Revised Income Tax Exemption Calculator for Interest paid on Housing Loan Income or Loss or House Property Calculation under Section 24 of the Income Tax Act

Revised Income Tax Exemption Calculator for Interest paid on Housing Loan  Income or Loss or House Property Calculation under Section 24 of the Income Tax Act.

After enactment of Finance Act 2014, maximum housing loan interest amount (Interest on house property) which can be deducted from the income of a tax payer under Section 24 of the Income Tax Act in respect of self occupied house, is Rs. 2 Lakhs (Rs. 2,00,000).

Also there is no limit specified for deduction of home loan interest amount from income in the case of House property being rented out.

How to calculate Income / loss on House Property (Deduction of Home Loan Interest from Total Income) ?

In the case of Self Occupied House Property:

Actual annual value of Interest paid on Home loan or Rs. 2,00,000 whichever is maximum

In the case of House Property rented out:

1. Actual annual value of Interest paid on Home loan
2. Add annual rental value of the house property
3. Less House property Tax paid
4. Less Rebate 30% of the Annual Value of Rent as Repairs and Maintenance

Section 80EE reintroduced in Finance Act 2016
As per Finance Act 2016, the tax payer is entitled to claim additional deduction of Rs. 50,000 under Section 80 EE if you are a first time home buyern interest. This deduction is over and above the Rs 2 lakhs limit under section 24 of the income tax act. Read more about deduction of Rs 2 lakhs on interest on home loan here.

Section 80EE was introduced effective 2013-14 and was available for 2 years, FY 2013-14 and FY 2014-15 only (assessment year 2014-15 and 2015-16). However, this section has been reintroduced effective FY 2016-17 (assessment year 2017-18).

Who can avail this Deduction?

• This is the 1st house you have purchased
• Value of this house is Rs 50 lakhs or less
• Loan taken for this house is Rs 35 lakhs or less
• Loan has been sanctioned by a Financial Institution or a Housing Finance Company
• Loan has been sanctioned between 01.04.2016 to 31.03.2017
• As on the date of sanction of loan no other house is owned by you

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Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees under Section 10, Section 24, Section 89(1), Chapter VIA, and Section 87A

Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees under Section 10, Section 24, Section 89(1), Chapter VIA, and Section 87A

Income Tax Rate 2016-17

TAXABLE INCOME RANGE	RATE OF INCOME TAX
Up to RS.2,50,000	NIL
Rs.2,50,001 to Rs.5,00,000	10% of the amount by which the income exceeds Rs.2,50,000
Rs.5,00,001 to Rs.10,00,000	Rs.25,000 plus 20% of the amount by which the income exceeds Rs.5,00,000
Above Rs.10,00,001	Rs.1,25,000 plus 30% of the amount by which the income exceeds Rs.10,00,000
Education Cess	3% on Total Income Tax Payble

Section 10 (13A) - Exemption in respect of HRA:

Under Sec. 10(13A), an employee who is in receipt of House Rent Allowance (HRA) can claim exemption, if he does not live in his own house, and pays rent in excess of 10% of his salary for his residential accommodation.
Exemption u/s 10(13A) is the least of the following
1. Actual amount of HRA received
2. 50% (for Chennai, Mumbai, Kolkata and Delhi) / 40% (for other places) of the Salary for the relevant period
3. Rent paid Less 10% of Salary for the relevant period.

Section 87A - Rebate of Income Tax for Taxable income up to Rs. 5 Lakh 

Finance Act 2016 provides for rebate of Income up to Rs. 5000/- in respect of Persons who have Taxable not exceeding Rs. 5 lakh.

Section 10(14) - Transport Allowance and Children Education Allowance (CEA)

Under Section 10(14), the Budget FY 2016-17 lets you claim Rs. 19,200 tax exemption as transport allowance and Rs. 2,400 tax exemption as Children Education Allowance (CEA) in a financial year.

Section 24(b) - Home Loan

If you have taken a Home Loan, then you can claim a tax deduction on the interest component of the loan under Section 24(b). For self-occupied properties, you can benefit from deductions of up to Rs. 2,00,000.

Section 89(1) - Income Tax relief in respect of Arrears of Salary pertaining to previous years

If arrears of salary has been received in Financial year 2016-17 related to previous years then Relief of Income Tax can be claimed u/s 89(1) by accounting income from arrears in respective years on notional basis.

Deductions allowed under Chapter VI A of Income Tax Act

Deduction Limit - Sec 80CCE. As per Section 80CCE, deduction can be claimed upto Rs. 1,50,000 for the payments / contributions made under Sections 80C, 80CCC and 80CCD

Section 80C - Subject to overall limit of Rs. 1,50,000 under Section 80CCE

For investments in specified schemes, saving instruments etc.

