Thursday, 6 October 2022

Housing Loan Interest Deduction - Section 24B| Section 24b of the Income Tax Act allows for the

deduction of interest on mortgage loans from taxable income. The said loan must be taken for the

purchase or construction or repair or reconstruction of residential property.

This deduction is allowed on an accrual basis, not the payment. In other words, interest due for the year is allowed as a deduction whether or not it is paid.

The deduction may be claimed for two or more home loans. The deduction may also be claimed for two or more households.

To claim the deduction under this section, a person must own the house and the loan must also be in his or her name.

Interest inclusions/exclusions

Interest includes service fees, brokerage, commission, prepayment fees, etc.

Interest/fines on unpaid interest will not be allowed as a deduction.

Type of loan for which the deduction is allowed

The deduction will be allowed regardless of the nature of the loan, whether it is a home loan or a personal loan from any person/institution. The loan must be used for the construction, purchase or repair/reconstruction of the house.

If a person, instead of taking out a loan from a third party, pays the sale price to the seller in instalments with interest, then that interest is also allowed.

Maximum deduction limit

These deduction limits apply per appraised and not per property. Therefore, if a person owns two or more homes, the total deduction for that person remains the same.

1) On rented property / Considered leased - Rs. 2 million

2) Self-Occupied House (SOP) - Rs. 2 million

Interest in the pre-construction/acquisition period

Pre-construction/acquisition period interest is allowed in five equal instalments from the year of completion of home ownership. This deduction is not allowed if the loan is used for repairs, renovations or reconstruction.

The pre-construction/acquisition period begins on the loan date and ends on the last day of the previous fiscal year in which construction is completed.

Deduction in case of co-borrower

If the mortgage loan is taken together, the deduction is allowed to each co-borrower in proportion to his share of the loan. To make such a deduction it is necessary that the said co-borrower is also co-owner of that property. If the beneficiary is a co-owner but is paying off the entire loan, he or she can claim the deduction of the entire interest paid by the beneficiary.

The deduction limit in the case of Autonomous Property is applied individually to each co-borrower. In other words, each co-borrower can claim a deduction of up to Rs. 2 lakhs/Rs. 30,000. No limits apply to the leased property.

Interest deduction with HRA

The HRA pursuant to section 10(13A) and the interest deduction may be used simultaneously, even if the home owner is in the same city where you reside in a rental property.

Form 12BB must be filed with the employer if you want your employer to consider a deduction under this section and therefore deduct lower TDS

Download Automated Income Tax Arrears Relief Calculator U/s 89(1) along with Form 10E from the Financial the Year 2000-01 to Financial Year 2022-23 (Up-to-date Version)

Housing Loan Interest Deduction - Section 24B

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Tuesday, 4 October 2022

All the West Bengal Government Employees are well known that the Bengal Government has not

paid the D.A.till now from the financial year 2020-21 to on-words. The Govt employees get the

benefits only the Annual Increment in the month of July of each financial year. It is too hard to listen

to the pending D.A. In this regard where the other State Government has already paid the up-to-

date D.A. as same as the Central Govt Employees. The Pending D.A. of the West Bengal Government

is @31% back to the Central Govt Employees.

If paid by the D.A.by the West Bengal Government between March 2024, then the Income Tax may hike for each State Govt Employee. As such the West Bengal Government has already declared the 6^th Pay Commission since 1/2/2016. By this 6^th Pay Commission hike the Pay of each and every State Govt Employees. And also hike the Tax Liability of the Govt Employees.

However, the Financial Year 2021-22 and Assessment Year 2022-23 have gone and started the New Financial Year 2022 from the 1^st April 2022 and which will end on 31/3/2024 means the running financial year 2022-23 and Assessment Year 2023-24.

So, you should calculate your Income Tax for the Financial Year 2022-23 and assessment Year 2023-24 and you can plan your Tax Savings Idea. For the easy calculation by this site prepare a Unique Excel Based Software All in One only for the West Bengal State Employees for the Financial Year 2022-23. With this software, you can calculate your actual Income Tax Liability with prepare at a time Income Tax Form 16 Part A&B and Part B and Auto calculate Exemption of House Rent U/s 10(13A) as per the New Finance Budget 2022.

