Allowances / Exemptions Under Income from House Property A Y 2018-19

This blog is summarize for those taxpayers who declares their income under the head Income From House Property. Sometimes they forget to avail exemptions that can save their taxes. Here given some section wise info which is available exemptions to save tax to all assessee. So, take consider this exemption before filing your income tax return with the income head income from house property.


List of Allowances / Exemptions Under the head Income from house property for A. Y 2018-19 [F Y 2017-18]

SL. No.
Section
Particulars
Limit of exemption
Exemption available to
1.
First proviso to
section 23(1)
Municipal tax levied by local authority and borne by owner in respect of house property

Amount actually paid during the relevant previous year
All assessee
1A.
23(5)
No Notional income for house property held as stock-in-trade
Any building and land appurtenant thereto held as stock-in-trade which is not let during the whole or any part of the previous year.
Annual value of such property for the period upto one year from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority, shall be taken to be Nil.

All assessee
2.
24(a)
Standard Deduction
30% of the Annual Value (Gross Annual Value- Municipal Taxes)

All assessee
3.
24(b)
Interest incurred on borrowed capital
Interest on borrowed capital is allowed as deduction from income from house property as under:
a) Up to Rs. 2,00,000 (if amount is borrowed for construction/acquisition of self-occupied house property on or after 01-04-1999), subject to certain other conditions
b) Up to Rs. 30,000 (if amount is borrowed for reconstruction, repair or renewals of self-occupied house property)
c) Actual amount of interest paid or payable during the year (in case of let-out property)
d) Pre-construction period interest is allowed in 5 annual equal installments (Subject to certain conditions)

All assessee
4.
Section 25A
Standard Deduction from arrears of rent or unrealized rent received subsequently
30% of arrears of rent or unrealized rent.
All assessee


Do Expenses Save Taxes

We incur several regular expenses which make us eligible for tax benefits but we fail to utilize them due to our less knowledge about it. Here we will discuss about some expenses which will help you to save tax.

Expenses-Saves-Taxes
1) House Rent : IF we are on rental, pay some amount as rent to our landlord, then you will get tax benefit. Some employee gets HRA (House Rent Allowance) which  helps to get income tax deductions. But if you are not getting HRA break-ups then you can also save tax as per provision under Section 80GG.


2) Travel Expenses : Income Tax gives tax rebate on conveyance @ 1600/- per month for office goers as Conveyance Allowances. Apart from this you can also enjoy tax saving benefit on LTA (Leave Travel Allowances) which can be claimed for two journeys in a block of 4 years. Expenses incurred by you & you family on travel for which your employer gives LTA can be claimed as deduction.

3) Medical Expenses : These expenses are a regular part of everybody's life. For this employee can get benefit of medical allowance allowed by their employee. Apart from this tax laws also allows some tax gains towards money spend on medical insurance & preventive health checkup. Limit of deduction is upto Rs.60000/- under Section 80D, if premium amount not make in cash.

4) Tuition Fees : To provide education we give tuition to our kids. IT Laws provides you opportunity to compensate the expenses you incur on your kids tuition fees by reducing your tax liability. This deduction can be claimed under Section 80C of IT Act.


5) Donations : If your kind hearted & God believer and doing some donations than this habit also helps you some in your tax liability. Cash Donation upto Rs.2000/- only and above by cheques/DD/Transfer to charitable Trust / Organisation will help you to save tax under section 80G.


6) Pension Fund : If your employee deduct your salary for pension fund contribution which is good for your future will also help you in tax saving. If your company not register with PF Scheme then you can opt some other Pension Fund Scheme for investment and future return.

7) Repayment of Home Loan : You have taken a home loan and worry about home loan burden and taxes. Then you should be happy that burden of your home loan EMI can reduce the burden of taxes. You can get the benefit on Repayment of both Principal Amount and Interest Amount components of your installments. You can get a deduction on home loan repayment under section 24 of IT Act  and a deduction on Principal amount under section 80C of Income Tax Act.


