When the overall taxpayers in the country are assessed, the salaried individuals make up a significant

 portion of it. And, their contribution to tax collection is considerable. With this in mind, the rules of the

 income tax deduction for salaried employees provide various opportunities for tax protection.

 

With these discounts and deductions, you can easily reduce your taxes significantly. Thus, if you are a salaried person, it is very important to know every little detail about the cuts. Let's learn more about it

 

Standard Income Tax (Deduction & Exemption) on Employees When presenting the Union Budget 2018, the Indian Finance Minister has proposed Rs. 40,000 is deducted in lieu of medical compensation (Rs. 15,000) and transport allowance (Rs. 19,200).

 

As a result, salaried individuals now earn Rs.9600/- You can get additional income tax exemption 5800 as per F.Y 2018-19. However, in the 2019 interim budget, the amount of Rs. 40,000 has been increased. 50,000 ..

 

Sections 80C, 80CCC, and 80CCD (1)

Undoubtedly, Section 80C is the most used option for salaried employees to get income tax exemption. Under this section, if an individual or a Hindu Undivided Family (HUF) spends or invests in a specific tax saving way, they can get up to Rs. 1.5 lakh.

 

The government also supports certain tax-saving instruments, such as NPS, PPF, and more, to allow individuals to invest and save for their retirement. Investments or expenditures under section 80C are not permitted as deductions for income from capital gains

 

This simply means that if you have a capital gain on your income, you will not be eligible to avail of the benefits of Section 80C. Some investments up to the amount eligible for rebate under Sections 80C, 80CCC, and 80CCD (1). 1.5 lakh is: -

Life insurance premium

Employees Provident Fund (EPF)

Equity Linked Savings Scheme (ELSS)

Pension / Annual Scheme

Home Loan Principal Payment

Children's tuition fees

PPF account

Contribute Sukanya Samridhi Account

NSC (National Savings Certificate)

Fixed Deposit (Tax Savings)

National pension scheme deposited during post office

Home Rent Allowance Discount (HRA)

If you are a salaried person, living in rented accommodation, it may be easier to get the benefits of HRA.

 

The amount can be partially or completely exempt from your income tax. However, if you do not live in rented accommodation and are still receiving HRA benefits, it will be considered taxable.

You may also, like- Automatic Income Tax Preparation Excel Based Software all in one for the West Bengal state Employees for the F.Y.2021-22

 

Holiday Travel Allowance (LTA)

The Income Tax Act also provides an LTA exemption to limit the travel expenses of salaried persons during the period of absence in the workplace.

However, you should keep in mind that this discount does not include the cost of the entire trip, such as food, shopping, leisure, entertainment and more.

 

Also, the allowance only covers domestic travel and not international. The mode of travel must also be airway, railway or public transport

 

Section 80D: Medical insurance

 

Deduction Section 80D is a deduction that you can claim for your medical expenses. That way, you can easily save tax on health insurance premiums that you are paying for yourself, your family or your dependent parents.

 

The limit under this section for deduction is money. 25,000 for insurance premium. If you pay insurance premiums for senior citizens, you can claim a discount of up to Rs. 50,000

 

Moreover, health check-up to money. Also covered in the overall range of 5,000. If your employer pays the premium on your behalf and deducts it from your salary, you can claim a deduction under section 80D.

 

Section 24(b):  home loan Interest Max Rs. 2 Lakh

 

Another primary tax-saving tool is home loan interest. You can claim a discount of up to 7 2 lakh for interest on the loan for self-acquired property

 

Article 80TTA: Deduction on interest earned from a savings account.

 

Under section 80TTA of the Income-tax Act, if you earn income from savings account interest, the deduction available for salaried employees in this regard will be Rs. 10,000

 

However, keep in mind that it is only available to individuals and HUFs.

 

If the income from interest is less than Rs. 10,000, the whole amount can be deducted.

 

Conclusion

The above-mentioned components can facilitate savings by accepting large tax breaks and rebates.

 

So, make sure that you are making the most of these income tax deductions for salaried employees. Also, structure your salary so that you can save more on your taxes.

Download Automated Income Tax Preparation Excel Based Software All in One for the Government & Non-Government (Private) Employees for the F.Y.2021-22 and A.Y.2022-23

 

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)

 

2) This Excel Utility has an option where you can choose your option as New or Old Tax Regime

 

3) This Excel Utility has a unique Salary Structure for Government and Non-Government Employee’s Salary Structure.

 

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

 

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

 

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

 

On December 06, 2021 by www.taxexcel.net

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 For most employees, home rent allowance (HRA) is part of their salary income. However, some small

 and medium-sized companies can pay a single amount of money to employees without separation.

 

For a hired employee, in order to claim deductions, HRA should be part of his salary income. However, the Income Tax Act 1961 provides for a deduction in respect of the rent paid to workers, even if the HRA is not part of their salary.

 

Such workers may claim a deduction in respect of house rent paid under section 80GG of the Income-tax Act. The rules also apply to self-employed persons. Now we make out the limits and criteria under which one will be able to claim tax exemption under section 80GG.

