VOLUNTARY RETIREMENT - 10(10C)
Amount received or receivable (ie.,in instalments) by an employee
on his voluntary retirement in accordance with any scheme of Voluntary
Retirement is exempt to the extent of Rs.5,00,000, provided the
VRS is in accordance with Rule 2BA of IT Rules.
HOUSE RENT ALLOWANCE EXEMPT U/S.10(13A)
a) Actual HRA received : Rs.xxxx
b) Rent paid in excess of 10% of Salary : Rs.xxxx
c) 50% of Salary in Metro Cities or
40% of Salary in other cities : Rs.xxxx
Least of a), b), c) is exempt.
NOTE : Here Salary means Basic Salary as well as DA if the terms
of employment so provide.
CONVEYANCE ALLOWANCE : Any allowance granted to meet the
expenditure incurred wholly, necessarily and exclusively on conveyance
in performance of the duties of office and so certified by the employer
is exempt u/s.10(14).
TRANSPORT ALLOWANCE : Any allowance granted to an employee
to meet the expenditure for the purpose of commuting between the
place of his residence and the place of his duty to the extent upto
Rs.800/- per month is exempt u/s.10(14).
MEDICAL REIMBURSEMENT : An amount of Rs.15,000 or the actual
amount reimbursed by the employer whichever is less is exempt u/s.17(2).
PROFESSION TAX : Profession Tax levied by the State Government
is allowable as a deduction from Gross Salary provided it has been
DEDUCTION U/S.16(1) IS NOT ALLOWABLE FROM A.Y.2006-07
FROM HOUSE PROPERTY
DEDUCTION U/S.23(1) : For let out property, amount paid
by the owner towards taxes levied by any local authority in respect
of the property is deductible from Annual value(taxes pertaining
to any previous years).
DEDUCTION U/S.24(a) : For let out property, deduction of
30% of the Net Annual Value is allowed. No separate deduction for
Repairs, Collection Charges, Insurance Premium, Annual Charge and
INTEREST ON BORROWED LOAN(U/S.24(b)):
FOR SELF OCCUPIED PROPERTY
a. If Property is acquired or constructed with loan taken after
01/04/99 and construction is completed within 3 years from the end
of the financial year in which the capital was borrowed - Rs.1,50,000
or actual interest paid/payable whichever is less is deductible.
b. If new housing loan is taken for repayment of old loan (old loan
taken after 1/4/99) - Rs.1,50,000 or actual interest paid/payable
whichever is less is allowed as deduction.
c. If Property is acquired or constructed with loan taken before
01/04/99, Rs.30,000 or actual interest paid/payable whichever is
less is allowed as deduction.
d. If loan taken for Repairs, renewal, reconstruction of property,
Rs.30,000 or actual interest paid/payable which ever is less is
allowed as deduction.
LET OUT PROPERTY, actual interest paid/payable can be claimed
OWNER OF THE HOUSE PROPERTY CAN AVAIL THE ABOVE DEDUCTIONS.
from 01/10/2004, Long Term Capital Gains arising on sale of equity
shares or unit of equity oriented fund through recognized stock
exchange is exempt if such transaction is chargeable to Securities
Transaction Tax (u/s.10(38)).
from 01/10/2004, Short Term Capital Gains arising on sale of equity
shares or unit of equity oriented fund through recognized stock
exchange is subject to tax at the rate of 10% if such transaction
is chargeable to Securities Transaction Tax.
Gain arising out of sale of long term capital asset can be invested
in National Highways Authority of India, Rural Electrification Corporation
Limited, within six months from the date of sale. (Lock-in period
is 3 years)
For Cost Inflation Index, refer website.
DEDUCTION FOR FAMILY PENSION U/S.57(iia):
An amount of
Rs.15,000 or 331/3% of family pension whichever is less is allowed
as deduction. If an assessee receives arrears of family pension,
then Relief u/s.89(1) can be claimed by him.
Family Pension received by the widow or children or nominated heirs,
as the case may be, of a member of the armed forces(including para-military
forces) of the union, where the death of such member has occurred
in the course of operation is exempt.