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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.2022-23

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

7) Individual Salary Sheet

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Tuesday, 20 September 2022

Exemption from House for Rent U/s10(13A)| Often, people have to move to another city to work. In

such cases, they may pay rent for their stay. Organizations often compensate employees for this cost by

paying them to rent instead of their basic salary. This is usually part of the salary structure. However,

an HRA qualifies for income tax exemption and can be a great way to reduce your taxable income.

1. What is HRA or Housing Rent Allowance?

House Rent Allowances is the amount paid by an employer to an employee in compensation for the rent paid to occupy the workplace. Although a deduction is allowed for house rent allowance under Section 10(13A) of the Income Tax Act, CRT may be taxed in whole or in part. The calculation of HRA deduction depends on your salary, the HRA you have earned, the actual rent you pay, and where you work and live. Self-employed individuals can even claim HRA tax benefits.

2. HRA calculation method

The HRA calculation is based on several factors, including your salary, the HRA you get from your employer, the actual rent you pay, and whether you live in a metro or non-metro city. However, when calculating the CRT tax, the exemption rate will be the lower of the following:

HRA paid by your employer

Actual rent paid for accommodation less 10% of basic salary

50% of basic pay plus D.A. if you live in a metro city (Mumbai, Delhi, Kolkata, or Chennai) or 40% of basic salary plus dearness allowance if you live in a non-metro city.

To calculate house rent allowance or HRA policy is to calculate the above three factors and claim the lowest one as HRA deduction under Section 10(13A) of the ITA.

3. Tax Benefits of HRA

The HRA exclusion under Section 10(13A) of the ITA has the following benefits:

The main advantage of an HRA refund is that it reduces your taxable income.

You can claim an HRA deduction in your income tax file even if you live with your parents, as long as you show proof of rent payment.

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

Exemption from House for Rent U/s 10(13A)

4. Important Points to Remember While Applying for HRA Deduction

Any HRA paid to you cannot be claimed as an exemption. Only the lesser of the annual rent actually payable less 10% of basic salary, HRA paid by the employer and 40%/50% of salary depending on where you live can be claimed.

You can claim HRA deduction even if you live with your parents, as long as you show proof of rent payment, such as rent receipts or bank transfers. However, your parents will need to show this as income when filing their returns.

Rent paid by a spouse does not qualify for HRA deduction.

If the annual rent paid exceeds Rs 1,00,000, the PAN of the landlord will have to apply for an HRA exemption. If they do not have PAN, a signed document is required.

5. How to claim a deduction if you don't get HRA

Self-employed and salaried individuals who are not eligible for the HRA cannot claim a house rent allowance deduction under Section 10(13A) of the ITA. However, they can avail of rent exemption under Section 80GG of the Income Tax Act.

Under section 80GG, an individual can claim a minimum of the following in lieu of the house rent he or she pays:

5,000 per month ie. 60,000 per annum

25% of gross turnover

Actual rent paid minus 10% of gross income

In understanding the difference between what is HRA and the deduction claimed under section 80GG, here are some points to keep in mind:

The deduction under section 80GG is available only to those who do not receive HRA.

This includes members of Hindu Undivided Families, self-employed persons, and salaried individuals who do not receive HRA from their employer.

The maximum deduction allowed under section 80GG is Rs 60,000.

You cannot claim a deduction under both Section 10(13A) and Section 80GG

According to section 10(13A), an individual, spouse or minor child cannot own property in the city of residence to claim the benefit.

Individuals wishing to apply for this exclusion will need to submit a Form 10-BA showing that they meet all of the conditions listed above.

6. Documents Required to Apply for HRA Tax Exemption

To claim an HRA tax exemption, an individual will have to submit certain documentary proofs.

This includes rent receipts showing the rental income used to calculate the HRA deduction or a rental agreement with a specified equivalent rental rate.

Additionally, if the rent exceeds Rs 1,00,000/- per annum, then a copy of the landlord's PAN card or a declaration form signed by them is required. For rent paid to family members or parents, the same proof will be required to calculate HRA tax.