1. Life insurance premium for policy:a) in case of individual, on life of assessee, assessee’s spouse and any child of assessee
   b) in case of HUF, on life of any member of the HUF
2. Sum paid under a contract for a deferred annuity:a) in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)
   b) in case of HUF, on life of any member of the HU
3. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]
4. Contributions by an individual made under Employees’ Provident Fund Scheme
5. Contribution to Public Provident Fund Account in the name of:a) in case of individual, such individual or his spouse or any child of such individual
   b) in case of HUF, in the name of any member there of
6. Contribution by an employee to a recognized provident fund
7. Contribution by an employee to an approved superannuation fund
8. Subscription to any notified security or notified deposit scheme of the Central Government.For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction. Amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.
9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
10. Contribution for participation in unit-linked Insurance Plan of UTI:a) in case of an individual, in the name of the individual, his spouse or any child of such individual
    b) in case of a HUF, in the name of any member thereof
11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:a) in the case of an individual, in the name of the individual, his spouse or any child of such individual
    b) in the case of a HUF, in the name of any member thereof
12. Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
13. Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children
14. Certain payments for purchase/construction of residential house property
15. Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both
16. Sum paid towards notified annuity plan of LIC or other insurer
17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
18. Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
20. Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above. 21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.
21. Subscription to notified bonds issued by the NABARD.
22. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
23. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)

Section 80CCC - Subject to overall limit of Rs. 1,50,000 under Section 80CCE

Contribution to certain specified Pension Funds such as LIC or other authorised Insurance Companies

Section 80CCD(1) - Subject to overall limit of Rs. 1,50,000 under Section 80CCE

Deduction in respect of contributions to National Pension Scheme / System (NPS) notified by Central Government
Limit : 10% of salary in case of employees, 10% of gross total income in case of others

Section 80CCD(1B)

Deduction in respect of the deposit under a pension scheme notified by Central Government (NPS) up to Rs. 50,000/-

Section 80CCD(2)

Deduction in respect of employer contributions to NPS - National Pension Scheme / System - This deduction is available over and above the Rs. 1.5 lakh limit

Section 80 CCG

Amount invested in listed shares covered by Rajiv Gandhi Equity Equity Saving Scheme. Deduction of 50% of total investment subject to maximum of Rs. 25,000 is allowed for 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired

Section 80D

Amount invested in Health Insurance
In case of Individual, amount paid: a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen) b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 30,000 if parent is a senior citizen or very super senior citizen) In case of HUF, up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen).
The aggregate amount of deduction cannot exceed Rs. 60,000/- in case of an individual.

Section 80DD

Expenditure incurred for the medical treatment of a dependent (spouse, children, parents, brothers and sisters of the individual) up to Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Section 80DDB

Expenditure incurred for medical treatment of specified diseases for self, or wholly dependent spouse, children, parents, brothers and sisters up to Rs. 40,000 (Rs. 60,000 in case of senior citizen and Rs. 80,000 in case of very senior citizen)

Section 80E

Interest paid on Educational Loan with no limit

Section 80EE

Interest on loan for acquiring residential house property, sanctioned during the financial year 2016-17. The Housing Loan availed should be up to Rs. 35 lakh and should have been availed in the year 2016-17

Section 80G

Deduction in respect of donations to certain funds, charitable institutions, etc.

Section 80GG

Rent paid for residential accommodation from the income of Tax Payer / assessee who is not in receipt of HRA
Least of the following shall be exempt from tax: a) Rent paid in excess of 10% of total income*;
b) 25% of the Total Income; or
c) Rs. 5,000 per month.

Section 80 TTA

Interest on Savings Bank accounts subject to maximum of Rs. 10,000

Section 80U

Exemption of income tax for an income up Rs. 75,000 for persons with disability (Rs. 1,25,000 in case of persons with severe disability)
Source: Incometaxindia.gov.in

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Income Tax: Creation of name based Email IDs for PAN users

Income Tax Business Application (ITBA) new module for PAN Users by creating their own name based email ids.

ITBA Instruction No. 7

DIRECTORATE OF INCOME TAX (SYSTEM)

