If you leave from any Concern and Joined other New Concerned, You have need the Income Tax Form 12B? With Automated Income Tax Preparation Excel Based Software All in One for Govt & Non Govt Employees for the F.Y. 2019-20

People often change their jobs for various reasons. If you have switched your job in the middle of the financial year, you will have to provide details of your previous salary earned along with tax deductions to the new employer through Form 12B. When you submit your Form 12B, your  the current employer can deduct the correct amount of TDS or Tax Deducted at Source from your salary. Every new employee has to submit Form 12B to their new employer along with proofs of all the investments made before 31st March.

 Download All in One TDS on Salary for Govt and Non-Govt Employees for the F.Y. 2019-2020 and A.Y.20120-2021 With H.R.A.Exemption Calculation U/s 10(13A) + Automated Arrears Relief Calculator U/s89(1) with Form 10e for F.Y. 2019-20

The feature of this Excel Utility is the following:-

1) This Excel Utility can prepare automatic Tax Calculation as per new Finance Budget 2019

2) The Salary Structure as per the All of Govt and Non-Govt employee’s Salary Pattern

3) Automated Individually Salary Sheet for each Employee

4) Automated Income Tax Salary Sheet for each Employee 

5) This Excel Utility calculate your House Rent Exemption Calculation U/s 10(13A)

6) Automated Income Tax Form 16 Part A&B for F.Y. 2019-20 in New Format

7) Automated Income Tax Form 16 Part B for the F.Y. 2019-20 in New Format

8) Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10e from the F.Y. 2000-01 to 2019-20

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Download Automated Arrears Relief Calculator U/s 89(1) with Form 10E for F.Y.2018-19 And More Tax Relief to the Salaried Persons by this Budget 2018-19 as Re-Introduce the Standard Deduction Max Rs.40,000/-

Budget 2018 tho' failed to modification the broad tax slabs however created some changes within the tax exemptions. one among them was the introduction of normal Deduction for salaried and pensioners. From FY 2018-19 (AY 2019-20) all salaried and pensioners would be eligible for the quality deduction of Rs forty,000. However, as they assert, the devil lies in details. With the introduction of the quality deduction, the government minister has removed 2 widespread tax deductions that were offered for salaried: Transport Allowance of Rs nineteen,200 and Medical compensation of Rs fifteen,000. So, internet impact of the quality deduction for salaried would solely be Rs five,800 (40,000 – 19,200 – 15,000). However, as pensioners failed to have these allowances customary deduction for them is actually excellent news.

Standard Deduction Impact:

The table below shows the impact of standard deduction on salaried who used to receive tax-free transport allowance and medical reimbursement till this year.

Particulars	Until AY 2018-19	From AY 2019-20
Gross Salary (in Rs.)	10,00,000	10,00,000
(-) Transport Allowance	19,200	Not Applicable
(-) Medical Allowance	15,000	Not Applicable
(-) Standard Deduction	Not Applicable	40,000
Net Taxable Salary	9,65,800	9,60,000

As you can see in the above example the NET impact would be only Rs 5,800 extra tax exemption over the last year.

CBDT issues clarification regarding the applicability of standard deduction to pension received from a former employer.

As per the amended Section 16 of the Income-tax Act, 1961, a taxpayer having income chargeable under the head “Salaries” shall be allowed a deduction of Rs 40,000/- or the amount of salary, whichever is less, for computing his taxable income.

It is clarified that a taxpayer who is in receipt of a pension from his former employer shall be entitled to claim a deduction of Rs 40,000/- or the amount of pension, whichever is less, under Section 16 of the Act.

Standard Deduction for salaried was abolished in Budget 2005. Until then salaried individuals could claim Rs 30,000 or 40% of salary whichever is less for gross salary up to Rs 5 lakh. For salary of more than Rs 5 Lakh, the standard deduction was fixed at Rs 20,000.

Many salaried had this question what proof would be required to claim standard deduction? The answer is there is NO proof or declaration is required for the standard deduction. It's more in the lines of transport allowance where no proof was required. An added advantage with the abolition of medical reimbursement there would be one lesser proof to submit to an employer!

Standard Deduction for Family Pension?

