October 26, 2020

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Download Automated Income Tax Master of Form 16 Part B for F.Y. 2018-19 With Complete Guide to Tax Exemption for Financial Year 2018-19

       Tax planning is overwhelming for most of us. With the complex
network of various sections, sub-sections, and provisions, it is crucial
to completely understand tax provisions are applicable to you, and what
can work for or against you. If you are losing your sleep over your
taxes, look no further. We bring to you a complete guide to tax
exemption for the financial year 2018-19.

 
    Budget 2018 has created a significant impact on personal finance,
in respect of investments, savings, and taxes. It is important to think
beyond Section 80C to maximize your income tax benefits. Also, you must
align your investments with your tax-saving instruments to get absolute
benefits.
Here we have a complete list of tax deductions you can claim under the Income Tax Act, this financial year 2018-19.

Section 80C – Investments

 
    There are approximately 14 instruments through which you can claim a
deduction under Section 80C. Financial instruments like Employee
Provident Fund, National Savings Certificate, Public Provident Fund,
National Pension System, payment made towards children’s tuition, Life
Insurance premium, ELSS, deposit in Sukanya Samriddhi Yojana, etc offer
tax benefit under this section.
A deduction of Rs.1,50,000 from your total income in FY 2017-18 can be claimed by an individual or a HUF, u/s 80C.

Section 80CCD – Government Pension Scheme

      Under this section, you can claim a deduction for a contribution made towards the National Pension Scheme.
Section 80CCD (1) – Employee’s Contribution –
If you are an employee: Maximum deduction allowed is 10% of your salary.
If you are self-employed: Maximum deduction allowed is 20% of your gross total income.
Section 80CCD (1B) – Self contribution –
An
additional deduction of up to Rs. 50,000 for investment in Tier I NPS
account. The contribution made towards Atal Pension Yojana is eligible
as well.
Section 80CCD (2) – Employer’s Contribution –
An
additional deduction of up to 10% of the salary of the employee,
towards contribution made to employee’s pension fund. No financial limit
exists on this deduction.

Section 80CCG – Equity Investments

 
    The Rajiv Gandhi Equity Savings Scheme deduction aims to encourage
investment in equity shares. Under section 80CCG, you can claim a tax
deduction of Rs.25,000, or up to 50% of the amount invested in equity
shares, whichever is lower.
Rajiv
Gandhi Equity Savings Scheme has been discontinued w.e.f April 2017. No
deductions shall be available u/s 80CCG AY 2018-19 onwards. Those who
invested under the scheme in FY 2016-17 will be able to claim the tax
deduction until AY 2019-20.

Download Automated Income Tax Salary Certificate Master of Form 16 Part B for Financial Yar 2018-19 and Ass Year 2019-20.[ This Excel Utility can prepare at a time 100 employees Form 16 Part B for f.Y. 2018-19 ]


Section 80D – Health Insurance

      Tax benefit u/s 80D of Rs.50,000 shall be available for senior citizens.
If
you pay a premium for a Health Insurance, on behalf of your parents, an
additional deduction of up to Rs.20,000 (Rs.50,000 (less) Rs.30,000)
shall be available. If you fall under the tax bracket of 30%, you shall
be eligible for an additional tax benefit of up to Rs.6,000 (30% of
Rs.20,000).
In
the case of super senior citizens (aged above 80 years) who are
uninsured, a medical expense of up to Rs.30,000 shall be allowed as a
deduction.

Section 80DDB – Critical Illness

Under
section 80DDB tax deduction of Rs.40,000 is available, for medical
treatment of specified ailments, for individuals below 60 years of age.
These specified ailments include AIDS, Cancer, Thalassaemia, etc.
Rule
11DD has the list of these specified ailments. A certificate from a
registered doctor, in Form 10I, will have to be furnished.
Tax
exemption on treatment expense of specified critical illness was
Rs.60,000 for senior citizens and Rs.80,000 for very senior citizens.
This limit has been proposed to be increased to Rs.1,00,000 for all
senior citizens.
If
an expenditure has been incurred by you for treatment of your senior
citizen parents, for a specified ailment, ad additional tax deduction of
Rs.40,000 can be claimed.

Section 80TTA – Savings Account

      interest earned on Savings Account in the post office, bank, or cooperative society shall be exempt up to Rs.10,000.
Interest
earned from this account will have to be included in Other Income.
Deduction claimed will have to be on the total interest earned or
Rs.10,000, whichever is less. This benefit is available for an
individual and a HUF.
This tax benefit is not allowed on interest earned via Recurring Deposits, Fixed Deposits, or Corporate Bonds.

Section 80GG – HRA

 
    If you are residing in a rented house, HRA is an excellent tax
saving option for you. The tax benefit you will be able to avail would
depend on your Basic Salary, the HRA that has been provided by your
employer, the rent you pay, and your place of residing.

Section 80G – Charity & Relief Funds

 
    Tax exemption of up to 50% of the amount paid via cash, draft, or
cheque (up to Rs.10,000), towards a charitable organization or relief
fund can be claimed. Contribution towards specified organizations makes
you eligible for 100% tax exemption.
W.e.f
FY 2017-18, a donation in cash, in excess of Rs.2,000, shall not be
allowed as a deduction. A donation made above Rs.2,000 will have to be
made in any mode other than cash, to avail tax benefit.

Section 80GGB – Political Party Contribution

 
    In respect to this section, “Political Party” refers to a political
party registered u/s 29A of Representation of the People Act.
100%
tax exemption is available under this section on the contribution made
by a company toward an electoral trust or political parties, under
section 80GGB.

Section 80E – Education Loan

 
    Interest paid on loan for higher education post completion of your
Senior Secondary Examination shall be eligible for a tax deduction claim
under this section. This benefit shall be allowed on loan taken for
higher education of yourself, your spouse, your children, or a student
for whom you are a local guardian.
Tax
deduction under this section can be availed for up to 8 years or till
the payment of interest, whichever is earlier. No limit has been set on
the amount of interest.

Section 56(2) – Gift Tax

 
    If you receive a gift in the form of cash, cheque, etc, of a value
of up to Rs.50,000 from anybody other than a blood relative, you will
not have to pay tax towards the same.
For a gift in excess of Rs.50,000, the entire amount shall be taxable.

Standard Deduction of Rs.40,000

 
    A standard deduction of Rs.40,000 has been introduced for
employees. You will have to forego the transport allowance with
deduction
19,200, and medical reimbursement with deduction Rs.15,000.
This standard deduction will provide a benefit of Rs.5,800 (Rs.40,000 (less) Rs.34,200)

Section 24(b) – Home Loan

 
    You can claim a tax benefit on the interest component of your home
loan u/s 24(b). In case of properties that are self-occupied, deduction
of up to Rs.2,00,000 shall be applicable.

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