ARA Center, Ground Floor, E-2,Jhandewalan Extension,

New Delhi-110055

F.No.System/TBA/Instruction/14-15/144/4247

Dated: 09/10/2015

To
The Principal Chief Commissioners of Income-tax/ CCsIT/ Pr DsGIT, DsGIT (By Name)
Ahmedabad/ Allahabad/ Amritsar/ Bangalore/ Baroda/ Bhopal/ Bhubaneshwar/Bareilly/Chandigarh/ Chennai/ Cochin/ Coimbatore/ Dehradun/ Delhi/ Durgapur/Guwahati/Hubli/Hyderabad/Indore/ Jaipur/ Jalpaiguri/ Jodhpur/ Kanpur/ Kolkata/ ucknow/Ludhiana/Madurai/Meerut/Mumbai/Nagpur/ Nashik/ Panaji/ Panchkula/ Patna/Pune/Raipur/ Rajkot/ Ranchi/ Shimla/ Shillong/ Surat/Thane/ Trichy/ Trivandrum/Udaipur/Vishakhapatnam; and
The Principal Commissioner of Income-tax/CsIT/CslT(co) (By Name)
Agra/ Bikaner/ Calicut/ Dhanbad/ Gandhinagar/ Gwalior/ Jabalpur/ Jalandhar/ Kolhapur/Muzzaf-farpur/ Mysore/ Patiala/ Rohtak/ Sambalpur/ Varanasi/ Vijayawada/ Delhi(CO)/MumbaiCO/ Chennai(CO)/Ahmedabad(CO)/Bangalore(CO)/Bhopal(CO)/ Bhubaneshwar (CO)/ Kolkata(CO)/ Cochin(CO)/ Chandigarth(CO)/ Hyderabad(CO)/ Jaipur(CO)/ Kanpur(CO)/ Patna(CO)/Pune(CO)/ Guwahati(Co)/ Nagpur(CO) Lucknow (CO).

Subject: Creation of name based Email IDs for PAN users – Reg.
Reference: lTBA-HRMS Instruction No.-2 dated 08.10.2015

Sir/Madam,
Kindly refer to above.

2. The Directorate of Income Tax (Systems) is going to roll out ITBA Phase-2, which includes the PAN module. To access PAN module under ITBA system by new as well as existing ITD users, name based email id is mandatory to receive credentials of login. Reference may be made to earlier instructions (ITBA Instruction No. 6 dated 19/08/2015) in this regard on the subject of creation of new name based email ID.

3. Over 2000 AOS/ITD Users have been identified who do not having name based email id to receive login credentials and, therefore, may not be able to access the new PAN module under the ITBA system. To speed up the process, name based email ids have been created based on the details available in the system and provided to respective CIT(CO) on their official email id.

4. All ADS/Users who do not have name based email id require access to the ITBA-PAN module may kindly contact respective CIT(CO) for obtaining the password for the assigned name based email id. For this purpose, RCC user would have to obtain the user’s Tarang mobile number and select Reset password after updating Tarang mobile through the “Name Based Email ID” interface available in HRMS application. May kindly note that without valid Tarang mobile number, email password would not be communicated. In case name based email id is not assigned, RCC user would process for new email id as per ITBA instruction No. 6 dated 19/08/2015.

5. After receiving name based email id and password, AOs/Users need to follow below steps to access ITBA-PAN module:

• Step 1: Open ITBA system in web browser (URL=itba.incometax.gov.in)
• Step 2: Click on Forgot Password
• Step 3: Enter UserlD (“U” followed by the Employee ID) in User Login box and click on Submit button. The new ITBA password would be sent on user’s name based email id
• Step 4: Open income tax webmail in web browser (URL=webmail.incometax.gov.in)
• Step 5: Type name based email id (without @incometax.gov.in) as Username and Password. After Authentication, AO can view the new password for ITBA portal. Ao may note down new ITBA password.
• Step 6: For security reason, Ao should change the system generated password of provided email id. To change email password, please select Options–>Global–>Change password.
• Step 7: AO can then open ITBA system (URL=itba.incometax.gov.in). Enter UserlD & ITBA Password provided in email and BSA number and click on login button. System would prompt (user to change the system generated ITBA password, please follow steps and login again with changed ITBA password. After successful authentication, user would be able to see PAN option in the ITBA system to open PAN module.

6. For any clarifications/difficulties, user may be advised to contact helpdesk of ITBA.
This may be widely circulated.

Yours sincerely,

(Ramesh Krishnamurthi)
Addl. Director General (S)-3, CBDT

Download Income Tax letter No.F.No.System/TBA/Instruction/14-15/144/4247 dated 09.10.2015

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Income Tax Exemption on LTC – Income Tax provision relating to Leave Travel Concession under Section 10 (5)

Income Tax Exemption on LTC – Income Tax provision relating to Leave Travel Concession under Section 10 (5)

Leave Travel Concession applicable to Central Government Employees and other Salaried Class Employees is exempted under Section 10 (13A) of Income Tax Act as a prequisite to an employee. However, Income Tax Exemption on LTC is not blanket one and involves many conditions such as spending of amount received under LTC for purpose of preforming holiday travel declared, restriction of exemption to economy fare of the national carrier by the shortest route to the place of destination in the case of Air Travel etc.

We have provided here a brief on eligibility criteria for availing Income Tax Exemption on LTC:

1. LTC / LTA granted by an employer is exempted from Income Tax only when the amount is spent for the purpose of performing holiday Travel to a place in India. While LTC for government employees is only an reimbursement of travel expenses, this restriction would apply only for employees of Private Companies which pay LTA as lumpsum irrespective of employee performing holiday travel.

