How to save tax for salaried individuals for the F.Y.2021-22– With Automated Income Tax Revised Form 16 for the F.Y.2020-21

 

How to save tax for salaried individuals for the F.Y.2021-22. Who doesn't want to save taxes? So, in this article, we are discussing how a salaried person can save tax through tax planning. Salary earners have relatively limited options when it comes to saving salaries. Yet, what we use efficiently can achieve a significant amount of tax.

 A. Save tax by including tax-saving elements in the salary structure 

B. Save tax through deductions

You may be interested to read about which system will be beneficial for you, this article can be a bit helpful here 

A. Save tax by including tax-saving elements in the pay structure:

I) Save tax on rent payments 

1) House rent allowance

If you live in a rented house, this can help you save on taxes through HRA discounts.

The maximum HRA discount will be the lowest of any claim

Got the original HRA

40% / 50% * (Basic Salary + DA)

Rental (minus) 10% (Basic Salary + DA)

* For metro cities

Note: To claim HRA exemption, one needs to have HRA as a component of salary

Download Automated IncomeTax House Rent Exemption Calculator U/s 10(13A) in Excel

 2) Rent deducted 80GG

If you are renting, if you do not have HRA as a component of your salary, then you can save duty on the rent paid. You can claim a discount of up to Rs 5,000 per month under the 80GG section.

Note: You need to file 80GG Form 10BA to claim clearance

You may also, like- Prepare at a time 50 Employees Automatic Income Tax Revised Form 16 Part B F.Y.2020-21(This Excel Utility can prepare at a time 50 Employees Form 16 Part B) 

Children's education allowance

Education allowance for children up to Rs.100 per month is not taxable (up to a maximum of 2 children) 

Hostel Expenses Allowance

Hostel Expenditure Allowance is not taxable up to Rs.300/- Per month

 

Medical facilities U/s 80D

Medical insurance paid or paid by the employer is not applicable for premium tax. So, include it in your salary structure to save tax. For below 60 Years of age Max Rs. 25,000/- and above 60 Years Rs. 50,000/- for Senior Citizen.

 

Leave Travel Allowance (LTA)

It is tax-free when an employer raises an employee to go anywhere in India with his family. The discount is available for travel expenses, not for hotel and food bills.

This deduction will be allowed twice in a block of 4 years.

Some restrictions can be claimed here for the cost of travel although it is quite reasonable. Anyone can take the equivalent cost of first-class train fare or economy class airfare.

Note: This is only available for submission of spent bills

You may also, like- Prepare at a time 100 Employees Automatic Income Tax Revised Form 16 Part B F.Y.2020-21(This Excel Utility can prepare at a time 100 Employees Form 16 Part B) 

Contribution of recruiters to PF and NPS

 

Employers' contribution to NPS and EPF is tax-free up to 12% of basic salary. So, it helps you to save tax as well as induce saving habits.

Important aspects should be known before filing ITR

 

B. Deduction from salary income

I. Standard Deduction

A Standard Deduction of Rs 50,000 for all salaried persons

II. Employment / Professional Tax

In fact, the amount paid during the year is discountable. However, if the professional tax is paid by the employer on behalf of his employee, it is first included in the employee's salary as a precondition and then the same amount is allowed to be deducted.

You may also, like- Automatic Income Tax Revised Form 16 Part B for the F.Y.2020-21(This Excel Utility can prepare One by One Form 16 Part B) 

III. Investment-linked Deductions

A. Exemption under section 80C

This is the most popular area used by taxpayers to save taxes. It allows discounts of up to Rs 1.5 lakh. Any taxpayer may invest in PF, ELSS, FD, NSC, NPS, life insurance. In addition, you can claim payment of principal for any home loan, tuition fee, and stamp duty under this section.

 

B. Exemption under Section 80 CCD(1B)

It gives an additional discount of Rs 50,000 for investing in NPS

 

C. Exemption under Section 80D

This department provides discounts for medical insurance premiums paid for self, family, and parents.