8) Repayment of Education Loan : Maintaining positions & for promotion higher qualification and up-gradation in it is must. Due to rising costs of educational courses, people often go for education loans when it comes to higher education. Just like deduction available on tuition fees, your education loan EMI also bring tax benefits to you.

Some Expenses are good. Above these expenses helps you to fulfill your dreams and reduce your tax burden, so don't worry about this. 

How to Avoid Insurance Claim Rejection ?

Life insurance is not just a tax saving tool, it is a serious financial product which if used correctly can be a bless for your family and dependents. We people take life insurance to safe our future from any mishappen.      
How-to-Avoid-Insurance-Claim-Rejection ?
But it will be only if it get paid to our nominee on time without hassle. There are so many clauses, conditions and exceptions in insurance policies. Failure to meet any of these conditions would result in no insurance benefit being pay out. Most often, insurers rely on legal loopholes and clauses in their policy documents to avoid making payments of sums assured, but surprisingly a large number of times, the fault and blame belongs to the customers themselves.
Here are some points to ensure yourself as a customer that you always get paid.
1. Don't Conceal Information:- While taking a life insurance policy any information pertaining to your health/habits which can put an impact should disclose. Any pre-existing disease or condition or smoking/drinking habits or anything that can be linked as being as cause to your hospitalization or death will be investigated and if you have not disclosed to the company about it then sum assured & other benefits will not be given to you or your dependents/nominee. Remember your premiums are decided on this information. If there is nothing that can be held against you then the insurer will have to honor the insurance claim.
2. Accept Medical Examination: After certain age, life insurer ask for sponsored medical examination and test to get better understanding of your medical condition. These test may also help you detect diseases early, and treat them accordingly. These test will decide acceptance/rejection of policy or clear your doubts about any future rejection of claims due to concealing health information. 
3. Pay Insurance Premium On-Time: Remember Insurance company only settle claims on Active Insurance Policies. But there are number of people who do not understand that delaying premium payments result in lapsed policies. Once your policy get lapse, you are no longer covered and all your premiums paid that far will be rendered useless. Your nominee may lost their legal validity to get sum assured on death from the company. In some cases delaying your insurance premium payments lead to Late Payment Surcharge for re-reinstatement of the policy.
4. Nominee Information: Nominee is the person who will receive any and all benefits that come out of your insurance policy in your absence. Nominee should be generally that person whose livelihoods are directly depends on you being alive and well. So nominate some one is more important. If you are single than nominate your parents, if married then spouse or children. Whatever your present relationship status is, always keep nominee name update so that some benefits will to some dependents of yours. If there is no nominee then death benefits may be freeze/rejected.
5. Scrutinize the Policy Documents: Merely telling the insurance agent everything about your medical history will not qualify him to understand and explain all on the form about your medical history. Insurers decide your premium payment amount, overall coverage, and even some exclusions based on whats' filled out in your forms. No one knows better that you, and you need to make sure the insurance provider knows too. You need to take the time out of your busy schedule and check the form that all details are filled in order and truthfully. Check Clauses such as the exception list that indemnifies the insurer from any kind of liability towards you exist all over your policy documents. 

Keep  yourself informed about all developments with your insurer. Keep yourself informed about the details in your policy documents. Stay well informed about the conditions under which you will be eligible for a claim. 

Personal Loan - How To Avail it !

