Taxexcel

Wednesday, 10 November 2021

Income tax deduction under Sec 80 CCD (1B). According to the rules and regulations of the Income

Tax Act 1961, payment of income tax is mandatory for every citizen of India. But that doesn't mean

you have to pay tax on the income you make. In a given financial year. There are several provisions

under the Income Tax Act that allow you to claim exemptions against certain investments and

expenses.

Plan your taxes to save your income

By planning your taxes carefully, you can save a significant amount for your taxation obligations and create an additional source of income for yourself. With the dual benefits of tax savings and income growth, these discounts offer you significant benefits.

You may also, like- Automated Income Tax Preparation Software in Excel for the Non-Government Employees for the F.Y.2021-22

Income Tax deduction under sec 80CCD(1b)

The government introduces new exemptions or amendments from time to time which you must observe closely. One deduction available to you is Sec 80 CCD (1B) which deals with contributions to NPS.

About NPS

The NPS or National Pension System is a pension scheme available to both government employees as well as private citizens. NPS is one of the most popular options for people looking to build a corpus for their retirement with a regular monthly income.

The investment in NPS is a variety of securities and deposition of avenues, including the share market. It is widely regarded as one of the cheapest investment options, including exposure to equity. Since returns are directly related to market performance, there is no guarantee of a fixed amount, but within a specified period, the return from NPS is one of the highest in the market.

You may also, like- Automated Income Tax Preparation Software in Excel for the West Bengal State Government Employees for the F.Y.2021-22

NPS has two types of accounts, NPS Tier 1 and NPS Tier 2.

Tier 1 account: It has a fixed lock-in period until the customer reaches 60 years of age. Partial withdrawal can be made only in certain conditions. Contributions made for Tier 1 are tax-exempt and deductible under section 80CCD (1) and section 80CCD (1B). This means you can invest up to money. Claim a deduction for 2 lakhs and the full amount in an NPS Tier 1 account, i.e. Rs. 1.50 lakh under section 80CCD (1) and Rs. 50,000 under Section 80CCD (1B)

Tier 2 Account: This is essentially a voluntary savings account that allows customers to withdraw money of their choice. But contributions made to a Tier 2 account are not eligible for a tax deduction. To open a Tier 2 account, you must first open a Tier 1 account. Contributions to the NPS now qualify under the Tax-Free-Free (EEE) mode where the amount of contributions to the NPS, the income generated and the amount of maturity are all tax-free. According to the latest guidelines, you can withdraw up to 60% at maturity and reinvest the remaining 40% to make an annual purchase that gives you a regular monthly income.

You may also, like- Automated Income Tax Preparation Software in Excel for the Bihar State Government Employees for the F.Y.2021-22

What is Sec 80CCD (1B)?

Section 80CCD of the Income-tax Act deals with deductions made by persons contributing to NPS. As per Section 80CCD, till 2015, a person has to pay Rs. Till was eligible to claim income tax exemption. 1 lakh against the contribution to NPS. In the 2015 budget, the government increased the maximum amount payable for NPS to Rs. 1.50 lakh annually.

In addition, a new sub-section 1B has also been introduced, which offers discounts up to extra money. 50,000 / - for contribution to NPS by individual taxpayers. Extra money has been deducted. Benefits of Rs. 50,000 / - and above are available for assessment under Section 80CCD (1B). 1.50 lakh is available as an exemption under section 80CCD (1). Thus, by increasing the maximum limit of discount to Rs. 2.00 lakhs including Section 80CCD (1) + Section 80CCD (1B).

You may also, like- Automated Income Tax Preparation Software in Excel for the Jharkhand State Government Employees for the F.Y.2021-22

Salary Structure for Jharkhand State Employees

Things to keep in mind when claiming a deduction under section 80CCD (1B)

Here are some important points about Section 80CCD (1B) that you should be aware of.

Extra money has been deducted. 50,000 / - is available for contributions to NPS Tier 1 account only

Tier 2 accounts are not eligible to claim deductions under section 80CCD (1B)

Deductions under section 80CCD (1B) are available to salaried persons as well as self-employed persons.

You will need to present documentary evidence of the transaction related to your contribution to the NPS

Partial withdrawal is allowed under NPS but subjects to certain conditions

The Maximum limit under section 80CCD (1B) is Rs. 50,000 / - and exempt from exemption under section 80C. As a result, you can claim the maximum money discount. 2,00,000 / -

You may also, like- Automated Income Tax Preparation Software in Excel for the Andhra Pradesh State Government Employees for the F.Y.2021-22

Salary Structure for Andhra Pradesh State Employees

If the assessee dies, and the nominee decides to close the NPS account, the nominee is exempt from tax.

If the account is partially deducted, only 25% of the contribution is exempt from tax

If the appraiser is an employee and decides to close the NPS account or opt out of the NPS, only 40% of the total amount is tax-free.

After reaching the age of 60 as tax-free income, the assessor will be able to withdraw 60% of the total amount. The remaining 40% is tax-free if it is used to purchase an annual plan. Section 80CCD (1B) gives you an excellent opportunity to save a substantial amount on your taxation obligations.

