Section 80TTA of the Information Technology Act provides a tax deduction for interest income from

 personal savings. To help you claim your Section 80TTA Income Tax Act deductions, we will discuss

 your eligibility, threshold, inclusions, and exclusions in detail.

 

What is a section 80TTA deduction?

Section 80TTA deduction was established in 1961 and provides for a deduction of up to Rs. 10,000. This law applies to individual savings in banks and individual savings groups under the HUF (Hindu Undivided Family). However, it is ineffective with respect to income from interest on term or term deposits.

Interest Income Deductible under Section 80TTA

Savings income from the following institutions is tax-deductible under section 80TTA of the Income Tax Act:

Bank

Banking cooperative society

Post Office

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What is the maximum allowable deduction under section 80TTA?

The maximum applicable deduction of 80TTA is Rs. 10,000 per year, i.e. any excess of the amount of savings income will be taxable. Here, the calculation is based on the amount of interest accrued from one or more savings accounts of different banks.

 

Interest income is treated as income from other sources. Taxpayers can claim a maximum deduction of Rs. 10,000 of your total gross income and receive taxable income. The applicable tax percentage will then be calculated based on the taxpayer's taxable income.

 

What interest is non-deductible under Section 80TTA?

Interests from the following sources are not allowed in this section -

Fixed deposit.

Duplicate account.

Term deposit.

Savings in non-bank financial companies.

Companies, LLPs and partner firms are not permitted to receive interest payments under section 80TTA.

 

Who is eligible to claim tax credits under Section 80TTA?

The most important factors for compliance with the requirements of Section 80TTA are:

Taxpayers residing in India

Group of persons in HUF

NRI with NRO Savings Account

Age under 60 (Section 80TTA does not apply to older people, they can apply for section 80TTB)

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

 

The deduction under section 80TTA applies to persons whose total income exceeds the taxable base. For example, if your income is Rs. 2,00,000 and your specific interest income is Rs. 50,000 in the reporting year. In this case, you are not eligible to apply for section 80TTA because your total income is below the taxable level.

 

How much tax will you save?

This is a viable question on the internet, what is 80TTA in income tax and how much can you save on it? The maximum amount of tax that can be saved with 80TTA depends on the tax rate that the taxpayer is subject to.

 

If your total income falls under the 20 % tax rate, the maximum amount of tax you can save is Rs. 2000 thousand minus 20,000 thousand 10,000 below 80TTA. Likewise, if you qualify for the 30 % tax rate, the maximum amount you can save is Rs. 3000.

Section 80TTA of the Income Tax Act aims to improve financial management. Thus, it helps people avoid paying taxes on income earned by small savings and large investors, without bothering them to include small amounts of interest in the income tax return process.

You may also like- Automated Income TaxForm 16 Part B for the F.Y.2021-22[This Excel Utility can prepare at a time 100 Employees Form 16 Part B]

 

General issues

✓ How do I get Section 80TTA deductions?

To claim a deduction under Section 80TTA, you must show savings interest income as income from other sources on your ITR file. You should mention this both in the chapters under other sources and in the chapters of deduction.

 

✓ How is 80TTA different from 80TTB?

Both acts are in accordance with section 80 of income tax. Section 80TTA is for a tax deduction on personal savings income and HUFS under the age of 60, whereas; 80TTB applies to the retiree tax deduction.

In addition, 80TTA excludes savings from fixed deposits, while 80TTB includes savings from all sources.

 

✓ Do I need to mention the interest accruing on a savings account balance to receive Section 80TTA benefits?

Yes, it is mandatory to indicate all sources of income from savings interest.

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

On May 30, 2022 by www.taxexcel.net

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 Income tax rebate U/s 87A | The Income Tax Act of 1961 allows for several types of tax credits so that

 taxpayers can reduce their taxable income and therefore their tax liability. One such provision under

 the Income Tax Act is the tax credit permitted under section 87A of the Act. Let's see what this

 discount is about –

 

What is the u/s 87A tax credit? 