- OTHER SOURCES
Any income by
way of Dividends from company, Income received in respect of units
from the Unit Trust of India, Income received in respect of the
units of a mutual fund are exempt.
FROM GROSS TOTAL INCOME (CHAPTER VIA):
DEDUCTION U/S.80C : Deduction is available for the amount
paid or deposited towards Life Insurance Premium, PF, PPF, Unit
Linked Insurance Plan Contribution, NSC, Subscription to Units of
Mutual Fund referred to u/s.10(23D), Contribution to any Pension
Fund set up by Mutual Fund referred to u/s.10(23D), Tuition Fees
(excluding development fees, donation etc), Repayment towards Principal
amount of Housing Loan, Term Deposit for a fixed period of not less
than five years with a Scheduled Bank etc. to the extent of Rs.1,00,000
( for more details refer Act )
DEDUCTION U/S.80CCC : Deduction to the extent of Rs.1,00,000/-
for contribution to effect or keep in force or a contract of any
annuity plan of LIC or other insurer for receiving pension.
DEDUCTION U/S.80CCD : Deduction for any amount paid or
deposited under a Pension Scheme notified by the Central Government
to the extent of 10% of salary (including DA if terms of employment
so provide but excluding all other allowances & perquisites).
AGGREGATE AMOUNT OF DEDUCTIONS U/S.80C, 80CCC & 80CCD SHALL
NOT EXCEED RS.1,00,000/-
DEDUCTION U/S.80D : Any sum paid by cheque to keep in force
an insurance on health of the assessee or his dependants in accordance
with the scheme framed by the General Insurance Corporation of India
or any other insurer and approved by the Insurance Regulatory and
Development Authority, upto Rs.10,000 is allowed as deduction. Where
the premium is paid in respect of an assessee aged 65 years and
above, the permissible deduction will be Rs.15,000.
DEDUCTION U/S.80DD: The amount a) of expenditure incurred
by way of medical treatment, training and rehabilitation of a handicapped
dependant or b) paid or deposited under any scheme framed in this
behalf by the LIC or UTI or any other insurer and approved by the
Board for the maintenance of the handicapped dependant, shall be
allowed as a deduction up to Rs.50,000 either under (a) or (b) or
aggregate of (a) & (b) on the production of a certificate from
the Government hospital in the prescribed form and manner, along
with the return of income u/s.139 in respect of the assessment year
for which the deduction is claimed. Where such dependant is a person
with severe disability, a deduction of Rs.75,000 can be claimed.
DEDUCTION /S.80DDB: If any amount is actually paid for
the medical treatment of specified diseases or ailments of the assessee
or his dependants, then, a deduction of the amount actually paid
or Rs.40,000 whichever is less is allowable on the production of
a certificate in Form No.10-I, issued by a Neurologist, an Oncologist,
a Urologist, a Hematologist, an Immunologist or such other specialist
as may be prescribed, working in a Government Hospital, while filing
the Return of Income. If the expenditure is incurred in respect
of an assessee aged 65 years and above, the limit of deduction is
Rs.60,000. The deduction shall be reduced by the amount received,
if any, under any insurance.
DEDUCTION U/S.80E: Any amount paid by the assessee in the
previous year out of his income chargeable to tax by way of repayment
of interest on loan taken by him from any financial/approved Charitable
Institution for the purpose of pursuing his higher education is
eligible for deduction in computing total income in respect of the
initial assessment year & for seven immediately succeeding assessment
years or till the interest is paid in full, whichever is earlier.
DEDUCTION U/S.80G: Donations in the form of money to certain
funds, approved charitable institutions qualify for deduction to
the extent of 100% or 50%. (for details, refer Act)
DEDUCTION U/S.80GG: An assessee not in receipt of HRA incurs
any expenditure on rent, is allowed a deduction of least of the
a) Rent paid in excess of 10% of the total income
b) 25% of the total income
c) Rs.2,000 per month
NOTE : Total Income means Total Income before allowing deduction
under this section.
The above deduction is allowable only if the assessee or spouse
or minor child does not own a house in the place of employment/business.