 

To get these benefits as well as deduction U/s 80GG, you should not receive HRA in any part of your financial year. Arun Kumar, a Kolkata-based chartered accountant, said, "Taxpayers seeking exemption from HRA cannot claim a deduction for rent paid under section 80GG."

 

A person seeking a deduction under section 80GG should not own a home in a residential town. In fact, there should be no house in the name of wife, minor child or Hindu Undivided Family (HUF) in which the person is a member, in which the office is located or business is done.

 

So, if you have a family home in the town where you work, you cannot claim this discount.

 

The taxpayer must file a Form 10 BA; Only then can he claim this discount. It is a declaration made by the person that all the conditions of the department are met.

Taxpayers who opt for the alternative, or the new tax system, cannot claim this discount.

 

This is how it is calculated

 

The deduction must be calculated based on a formula. The deduction under this provision will be less than three: a) rent more than 10% of total income, b) 25% of total income, c) maximum Rs 5,000 per month. Therefore, the maximum discount allowed per year is Rs 60,000.

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 2022-23 U/s 115 BAC

 

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 Form 12 BA

 

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

 

5) Individual Salary Structure as per the Non-Govt(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

On December 03, 2021 by www.taxexcel.net

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 Save tax for salaried people,Central Budget 2021 results

Exemption from ITR filing for senior citizens aged 75 years and above, only pension and interest income.

 

B. The Income Tax Department has introduced pre-filled ITR with additional details to facilitate the return filing process.

C. The deadline for submission of delayed and amended returns has been reduced to 3 months. This means that the IT department has to process the returns and send a notice under section 143 (1) by 31st December.

 

Picture of tax exemption

 

 It is important to understand what your tax slab and each of your pay segregation elements mean. This can help you determine how to save tax.

 

Category I - Understanding your payslip

Basic salary

It’s a specific component of your paycheck and it forms the basis of other parts of your paycheck, hence the name. For example, HRA is defined as the percentage of this basic salary (as considered by the company). Your PF is deducted 12% of your basic salary. This is usually a large portion of your total salary.

House rent allowance

 

Salary earners, who live in rented houses/apartments, can claim house rent allowance or HRA for a tax deduction.  The Income Tax Act prescribes a procedure for calculating HRA which can be claimed as an exemption.

 

Download Auto Home Rental Calculator U / s 10(13A) in Excel

 

Case Study: Manika works at an MNC in Nagpur she's the company pays her a house rent allowance. But she does not live in a rented house because she lives with her parents.

 

How can Manika use this allowance?

Malaika can rent to her parents and claim the allowance if they own the land they currently live on. All he has to do is enter into a rental agreement with his parents and transfer money to them every month.

 

Also, keep in mind that your HRA will be fully taxable if you receive and do not rent an HRA.

 

Holiday travel allowance

Paid workers can get concessions for travelling in India under LTA. Discount only for the shortest distance on one trip. This allowance can only be claimed for a trip taken with your wife, children and parents, but not with other relatives. This special discount depends on the actual cost, so if you don't really make the trip and don't cover these costs, you can't claim it. Submit a bill to your employer to claim this discount.

 

Bonus

Performance Incentive, whatever its name may be, is 100% taxable. Performance bonuses are usually linked to your valuation rating or your performance over a period of time and are based on company policy.

 

Employee Contribution to Provident Fund (PF)

Future Fund or PF is a social security initiative of the Government of India. Both the employer and the employee make an equivalent contribution of 12% of the employee's basic salary per month towards the employee's pension and provident fund. About 8.65% interest is accrued from FY 2018-19 (previously it was 8.55% for FY 2017-18). This is a retirement benefit that must be paid by companies with more than 20 employees in accordance with the EPF Act, 1952.

Standard deduction

 

Standard deduction U/s 16(ia) was first reintroduced in the 2018 budget. This deduction replaces transportation allowance and medical allowance. Employees can now claim a flat for Rs. 50,000 (before Budget 2019, it was Rs. 40,000) deducted from the total income, resulting in lower tax costs.

 

Professional tax

Occupational tax or employment tax is a tax levied by a state, just like the income tax levied by the central government. The maximum amount of professional tax that can be levied by a state is Rupees Two Thousand Five Hundred. It is usually deducted by the employer and submitted to the state government. On your income tax return, professional tax is deducted from your salary income.

 

Relief under section 89 (1)

If you have to get any arrears salary you can avail this section 89(1)

Calculate tax relief yourself

A. Calculate the tax payable on the total income including the additional salary in the year received.

 

B. Calculate the tax payable on the total income after deducting the extra salary in the year received

C. Calculate the difference and steps 1 and step 2

D Calculate the tax payable on the total income of the year related to the arrears including E Calculate the difference between step 4 and step 5

F The additional amount in step 6 in step 3 is the tax relief that will be granted.

Note that if the amount in step 6 exceeds the amount in step 3, no relief will be allowed.

 

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 the 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

On December 02, 2021 by www.taxexcel.net

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