Download Automated Income Tax Arrears Relief Calculator From F.Y.2000-01 to F.Y. 2018-19 With a Complete Guide to Tax Exemption for 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 the contribution made towards 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 a 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.

Download Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from F.Y. 2000-01 to F.Y.2018-19 [ Updated Version ]

 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 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 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.

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 Rs.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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Good and Bad News to the all Salaried persons the Standard Deduction of Rs.40,000 in 2018, Income Tax Benefits by the Finance Budget 2018-19

Medical and Transportation Allowances Subsumed into Standard Deduction

Standard Deduction: Budget 2018 has not cheered the Salaried Class at all, neither the tax slab is changed nor the deduction limit under section 80C is hiked. The tax rebate of Rs.5,000 has been reduced to Rs.2,500 and that too up to the taxable income of Rs.3,00,000 which was earlier up to Rs.5,00,000.

The only changed proposed for the salaried class is the reintroduction of Standard Deduction of Rs.40,000. This standard deduction was the part of income tax act but was done away with in Union Budget 2005-06 by P. Chidambaram by introducing medical and transportation allowances, but now from Assessment Year 2019-20, both medical allowances and transportation allowance are subsumed into the standard deduction of Rs.40,000.

Download: Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from F.Y.2000-01 to F.Y.2018-19

All about Standard Deduction

1. Standard Deduction allows a flat deduction of a specified amount (i.e. Rs.40,000) from income of salaried taxpayers towards expenses incurred during the course of employment. Say for example if your salary is Rs.5.20 lakh than you can start calculating tax by deducting Rs.40,000 straight away i.e. start with Rs.4.80 lakh.

2. Standard Deduction is reintroduced by abolishing medical reimbursements and transport allowance, enhancing a deduction by just Rs.5,800 which would in turn saves tax of mere Rs.290 for the person falling in lowest tax bracket of 5%, Rs.1,160 for person falling in tax bracket of 20% and Rs.1,740 for the person falling in highest tax bracket of 30%. But the same savings of tax is nullified due to the increase in cess by 3% to 4%.

Income Tax Slab for the Financial Year 2018-19&Ass Year 2019-20 as given below:-

Download Automated Advance Income Tax Calculator for F.Y.2018-19 & A.Y. 2019-20

3. Unlike Medical Reimbursements and Transport Allowances, No proof or any type of documents are needed to claim the standard deduction of Rs.40,000.

4. Since pension is taxable under the head of salaries, any pension received by a person from his past employer shall be entitled to claim a standard deduction of Rs.40,000 or pension amount, whichever is lower under section 16 of the Income Tax Act.

5. Please note that No standard deduction of Rs.40,000 is allowed in case of family pension received by the legal heirs of the deceased. The Family Pension is taxed under the head of income from other sources and a standard deduction of Rs.15,000 or 1/3^rd of uncommitted pension received, whichever is lower, shall be exempt.

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The Key Features In Tax Rules To Come Into Effect From April 1,2018 with Automatic All in One Income Tax Calculator for F.Y.2018-19 & A.Y. 2019-20

April 1, the beginning of the new fiscal 2018-19, brings in some major changes in the tax structure which were announced by Finance Minister Arun Jaitley while presenting the Union Budget 2018. The tax reforms will impact individual taxpayers in a number of ways, such as the standard deduction of Rs 40,000 instead of the transport allowance and medical expenses.

Standard Deduction

Though the tax slabs were not changed this year, the finance minister reintroduced the standard deduction method. A standard deduction of Rs 40,000 will be effective in lieu of transport allowance and medical reimbursement.

Around 2.5 crore salaried employees and pensioners will gain from the new rule.

The Central Board of Direct Taxes had previously said that the standard deduction can be claimed directly and would not require any proofs or bills to avail it.

Medical, travel allowances will be taxed(Abolished)

With the induction of standard deduction, medical and travel allowances will be taxed from next fiscal. Medical allowances up to Rs 15,000 and travel allowance till Rs 1,600 per month used to be tax-free and could be claimed by furnishing bills.