People under the age of 60 years can claim a discount of Rs 25,000 for themselves and their families and Rs 25,000 for parents (if they are below 60 years) but above the age of 60 years Rs.50,000/- for the Senior Citizen

 

D. Section 80E for interest on education loan

 

The interest paid on a loan taken for the higher education of self, wife, or children can be claimed on a real basis. There is no upper limit for this discount.

 

E. Deduction U/s 80G

Eligible grants are subject to a 50-100% deduction.

 

F. Deduction for home loan interest

Section 24

For self-occupied houses and for those who have the opportunity to move out of the house, there is a system of interest rebates on home loans up to Rs 2 lakh, there is no limit to claim interest rebates.

 

Download and Prepare at a time 50 Employees Automatic Income Tax Revised Form 16 Part A&B F.Y.2020-21(This Excel Utility can prepare at a time 50 Employees Form 16 Part A&B)

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What is the importance of Income Tax Form 16? With Automated Income Tax Revised Form 16 for the F.Y.2020-21

What is the importance of Income Tax Form 16? Understand the details about the topic form 16. In this article first, discuss what is form 16, then its components and its importance. First, what is form 16? Each year each and every employer issues Form 16 salary certificate. This is a certificate under Section 203 of the Income Tax Act that provides details about the tax amount that has been deducted by your employer that is called TDS.

 

 

However it also contains the details of your salary other incomes and tax benefits available and availed by you in the last financial year. This Revised Form 16 has detailed information about the manner of calculating income as per the income tax laws and tax payable on it. May, 31 is the last date for your employer to issue a Form 16 to you. Now we will discuss the components of form 16 helps us understand the tax paid probable tax refund we can get, and can also help in better tax planning, we can do it next year, and most importantly, can also assist us to file our income tax returns

Download Automated Income Tax Revised Form 16 Part A&B for the Financial Year 2020-21 for the F.Y.2020-21 as per New and Old Tax Regime [ This Excel Utility Can prepare at a time 50 Employees Form 16 Part A&B]

 

Form 16 comprises mainly of two sections. Form 16 Part A what has in the Part A of Form 16?. It contains our personal information like our name, address, employers name and address pan of both pans of our employer and receipt number of TDs payment. All this information assists the income tax department to keep a track of money flow from our own as well as our employer's account.

 

In addition, the party provides information like assessment tier, that is a year in which tax liability is computed for the income earned during the previous year. Assessment year here means taxes calculated on the income from first April 2013, to 31st March 2014. It has a summary of  tax deducted by the employer on our behalf.

 

This amount is deducted by the employer from our salary every month as tax and credits the same to the income tax department to know why this TDs is deducted you should watch our video on what is tedious. The most important information in Part A is a tab. That is, tax deduction account number of employer and total tax deducted, as both of this information has to be correctly mentioned in our income tax return, so that if there is any tax credit, we can get that.

 

Now let's discuss Part B. This part of form 16 provides major information that you require to file your income tax return. First of all, the total salary given by the employer in the financial year is mentioned, then prerequisite, or perks is an additional benefit provided by the employer. In addition to the salary. It is any benefit granted free of cost, or at confessional rates, such as rent-free home motorcar facility loans at subsidized rates, etc.

 

Download Automated Income Tax Revised Form 16 Part A&B &B for the Financial Year 2020-21 for the F.Y.2020-21 as per New and Old Tax Regime [This Excel Utility Prepare One by One Prepare  Form 16 Part A&B and Part B]

 

 Then this field, profit in lieu of salary means any payment due to, or received by the employer in connection with the termination of employment. For example, gratuity committed value of pension etc. Then there are allowances. They are the amount paid by the employer, in addition to salary to meet some service requirements such as DNS allowance house rent allowance. Live travel allowance conveyance allowance children's education allowance etc allowance can be fully taxable. Partly or non-taxable. Here the person has got only a child allowance, which is fully tax-deductible. in this case, and hence is deducted from total salary before tax calculations, then here are the details of tax benefits we get on our home loan interest payments as per section 24(B) of Income Tax Act.

