Automated Income Tax TDS on Salary All in One for Govt & Non-Govt employees for F.Y.2017-18, with Claim Tax Benefit on both HRA & Home Loan?

Can you claim Tax Benefit for both HRA & Home Loan? – A question which is often asked by many taxpayers. This is mainly because many employers do not allow both tax benefits together in certain situations. Unfortunately, this is NOT the right thing to do.

Both HRA and Home Loan Interest tax sections are unrelated. You claim tax benefit on HRA (House Rent Allowance) under section 10(13A) while the tax benefit on payment of interest on home loan comes under section 24(b). However, there can be issues if both the sections are used together with the intent of tax evasion.

We can have four situations for people claiming HRA & Home Loan tax benefit.

1.                 Rented house in place of employment and own house in different city

2.                 Own flat in city of employment and stay in rented house in the same city

3.              Own flat in city of employment and stay with parents/siblings in the same city and pay the rent

4.                  Rented house in different city and own house in place of employment

Click here to Download Automated Income Tax Preparation Excel Based Software for Govt & Non-Govt employees for the Financial Year 2017-18 as per new Tax Slab Rate. [ This Excel utility can prepare at a time Individual Salary Statement + Individual Salary sheet + Individual Salary Structure for both of Govt & Non-Govt employees Salary Pattern + Automatic H.R.A. Calculation U/s 1013(1) + Automated Arrears Relief Calculator from F.Y.2000-01 to 2017-18 with Form 10E + Automated Form 16 Part A&B and Part B for F.Y.2017-18]

Salary Structure for Govt & Non-Govt employees 

1. Rented house in place of employment and own house in different city

This is a very easy situation to handle. You can easily claim tax benefit on both and NO employer has an issue with this arrangement.

2. Own flat in city of employment and stay in rented house in the same city

This is a tricky situation. The first logical question which comes to mind is why would any person owning a house in the same city stay on rent? Most employers have an issue with this arrangement and may not give tax benefit on both HRA & Home Loan.

But legally you can claim tax benefit on both if you can give a valid reason for this arrangement. The reasons can be it's more convenient to stay. For e.g. your flat is on the outskirts with almost negligible public transport, you might not want to live there and rather stay close to your place of employment. The other reason could be the owned house is smaller for the size of the family. There are misconceptions that there should be the minimum distance between two houses. All this is the myth! All you need a genuine reason to stay on rent.

Also if you move to your new owned house in the middle of the financial year, it's a genuine thing to do and you can claim HRA for the period you stayed on rent and house loan benefit for the entire year. In case your employer is not ready to give a tax benefit to both – you can claim HRA tax benefit from the employer and claim tax benefit on Home Loan while filing your Income Tax return. 

The other question is should the owned house be assumed to have notional rent? The answer is No. If you receive actual rent then show, only then you need to pay tax on that.

3. Own flat in city of employment and stay with parents/siblings in the same city and pay the rent

The situation is similar as discussed above with the difference being your landlord or landlady is your close relative of parents/siblings. Any such rental transaction is full of suspicion and so you should be very careful if you use this for tax saving. You must do the following:

1.                 Actually, pay the rent by Cheque /ECS etc. and receiver should give rent receipt for the same.

2.                 The landlord/lady should show this rent as “income from house property” and pay taxes on the same.

There have been cases where rent paid to close relatives have been denied tax benefit by income tax department as there was NO evidence of the actual transaction. So stay careful.

4. Rented house in different city and own house in place of employment

There may be the case where you have rented a place where your spouse/parents stay (in a different city) while you own a house in the city of your employment and stay there. In this case, you cannot claim HRA tax benefit as HRA is paid for staying on rent for purpose of employment. However, you can easily claim home loan tax benefit.

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Prepare at a time Tax Compute Sheet + Individual Salary Sheet + Automatic H.R.A.Exemption Calculation + Automated Arrears Relief Calculator with Form 10E + Automated Form 16 Part A&B and Part B for F.Y.2017-18

Highlights of Income-tax Slab 2017-18

·             The Slab for Tax-free Income is the same. For FY 2017-18, No Tax on income up to Rs.2.5 lakhs.

·             The Government has reduced the tax rate for the income up to Rs 5 lakhs. The new tax rate for income between 2.5 lakhs to 5 lakhs is 5%.

·             The Upper limit to claim income tax deduction under section 80C is still at 1.5 lakhs.

·             The government has reduced the income tax rebate. Now, it is Rs 2,000 instead of Rs 5000.

·             The Upper limit to get the rebate is also reduced. Now, you would be eligible for the rebate if income is less than Rs 3.5 lakhs. Earlier this limit was at 5 lakhs.

·             The threshold for surcharge came down. Now, you have to pay a surcharge if your taxable income is more than 50 lakhs (5 million rupees). Earlier, this limit was 1 crore.