Journey Performed by	Exemption Limit
Air	Air Economy fare of the national carrier (Air India) by the shortest route to the place of destination
Places   connected   by   rail and  journey  performed  by any mode other than by air.	First Class Air conditioned rail fare by the shortest route to the place of destination
Place      of      origin      and destination or part thereof  not  connected  by rail.	a)  Where  public  transport  system  exists,  first  class  or deluxe class fare on such transport by the shortest route to the place of destination. b) Where no public transport system exists, first class A/C rail fare, for the distance of the journey by the shortest route, as if the journey has been performed by rail

Foreign Travel – As per the provisions of the Rules, exemption is not allowable in case of travel abroad.

Obligation of the employer –The employer has to satisfy the obligation that leave travel (fare) concession is not taxable in view of section 10(5)  and he is not only required to be satisfied about the provisions of the said clause but also to keep and preserve evidence in support thereof.

2. In the case of air travel, Income Tax Exemption is restricted to economy fare of the national carrier by the shortest route to the place of destination. As LTC Rules of Central Government Employees provides for granting LTC by Air only if LTC 80 Tickets of Air India are purchased for the shortest route to the destination, this condition would again would apply only to Private Employees.

3. IT Exemption on LTC performed by self and family. The term Family includes – Spouse and children of the employee (not more than two surviving children born after October 1998). It also includes parents, brothers, sisters who are wholly or mainly dependant on the employee. The child includes step child and adopted child.

4. The exemption shall be available in respect of 2 journeys performed in the block of 4 calendar years.

5. Exemption is available only in respect of air fare, rail fare and bus fare. No exemption will be available in case of other expenses.

Extract of Section 10(5)

“Section 10(5)  in the case of an individual, the value of any travel concession or assistance received by, or due to, him,—

(a)  from his employer for himself and his family, in connection with his proceeding on leave to any place in India ;

(b)  from his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service,

subject to such conditions as may be prescribed (including conditions as to number of journeys and the amount which shall be exempt per head) having regard to the travel concession or assistance granted to the employees of the Central Government :

Provided that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.

Explanation.—For the purposes of this clause, “family”, in relation to an individual, means—

(i)  the spouse and children of the individual ; and

(ii)  the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual; ]”
Conditions for the purpose of section 10(5) as Prescribed in Rule 2B of Income Tax Rules- Extract of Rule 2B

2B. (1) The amount exempted under clause (5) of section 10 in respect of the value of travel concession or assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding,—

(a)  on leave to any place in India;

(b)  to any place in India after retirement from service or after the termination of his service,
Shall be the amount actually incurred on the performance of such travel subject to the following conditions, namely :—

[(i)  where the journey is performed on or after the 1st day of October, 1997, by air, an amount not exceeding the air economy fare of the national carrier by the shortest route to the place of destination;

(ii)  where places of origin of journey and destination are connected by rail and the journey is performed on or after the 1st day of October, 1997, by any mode of transport other than by air, an amount not exceeding the air-conditioned first class rail fare by the shortest route to the place of destination; and

(iii) where the places of origin of journey and destination or part thereof are not connected by rail and the journey is performed on or after the 1st day of October, 1997, between such places, the amount eligible for exemption shall be :—

(A)  where a recognised public transport system exists, an amount not exceeding the 1st class or deluxe class fare, as the case may be, on such transport by the shortest route to the place of destination; and

(B)  where no recognised public transport system exists, an amount equivalent to the air-conditioned first class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail.]

(2) The exemption referred to in sub-rule (1) shall be available to an individual in respect of two journeys performed in a block of four calendar years commencing from the calendar year 1986 :
[Provided that nothing contained in this sub-rule shall apply to the benefit already availed of by the assessee in respect of any number of journeys performed before the 1st day of April, 1989 except to the extent that the journey or journeys so performed shall be taken into account for computing the limit of two journeys specified in this sub-rule.]

(3) Where such travel concession or assistance is not availed of by the individual during any such block of four calendar years, an amount in respect of the value of the travel concession or assistance, if any, first availed of by the individual during first calendar year of the immediately succeeding block of four calendar years shall be eligible for exemption.

Explanation : The amount in respect of the value of the travel concession or assistance referred to in this sub-rule shall not be taken into account in deter-mining the eligibility of the amount in respect of the value of the travel con-cession or assistance in relation to the number of journeys under sub-rule (2).]

[(4) The exemption referred to in sub-rule (1) shall not be available to more than two surviving children of an individual after 1st October, 1998 :

Provided that this sub-rule shall not apply in respect of children born before 1st October, 1998, and also in case of multiple births after one child.]

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