Congrates! Personal Loan ApprovedPersonal Loan everybody's prime requirement nowadays. Every persons are in need of some fund to fulfill their desire, enjoy their festivals, or special occasion. But sometimes earlier people thinks taking loan is almost a big sin. Daily you certainly get some calls from bank or financial institution asking you about your willingness to take personal loan. It seems Personal Loan is become your helping hand. Here we shall discuss about your financial companion i.e. Personal Loan. 
Unsecured Loan: Personal Loan comes under Unsecured Loan category. It is unsecured because you do not have to put any thing lien or give guaranty to get it. So, it becomes attractive.
Tenure: You can generally get personal loan for the period of 1-5 years. 
Documentation: First you should know the documents mandatory to apply for personal loan. The list of documents are as follows:
1) PAN Card
2) Aadhar Card (It is mandatory)
3) Passport or Driving License as Identity Proof
4) For Resident Proof you can submit Passport copy, Ration Card Copy, Electricity/Telephone bill, Gas Bill, Bank Statement copy etc.
5) If you are salaried then arrange Salary Slip (latest 3 Months), Form 16 and Six month Bank Statement. If you are self employed then you have to provide 2-3 years account statement and Income Tax Return copy as proof of Income.
Other Charges: Bank charge not only interest on the loan amount for the given tenure but also charges Service Tax / GST (now) on  interest amount and a processing fee with GST. 
  (a) Processing Fee is charged for complete the loan procedure. Sometimes this processing fee is non-refundable depending upon bank/financial institution' policy. It can be 0.5% to 3% of the loan amount or upto a maximum amount.
  (b) Pre-closure charges, is if you repay the entire loan amount before it's sanctioned tenure the bank levy a pre-closure/pre-repayment charges which is upto 2% - 5% with applicable taxes
   (c) Apart from this if you make late to pay EMI then an other charges levy that is Late Fee, Finance charges with applicable taxes.
Interest Rate: Personal Loan is totally unsecured loan so bank try to charges as maximum as possible interest rate. Normally this rate is discussed before the deal. Range of interest is between 12% to 30% per annum. Moreover interest rates are differ from bank to bank. For government employee interest rates may go down further. So, depending upon your repaying capacity and bank's policy to lend you can, negotiate for the better rates. 
You can even offer Mutual Fund, Insurance or Fixed Deposits as security to increase loan amount.
Requirement / Usage of Personal Loan, depends on your financial/social positions. You may require it if you have taken any borrowing at higher interest rate. In such cash take a personal loan and repay it. Personal loan for paying off Credit Card balance which is being rolled over for months and attracting charges. 
So you can take it to fulfill your requirements or pay off dues or liabilities but remember loan is always injurious to your financial health.

Tax Benefits For Senior Citizens

In this blog we will discuss Income Tax Benefits to Senior Citizen available as per Income Tax Act. A person becomes senior citizen once he attains 60 years of age. Income Tax Department categories Senior citizen into two part. First Senior Citizen is with age bracket of 60 years to 79 years old and Second Senior Citizen is with age bracket of 80 years and above. 
Income-Tax-Exemption-Available-for-Senior-Citizen
There are some tax exemption available for senior citizen. From F. Y. 2011-12 qualifying age limit for senior citizen has been reduced from 65 years to 60 years and from F Y 2015-16 exemption limit for senior citizen has been enhance from 2,50,000/- to 3,00,000/-. 

A new category of Very Senior Citizen has been introduced in F Y. 2011-2012 (A Y 2012-13) with qualifying age 80 years and above with enhance exemption limit of Rs.5,00,000/-.

Senior Citizens and very senior citizen are granted a higher exemption limit as compared to normal tax payers.

EXEMPTION LIMITS
The Exemption Limit of a Senior Citizen for the financial year 2016-17 available to a Resident Senior Citizen is Rs.3,00,000/-. An Additional benefit of Rs.50,000/- in form of higher exemption limit available to Resident Senior Citizen in comparison to non-senior citizen.
The Exemption Limit of a Very Senior Citizen for the financial year 2016-17 available to a Resident Senior Citizen is Rs.5,00,000/-. An Additional benefit of Rs.250,000/- in form of higher exemption limit available to Resident Very Senior Citizen in comparison to non-senior citizen and Rs.2,00,000/- higher than Resident Senior Citizen.

