Income tax exemptions for salaried employees 201819

What is income tax deduction for salaried employees? Can I subtract tax deductions from my gross income? Are dependents entitled to income tax exemption? House Rent Allowance (HRA) HRA is amongst the most popular and probably the most utilized tax deductions for salaried.

Rent paid by the employee for his accommodation in excess of of his salary. The salary for this calculation means the basic salary which includes dearness allowance if the terms of employment provide for it and commission based on a fixed percentage of turnover achieved by the employee.

Please note that if the employee is staying in his own house or not paying any rent, he will not be eligible for the above tax exemption. See full list on taxguru. Actual HRA received by you 2. Your city of residence 4. What are the dependent factors in calculating HRA for the salaried individual?

When you are calculating HRA for tax exemption, you take into consideration four aspects which includes salary, HRA receive the actual rent paid and where you reside, i. If these aspects remain constant through the year, then tax exemption is calculated as a whole annually, if this is subject to change, as in a rent hike, pay hike or shift in residence etc. It is usually rare for all the values to remain constant i.

Can I pay rent to my parents or spouse to avail HRA benefits? You can pay rent to your parents, however, they need to pay tax on the same or account the same in calculating their taxable income. On the other han you cannot pay rent to your spouse.

Sham transactions can only spell trouble under scrutiny, so steer clear of these. Do I need to submit any proof for my HRA claim? You need to submit proof of rent paid through rent receipts, for which only two need to be submitte one for the beginning of the year and one towards the end of the financial year. It should have a one rupee revenue stamp affixed with the signature of the person who has received the rent, along with other details such as the rented residence address, rent pai name of the person who rents it etc. Surcharge: The amount of income - tax shall increase by a surcharge at the rate of of such tax , where the total income exceeds Rs.

Lakh, but is less than Rs. Salaried can take benefit of HRA as an exemption of Income - tax under section GG, (if you are not getting HRA separately in your pay). To claim this standard deduction, there is no need to submit medical bills to your employer. Income Tax slab rates for salaried employees F. Access IRS Tax Forms.

Complete, Edit or Print Tax Forms Instantly. As a result of it, salaried individuals can now get an extra income tax exemption of Rs. This section allows deduction to individuals who are physically and mentally challenged.

As a salaried person, you would want to know the income tax exemption that you can claim and save on taxes.

Individual – Salaried employee : 20: 10(14) Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations) Amount exempt from tax varies from Rs. This is a short slide power point presentation (in pdf) which covers all the tax saving sections and investments applicable for tax payers. While for other employees , the maximum amount of gratuity exemption under section 4(3) is ₹10.

Now, these will be exempt from tax. That will also give these employees advantage of getting an additional payment that otherwise was being deducted as income tax from salary. Expenses incurred on club facilities for the official purposes are exempt from tax. Use of health club, sports and similar facilities provided uniformly to all employees shall be exempt from tax.

Rule 3(7)(vii) Use of movable assets of the employer by the employee is a taxable perquisite. It is important to know that in case an employee is staying in a rented accommodation, HRA can be claimed as tax exempt , as per. By Vinotha Tilak On Nov Income tax is the hard truth that every salaried employee in the taxable bracket has to live with.

HRA Exemption is one of the most important calculation in order to save tax on your salary income. Salaried taxpayers should also understand that these avenues are to reduce their tax burden an in no way, a means to avoid paying income tax. For salaried employees , Section 10. How tax saving increased?

Professional tax is usually paid to the Government by the employer of an organisation, a failure of which can result in imposition of penalties. Section 80C : Deduction under this section allows an exemption upto Rs. These allowances are given over an above the salary as a financial benefit to the employee.

There are allowances which are fully taxable, partly taxable and fully exempt from income tax.