Time to submit investment proof – Remember these deductions for salaries
You are at the part of the year when your HR department is
asking you for Investment proofs. You started to assess your investments, and
what, you have not done your investment fully. I am explaining you below what
all types of investment you can do to save tax on salaries.
Please note that all deduction are available on paid basis.
House Rent
Allowance:
HRA is allowed to employees who are leaving in the rented
accommodation as they are away from their home or could not live in their owned
house due to some unavoidable reasons:
HRA limits varies with city you live in:
The least of the
following will be exempt:
|
|
Mumbai/Kolkata/Delhi/Chennai
|
Other Cities (Gurgaon,
Noida etc.)
|
Allowance actually
received
|
Allowance actually
received
|
Rent paid less 10% of
basic salary
|
Rent paid less 10% of
basic salary
|
50 per cent of basic
salary
|
40 per cent of basic salary
|
PAN Card number along with name and
address of the landlord is mandatory and needs to be
declared if the rent paid is more
than ₹ 1 lakh annually.
Can
I claim HRA and home Loan together?
There are no restriction
as per Income Tax Act and hence,
Home Loan deduction and HRA can
be claimed together.
However, organizations have
differing views on the subject of an individual having an owned
property in the same city as that in
which he is staying in a rented accommodation. Some
organizations feel, this combination
can be claimed only if the individual has a sufficient reason
for having a property in the same
city but is staying in a rented accommodation.
There is no problem when both the
owned property and rental accommodation is in different
cities.
House
property:
If you have purchased a property on loan, then principal,
interest and loss on house property is available for deductions, given you have
received the possession of the house property.
Maximum deduction allowed on account of interest paid on loan
for a self-occupied property:
Purpose of borrowing
capital
|
Date of borrowing
capital
|
Maximum Deduction
allowable
|
1 Repair or renewal or
reconstruction of the house
|
Any time
|
₹ 30,000
|
2 Acquisition or construction
of the house
|
Before 01.04.1999
|
₹ 30,000
|
3 Acquisition or
construction of the house
|
On or after 01.04.1999
|
₹ 2,00,000
|
Conditions for availing maximum
deduction of ₹ 2,00,000:
1.
The house so acquired or constructed
should be completed within 5 years from the end of the FY in which the capital
was borrowed.
2.
The completion certificate of the
house property against which deduction is claimed either from the builder or
through self-declaration from the employee.
3.
Certificate specifying the amount of
interest payable.
Note:
In case of Joint Property, the co-owner’s declaration needs to be submitted.
A maximum of 1/5th of the pre-construction period Interest will be allowed as deduction.
Pre-construction period Interest will be allowed as deduction subject to
maximum ceiling of ₹30,000 or ₹2,00,000 as the case may be.
Any principal amount paid during the
pre-construction period cannot be claimed.
Deduction of principal is covered in section 80C.
Loss from house property is limited to maximum of Rs.
2,00,000.
Investment
under section 80C:
You can invest in one or more of the following options and
get a deduction u/s80C:
Life Insurance, Unit Linked Insurance Plan (ULIP), Pension
plans, Equity Linked Savings Scheme(ELSS) or Mutual fund, Infrastructure bond,
Public Provident Fund, National Saving Certificate, Deposits more than 5 years,
Sukanya Smiridhi Yojna.
You will also get deduction for Home loan and Tuition fee
(upto 2 children)
Limit for deduction for above items cannot be more than Rs.
1,50,000.
Note : NPS is available for deduction more than limit of
Rs.1,50,000 basis satisfying some conditions.
Mediclaim:
Limits are:
S. No
|
Self, spouse,
dependent children
|
Maximum Eligible in ₹
|
Parents
|
Maximum Eligible in ₹
|
Maximum Eligible
Deduction (inclusive of preventive check-up)
|
1
|
Senior Citizen
|
50,000.00
|
Senior Citizen
|
50,000.00
|
100,000.00
|
2
|
Other than Senior
citizen
|
25,000.00
|
Senior Citizen
|
50,000.00
|
75,000.00
|
3
|
Other than Senior
citizen
|
25,000.00
|
Other than Senior
citizen
|
25,000.00
|
50,000.00
|
Disability
Conditions for
claiming deduction under section 80DD/80U:
|
||
Particulars
|
80DD
|
80U
|
Eligible Person
|
Resident Individual or
HUF
|
Resident Individual
|
Allowable for
|
Spouse, children,
parents, brothers/sisters of employee or any of them dependent on him
|
Self
|
|
|
|
Disability
|
Rs, 75000
|
Rs. 75000
|
Severe disability
|
Rs. 125000
|
Rs. 125000
|
Requirement
|
Incurred any
expenditure or paid /deposited any amount as specified
|
Certificate from the
medical authority
|
It may be noted that
employer should ensure that employee has submitted Form No. 10-IA for
claiming deduction u/s 80DD or 80U.
|
Education
loan
All interest on loan for education for Self/Spouse/Children is
allowed for deduction.
Please note that:
Investment proofs are
submitted with Employers for deductions, however, ultimate responsibility
resides with employee to produce documents as and when required by the
authorities, so keep them handy.
Always check with
your HR department for documents required by them for deductions. This guide
can help you to be prepared.
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