TAX BENEFIT OF MEDICAL INSURANCE
From Financial Year 2015-17 (A Y 2016-17) a Resident Senior Citizen can claim higher deduction of Rs.30,000/- under section 80D on insurance premium paid for Medical Insurance. Earlier it was Rs.20,000/-

HIGHER DEDUCTION U/S 80DDB
Section 80DDB provides deduction to an assessee in case of expense on medical treatment of specified ailments. Deduction Limits is Rs.40,000/- for normal patient while deduction limit Rs.60,000/- for a senior citizen patient.
From A Y 2016-17 higher limit of deduction of upto Rs.80,000/- is allowable for the expenditure incurred in respect of the medical treatment of a Very Senior Citizen.

TDS EXEMPTION ON BANK DEPOSITS
Senior Citizen can claim exemption on the Tax Deducted At Source (TDS) on interest income earned on bank deposits. It can be done by submitting Form 15H  under Section  197 of the IT Act.

HIGHER INTEREST RATES
Senior Citizen receives higher interest rates on 5 Year Fixed Deposit which is eligible for deduction from total income under Section 80C.

Allowances /Exemptions available For Salaried [A. Y. 2018-19]

Every taxpayer who are liable to file Income Tax Return under the head Salary do knows very well that what are the allowances / exemptions available under the head salary that help them to save tax 
Allowances-Exemptions-on-Salary-under-Income-Tax-Act

Here we have made an efforts to Summarize all Allowances /Exemptions available under the head Salaries of Tax Payers for AY 2018-19 [ F Y 2017-18]

Allowances / Exemptions Under the head Salaries
SL. No.
Section
Particulars
Limits of exemption
Exemption available to
1.
10(7)
Any allowance or perquisite paid or allowed by Government to its employees posted outside India
Entire Amount
Individual- Salaried Employee (being a citizen of India)
2.
Allowances to Judges of High Court/Supreme Court
Exempt, subject to certain conditions.
Individual – Judges of High Court/Supreme Court
3.
Compensatory allowance received by a Judge under article 222(2) of the Constitution
Fully Exempt

4.
Salary and allowances received by a teacher /professor from SAARC member state (Subject to certain conditions).
Fully Exempt

5.
10(45)
Following allowances and perquisites given to serving Chairman/Member of UPSC is exempt from tax:
a) Value of rent free official residence
b) Value of conveyance facilities including transport allowance
c) Sumptuary allowance
d) Leave travel concession
Fully Exempt

6.
10(45)
Allowances to Retired Chairman/Members of UPSC
Exempt subject to maximum of Rs. 14,000 per month for defraying the services of an orderly and for meeting expenses incurred towards secretarial assistant on contract basis.