You may also, like- Automated Income Tax Preparation Software in Excel for the Assam State Government Employees for the F.Y.2021-22

This way you can not only reduce your current tax liability but also work towards creating a significant corpus for your retirement. Please note the above points before taking any action regarding your NPS account regarding Section 80CCD (1B).

Convenience for existing NPS customers

Presently NPS members can also avail of deduction under Section 80CCD (1B) in addition to deducting Rs 1.5 lakh under Section 80C. They can claim an additional Rs 50,000 rebate on their contribution under section 80CCD (IB). They can split their NPS contributions and claim partially at 80C and the remaining 80CCD (1B), with a maximum tax deduction of Rs 2 lakh. See NPS tax benefits here:

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

Feature of this Excel Utility:-

1) This Excel Utility Prepare Your Income Tax as per your option U/s 115BAC perfectly.

2) This Excel Utility has all amended Income Tax Section as per Budget 2021

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

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

5) Individual Salary Structure as per the Govt and Private Concern’s Salary Pattern

6) Individual Salary Sheet

7) Individual Tax Computed Sheet

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

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

10) Automatic Convert the amount in to the in-words without any Excel Formula

Share It

No Comments

Tax Saving options for A.Y.2022-23.We all want to save as much money as we can within the law.

All of us should always pay our income tax because it builds the nation and strengthens the-

economy. But, wise, planned and strategic investment can help us save some money to pave the

-way for a financially secure future. Here are some top options that every taxpayer should explore-

to save their income tax.

Five tax saving options under section 80C

To encourage savings, the Government of India offers tax breaks if you invest in certain financial instruments each year. The amounts invested in these classified instruments are deductible from your taxable income.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the West Bengal State Employees for theF.Y.2021-22

Section 80C is one of the most popular tax-saving options among income taxpayers and offers a variety of ways to invest money and save tax every year. The annual limit for claiming tax deduction is currently set at Rs 1.5 lakh. The following devices are widely popular because of the specific benefits of each:

1. Public Provident Fund

The current interest rate is 7.1% and this is a safe option if you are looking for a risk-free, stable return in the long run. The minimum validity of PPF accounts opened at selected bank branches and post offices is 15 years and can be extended up to 5 years block.

The amount deposited in the PPF account is deductible from taxable income under section 80C, although partial withdrawals are only allowed from the 7th year. It is mandatory to deposit a minimum of Rs.500 per annum to keep the account active.

2. National Pension Scheme (NPS)

NPS is a voluntary pension scheme that is tax-exempt at both maturity and annuity (up to 40%). Contributions to NPS are also deductible from taxable income under section 80C.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the Andhra Pradesh State Employees for theF.Y.2021-22

3. Life insurance plan

If you are looking for a healthy investment then the most powerful and difficult instrument. Use it if you are looking for inflation-beating returns, wealth creation and financial security for your family. No material other than the tax benefit under section 80C provides financial protection for your family.

Canara HSBC Oriental Bank of Commerce Life Insurance offers some savings plans and even guaranteed returns to give you peace of mind. In the case of premature death, future premiums are paid by the company (for certain policies) so that the family's lifestyle and education aspirations are not affected.

In addition to investing in National Pension Scheme under Section 80C, there is now an extra opportunity to claim an additional exemption of up to Rupees Fifty Thousand under Section 80CCD (1B). If you have invested Rs 1.5 lakh in life General Provident Fund or Public Provident Fune, you can invest another Rupees Fifty Thousand in National Pension Fund and deduct a total of Rupees Two lakh from your taxable income.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the Assam State Employees for the F.Y.2021-22

Salary Structure for the Assam State Employees

4. Mediclaim under Section 80D

Health insurance not only protects you from the cost of hospitalization but also saves taxes on premiums paid. This dual benefit is because the premiums paid can be deducted under Section 80D of the Indian Income Tax Act. What's more, you can even include premiums paid for your family and dependent parents.

Up to Rs 25,000 can be deducted from taxable income for health insurance cover for you, your spouse and your dependent children. Also, you are entitled to claim an additional deduction of Rs 25,000 paid for health insurance if your parents are under 60 years of age.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the Bihar State Employees for theF.Y.2021-22

Salary Structure for the Bihar State Employees

There is also an incentive to do preventive health check-ups. It has cost Rs 5,000 to get a health check for you, or your family is also eligible to be deducted under Section 80D though under the overall limit.

5. Home Loan - Section 24B

Buying a home with a home loan is not just about building your home or fulfilling your family's dreams. Not only will you save money on constantly rising rents, but you can also save some money that would otherwise have been paid as taxes.

A) Home Loan Principal:

Home loan EMI has two components- principal and interest. The principal component that is paid each year is deductible from your taxable income under section 80C and within the total limit of Rs 1.5 lakh under section 80C.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the Jharkhand State Employees for theF.Y.2021-22

b) Interest on home loan:

If the property is self-acquired, interest up to a maximum of Rs. 2 lakhs is also deductible from the taxable income under section 24B.

C) Registry and other charges:

Whenever you register your property, you are also eligible to claim a deduction of stamp duty and the amount paid for registration.

With so many ways to invest and save tax, you must look for the benefits and returns of each before zeroing in on the right one for you. Even with the above options, you can claim a discount of up to Rs 5 lakh from your taxable income. If you fall into the 30% tax bracket, you can save a whopping Rs 1.5 lakh with just the above options!