INCOME TAX DEDUCTIONS U/s 80C FOR F.Y 2019-20 & A.Y 2020-21,WITH AUTOMATED INCOME TAX ARREARS RELIEF CALCULATOR U/S 89(1) WITH FORM 10E FOR F.Y. 2019-20

The maximum tax exemption limit under Section 80C has been retained at Rs 1.5 Lakh only. The various investment avenues or expenses that can be claimed as tax deductions under section 80c are as below;

• PPF (Public Provident Fund)
• EPF (Employees’ Provident Fund)
• Five year Bank or Post office Tax Saving Deposits
• NSC (National Savings Certificates)
• ELSS Mutual Funds (Equity Linked Saving Schemes)
• Kid’s Tuition Fees
• SCSS (Post office Senior Citizen Savings Scheme)
• Principal repayment of Home Loan
• NPS (National Pension System)
• Income Tax benefits are currently available on Tier-1 deposits only (FY 2018-19). The contributions by the government employees (only) under Tier-II of NPS will also be covered under Section 80C for deduction up to Rs 1.5 lakh for the purpose of income tax, with a three-year lock-in period. This is w.e.f April 2019.
• Life Insurance Premium
• Sukanya Samriddhi Account Deposit Scheme

Section 80CCC

Contribution to the annuity plan of LIC (Life Insurance Corporation of India) or any other Life Insurance Company for receiving a pension from the fund is considered for tax benefit. The maximum allowable Tax deduction under this section is Rs 1.5 Lakh.

Section 80CCD

The employee can contribute to the Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be up to 10% of the salary (salaried individuals) and Rs 50,000 additional tax benefit u/s 80CCD (1b) was proposed in Budget 2015.

As per the Budget 2017-18, the self-employed (individual other than the salaried class) can contribute up to 20% of their gross income and the same can be deducted from the taxable income under Section 80CCD (1) of the Income Tax Act, 1961.

To claim this deduction, the employee has to contribute to Govt recognized Pension schemes like NPS. The 10% of the salary limit is applicable for salaried individuals only and the Gross income is applicable for non-salaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to the Pension Scheme, the whole contribution amount (10% of salary) can be claimed as tax deduction under Section 80CCD (2).

The Centre will now contribute 14% of basic salary to Govt employees’ pension corpus, up from 10%. This is w.e.f April 2019.

Kindly note that the Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2019-20. The additional tax deduction of Rs 50,000 u/s 80CCD (1b) is over and above this Rs 1.5 Lakh limit.

Contributions to ‘Atal Pension Yojana‘ are eligible for Tax Deduction under section 80CCD.

Free Download Automated Income Tax Arrears Relief Calculator U/s 89(1) From the F.Y. 2000-01 to F.Y. 2019-20 [ Updated Version ]

 

 

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INCOME TAX DEDUCTIONS U/s 80C FOR F.Y 2019-20 & A.Y 2020-21,WITH AUTOMATED INCOME TAX ARREARS RELIEF CALCULATOR U/S 89(1) WITH FORM 10E FOR F.Y. 2019-20

The maximum tax exemption limit under Section 80C has been retained at Rs 1.5 Lakh only. The various investment avenues or expenses that can be claimed as tax deductions under section 80c are as below;

• PPF (Public Provident Fund)
• EPF (Employees’ Provident Fund)
• Five year Bank or Post office Tax Saving Deposits
• NSC (National Savings Certificates)
• ELSS Mutual Funds (Equity Linked Saving Schemes)
• Kid’s Tuition Fees
• SCSS (Post office Senior Citizen Savings Scheme)
• Principal repayment of Home Loan
• NPS (National Pension System)
• Income Tax benefits are currently available on Tier-1 deposits only (FY 2018-19). The contributions by the government employees (only) under Tier-II of NPS will also be covered under Section 80C for deduction up to Rs 1.5 lakh for the purpose of income tax, with a three-year lock-in period. This is w.e.f April 2019.
• Life Insurance Premium
• Sukanya Samriddhi Account Deposit Scheme

Section 80CCC

Contribution to the annuity plan of LIC (Life Insurance Corporation of India) or any other Life Insurance Company for receiving a pension from the fund is considered for tax benefit. The maximum allowable Tax deduction under this section is Rs 1.5 Lakh.

Section 80CCD

The employee can contribute to the Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be up to 10% of the salary (salaried individuals) and Rs 50,000 additional tax benefit u/s 80CCD (1b) was proposed in Budget 2015.

As per the Budget 2017-18, the self-employed (individual other than the salaried class) can contribute up to 20% of their gross income and the same can be deducted from the taxable income under Section 80CCD (1) of the Income Tax Act, 1961.

To claim this deduction, the employee has to contribute to Govt recognized Pension schemes like NPS. The 10% of the salary limit is applicable for salaried individuals only and the Gross income is applicable for non-salaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to the Pension Scheme, the whole contribution amount (10% of salary) can be claimed as tax deduction under Section 80CCD (2).

The Centre will now contribute 14% of basic salary to Govt employees’ pension corpus, up from 10%. This is w.e.f April 2019.