7.
Allowances paid by the UNO to its employees
Fully Exempt Individual – Government employee
Individual – Employees of UNO
8.
16 (ii)
Entertainment Allowance received by the Government employees (Fully taxable in case of other employees)
Least of the following is exempt from tax:
a) Rs 5,000
b) 1/5th of salary (excluding any allowance, benefits or other perquisite)
c) Actual entertainment allowance received
Individual – Government Employee
9.
10(13A)
House Rent Allowance (Sec. 10(13A) & Rule 2A)
Least of the following is exempt:
a) Actual HRA Received
b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)
c) Rent paid minus 10% of salary
* Salary= Basic + DA (if part of retirement benefit) + Turnover based Commission
Note:
i. Fully Taxable, if HRA is received by an employee who is living in his own house or if he does not pay any rent
ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 dated 10th October, 2013].
Individual – Salaried employee
10.
10(14)
Children Education Allowance
Up to Rs. 100 per month per child up to a maximum of 2 children is exempt
Individual – Salaried employee
11.
10(14)
Hostel Expenditure Allowance
Up to Rs. 300 per month per child up to a maximum of 2 children is exempt
Individual – Salaried employee
12.
10(14)
Transport Allowance is granted to an employee to meet expenditure on commuting between place of residence and place of duty
Up to Rs. 1,600 per month (Rs. 3,200 per month for blind, deaf, dumb and handicapped employees) is exempt
Individual – Salaried employee
13.
Sec. 10(14)
Allowance granted to an employee working in any transport business to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided employee is not in receipt of daily allowance.
Amount of exemption shall be lower of following:
a) 70% of such allowance; or
b) Rs. 10,000 per month.
Individual – Salaried employee
14.
10(14)
Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office
Exempt to the extent of expenditure incurred for official purposes
Individual – Salaried employee
15.
10(14)
Any Allowance to meet the cost of travel on tour or on transfer
Exempt to the extent of expenditure incurred for official purposes
Individual – Salaried employee
16.
10(14)
Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty
Exempt to the extent of expenditure incurred for official purposes
Individual – Salaried employee
17.
10(14)
Helper/Assistant Allowance
Exempt to the extent of expenditure incurred for official purposes
Individual – Salaried employee
1.
10(14)
Research Allowance granted for encouraging the academic research and other professional pursuits
Exempt to the extent of expenditure incurred for official purposes
Individual – Salaried employee
2.
10(14)
Uniform Allowance
Exempt to the extent of expenditure incurred for official purposes
Individual – Salaried employee
3.
Sec. 10(14)
Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)
Amount exempt from tax varies from Rs. 300 per month to Rs. 7,000 per month.
Individual – Salaried employee
4.
Sec. 10(14) read with Rule 2BB
Border area allowance Remote Locality or allowance or Disturbed Area allowance or Difficult Area Allowance (Subject to certain conditions and locations)
Amount exempt from tax varies from Rs. 200 per month to Rs. 1,300 per month.
Individual – Salaried employee
5.
Sec. 10(14)
Tribal area allowance in (a) Madhya Pradesh (b) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f) Assam (g) West Bengal (h) Bihar (i) Orissa
Up to Rs. 200 per month
Individual – Salaried employee
6.
Sec. 10(14)
Compensatory Field Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)
Up to Rs. 2,600 per month
Individual – Salaried employee
7.
Sec. 10(14)
Compensatory Modified Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)
Up to Rs. 1,000 per month
Individual – Salaried employee
8.
Sec. 10(14)
Counter Insurgency Allowance if this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)
Up to Rs. 3,900 per month
Individual – Members of Armed Forces
9.
Sec. 10(14)
Underground Allowance is granted to employees working in uncongenial, unnatural climate in underground mines
Up to Rs. 800 per month
Individual – Salaried employee
10.
Sec. 10(14)
High Altitude Allowance is granted to armed forces operating in high altitude areas (Subject to certain conditions and locations)
 a) Up to Rs. 1,060 per month (for altitude of 9,000 to 15,000 feet)
b) Up to Rs. 1,600 per month (for altitude above 15,000 feet)
Individual – Members of Armed Forces
11.
Sec. 10(14)
Highly active field area allowance is granted to members of armed forces (Subject to certain conditions and locations)
Up to Rs. 4,200 per month
Individual – Members of Armed Forces
12.
Sec. 10(14)
Island Duty Allowance is granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island (Subject to certain conditions and locations)
Up to Rs. 3,250 per month
Individual – Members of Armed Forces
13.
City Compensatory Allowance
Fully Taxable
Individual – Salaried employee
14.
Fixed Medical Allowance
Fully Taxable
Individual – Salaried employee
15.
Tiffin/Lunch/Dinner/Refreshment Allowance
Fully Taxable
Individual – Salaried employee
16.
Servant Allowance
Fully Taxable
Individual – Salaried employee
17.
Dearness Allowance
Fully Taxable
Individual – Salaried employee
18.
Project Allowance
Fully Taxable
Individual – Salaried employee
19.
Overtime Allowance
Fully Taxable
Individual – Salaried employee
20.
Telephone Allowance
Fully Taxable
Individual – Salaried employee
21.
Holiday Allowance
Fully Taxable
Individual – Salaried employee
22.
Any Other Cash Allowance
Fully Taxable
Individual – Salaried employee


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