Tax Slab for Individuals

This is the general income tax slab. This slab is applicable to those who are less than 60 years old. It means if you born on or after 1^ST April 1957, refer to the following tax rates. This slab rate is also applicable to Non-Resident Indian, Hindu undivided family (HUF), Association of Persons, Body of Individuals and Artificial Judicial Person.

Income Tax Slab for 2017- 18	Tax Rate	Details
Income Up to Rs. 2,50,000	0
Rs. 2,50,000 –  Rs. 5,00,000	5%	On Amount above and over 2,50,000
Rs. 5,00,000 – Rs. 10,00,000	20%	On Amount above and over 5,00,000
Above Rs. 10,00,000	30%	On Amount above and over 10,00,000

Click here to Download Automated All in One TDS on Salary for Government & Non-Government Employees For Financial Year 2017-18 with New Tax Slab for A.Y.2018-19

Feature of this Excel Utility:-

1) Automated Individual  Tax Compute Sheet

2) Individual Salary Structure for both of the Government & Non-Government Employees

3) Automatic House Rent Exemption Calculation U/s 10(13A)

4) Automated Arrears Relief Calculation with Form 10E from F.Y. 2000-01 to F.Y.2017-18

5) Automated Income Tax Salary Certificate Form 16 Part A & B for F.Y.2017-18

6) Automated Income Tax Salary Certificate Form 16 Part - B for F.Y.2017-18

Main Data Sheet for details of Employer & Employees

Individual Salary Structure with Tax Deduction all sections

Automated Tax Computed Sheet

House Rent Exemption Calculation 

Automated Arrears Relief Calculation with Form 10E

Automated Form 16 Part A&B

Automated Form 16 Part B

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Everything you wanted to know about Advance Tax and Penalties under it, With Automated All in One TDS on Salary for Govt & Non-Govt Employees for F.Y. 2017-18 with Arrears Relief Calculator including Form 10e

Are you paying your income tax only at the end of the financial year ? If your answer is YES, then understand that you are doing it in wrong manner. Today we will learn about Advance Tax which is not widely understood and its quite important thing to know. I know that majority of the people don’t follow this process and pay the income tax at the end of the year only (in fact on the last minute many times), But today you should understand if advance tax is applicable in case your case or not.

Download Automated Income Tax Preparation Excel Based Software for Govt & Non-Govt Employees for F.Y.2017-18.

Feature of this Excel Utility

• Automatic Calculation of your Income tax liability as per new Budget 2017 with New Tax Slab
• Automatic Calculation House Rent Exemption Calculation U/s 10(13A)
• Automatic Calculation Arrears Relief Calculation U/s 89(1) with Form 10E up to F.Y.2017-18
• Individual Salary Sheet 
• Individual Salary Structure as per Govt & Non-Govt Concerned Salary Pattern
• Automated Form 16 Part A& B for F.Y.2017-18
• Automated Form 16 Part B for F.Y. 2017-18
• Easy to install in any system, Just like an Excel File.

What is Advance Tax ?

As the name suggests, Advance Tax is part payment of your income tax liability in advance. So instead of paying everything at the end of the year, you pay it 3 times in a year in parts. The concept of Advance tax exists because govt wants you to pay income tax as you earn month after month and not at the end of the year. Advance tax is to be paid when your annual tax liability exceeds Rs 10,000 overall .

However important point is that Advance tax is applicable on your Income from sources other than your Salary like

• Interest on FDs or Savings bank deposits exceeding Rs. 10,000/-
• Rental income on House Property/properties
• Capital Gains on sale of Mutual Funds or Shares
• Income from any other sources not mentioned as above.

Which means that if you are a salaried employee who does not have any other income source and if your employer deducts TDS regularly, then Advance Tax is not applicable in your case. You don't need to worry about it.

On which date you have to pay Advance Tax ?

You have to pay advance tax 3 times in a year, which is 15th Sept , 15th Dec and 15th Mar and you should be paying not less than 30% , 60% and 100% of your income tax liability before these dates. Below picture makes it clear for you.

Which means that if your income tax liability for a year is Rs 1,00,000 , then you should pay advance tax of Rs 30,000 by 15th Sept, another Rs 30,000 by 15th Dec and rest Rs 40,000 by the end of 15th Mar

What if I don’t pay Advance Tax on time ?

If Advance Tax is applicable in your case, then you should be paying it on time, but if you don’t pay it on time, then you can pay it on the next due date along with the interest. So those who have not paid the first installment (i.e. September 15) of Advance Tax (if applicable to you), then you can pay it together with second installment (on of before 15th Dec), but with interest on the first installment for deferment of the same by three month and if you are not paying it even on Dec 15th , then you can pay it by the end of the year along with the interest.