Download Automated Income Tax Preparation Excel-Based Software All in One for the Government & Non-Government (Private) Employees for the F.Y.2022-23 and A.Y.2023-24

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 employees 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.2022-23 (Update Version)

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

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

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Thursday, 15 September 2022

Section 80 TTA - Exemption for Savings Interest | 80TTA Complete Guide: Definitions, Limits,

Eligibility, Exceptions for the Fiscal Year 2022-23 (A..Y 2023-24

A savings bank account is like a digital piggy bank where interest is earned. Most people have savings bank accounts, but most of them are not aware of the taxation of accrued interest on savings accounts. Interest earned from savings accounts is taxed based on income from other sources and interest deduction u/s 80TTA is also allowed.

What is the 80TTA section?

Section 80TTA of the 1961 Income Tax Act provides for the deduction of interest earned from savings accounts in banks, cooperatives or post offices, up to Rs 10,000/-. No FD interest discount available u/s 80TTA. This deduction is allowed for all individuals and HUFs other than super seniors (aged 60 and over) as they have a separate 80TTB Part deduction for themselves.

Section 80TTA was introduced in 2013 as part of the Finance Act which was passed that year and came into effect from the 2012-13 fiscal year onwards and remains in effect.

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

Who can take advantage of the discount under the 80TTA section?

Undivided Hindu individuals or households (HUF) can claim a deduction of less than 80 TTA on interest earned on all their bank and postal accounts.

Can an NRI request a deduction of fewer than 80 TTA?

Like Indian residents, non-resident Indians (NRIs) are also eligible for a reduction of up to 80 TTA.

The 80TTA benefit is only available in NRO savings accounts. Please note that no deductions are allowed on NRO time deposits.

How much is the reduction amount of 80TTA u/s?

A deduction of Rs 10,000 u/s 80TTA on interest earned from savings accounts is allowed. If one has several savings accounts with different banks, the maximum deduction that can be claimed for all savings accounts combined is Rs 10,000/-.

The reduction under the 80TTA section is higher than the 1.5 lakh limit of the 80C section.

Download and Prepare at a time 50 Employees Form 16 Part B fort he F.Y. 2021-22 in Excel

Section 80 TTA - Exemption for Savings Interest

What organizational savings accounts does Section 80TTA cover?

Savings accounts with the following institutions fall under Section 80TTA:

Banks: Banking companies established under the provisions of the Banking Regulations Act, 1949. This includes all banks and banking institutions established under Section 51 of the same law.

Post Office: All Indian government post offices that have a savings account.

Cooperatives: Cooperatives that are registered by the government and are eligible to have a savings account as a feature of their banking system.

What are the exceptions to 80TTA?

The exceptions to 80TTA are:

Deposits in non-bank financial companies

Fixed deposit interest (FD)

Interest from Recurring Deposit (RD)

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

Frequently asked questions

Q- If I have a savings account with the Cooperative, am I entitled to a tax deduction under Section 80TTA?

Yes, you are eligible for tax deductions under Section 80TTA if you have a savings bank account with a registered Cooperative.

Q- My annual income is below the minimum annual tax threshold, do I have to pay tax on interest earned from my savings account?

No, as long as your total annual income is not below the lower tax threshold. You do not have to pay tax on interest earned from your savings account even if it exceeds Rs.10,000/- as there is no taxable income.

Q- If the appraiser has earned capital gains or income from home ownership, etc, can 80 TTA be claimed?

80 TTA can only be requested if the appraiser has earned interest income on the savings account.

Q- Can seniors apply for 80TTA?

No, deductions can be claimed by seniors up to Rs.50,000 under 80 TTB share.

Q- Can 80TTA be claimed by NRI?

Yes, Section 80TTA can be claimed by NRIs like Indian residents.

Q- How many bank accounts can I request for a deduction under the 80TTA section?

In the 80TTA section, the limit is on the interest amount and not on your account amount. Therefore, tax benefits can be claimed for a number of accounts up to an aggregate interest amount of Rs 10,000.

Q- Will TDS be deducted from my interest income?

Ans. No, there is no provision under the Income Tax Act to deduct the TDS on interest income received from savings accounts.

Download Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10 E from the F.Y.2000-01 to F.Y.2022-23(Up-to-date Version)