 

So after deducting all the expense allowances, and money paid on home loan interest EMI, we get our cross income. Then, deductions are disclosed deductions include those under Section 80 C, 80CCC and 80CCD, whose total sum deductible under these respective sections must not go beyond rupees 1.5 lakhs. In this case, the person has not taken complete rupees 1.5 lac tax benefit in this year, which means has paid higher tax than he or she should have.

Download Automated Income Tax Revised Form 16 Part B for the Financial Year 2020-21 for the F.Y.2020-21 as per New and Old Tax Regime [This Excel Utility Prepare One by One Prepare  Form 16 Part B]

 

Then after this deduction under Section 80 D add and others are also mentioned here, the person has taken, none of them. The entire deductions are then subtracted from gross income so as to arrive at taxable income. Hence, tax is then computed on this amount based on the current tax lap of the IRS, which in this example is this much relief under the section, 89 means, if you have received any portion of your salary in early years, or in advance, you are allowed some tax relief under this. In simple words, you are saved from paying more tax because of delaying payment to you.

 

Now let's go about the importance of form 16 serves as a source document during filing of income tax return, as it comprises details about your income deductions tax calculated and TDs deducted as per income tax rules. It serves as an important document for claiming credit of tax deducted by employers, and you might require it to produce before income tax authorities. If you don't get a credit of TDs properly form 16 can also be used if you wish to apply for home loans, there are some banks that asked for form 16 for income proof form 16 is needed for visa processing as well.

 

And it is an authenticated certificate for income proof. Before we close a few other important information about the form 16 hours. If TDs is not deducted, then it is not mandatory to issue form 16 to the employer. If the organization does not possess the Tan. Then they are not entitled to deduct TDS, and then in this situation, they will obviously not give form 16. Self-employed person cannot acquire form 16.

Download Automated Income Tax Revised Form 16 Part A&B for the Financial Year 2020-21 for the F.Y.2020-21 as per New and Old Tax Regime [ This Excel Utility Can prepare at a time 100 Employees Form 16 Part A&B]

 

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Deductions Allowable under Chapter VI A | With Automated Income Tax Revised Form 16 for the F.Y.2020-21

 

Deductions Allowable under ChapterVI A | the impact of Deductions available under various sections of the Income Tax Act isn't the same for all. It relies on applicable tax rates as per the total taxable income and status of assessees. An assessee, whose income is taxable at higher rates, will have more tax savings for example more impact on his/her tax liability than the assessee whose income is taxable at lower rates. You may utilize the Maximize Tax Savings device to check the impact of various available deductions on your tax liability.

You may also, Like- Automated Income Tax Revised Form 16 Part A&B and Part B for the F.Y.2020-21 as per New and Old Tax Regime[This Excel Utility prepare One by One Form 16 Part A&B and Part B]

 

Deductions Allowable under Chapter VI A

 

Important:

 

On the off chance that Section 115BAC selects (for example New Income Tax Rates pick), the lone deduction under Section, 80CCD(2) is available, if applicable.

 

In the event that Section 115BAC doesn't select (for example Existing Income Tax Rates have picked), all deductions appeared on this page are available, if applicable.

 

Section 80C: Deduction for interests in determining schemes, saving instruments and so forth

 

Exemption : Up to 1,50,000 (Subject to overall furthest reaches of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD) Available to: Individual and HUF

You may also, Like- AutomatedIncome Tax Revised Form 16 Part B for the F.Y.2020-21 as per New and Old Tax Regime[This Excel Utility prepare One by One Form 16 Part B]

 

Available to:

 

Section 80CCC: Deduction for contribution to certain predetermined Annuity Assets

 

Exemption: Up to Rs. 1,50,000 (Subject to overall furthest reaches of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1))

 

Available to:    Individual

 

Details: Contribution to certain predetermined Annuity Assets of LIC/another insurer (Subject to certain conditions).

