Who are not get HRA Allowances they can get House Rent Exemption U/s 80GG,with Automatic HRA Exemption Calculator

 Download Automatic House Rent Exemption Calculator

Under Section 80GG, an Individual can claim the deduction for the rent paid even if he does not get House Rent Allowances. Not many people are aware of this deduction.

Section 80GG allows the Individuals to a deduction in respect of house rent paid by him for his own residence.
Such deduction is permissible subject to the following conditions:-

• The Individual has not been in receipt of any House Rent Allowance from his employer specifically granted to him which qualifies for exemption under section 10(13A) of the Act;
• The Individual files the declaration in Form No. 10BA. Download Excel Based Form 10 BA
• The employee does not own:

1.  A)  any residential accommodation himself or by his spouse or minor child or where such Individual is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or

B ) at any other place, any residential accommodation being accommodation in the occupation of the Individual, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

• He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income, subject to a ceiling of 25% thereof or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG. In other words, eligibility will be the least amount of the following:-

2)

1. Rent paid minus 10 percent the adjusted total income.
2. Rs 2,000 per month.
3. 25 percent of the adjusted total income.

• The deduction will also not be available to an assessee if any residential accommodation is owned by the assessee at any other place, which he is occupying, and the concessions in respect of self-occupied house are claimed by him for that property. In such a case, no deduction will be allowed in respect of the rent paid, even if the person does not own any residential accommodation at the place where he ordinarily resides.

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Section 80GG – Save Tax on House Rent Paid up to 60,000/- P.A. With Automated All in One TDS on Salary for Non-Govt employees for F.Y.2017-18

Download Automated All in One TDS on Salary for Non-Govt (Private) Employees for F.Y.2017-18 & A.Y.2018-19 [ This Excel Utility can prepare at a time your Individual Tax Compute Sheet + Individual Salary Structure + Automatic H.R.A. Exemption U/s 10(13A) + Automatic Form 16 Part B + Automatic Form 16 Part A&B + Automatic Form 12 BA]

If you don’t get HRA

What if you don’t get HRA in your salary from your employer? Well, even if you don’t get such allowance, Income Tax Act has still got you covered. There is less known provision under the Act which allows employed individuals who do not get HRA to claim tax benefit. Section 80GG of the Income Tax Act, 1961 has provisions for such individuals to claim the tax deduction if the house to rent for their accommodation. To claim benefits under this section, one must satisfy the following conditions:

·                  The individual, who is an employee, should not receive HRA or any equivalent allowance from his employer as salary.

·                  The employee, his wife or his minor child should not have the ownership of the property where he resides.

·                  If the employee is part of a HUF, he or his family should not own the place of his residence.

·                  In case the employee owns a place other than his rented place of accommodation then he should not be claiming tax benefit on such property as self-occupied property. Such property would be deemed to be let-out.

Documents Required

·                  Employee needs to furnish documents like rent agreement and rent receipts.

·                  If your annual rental payment exceeds Rs. 1 lakh then you also need to furnish PAN details of your landlord.

·                  To claim deduction under section 80GG, he also needs to file Form 10BA. This form proves that the employee is not claiming the benefit of self-occupied property in any other location or the location where he is employed.

Amount of Deduction Available

Under section 80GG, you can claim least of the following as tax benefit:

·                  Rs. 60,000 per year (i.e. Rs. 5,000 per month)

·                  An amount equal to the total rent paid minus 10% of the total income

·                  25% of adjusted total income of employee

So, the least of the above-mentioned amount is available as tax deduction irrespective of whether the house is furnished or semi-furnished.

Income Tax deduction under section 80GG is a less known and less claimed deduction. The main reason behind this is that most of the employers give HRA as part of the salary to their employees.

We can understand its calculation with the help of an example. Let’s assume that Mr. Arjun gets an annual salary of Rs. 3,00,000 after all deductions out of which he pays an annual rent of Rs. 1,50,000. In this case, the tax deduction allowed to him would be least of the following:-

·                  Rs. 5,000 per month i.e. Rs. 60,000 per annum

·                  Rent paid i.e. Rs. 1,50,000 minus 10% of total income i.e. Rs. 30,000 = Rs. 1,20,000

·                  25% of total income i.e. Rs. 75,000

The least of the above can be claimed by him as a tax deduction. So, Rs. 60,000 would be allowed as a deduction under section 80GG for the complete Financial Year. Remember that filing Form 10BA is also needed to avail this deduction.

Here is a sample format of Form 10BA for your reference in case you want to claim this deduction.