The rules for standard deduction is clear for Pensioners but what happens after the death of pensioner? After the death of the pensioner, the legal heir (Spouse, children below the age of 25 years, unmarried daughter and dependent parents in certain cases) continue to receive a pension. This is referred to as “Family Pension”. Also in case of a normal pension, the income is part of salary in ITR, however in the case of a family pension, the income is considered from other sources. So the above standard deduction of Rs 40,000 proposed in Budget 2018 would not be applicable to family pension. 

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

However, for family pension, a standard deduction u/s 57(iia) is available under which an amount of Rs 15,000 or 1/3rd of the uncommitted pension received, whichever is less, shall be exempt. For Example, if a family member receives a pension of Rs 50,000, the exemption available is least of Rs 15,000 or Rs 16,667 (1/3rd of Rs 50,000). Thus, the taxable family pension will be Rs 50,000 – Rs 15,000 = Rs 35,000.

Do-EPF/Insurance Pension get Standard Deduction?

The standard deduction provision is clear for salaried and for people receiving the pension from their ex-employers. But what about investors receiving the pension from pension plans they invested? Well, they would not be eligible for standard deduction.

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Second Home Loan Tax Implication and Benefit With Automated Arrears Relief Calculator U/s 89(1) for F.Y.2018-19

In 2017, Mr.A  had taken a home loan for buying a home in Delhi. The home loan amount was 15 Lakh tenure was 20 years and EMI was Rs.14976. He got transferred to Mumbai before two years.

He could have sold the old house and purchased a new house at Mumbai. But, he decided to purchase another house instead of renting. He has taken a second home loan of Rs 15 lakh for 20 years, for which EMI is about Rs.16, 550.

His total EMI outgo is 31526 Rs/-. Increasing floating interest rates are making his life difficult. He is unable to manage hefty EMI amount for both home loans. In addition to that, the earlier income tax interest exemption benefit under section 24 is now no more reality. The maximum interest amount is capped at Rs.2 Lakh. He has no option but to sell his first home.

There are many people in India who builds a second home to earn extra income or for living purpose. Buying a second home with the second home loan can be an attractive investment. However, before you proceed, here are a few tax implications that you must consider.

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

Second Home Loan Tax Implication and Benefit

• If an individual is holding more than one property in his/her name, only one property is considered as self-occupied. Its annual income will be considered as NIL. Another property is considered as ‘deemed rented out’ if it is not given on rent. This consideration is for income tax purpose.
• You can select any property as self-occupied. It is not compulsory that first property is only taken as self-occupied.
• If one house is rented out and second house is self-occupied, actual rental income of rented house is considered for calculation of income tax.
• If both houses are rented out respective rental income from both properties is taxable.
• In case of joint ownership of property and home loan is taken on joint names, rental income is computed corresponding to percentage share of each co-owner.
• You can hold multiple properties in your name. There is no restriction whatsoever.

Income Tax on Home Loan Principal Component –

• Home loan principal payment is exempted under section 80C. The maximum limit is 1.5 Lakh. This principal payment exemption rule is applicable only on the first house. (self-occupied property). For second home loan principal payment is not eligible for deduction under section 80 C.
• You can also avail principal payment exemption benefit if you have let out or vacant property and you are staying in a different city for the work.
• Above rule of principal exemption is not applicable on under construction property.

Income Tax on Home Loan Interest Component – 

• The tax exemption benefit on interest payment is allowed as per actual subject to a maximum of Rs. 2 lakhs (Rs. 3 lakhs for senior citizens). This condition is applicable for self-occupied for which construction is completed within 5 years from the end of the financial year in which loan      is taken.
• For the second home or additional properties exemption on interest is capped at lower of either 2 lakhs or actual interest payment. If any additional interest payment is done it can be carried forward to set off against house property income of subsequent 8 years.

Income Tax benefit from Second House – Rented or Deemed let out

If your property is rented or deemed let out, you need to use method given below to calculate Income or Loss from Property.

If your property is rented annual rental income must be known to you. If it is deemed let out, you need to assume annual rental value based on market rates.

You can deduct municipal tax paid on the house. In addition to that 30% standard deduction on rented income is allowed.