A tax deduction is a type of discount offered on your tax liability. If your annual income, net of deductions and exemptions, does not exceed INR 5 lakh, you may claim a tax credit under section 87A on your tax liability. With the tax credit available under Section 87A, your tax liability becomes void if your net annual income does not exceed INR 5 lakh.

You may also like – Automated Income Tax Form 16 Part B for the F.Y.2021-22[This Utility can prepare at a time 50 Employees Form 16 Part B]

Allowable discount amount u/s 87A

 

The allowable discount amount for u/s 87A will be the lower of the two:

• The amount of tax payable, or

• INR 12,500

By applying the tax credit amount, your tax liability will be zero.

Things to Remember When Applying for an 87A Tax Credit

The tax credit available under section 87A of the Income Tax Act of 1961 gives you the benefit of zero taxation if you have a limited income. However, before you claim a discount, here are a few things you should keep in mind:

• Resident Indian taxpayers may only benefit from the rebate in accordance with Section 87A.

• The rebate will apply to tax liabilities calculated before the end of health care and education.

• Taxpayers under the age of 60 and between the ages of 60 and 80 can claim this discount.

• Taxpayers aged 80 and over, ie the very elderly, are not eligible for the discount.

• You may qualify for a discount under the old or new tax regime.

• If your tax liability is less than the rebate amount, you are not eligible for a refund. In these cases, the discount will be equal to the calculated tax liability.

• Rebate is only available if your taxable income does not exceed INR 5 lakh. If your taxable income is more than INR 5 lakh, you will have to pay tax on your total income without any discount.

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

 

How can you get the u/s 87A tax credit on your income?

Here are the detailed steps by which you can claim an available tax credit on your tax liability:

• List all the income you have earned during the financial year and categorize them into the appropriate headings.

• Sum up the total income you have earned from all sources.

• Subtract eligible income deductions and exemptions to find your net taxable income.

• Calculate your tax liability on your net taxable income if it exceeds the INR 2.5 lakh threshold.

• If your net taxable income is INR 5 lakh or less, apply for an estimated tax credit or INR 12,500, whichever is less.

 

Eligibility Criteria for Section 87A Discount

To qualify for the u/s 87A tax credit, the following eligibility criteria must be met:

• You must be an Indian taxpayer

• Your age must not exceed 80 years

• Your net taxable income, ie income after eligible deductions and exemptions, must be up to INR 5 lakh.

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

 

On May 27, 2022 by www.taxexcel.net

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Form 16 is a tax or payroll certificate for employees issued by the Department of Income Tax of the Government of India. This certificate contains comprehensive information about the employee's wages, including tax deductions made by the payer or employer in a given financial year.

What is Form 16?

Form 16 is essentially a tax certificate or document issued to resident employees of India by the Income Tax Department of the Government of India. A Form 16 document is issued under section 203 of the Income Tax Act 1961.

Download and Prepare at a time 50 Employees for the Form 16 Part B for the Financial Year 2021-22

Form 16 is commonly referred to as a "salary certificate". This certificate contains comprehensive information about the employee's wages, including tax deductions made by the payer or employer in a given financial year.

Form 16 Income Tax Components

For an employee, Income Tax Form 16 is the most important tax document. Document Form 16 consists of two parts.

Part A

Part A contains a summary of tax deducted by an employer or organization from an employee's paycheck and deposited on behalf of the employee with the IT department. This certificate is signed by the organization or employer and serves as proof that the employer or organization withheld income tax at source, that is, from the employee's salary, and transferred this amount to the IT department.

Download and Prepare at a time 50 Employees Form 16 Part A&B for the Financial Year 2021-22 

Details mentioned in Part A include:

Personal information about the employer and employee. This includes employer and employee names, addresses, PAN data, and employer TAN data. The TAN or tax account number is the number assigned to the account that is used to collect and withhold taxes. These details allow income tax authorities to analyze cash flows from an employer's account to an employee's account.

Note. An organization is not eligible to collect TDS if it does not have a TAN. In such cases, Form 16 is not issued.

The assessment Year is the specific year in which the taxpayer's income will be assessed. Simply put, this is the specific year that the taxpayer applies for an income tax return. For example, income or wages received between April 1, 2019, and March 31, 2020, are subject to assessment in 2020-2021. The estimated year is therefore 2020-21.