Cess now 4%

Finance Minister Arun Jaitley has hiked the educational cess on income tax and corporation tax to 4 percent. At present, individual taxpayers shell out a 3 percent cess – 2 percent cess for primary education and 1 percent cess for secondary and higher education.

For senior citizens
Tax exemptions were announced on deposits with banks and post offices for senior citizens only. Interest income will now be increased five times from Rs 10,000 to Rs 50,000.
TDS (tax deducted at source) under section 194A will not be applicable to any fixed deposit scheme or recurring deposit schemes for the senior citizens.

Breather for the senior citizen on medical expenses

The deduction limit for health insurance premium or medical expenditure was increased from Rs 30,000 to Rs 50,000 under section 80D.

The deduction limit for medical expenses for critical illness was also hiked from Rs 60,000 (for senior citizens) and Rs 80,000 (for very senior citizens) to Rs 1 lakh, under section 80DDB.

Pradhan Mantri Vaya Vandana Yojana

Pradhan Mantri Vaya Vandana Yojana was extended up to March 2020, under which senior citizens can invest up to Rs 15 lakh. The current limit is Rs 7.5 lakh per senior citizen.

National Pension System is tax-free

The withdrawal of pension money was made tax free for non-employee subscribers. There is no such provision at present.

Click here to Download Automated TDS on Salary for Govt & Non- Govt employees for F.Y.2018-19 and A.Y.2019-20 with Automated Arrears Relief Calculator with Form 10E from F.Y.2018-19 and A.Y. 2019-20 as per new Finance Budget 2018 [ This Excel Based Software can prepare at a time Tax Computed Sheet + Individual Salary Structure as per Govt & Non-Govt Salary Pattern + Automated H.R.A. Calculation U/s 10(13A) + Automated Form 16 Part B + Automated Form 16 Part A&B + Automated Arrears Relief Calculation from F.Y.2000-01 to F.Y.2018-19 with Form 10E]

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Automated Excel based Arrears Relief calculator with Form 10E for A.Y 2019-20 for claiming rebate u/s 89(1)

As per section 89(1) of the Income Tax Act, 1961 relief for income tax has been provided when in a financial year an employee receives the salary in arrears or advance. As per Rule 21AA of the Income Tax Rules, 1962, Form 10-E has been prescribed for claiming the relief.

According to the said rule, in case the employee is a Government servant or is an employee of a company, cooperative society, local authority, university, institution or association of body, he/she may for claiming the relief submit the form 10E to his/her employer who is responsible for making the payment of the salary as referred to in subsection (1) of section 192 of the Income Tax Act, 1961

 In all other cases, the assessee for claiming the relief should file an application in form 10E to his/her income tax assessing officer.   The relief under section 89(1) is allowable in the assessment year in which the arrears or the advance is received by the employee.

Pay revisions, particularly in the Government Sector, has become common. Since independence six Pay Commissions have been set up by the Government so far. Recommendations of each commission with retrospective effect have resulted in arrears of salaries. The rationale behind giving this relief under section 89 is that due to the payment of arrears or advance salary received in a given financial year, the income of the employee for that financial year gets increased due to the amount of the arrears or advances. As a result, the income of the employee attracts taxation at a higher rate than that rate at which his income would have been taxed had there been no such arrears or advances. 