 

Section 80CCD (1): Deduction for assessee's contributions to the annuity scheme of Central Government

 

Exemption: 10% of salary in case of representatives

 

10% of gross total income in case of others

 

(Subject to overall furthest reaches of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1))

You may also, Like- Automated Income Tax Revised Form 16 Part A &B for the F.Y.2020-21 as per New and Old Tax Regime[This Excel Utility can prepare at a time 50 Employees Form 16 Part A&B]

 

Available to: Individual

 

Section 80CCD (1B): Deduction for the store under a benefits scheme told by Central Government (NPS) up to Rs. 50,000. The exemptions in addition to deduction of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1)

 

Available to: Individual

 

Section 80CCD (2): Deduction for employer's contributions to benefits scheme told by Central Government

 

Exemption: (a) fourteen per penny., where such contribution is made by the Central Government (New)

 

(b) 10% where such contribution is made by any other employer

 

Available to: Individual

 

Section 80D: Deduction for Amount put resources into Health Insurance

 

Section 80DD: Deduction for expenditure incurred for the medical treatment of the award

 

Section 80DDB: Deduction for expenditure incurred for medical treatment of indicated diseases

 

Section 80E: Exemption from Interest paid on Educational Loan

 

Section 80EE: Exemption from Interest on loan for residential house property, sanctioned during F.Y 2016-17

 

Section 80EEA: Exemption from Interest on loan for acquiring residential house property, sanctioned during F.Y 2019-20

 

80G: Deduction for donations to certain assets, charitable foundations, and so forth

 

Section 80GG: Exemption allowed for Rent paid for residential accommodation

 

Exemption: Least of the accompanying shall be excluded from tax: a) Rent paid in the abundance of 10% of total income*;

 

b) 25% of the Total Income; or

 

c) Rs. 5,000 per month.

 

Total Income = Gross total income less long haul capital gains, short-term capital gains under section 111A, deductions under sections 80C to 80U (other than 80GG) and income under section 115A

You may also, Like- Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21 as per New and Old Tax Regime[This Excel Utility can prepare at a time 100 Employees Form 16 Part A&B]

 

Available to: Individual not receiving HRA

 

Details: Rent paid for furnished/unfurnished residential accommodation (Subject to certain conditions)

 

Section 80 TTA: Exemption from Interest on Savings Bank/Post Office  accounts

 

Exemption: 100% of the amount of such income subject to a maximum of Rs. 10,000

 

Available to: Individual and HUF (w.e.f. 01.04.2018 not available to Senior/Very Senior Residents)

 

Details: Interest in stores in saving account with a banking company, a mail centre, co-operative society engaged in the banking industry, and so on (Subject to certain conditions)

 

Section 80 TTB: Deduction for Interest on stores with Mail depots, Banks, Co-operative Banks (w.e.f. 01.04.2018)

 

Section 80U: Deduction for Persons with Disability

 

Section 16(ia): Standard Deduction

 

Exemption: Rs. 40,000 in lieu of Transport Allowance and Reimbursement of Misc. Medical Expenditure. Increased to Rs. 50,000/ - for A.Y 2020-21.

 

Available to: Salaried Tax Payers w.e.f. 01.04.2018

 

In case of any uncertainty/clarification, please visit the official site of Income Tax Department.

Download Automated Income Tax Revised Form 16 Part B for the F.Y.2020-21 as per New and Old Tax Regime[This Excel Utility can prepare at a time 50 Employees Form 16 Part B]

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The Lazy Income Tax Payers 's Way to Income Tax Form 16| With Automated Income Tax Revised Form 16 for the F.Y.2020-21

 

What is Form 16?

 

The Lazy Income Tax Payers's Way to Income Tax Form 16|Form 16 is a record or testament, given according to Section 203 of the Income-TaxAct 1961, to salaried experts in India by their particular employers.

 

It contains details with respect to the salary paid by the employer to the employee in a financial year and the income tax that has been deducted from the salary of the person by the payer.