The period of employment of an individual in the organization during a given financial year

Summary of paid salary

Date of collection or withholding of tax

Details of quarterly tax credits and tax deposits at the Department of Income Tax

The date the tax was credited to the TAN account

Confirmation number associated with the payment of the TDS amount

The BSR Code of the bank from which the payments were made and the following Challan numbers.

Part B

This section, in essence, is a summary sheet of information about the total wages paid for a given year, other sources of income declared by an individual to the organization, taxes due and amounts of taxes paid. The information is provided in an orderly and comprehensive manner in the prescribed form. Part B of Form 16 lists the employee's total income and related deductions and benefits. All names and contact details of employees and employers are also listed in this section.

Download and Prepare at a time 100 Employees Form 16 Part B for the Financial Year2021-22

 Details mentioned in Part B include

Total Wage Received: The salary structure is divided into different components, which include bonus, vacation pay, vacation pay, rental housing allowance, and others.

Eligible Benefits: Pursuant to section 10 of the Income Tax Act of 1961, employee benefits such as HRA or rental housing, transportation costs, housing and school expenses with children, medical care, etc. are mentioned in Part B of Form sixteen.

Gross Income:

 

The total annual salary received by the employee and other sources of income (eg property/household income, etc.) is reported by the individual employee to the employer. Details of the additional source of income must be provided to the employer when employees submit their proof of investment for deductions.

 

Salary Deduction: Deductions under section 80C/80CCC/80CCD of the Income Tax Law include contributions to tax saving schemes or instruments such as Sukanya Samriddhi, pension, life insurance policy, tax saving mutual funds and government pension funds. The maximum exemption limit is INR 1.5 lakh.

Download and Prepare at a time 100 Employees Form 16 Part A&B for the Financial Year 2021-22

Net taxable income: Total tax credits are summarized in "Chapter IV-A" and the amount is subtracted from gross annual income to determine total taxable income. The individual's tax liability is calculated on this taxable amount.

Co-payments and educational fees, if any

Assistance under section 89, if applicable

Section 87 rebate if eligible.

Tax decision and refund of tax or tax balance payable

Benefits of Form 16

Form 16 can be useful in many ways. Here are some of the uses and benefits of Form 16.

File a tax return

Form 16 contains a detailed breakdown of the components of your salary. The income information on Form 1 will help you file your tax return. You can refer to it when submitting declarations.

Check deposited TDS

Employers or a tax officer can only issue a Form 16 after filing a TDS with the government. Therefore, Form 16 can be used as evidence that your employer or tax officer has filed a TDS with the government.

Loan and credit card applications

Download and Prepare One by One Form 16 Part A&B and Part B for the Financial Year 2021-22

 Financial institutions consider Form 16 as a way to determine a user's credit limit. Most institutions request a Form 16 for the last 2 years when applying for a credit card. For loan applications, this form is useful for evaluating your application. Individuals must provide tax return information when applying for a personal loan, mortgage loan, or vehicle loan. The lender will assess your financial condition and solvency based on your transactions on Form 16.

 16 types of forms

Form 16 is of two types, depending on the person's source of income:

Form 16A

When tax or TDS is deducted from an employee's wages by an employer, the employer issues Form 16. Form 16A is issued when tax is deducted from income in addition to wages.

This form details your total income from additional sources and the resulting tax deducted from that income and deposited in your PAN. It also contains name details, deductor/deductor contact details, deductor's TAN details, PAN details, and Challan details of the deductor's deposited TDS.

Download and Prepare One by One Form 16 Part  B for the Financial Year 2021-22

 Form 16B

This TDS certificate is issued for deductions made on the sale of real estate. Form 16B reflects the amount of TDS deducted from the total sale amount and is paid by the buyer to the IT department. The buyer is required to deduct 1% as TDS from the total sale price of the property at the time of sale. The buyer must then deposit the amount received under the TDS with the Income Tax Department and provide the seller with Form 16B as proof of the tax deposit.

On May 26, 2022 by www.taxexcel.net

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