Kindly note that the Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2019-20. The additional tax deduction of Rs 50,000 u/s 80CCD (1b) is over and above this Rs 1.5 Lakh limit.

Contributions to ‘Atal Pension Yojana‘ are eligible for Tax Deduction under section 80CCD.

Free Download Automated Income Tax Arrears Relief Calculator U/s 89(1) From the F.Y. 2000-01 to F.Y. 2019-20 [ Updated Version ]

 

 

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INCOME TAX DEDUCTIONS U/s 80C FOR F.Y 2019-20 & A.Y 2020-21,WITH AUTOMATED INCOME TAX ARREARS RELIEF CALCULATOR U/S 89(1) WITH FORM 10E FOR F.Y. 2019-20

The maximum tax exemption limit under Section 80C has been retained at Rs 1.5 Lakh only. The various investment avenues or expenses that can be claimed as tax deductions under section 80c are as below;

• PPF (Public Provident Fund)
• EPF (Employees’ Provident Fund)
• Five year Bank or Post office Tax Saving Deposits
• NSC (National Savings Certificates)
• ELSS Mutual Funds (Equity Linked Saving Schemes)
• Kid’s Tuition Fees
• SCSS (Post office Senior Citizen Savings Scheme)
• Principal repayment of Home Loan
• NPS (National Pension System)
• Income Tax benefits are currently available on Tier-1 deposits only (FY 2018-19). The contributions by the government employees (only) under Tier-II of NPS will also be covered under Section 80C for deduction up to Rs 1.5 lakh for the purpose of income tax, with a three-year lock-in period. This is w.e.f April 2019.
• Life Insurance Premium
• Sukanya Samriddhi Account Deposit Scheme

Section 80CCC

Contribution to the annuity plan of LIC (Life Insurance Corporation of India) or any other Life Insurance Company for receiving a pension from the fund is considered for tax benefit. The maximum allowable Tax deduction under this section is Rs 1.5 Lakh.

Section 80CCD

The employee can contribute to the Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be up to 10% of the salary (salaried individuals) and Rs 50,000 additional tax benefit u/s 80CCD (1b) was proposed in Budget 2015.

As per the Budget 2017-18, the self-employed (individual other than the salaried class) can contribute up to 20% of their gross income and the same can be deducted from the taxable income under Section 80CCD (1) of the Income Tax Act, 1961.

To claim this deduction, the employee has to contribute to Govt recognized Pension schemes like NPS. The 10% of the salary limit is applicable for salaried individuals only and the Gross income is applicable for non-salaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to the Pension Scheme, the whole contribution amount (10% of salary) can be claimed as tax deduction under Section 80CCD (2).

The Centre will now contribute 14% of basic salary to Govt employees’ pension corpus, up from 10%. This is w.e.f April 2019.

Kindly note that the Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2019-20. The additional tax deduction of Rs 50,000 u/s 80CCD (1b) is over and above this Rs 1.5 Lakh limit.

Contributions to ‘Atal Pension Yojana‘ are eligible for Tax Deduction under section 80CCD.

Free Download Automated Income Tax Arrears Relief Calculator U/s 89(1) From the F.Y. 2000-01 to F.Y. 2019-20 [ Updated Version ]

 

 

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INCOME TAX DEDUCTIONS U/s 80C FOR F.Y 2019-20 & A.Y 2020-21,WITH AUTOMATED INCOME TAX ARREARS RELIEF CALCULATOR U/S 89(1) WITH FORM 10E FOR F.Y. 2019-20

The maximum tax exemption limit under Section 80C has been retained at Rs 1.5 Lakh only. The various investment avenues or expenses that can be claimed as tax deductions under section 80c are as below;

• PPF (Public Provident Fund)
• EPF (Employees’ Provident Fund)
• Five year Bank or Post office Tax Saving Deposits
• NSC (National Savings Certificates)
• ELSS Mutual Funds (Equity Linked Saving Schemes)
• Kid’s Tuition Fees
• SCSS (Post office Senior Citizen Savings Scheme)
• Principal repayment of Home Loan
• NPS (National Pension System)
• Income Tax benefits are currently available on Tier-1 deposits only (FY 2018-19). The contributions by the government employees (only) under Tier-II of NPS will also be covered under Section 80C for deduction up to Rs 1.5 lakh for the purpose of income tax, with a three-year lock-in period. This is w.e.f April 2019.
• Life Insurance Premium
• Sukanya Samriddhi Account Deposit Scheme

Section 80CCC

Contribution to the annuity plan of LIC (Life Insurance Corporation of India) or any other Life Insurance Company for receiving a pension from the fund is considered for tax benefit. The maximum allowable Tax deduction under this section is Rs 1.5 Lakh.

Section 80CCD

The employee can contribute to the Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be up to 10% of the salary (salaried individuals) and Rs 50,000 additional tax benefit u/s 80CCD (1b) was proposed in Budget 2015.

As per the Budget 2017-18, the self-employed (individual other than the salaried class) can contribute up to 20% of their gross income and the same can be deducted from the taxable income under Section 80CCD (1) of the Income Tax Act, 1961.