You will be charged with penalty under Sec 234B and 234C in case you don’tpay your advance tax on time. Let me quickly share what is sec 234C and sec 234B

Understanding Penalty under Section 234C

Lets first understand sec 234C. Under this section, if you don’t pay your installments of advance tax on time, then you are charged 1% of simple interest for next 3 months on the amount of shortfall. So this is the penalty to be paid because of DELAY!

Understanding Penalty under Section 234B

If your total advance tax paid by last due date (15th Mar) is less than 90% of your advance tax liability, then you will have to pay 1% interest on the balance amount each month until you complete the payment. which means that suppose your income tax liability is Rs 1,00,000 in total and if you have not paid anything upto 15th Mar, then you will be charged 1% on the outstanding balance (Rs 1 lac in this case) each month, unless you pay it, so if you pay in June , then you will be charged for 3 months penalty and it would be Rs 3,000 in total other than penalty under sec 234C.

Lets understand sec 234B and 234C with help of case studies. Lets assume that your total Income Tax payment for the year would be Rs 50,000, then as per rules of Advance tax, you should be paying

• Rs 15,000 by 15th Sept
• Another Rs 15,000 by 15th Dec
• And Rest 20,000 by 15th Mar

Now imagine you don’t pay any advance tax , then how much penalty you will pay under sec 234B and 234C under various situations ? Below I have explained 4 situations where you pay your full income tax on different dates. Check out how much penalty you will have to pay under these situations !

How to pay Advance Tax ?

Now comes the final question, that how can you pay your advance tax ? Most of the people are worried on this, as they feel that paying advance tax would be very tough or involves lots of hassles, but thats not correct. You can make payment of your advance tax in less than 5 min.

There are mainly two ways of payment advance tax.

1. Offline option

Almost all the banks have tie up with govt for accepting the advance tax from the taxpayers, you can go to the banks which have the tie up and fill up the challan number 280 and pay your advance tax to them.

1. Online Payment of Advance Tax

The other faster way to make payment online. Here is how it works

Step 1: Go to https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

2. Choose Advance Tax option and other details and make payment

When come to the next page, you will have to choose various details here. Make sure you choose your

• PAN Number (of utmost importance)
• Advance Tax (under Type of Payment)
• Email, Phone and Address details
• Assessment year 

Once you choose these details, you can then click on “proceed” and it will connect you to the Bank which you had selected, It will show you your NAME on the next page, so that you can confirm there was no mistake from you end, then you can make the payment online, and you will be able to print the receipt online (you will also get it on email)

Are you paying your Advance Tax

I guess, you are now clear about the advance tax and how its calculated . Its a good practice to pay your advance tax on time and do not delay it because it can mean a penalty of few thousand rupees in most of the cases. I know its tempting to delay the headache and complete the payment once in a year, a lot of people might be ok with paying some penalty, but then you also invite related problems with it. Pick your choice.

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Check if Your PAN Card is still Active? With Automated All in One TDS on Salary for Non-Govt Employees for F.Y.2017-18

Recently Government reported that it has canceled more than 11.5 lakhs PAN Card in a bid to weed out duplicate and fake cards.  As per Income Tax Laws, one person can hold only one PAN Card. However, it was found that there had been multiple duplicate PAN cards issued to the same person. Also, there were cases where a PAN card was allotted to the non-existent person. The government hopes to get rid of more such duplicate/forged PAN cards as they get linked to Aadhaar Number.

Download:- Automated Income Tax All in One TDS on Salary for Non-Govt employees for F.Y.2017-18 & A.Y 2018-19

Also as there have been so many PAN card cancellations, it's important for tax payers to check if their PAN card is still active as more often than not a few genuine people also suffer when such actions take place. Deactivating PAN can seriously jeopardize person financial transactions.

Below is step by step instructions and screenshot to check if your PAN card is still active.

Step 1:  Go to www.incometaxindiaefiling.gov.in and Click “Login Here” (It does not matter if you are registered user or not)

Step 2: On Menu Click on Services >> ‘Know Your PAN’ (there is NO need to Login)

Step 3: A small Form opens as shown below where you need to fill up details such as name, status, date of birth and contact number.

Download:- Automated TDS on Salary for Govt & Non-Govt Employees For F.Y.2017-18 & A.Y.2018-19 with Automated Arrears Relief Calculator U/s 89(1) with Form 16 from F.Y.2000-01 to 2017-18

Step 4: On the next page you have to enter OTP (One Time Password) received on the phone hit ‘Validate’.

In case there is more than one PAN card registered with the above details, a message appears saying “There are multiple records for this query. Provide additional information.” Enter some more details such as your father’s name.

Step 5: On the final page, if the PAN number is not duplicated, it will be indicated as ‘Active’ under the ‘Remarks’ column.

Download: Automated Arrears Relief Calculator U/s 89(1) with Form 10E from F.Y.2000-01 to F.Y.2017-18

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