Click here to Download Automated Arrears Relief Calculator U/s 89(1) with Form 10E From the F.Y. 2000-01 to F.Y.2018-19 & A.Y. 2019-20 ( Update Version)

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All in One TDS on Salary for Central Govt employees for F.Y.2018-19

All in One TDS on Salary for Central Govt employees for F.Y.2018-19 is the most unique Excel Based Software for the Financial Year 2017-18 including the Automated Arrears Relief Calculator from F.Y.2000-01 to F.Y.2018-19

This Excel Utility can prepare at a time your Tax Computed Sheet + Salary Structure as per the Central Govt Salary Structure + Automated H.R.A. Exemption U/s 10(13A) + Automated Form 16 Part A&B and Form 16 Part B + Automated Arrears Relief Calculator with Form 10E for the Financial Year 2018-19

Click here to Download the All in One TDS on Salary for Central Govt Employees for the Financial Year 2018-19

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All in One TDS on Salary for Govt & Non-Govt Employees for F.Y.2018-19 & A.Y. 201920 with Budget 2018: Impact on the Salaried Class

Budget Impact on the Salaried Class

Budget 2018 is rolled out and how! Mixed feelings for most people, except for the salaried class. The budget has not made any changes to the tax slabs of salaried individuals, leading them to sing the blues, in a chorus. Given the pattern from the last few years, there were similar expectations this year too. Even though that did not happen, the Finance Minister has proposed to reintroduce the “standard deduction” from the gross salary of individuals.

The amount of standard deduction proposed to be Rs 40,000, will replace the existing transport allowance of Rs 1600 per month and medical allowance of Rs 15,000 per annum which are usually deducted from the gross salary and claimed as an exemption. So, no changes in tax slabs is not a total loss, since the standard deduction of Rs 40,000 will replace medical allowance of Rs 15,000 and transport allowance of Rs 1600 per month i.e. Rs. 19,200 per annum, so the effective additional benefit would be an additional income exemption of Rs 5,800.

Furthermore, FM Jaitley proposed to hike the cess by 1%, in the name of Health Cess, making it effectively 4% ‘Health and Education Cess’. As of now, an education cess of 3% was levied on personal income tax, after the budget announcement it soared high to a 4%. While this move may help the government in meeting the healthcare and education needs of the rural families, it is certain that the tax liability of both individuals and corporate will increase.

Let’s have a look at the tax proposals made in the Budget 2018 for the Salaried Class

The Income Tax Slabs for the Assessment Year 2019-20 would continue to be as follows

For Individuals (resident or non-resident) upto 59 years
Upto 2,50,000	NIL
2,50,001 – 5,00,000	5%
5,00,001 – 10,00,000	20%
10,00,001 & Above	30%

For resident individuals who are 60 years and above but below 80 years
Up to 3,00,000	NIL
3,00,001 – 5,00,000	5%
5,00,001-10,00,000	20%
10,00,001 & Above	30%

For resident individuals who are 80 years and above
Up to 5,00,000	NIL
5,00,001 – 10,00,000	20%
10,00,001 & Above	30%

Surcharge too has not undergone any change from that of AY 2018-19

Income from Rs 50,00,001 – 1,00,00,000	10% of tax
1,00,00,001 & Above	15% of tax

In a nutshell:

• A resident individual is entitled to rebate u/s 87A if his total income does not exceed Rs. 3,50,000. The amount of rebate shall be 100% of income-tax or Rs. 2,500, whichever is less

• ‘Health and Education Cess’ charged at 4% replaces ‘Education Cess’ and ‘Higher & Secondary Education Cess’ earlier charged at 3%

• A Standard deduction of Rs 40,000 from the taxable Salary replaces the transport allowance and the miscellaneous medical Reimbursement. This will result in an additional income exemption of up to Rs 5,800/-

Click here to Download Automated TDS on Salary for Govt & Non- Govt employees for F.Y.2018-19 and A.Y.2019-20 with Automated Arrears Relief Calculator with Form 10E from F.Y.2018-19 and A.Y. 2019-20 as per new Finance Budget 2018 [ This Excel Based Software can prepare at a time Tax Computed Sheet + Individual Salary Structure as per Govt & Non-Govt Salary Pattern + Automated H.R.A. Calculation U/s 10(13A) + Automated Form 16 Part B + Automated Form 16 Part A&B + Automated Arrears Relief Calculation from F.Y.2000-01 to F.Y.2018-19 with Form 10E]

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