To claim this deduction, the employee has to contribute to Govt recognized Pension schemes like NPS. The 10% of the salary limit is applicable for salaried individuals only and the Gross income is applicable for non-salaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to the Pension Scheme, the whole contribution amount (10% of salary) can be claimed as tax deduction under Section 80CCD (2).

The Centre will now contribute 14% of basic salary to Govt employees’ pension corpus, up from 10%. This is w.e.f April 2019.

Kindly note that the Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2019-20. The additional tax deduction of Rs 50,000 u/s 80CCD (1b) is over and above this Rs 1.5 Lakh limit.

Contributions to ‘Atal Pension Yojana‘ are eligible for Tax Deduction under section 80CCD.

Free Download Automated Income Tax Arrears Relief Calculator U/s 89(1) From the F.Y. 2000-01 to F.Y. 2019-20 [ Updated Version ]

 

 

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Relief under section 89(1) for arrears of salary, With Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from F.Y. 2000-01 to F.Y. 2019-20

Did you receive any advance salary or arrears of salary? If yes, you might be worried about the tax implications of the same. Do I have to pay taxes on the total amount? What about the tax calculations of the previous year and so on? Taxpayers who have such questions in their mind, here is all that you need to know. 

By now, you would have already figured out that income tax is calculated on the total income of a taxpayer for a certain year. The income can either be in the form of salary or family pension or other sources of income. However, there might be scenarios where you have received arrears of family pension or pending salary during the current fiscal year. It can happen that an income tax payer gets a part of his profit or salary in advance or as arrears in any financial year, which increases his total income thereby increase the payable taxes. In such a case, an application can be made and the assessing officer can grant relief to the tax payer. To sum it up, the Income Tax Act ensures there is parity in the income tax slab rates, and thus, when a portion of the income received does not pertain to the current year, relief is granted so that the taxable income does not increase.

To ensure that you are not burdened with paying additional taxes, the income tax department provides Relief U/s 89(1). If you receive any pension or payments for the previous year, you will not be taxed on the total amount for the current year. Essentially keeping you away from paying extra taxes, because there was a delay in payment.

To avail the benefits under Section 89(1) you would need to submit Form 10E. What is Form 10E would be the most obvious question? The details of Form 10E, along with how and why to submit the same is provided in detail below.

What is relief under section 89(1)?

When the taxpayer receives:

1.     Arrears of salary or 

2.     Advance salary or

3.     Arrears of family pension

Then such amount is taxable in the Financial Year in which it is received.

However, relief under section 89(1) is provided to reduce additional tax burden due to delay in receiving such income. 

How to calculate relief under section 89(1)?

Here are the steps to calculate relief under section 89(1) of Income Tax Act, 1961:

1.     Calculate tax payable on total income including arrears in the year in which it is received.

2.     Calculate tax payable on total income excluding arrears in the year in which it is received.

3.     Calculate the difference between (1) and (2).

4.     Calculate tax payable on total income of the year to which arrears are related, including arrears.

5.     Calculate tax payable on total income of the year to which arrears are related, excluding arrears.

6.     Calculate the difference between (4) and (5).

7.     The amount of relief will be the excess amount of (3) over (6). No relief shall be allowed if the amount of (6) is more than the amount in (3).

Example on how to calculate relief under section 89(1)

Mr. A has a total income of Rs. 6,00,000/- for Financial Year 2017-18 (the Assessment Year 2018-19) and received arrears of Rs. 1,50,000/- for Financial Year 2011-12 (Assessment Year 2012-13). The total income for Financial Year 2011-12 is Rs. 2,00,000/-.

The relief will be calculated as follows:

1.     Tax on total income of Rs. 7,50,000/- (Rs. 6,00,000+Rs. 1,50,000) including arrears for F.Y. 2017-18 is Rs. 64,375/- (as per rates applicable for F.Y. 2017-18 i.e. A.Y. 2018-19).

2.     Tax on total income of Rs. 6,00,000/- excluding arrears for F.Y. 2016-17 is Rs. 33,475/-

3.     Difference between (1) and (2) is Rs. 30,900/- (as per rates applicable for F.Y. 2017-18 i.e. A.Y. 2018-19).

4.     Tax on total income of Rs. 3,50,000/- (Rs. 2,00,000+Rs. 1,50,000) including arrears for F.Y. 2011-12 is Rs. 17,510/- (as per rates applicable for F.Y. 2011-12 i.e A.Y. 2012-13).

5.     Tax on total income of Rs. 2,00,000/- excluding arrears for F.Y. 2011-12 is Rs. 2,060/- (as per rates applicable for F.Y. 2011-12 i.e A.Y. 2012-13).

6.     Difference between (4) and (5) is 15,450/-

7.     The amount of relief will be Rs. 15,450/- [excess amount of (3) over (6)]

What is Form 10E?

For claiming relief under section 89(1) for arrears of salary received, it is mandatory to file Form 10E with the Income Tax department. If Form 10E is not filed and relief is claimed, then the taxpayer is most likely to receive notice from the Income Tax department for not filing Form 10E.

Download Automated Income Tax Arrears Relief Calculator U/s 89(1) Form the F.Y. 2000-01 to F.Y. 2019-20

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