You may also, like- Automated Revised Form 16 Part A&B and Part B for the F.Y.2020-21 [This Excel Utility prepare One by One Form 16 Part A&B and Part B]

The TDS, so deducted, by then an employer is kept with the Income Tax department and Form 16, thus, is the verification of the equivalent. Employers need to give Form 16 to their employees prior to fifteenth June of the financial year quickly following the financial year in which the income was paid and tax deducted.

 

Components of Form 16?

 

Every employee who is under the tax the section is required for Form 16. On the other side that an employee doesn't require the salary certificate form 16, he/she won't have to have Tax Deducted at Source (TDS)

You may also, like- Automated Revised Form16 Part -B for the F.Y.2020-21 [This Excel Utility prepare One by One Form 16 Part B]

 

Parts of Form 16

 

Form 16 is sub-isolated into the accompanying two parts which include:

 

•           Form 16 Part An and

 

•           Form 16 Part B

 

Form 16 Part A

 

Part A gives the outline of tax gathered by the employer from the salary income, for the employee's benefit, and stored in the public authority's record. It is a certificate properly endorsed by the employer that they have deducted the TDS from the employee's salary and stored it with the income tax department. Form 16 Part A mandatory to download from the TRACES Portal of the Income Tax department.

 

You may also, like- Automated Revised Form16 Part B for the F.Y.2020-21 [This Excel Utility prepare at a time 50 Employees Form 16 Part B]

 

It contains the accompanying details:

 

•           Personal information of the employer as well as the employee. Particulars, for example, the individual and employer's name, address details, Container details of both, and employer's TAN details.

 

•           The Assessment Year (AY)

 

•           The time-frame for which the individual was utilized with the employer in the concerned Financial Year

 

•           Summary of the salary paid

 

•           Date of tax allowance from the salary

 

•           Date of tax store in the record of government

 

•           Summary of tax deducted and saved quarterly with the Income Tax Department

 

•           Acknowledgment Number of the TDS Installment

You may also, like- Automated Revised Form16 Part B for the F.Y.2020-21 [This Excel Utility prepare at a time 100 Employees Form 16 Part Part B]

 

Form 16 Part B

 

Part B is a united assertion covering details with respect to the salary paid, some other income as uncovered by the employee to his/her association, a measure of tax paid, and tax due assuming any. Form 16 Part B  is an annexure to Form 16 Part A. It addresses the information alongside the exceptions and derivations relevant consequently. Employee details, for example, name and Container are referenced even in Part B.

 

It contains the accompanying information:

 

•           Total Salary Got

 

•           Exemptions Permitted U/s 10(5) 10(10) 10(10A) 10(10AA) 10(13A), measure of some other exclusion u/s 10.

 

•           Standard derivation permitted under section 16 of the Income Tax Act.

 

•           Income (or acceptable misfortune) from house property detailed by employee offered for TDS, Income under the head Different Sources offered for TDS.

 

•           Deductions from Salary: Section 80 C/80 CCC/80 CCD/80D/80E/80G/80TTA and other relevant sections are given. The details for all these allowances require to be put together by the employee alongside the fundamental supporting records to the employer.

 

•           Net Taxable Salary.

 

•           Education Cess and overcharges assuming any.

 

•           Rebate under Section 87, if appropriate.

 

•           Relief under Section 89, assuming any

 

•           Total the measure of tax payable on income.

 

•           Tax deducted and the equilibrium tax due or discount appropriately.

 

The the linkage between Form 16 and Form 26AS?

 

Form 26AS will consolidate all the tax deducted from your salary or potentially non-salary income and store with the specialists concerned. Along these lines, tax allowances that are appeared in Form 16/Form 16 A can be cross-checked and confirmed utilizing Form 26AS. Preferably, the TDS sums reflected in Form 26AS and Form 16/16A ought to consistently coordinate. On the off chance that there are disparities, the Income Tax Department considers the TDS figures according to the Form 26AS as it were.

Download Automated Revised Form 16 Part A&B for the F.Y.2020-21 [This Excel Utility prepare at a time 50 Employees Form 16 Part A&B]

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