Income or Loss from Property = Rental Income – Municipality Tax – Standard Deduction 30% – Interest Paid

E.g Suppose your rented annual income from second property is Rs. 90000. Municipality Tax is Rs.2000 and you are paying Rs.120000 as a home loan interest payment. So, income or loss from the property will be –

Income or loss from property = Rs.90000 – Rs.2000 – Rs.27000 – Rs.120000 = -59000 Rs.

The negative income indicates it is a loss from housing property and you need to reduce this amount from your taxable income.

Should you buy Second Home for Rented Income or Tax Benefit?

As per me, you should not buy a second home for rented income or tax benefit due to following reasons.

1. Maximum interest deduction limit for a second house is 2 Lakh. This limit is applicable FY2017-18, AY 2018-19 onwards. This means you will not get that much tax benefit on a second home.
2. A second house is considered as let out property (if not rented) and you need to consider equivalent rental income while calculating a tax.

Considering present income tax rule and real estate market condition investing in second property is not recommended option.

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What is the Procedure of Calculation of Arrears Relief Calculation U/s 89(1) with Automatic Arrears Relief Calculator with Form 10E from F.Y. 2000-01 to F.Y.2017-18

WHAT IS THE ACTUAL CALCULATION OF ARREARS RELIEF U/S 89(1) AND WHAT'S THE PROCEDURE TO CALCULATE THE ARREARS RELIEF WHICH IS GET THE AMOUNT OF AN EMPLOYEE BEHIND HIS PREVIOUS YEARS. HERE IS GIVEN THE AUTOMATIC ARREARS RELIEF CALCULATOR SINCE THE FINANCIAL YEAR 2000-01 TO 2013 WITH FORM 10E.

BELOW GIVEN THE METHOD OF CALCULATION U/S 89(1)AS PER THE INCOME TAX RULES.

SECTION 89 l RELIEF WHEN SALARY ETC., IS 

PAID IN ARREARS OR IN ADVANCE

Scope of relief under the section in five situations explained

1. Section 89(1) authorises the grant of relief in a case where an employee receives a salary in arrears or in advance or has received in any fiscal year salary for more than twelve months, a payment which under the provisions of section 17(3)(ii) is a profit in lieu of salary.  The effect of such increase is that the income will be assessed at a higher rate than it otherwise would have been assessed and it is for this reason that section 89(1) authorises relief to be allowed.  The relief is to be allowed in terms of rule 21A of the Income-tax Rules, 1962.

2. Rule 21A(1) enumerates the following five different situations wherein the assessees will be entitled to relief (four of these are specific situations while the fifth is a residuary one) :

   a.  salary being received in arrears or advance;

   b.  where the payment is in the nature of gratuity in respect of past services extending over a period of not less than five years is received;

   c.  where the payment is in the nature of compensation received by the employee from his employer or former employer at or in connection with a termination of his employment after continuous service of not less than three years and where the unexpired portion of the term of employment is also not less than three years;

   d.  where the payment is in the nature of commutation of pension;

   e.  where the payment is not covered by the description given in (a) to (d) above.

The relief is to be worked out in the first four situations in accordance with the specific modes described in rule 21A (2)(a) to (d).

3. The authority to grant relief in the four specific cases is the Income-tax Officer assessing the employee.  In the residua case, it is Central Board of Direct Taxes.

4. The relief under section 89(1) is to be given in the assessment in which the extra payment by way of arrears, advance, etc., is taxed. The mode of granting relief spelled out in rule 21A(2) to 21A(5) would show that in all the four different cases the exercise of giving relief is initiated by bringing to tax the whole of the extra amount in the assessment for the assessment year relevant to the year of receipt. Basically, the relief under section 89(1) is arithmetical. It involves finding out of two rates of tax. The first is the rate of tax applicable to the total income including the extra amount in the year of receipt. The second is finding out the rate by adding the arrears to the total income of the years to which they relate. For this purpose, the assessee should be asked for a true and authentic statement of the total income of the earlier years to which the arrears pertain  There is no warrant for issuing a notice under section 148 or calling for returns of income of the earlier years.

Circular: No. 331 [F.  No. 174/102/79-IT(A-I)], dated 22-3-1982. 

Click here to Download Automated Arrears Relief Calculator with Form 10E from the Financial Year 2000-01 to Financial Year 2017-18

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