Section 10 Income Tax Act | Under the Income Tax Act, 1961, any citizen of India whose income

 exceeds a certain threshold is liable to pay taxes. Therefore, when collecting each fiscal year, taxpayers

 look for ways to minimize their tax liability.

 

To ease the burden on taxpayers by encouraging them to save, invest, and pay taxes, the law listed some income as tax-exempt.

Download and prepare at a time 50 Employees Form 16 Part B for the F.Y.2021-22

Deduction under Section 10 of the Income Tax Law

Exemption from the category of sections and subsections

10 (1) Agricultural income of the self-employed No tax

10 (2) Income of a Hindu family member is indivisible Without tax

10 (10C) Voluntary Retirement Benefit Exempt up to Rs. 5 lakh

10 (10D) Life insurance claims including bonus No tax

10 (11) (12) Amount withdrawn from the pension fund Without tax

10 (10BC) State Disaster Damage Compensation No tax

Download and prepare One by One Income Tax Form 16 Part A&B and Part B for the F.Y.2021-22 in Excel

10 (13A) Rental Housing Benefit (HRA) At a minimum, the following are exempt: Actual HRA 40% of salary or 50% of salary if you live in metropolitan areas Rent paid less than 10% of salary

10 (15) Income from securities not taxed not taxed

Other exclusions under section 10

Employees receive a number of benefits in addition to their regular income. Most of these benefits are considered part of general income, and some are exempt under Section 10.

Download and prepare at a time 50 Employees Form 16 Part A&B for the F.Y.2021-22

 

1. Special compensation under section 10 (14):

Some allowances are classified as special benefits under Section 10 and are tax-free. The exception depends on the amount allowed or the money actually used for a particular purpose, whichever is less.

Grants under subsection (14) of section 10 of the Income Tax Act include:

2. Per diem: includes per diem provided to cover expenses incurred during a business trip or when moving/moving to a new job.

3. Travel Allowance: Provided to employees to cover travel expenses during official travel or when moving to another job. Including expenses incurred in connection with the transfer of personal belongings, etc.

Download and prepare at a time 100 Employees Form 16 Part B for the F.Y.2021-22

 

4. Adjutant's allowance: This exemption applies to the salary of an assistant assigned to assist in the performance of official duties.

5. Uniform allowance: Where the office requires you to wear a uniform while on duty, an allowance is offered to cover the cost of purchasing and maintaining a uniform.

6. Travel expenses: This subsidy is provided to cover expenses related to official travel. It does not cover travel expenses from home to work.

7. Research or Academic Scholarship: This exception is provided by educational and research institutions to encourage research or academic training, education, etc.

8. U/S 10(14)(i) exemption: -

A) Per Diem

B) Travel allowance

9. Specific compensation under Article 10(14)(ii):

Compensation excluded pursuant to paragraph (14)(ii) of Section 10 of the Income Tax Act

• Weather benefits: including compensation for work in the highlands or hills.

• Up to 800 for the hills of Himachal Pradesh, Uttar Pradesh Jammu and Kashmir and the northeast.

• Discount up to 7000 per month for Siachen.

• Discount up to 300 for other high altitude locations.

• Tribal Areas Allowance: 200 grants for those working in tribal areas, registered or pre-classified agencies such as Karnataka, West Bengal, Madhya Pradesh, Assam, Orissa, Tamil Nadu, Bihar, Uttar Pradesh and Tripura.

• Border Area Benefits: Pursuant to section 10(14)(ii) 2BB, military personnel serving in border areas, remote areas, or disturbed areas receive benefits ranging from 200 to 1,300 per month.

Download and prepare at a time 100 Employees Form 16 Part A&B for the F.Y.2021-22

 

• Compensation in the field: a grant of 2600 per month is permitted under section 10(14)(ii) provided that it is given to individuals for tasks in unusual areas.

• Children's Education Fund: Exceptions to Section 10(14)(ii) are available for a benefit of Rs.100 per child for up to 2 children. Boarding allowance can also be claimed in the amount of 300 / month/child up to 2 children.

• Counterinsurgency allowance: The Section 10(14)(ii) allowance of $3,900 per month is for those who work in the armed forces in counterinsurgency.

• Island Service Allowance: An exemption under Section 10(14)(ii) of 3250 per month for military personnel serving in the Andaman and Nicobar Islands or the Lakshadweep Island Group.

• Other benefits under paragraph (14) (ii) of Section 10 of the Income Tax Act include:

• 800/month for underground miners.

• 4,200 per month for employees in high activity areas.

• 1000 per month for workers in certain modification areas.

