investment in ULIPs (up to a maximum of Rs. Can and can claim a discount for investment for any member of the HUF.

The exemption under section 80C is limited to 10% of the sum insured. This means the sum insured is Rs. 1.5 Lakh, then the premium you pay under ULIP should be up to a maximum of Rs. 1,50,000. If the premium is outside 10%, it is not eligible for a discount under Sec 80. Any amount of premium payable above this limit is not deductible under section 80C.

Another important point to understand here is that if you stop paying premium before the expiry of the five-year term or you stop your participation with notice of that part, the total amount of discount allowed to you in previous years will be treated as income and your income tax slab Accordingly the tax is charged in the year in which such national termination occurs.

So, closing the ULIPs is like a double-edged sword. ULIPs charge you in one way with a hefty separation charge and in another way, the opposite of the tax benefit you receive under Sec.80C.

Remember that you can pay as much premium as possible. However, the benefit of Sec.60C is limited to Rs.1,50,000 per annum and the premium must be 10% of the insured.

# Tax rate of ULIPs on maturity

The proposal to change the budget for 2021 was given here. Let us first try to understand the old rules that exist.

Tax on ULIPs (before 2021 budget)

Section 10 (10D) provides for a rebate on any money received under the ULP, including money allocated through bonuses on such policies. However, if the premium payable for any year during the term of the policy exceeds 10% of the actual insured, no discount will be allowed.

Tax on ULIPs (after 2021 budget)

Effective from 1st February 2021, no waiver will be allowed under Sec.10 (10D) if the amount of premium payable for any of the preceding policies exceeds Rs. 2,50,000.

However, if the total premium paid for a financial year is less than Rs.250,000 (including all multiple policies), you will enjoy duty-free maturity under Sec.10 (10D).

The Finance Bill, 2021 proposes to insert a new sub-section (1B) in section 45 so that a person can receive any amount under any ULIP at any time during the previous year so that no exemption is given under section 10 (10D).

Apply to the account of the Fourth and Fifth Provisions, including the money allocated through bonuses in the policy of providing, then, any profit or gain from such person receiving such amount will be applicable for tax under the heading "Capital Gain" in the previous year where such amount was received. . Moreover, income tax under this head will be calculated in the prescribed manner. Thus, the method of calculating income will be informed later.

Section 112A proposes to amend the definition of 'Equity-Oriented Fund' by the Finance Bill, 2021. It is proposed to cover the cover of the exemption under serial (10D) which will not be applicable due to the application of the fourth. And of the fifth Proviso. Even if a portion of the fund is invested in the O-based project, higher premium ULIPs will be considered as equity-oriented funds.

Thus, long-term capital gains are Rs. 1,00,000 will be taxable at the rate of 10% without index under the section 112A. Although the full amount of short-term capital gains will be taxable at the rate of 15% under section 111A. ULIPs will be considered as long-term capital assets if they hold short-term capital assets for more than 12 months and for 12 months or less.

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Feature of this Excel Utility:-

1) This Excel utility prepares and calculates your income tax as per the New Section 115 BAC (New and Old Tax Regime)

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

5) Automated Income Tax Revised Form 16 Part B for the F.Y.2022-23

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Friday, 18 June 2021

What are the latest income tax slab rates after the 2020 budget of F.Y 2021-22 & A.Y 2022-23? Are there any changes in the tax rates applicable to individuals? Let us see the details.

Key Highlights of the 2021 Budget

# EPF's contribution above Rs 2.5 lakh is taxable!!

This will continue from 1st April 2021, with interest on any deposition more than Rs. 2.5 lakh by an employer from an approved recruiting fund is taxable under the provisions of Bill 2021. This also includes employee EPF and VPF contributions.

# The Income Tax Slab Rate is the same as the previous financial year 2020-21, slab no changes

Yes, the income tax slab rate has not changed from what it was last year. Even in the case of mutual funds, there is no change. "Mutual Fund Taxation F.Y 2021-22 & A.Y 2022-23.

No changes have been made to your tax saving options, such as # Sec.80C

Even in the case of tax saving options, there is no change in the limits of 80C or other sections.

You may also, like- Prepare at a time 50 Employees Form 16 Part B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC

# No one is required to file an income tax return if he is 75 years of age or older

Those whose life expectancy is 75 years or more are now exempted from filing income tax. But keep in mind that this benefit includes income for them like pension and interested income.

Financial Income for F.Y. 2021-22 & A.Y 2022-23 Latest Income Tax Slab Rate

This 2021 budget does not propose any change in the income tax slab rate. Thus, the old rates will continue for F.Y 2021-22 or A.Y 2022-23

Here are the two types of tax slabs rate.

1. For those who want to claim IT deduction and discounts.

2. For those who do not want to claim IT discounts and discounts.

I explain both slabs as below.

Income Tax Slab Rate for the F.Y.2021-22

You may also, like- Prepare at a time 50 Employees Form 16 Part A&B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC

Now, if you want to choose the new tax discipline, you need to forget the deduction or discounts below.

(i) The travel concessions included in section (5) of section 10;

(ii) The house rent allowance included in section (13a) of section 10;

(iii) Certain allowances contained in section (14) of section 10;

(iv) Allowance for MPs / MLAs as per Section 10 (17);

(v) The income allowance of minors included in section (32) of section 10;

(vi) Deduction of SEZ units under Section 10AA;

(vii) Standard exemption, including entertainment allowance and the exemption for employment / professional tax

Section 16;

(viii) H.B.L. Interest U/s 24 (B) Max Rs. 2 Lakh.

(Loss of principal income from the home property for the rented house will not be allowed to be left under anyone

Other heads and will be allowed to proceed in accordance with customary law);

(ix) additional depreciation under section (iia) of sub-section (1) of section 32;

(x) Exemptions under sections 32AD, 33AB, 33ABA

(xi) Subsection (ii) or various exemptions for grants or expenditures for scientific research contained in sub-section

(iia) Or sub-section (iii) of paragraph (1) or section (2AA) of 35;

(xii) Exemption under section 35AD or section 35cc;

(xiii) Exemption from family pension under section 57 (iia);

(xiv) Any waiver under Chapter VIA

You may also, like- Prepare at a time 100 Employees Form 16 Part B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC

80EEB, 80G, 80GG, 80GG, 80GGC, 80AI, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc.). However, under the deduction U/s 80

80. Sub-section (2) of the CCD section (Employer's contribution to the employee's account in the notified pension scheme) and

Section 80JJAA (for new employment) may be claimed.

However, there are some discounts that you can still claim using the new tax charges and they are below.

1. Retirement benefits, gratuity etc.

2. Transportation of pensions

3. Leave encryption in retirement

4. Return compensation

5. VRS facility

6. EPFO: Employer's Contribution

7. NPS withdrawal facility

8. Scholarship

9. Awarding prizes established in the public interest

Which one will you use for maximum tax benefit?

It’s still not clear and so it’s hard for me to say anything briefly. However, going by the changes, I assume it becomes different from the individual. Therefore, you need to calculate from yourself and take what is more beneficial for you.

The right consideration? Yes, in my opinion, this new tax slab duty is the most complicated tax slab rate ever introduced by any government. Now a lot of people will be in a dilemma as to which one to use, how to connect with existing headaches for taxpayers to save more taxes.

Download Automated Income Tax Preparation Excel Based Software All in One for the Andhra Pradesh State Government Employees for the F.Y.2021-22 and A.Y.2022-23