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Under Section 80GG, an Individual can claim deduction for the rent paid even if he does not get House Rent Allowances. Not many people are aware of this deduction.

Section 80GG allows the Individuals to a deduction in respect of house rent paid by him for his own residence.

Such deduction is permissible subject to the following conditions:-

• The Individual has not been in receipt of any House Rent Allowance from his employer specifically granted to him which qualifies for exemption under section 10(13A) of the Act;
• The Individual files the declaration in Form No. 10BA. Download Excel Based Form 10 BA
• The employee does not own:

1.      A)  any residential accommodation himself or by his spouse or minor child or where such Individual is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or

       B ) at any other place, any residential accommodation being accommodation in the occupation of the Individual, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

• He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income, subject to a ceiling of 25% thereof or Rs. 5,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG. In other words, eligibility will be the least amount of the following:-

2)

1.     Rent paid minus 10 percent the adjusted total income.

2.     Rs 2,000 per month.

3.     25 percent of the adjusted total income.

• The deduction will also not be available to an assessee if any residential accommodation is owned by the assessee at any other place, which he is occupying, and the concessions in respect of self-occupied house are claimed by him for that property. In such a case, no deduction will be allowed in respect of the rent paid, even if the person does not own any residential accommodation at the place where he ordinarily resides.

Download Automatic House Rent Exemption Calculator

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What Are The New Income Tax Rules? Check It Out Here, Plus All in One for Non-Govt Employees for F.Y. 2017-18 and A.Y. 2018-19

A new financial year started on April 1. The rules of last year are not applicable now. The new financial regulations announced by Arun Jaitley in Budget 2017 will be valid from April 1, 2017. The Finance Bill was passed by the Lok Sabha on Wednesday, completing the budgetary exercise for 2017-18. Make a note of the following changes in Tax law that come into effect from 1-4-2017: 

Download Automated All in One TDS on Salary for Non-Govt Employees for the Financial Year 2017-18 & Assessment Year 2018-19 [ This Excel Utility can prepare at a time Individual Salary Sheet + Individual Tax Computed Sheet + Automatic H.R.A. Calculation + Automated Form 16 Part A&B and Form 16 Part B + Automated Form 12 BA]

Limit for payment by cash Limit for payment of expenses by cash (both, capital and revenue expenditure) reduced from Rs 20,000 to Rs 10,000 per day in aggregate per person. Capital expenses paid in cash beyond the said limit will not be taken into account for depreciation purposes. However, the cash payment limit for lorry freight etc. remains the same at Rs 35,000.

Conditions No person shall receive an amount of two lakh rupees or more, by cash (Sec. 269ST) - in aggregate from a person in a day; or in respect of a single transaction; or in respect of transactions relating to one event or occasion. The penalty for violation of above is to be a sum equal to the amount of such receipt.

Tax exemption limit Tax Exemption limit is Rs2,50,000/- (same as earlier). After that, up to Rs 5 lakh, Tax Rate is 5% (earlier it was 10%). A tax rebate of maximum Rs 2,500 will be allowed, for total income up to Rs 3.50 lakhs.

Surcharge Individuals having total income exceeding Rs 50 lakhs but below Rs.1 crore, are to pay surcharge @ 10% of the tax. Those having total income exceeding Rs 1 crore shall continue to pay surcharge @ 15%.

Payment of Rent Rs 50,000 per month by any Individual or HUF (not subject to Tax Audit requirements) - deduct TDS @ 5%

Donations made exceeding Rs 2,000 will not be eligible for deduction under section 80G unless these are made using modes other than cash. Consequently, trusts accepting 80G donations may advise their donors to give donations exceeding Rs 2,000 vide cheque / RTGS / digital modes.

Late fee From the financial year 2017-18, if Return is not filed within due date, the late fee of Rs 5000 for delay up to 31st December, and Rs 10000 after that.

Aadhaar mandatory Every person who is eligible to obtain AADHAR number should quote such number, on or after 1 July 2017, in the Return of income. Furthermore, every person who has been allotted PAN as on 1st July 2017 must intimate the AADHAR number to the Tax Authority, failing which, PAN allotted to such person shall be deemed to be invalid. Kindly note that linking of AADHAR with PAN is not possible unless name as per AADHAR and PAN match perfectly. Hence, please take steps to rectify your name as per AADHAR to match as per PAN. Where Sec.12AA registered trusts modify their objects clause, they need to apply within 30 days to CIT for approval of the modified clauses.

Source from Goodreturns.in

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