To claim such a deduction, the assessee should file a declaration
in Form No.10BA.
U/S.80L IN RESPECT OF INTEREST ON CERTAIN SECURITIES/ DEPOSITS ETC.,
10. DEDUCTION U/S.80U: Any assessee suffering from
a permanent physical disability (including blindness) or is subject
to mental retardation, on the production of medical certificate
from Government Hospital in the prescribed form and manner, along
with a Return of Income, shall be allowed a deduction of Rs.50,000.
Where such assessee is a person with severe disability, a deduction
of Rs.75,000 can be claimed.
FROM INCOME TAX
DEDUCTION FROM AMOUNT OF INCOME TAX WILL BE ALLOWED U/S.88, 88B,
88C & 88D W.E.F. A.Y.2006-07
ON FRINGE BENEFITS:The tax on fringe benefits provided
by their employer to their employee as defined u/s.115WB(1) and
(2) is payable by the EMPLOYER.
PENALTY U/S.271F: If a person who is required to
furnish a return of income as required under section 139(1) or by
the proviso to sub-section, fails to furnish such return before
the end of the relevant assessment year, shall be liable to pay
by way of penalty a sum of Rs.5,000.
U/S.234A: Where the return of Income of any assessment
year u/s.139(1) or 139(4) or in response to a notice u/s.142(1),
is furnished after the due date as specified in sub-section 1 of
section 139, or is not furnished, the assessee shall be liable to
pay simple interest at the rate of one percent for every month or
part of a month comprised in the period commencing on the date immediately
following the due date.
U/S.234B: Where an assessee who is liable to pay advance
tax under section 208 has failed to pay such tax or, where the advance
tax paid by such assessee under the provisions of section 210 is
less than 90% of the assessed tax, the assessee shall be liable
to pay simple interest at the rate of one percent for every month
or part of a month comprised in the period from the 1st day of April
following the financial year.
U/S.234C: Where an assessee other than a Company, who is
liable to pay advance tax under section 208 has failed to pay such
1) The advance tax paid by the assessee on his current income on
or before the 15th day of September is less than 30% of the tax
due on the returned income or the amount of such advance tax paid
on or before the 15th day of December is less than 60% of the tax
due on the returned income, then, the assessee shall be liable to
pay simple interest at the rate of one percent per month for a period
of three months on the amount of the shortfall from 30% or, as the
case may be, 60% of the tax due on the returned income.
2) The advance tax paid by the assessee on his current income on
or before the 15th day of March is less than the tax due on the
returned income, then, the assessee shall be liable to pay simple
interest at the rate of one percent on the amount of the shortfall
from the tax due on the returned income.
DATES FOR FILING RETURN OF INCOME : All Individuals/HUF/Firms
deriving Income from Salary, House Property, Capital Gains, Business
or Other Sources and not covered under section 44AB are required
to file the Return of Income by 31st July. All Tax Audit Cases covered
under section 44AB, Company returns are required to file the Return
of Income by 31st October.
ACCOUNT NUMBER: Every assessee is required to obtain 10
Alpha numeric Permanent Account Number (PAN) and quote the same
in his returns, challans & correspondence. PAN can be obtained
by applying in new Form No.49A at the designated Service Centres
of UTITSL OR NSDL(Log on to our website). PAN is essential for processing
the Return of Income and for giving credit for taxes paid. If a
person who is required to quote his Permanent Account Number fails
to do so or intimates false number, the Assessing Officer may direct
that such person shall pay, by way of penalty, a sum of Rs.10,000.
To Know Your PAN, visit our website.
For PAN Grievances : UTITSL - e-mail - firstname.lastname@example.org
NSDL - e-mail - email@example.com
PAYMENTS : Advance tax payments and Self-assessment tax
payments have to be made in Challan No.280. Please obtain counterfoil
of challan containing Challan Identification Number (CIN) from the
Bank and enclose copy of the same with the return and quote CIN
in the return.
should not be construed as an exhaustive statement of law. In case
of doubt, reference should always be made to the relevant provisions
of Income Tax Act, Rules or Notifications.