• 3,200 per month in travel allowance for employees travelling between home and work

Download Automated Income Tax Arrears Relief Calculator U/s89 (1) with Form 10 E from the F.Y.2000-01 to F.Y.2022-23(Up-to-date Version)

On May 05, 2022 by www.taxexcel.net

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 Income Tax Section 16 of the Income Tax Act 1961 provides for a deduction from taxable income

 under the wage line. Provides deductions for the standard deduction, entertainment allowance, and

 labour tax. With this deduction, the taxpayer can reduce the taxable wage income that is subject to tax.

 

Also, with the recent changes to the flat-rate deduction, the benefit under this section extends to a larger amount. Plus, there's no problem providing travel and medical expenses, which makes it pretty straightforward.

 

In this article, we will look at each of the deductions in Section 16 along with the illustrations of the calculation.

You may also like- Automated Income Tax Form 16 Part B for the Financial Year 2021-22[This Excel Utility can prepare at a time 50 Employees Form 16 Part B]

Standard pay deduction under section 16 (ia)

 

A standard deduction is allowed under section 16ia of the Income Tax Act. The standard deduction replaced the transportation allowance of Rs 19,200 and the medical reimbursement of Rs 15,000. The 2018 budget, it was introduced by our finance minister, Jaitley.

 

The 2018 budget includes a standard deduction of Rs 40,000 in lieu of travel and medical expenses. This deduction of Rs 40,000 does not require the taxpayer to submit invoices or proof of expense. It provides for a fixed deduction of Rs 40,000.

 

Subsequently, in the provisional budget for 2019, the deduction was increased from Rs 40,000 to Rs 50,000. Therefore, the deduction for the 2018-2019 financial year was Rs 40,000 and from the 2019-20 financial year, the deduction will be Rs 50,000.

 

The ordinary deduction is also available for retirees. The CDTC has issued a clarification clarifying the applicability of the standard deduction to retirees. The pension received by the taxpayer from his former employer will be taxed under "salary". Since the pension received is taxed in the payroll section, the deduction will also be available to retirees under section 16.

You may also like- Automated Income Tax Form 16 Part A&B for the Financial Year 2021-22[This Excel Utility can prepare at a time 50 Employees Form 16 Part A&B]

 

The maximum deduction will be available U/s 16 for the standard deduction is:

Salary received

OR

50000 rupees

Whatever it is below

Remember that the standard deduction has nothing to do with u / s 80C deduction or any other section of the EIA chapter.

 

Illustration for the calculation of the standard deduction

Entertainment allowance under Section 16 (ii)

Entertainment allowance is first included in wage income and then deducted according to various criteria. The allowance must be an allowance specifically granted by the employer to the taxpayer as an entertainment allowance.

Entertainment allowance for government employees

 

For central and state government employees, the available deduction is the lower of the following:

 

20% of the basic salary

5000 rupees

Amount provided as an entertainment allowance in the fiscal year

You may also like- Automated Income Tax Form 16 Part B for the Financial Year 2021-22[This Excel Utility can prepare at a time 100 Employees Form 16 Part B]

 

To determine the amount of the allowance, the taxpayer must ensure that the following conditions are met:

 

The salary must not include any other allowances, employer benefits, or privileges received. Basically, the salary should be the gross amount received with no other benefits.

 

Never include the actual amount spent in the entertainment allowance received by the employer.

 

Entertainment allowance for a non-state employee

The entertainment allowance deduction is not available for non-state employees. Only central or state government employees are eligible for the deduction. Furthermore, employees of local and public bodies are not entitled to the deduction.

You may also like- Automated Income Tax Form 16 Part A&B for the Financial Year 2021-22[This Excel Utility can prepare at a time 100 Employees Form 16 Part A&B]

 

Employee tax under Section 16 (iii)

An employee's tax deduction is allowed under section 16iii of the Income Tax Act. The amount paid by the taxpayer for the labour tax or the professional tax is allowed as a deduction pursuant to article 16. Here, the labour tax is provided for by section 276, paragraph 2, of the Constitution.

 

When calculating professional tax deductions, the following points should be taken into account:

The taxpayer must request the deduction only in the fiscal year in which the professional tax is actually paid to the State.

 

Tax paid by the employer on behalf of an employee is also deductible. In this case, the amount paid by the employer as labour tax will first be included as a mandatory condition in the total salary. Thereafter, an equal amount will be allowed as a deduction under section 16.

 

 Under Section 16 of the Income Tax Act, there is no upper or lower deduction limit. The deduction depends exclusively on the actual amount of the business tax. However, the government of any state cannot charge more than 2,500 rupees per year as a business tax. Only tax paid is deductible, not interest or penalties for late or non-payment of labour tax.

Download Automated IncomeTax 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 115 BAC

 

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

 

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

 

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

On May 02, 2022 by www.taxexcel.net

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