Allowance is money that you get from your employer for meeting some particular expenses such as transport, HRA. All these allowances are taxable unless it is specifically exempted under income tax act. There are two types of allowance as defined under income tax act; House Rent Allowance Prescribed Allowance House rent allowances are exempted from income tax based on … [Read more...] about Is Your Salary Allowance Taxable in India
Income tax
How to deduct correct TDS from salary and non salaries items
Income Tax Act directs specified persons to deduct tax from payments which has been specifically required to deduct income tax at the rates specified there in. Different rates are specified for different type of payments to deduct TDS. TDS from salary is deducted by an employer from the salary of employee and deposited in the central government account against the PAN of the … [Read more...] about How to deduct correct TDS from salary and non salaries items
How salary is defined under Income Tax Act
The term salary is defined under section 17 (1) of the income tax act to include following items as salary; Wages Any annuity or pension Any gratuity Any fee, commission, perquisite or profit in lieu of salary or in addition to any salary or wages Any advance of salary Any payment received by an employee in respect of any period of leave not availed by him The … [Read more...] about How salary is defined under Income Tax Act
Debunking 5 common income tax return efiling Myths
Efiling of your income tax return has become mandatory if your taxable income generated during the financial year 2012-2013 has crossed Rs. 5, 00,000. Earlier to this the limit was Rs. 10, 00,000. By doing this change central board of direct taxes has widened the scope of e filing of IT return. Due to this change a salaried person having taxable income of more than Rs. 5, … [Read more...] about Debunking 5 common income tax return efiling Myths
How Taxable Income Is Derived In Income tax
All incomes according to IT act have been divided into 5 major heads to get it taxed in India. If it is falling under any one of these 5 heads then that will be taxable under that head and can not be taxed under any other head. Tax is charged on the total income that is generated during the financial year (previous year) starting from 1st of April to 31st March. Income … [Read more...] about How Taxable Income Is Derived In Income tax
Income tax liability while working for more than one employer
Any amount due or received by an employee from an employer or former employer during the financial year ending 31st march will be chargeable to income tax in the next assessment year following the financial year. For example if your financial year ends at 31st march 2013 (i.e. income generated during the financial year starting from 1st April 2012 to 31st march 2013) and an … [Read more...] about Income tax liability while working for more than one employer
How to claim income tax Deduction on rent paid – Section 80GG
Section 80GG of income tax act, 1961 is applicable to a self employed person, businessman and even to a salaried person for the expenses that they incur towards house rent. If you are not receiving house rent allowance from your employer or your salary does not include house rent allowance then you are eligible to claim income tax deduction under section 80GG for your … [Read more...] about How to claim income tax Deduction on rent paid – Section 80GG
Frequently Asked Questions on House Rent Allowance exemption
House rent allowance is paid by an employer to his employee. The employee as per the eligibility under section 10 (13A) can claim exemption from House Rent Allowance (HRA) received every month. A self-employed person did not get a salary from the employer. Therefore, he can not claim an exemption under section 10 (13A) of the income tax act 1961. However, a self-employed … [Read more...] about Frequently Asked Questions on House Rent Allowance exemption
Example for calculating Exemption for House Rent Allowance
Mr. X is working in a non-metro city and receives a basic salary of Rs. 14, 500, Dearness Allowance as Rs. 3000 and does not receive any commission. If he has paid Rs. 3000 as house rent while receiving house rent allowance of Rs. 4000. Let us calculate what will be his taxable house rent allowance; ParticularsCalculationAmount (Rs.)Actual house rent allowance4000*1248, … [Read more...] about Example for calculating Exemption for House Rent Allowance
House rent Allowance or HRA Exemption U/S 10 (13A)
House rent allowance granted by an employer to his employee is tax exempted to the extent provided under section 10 (13A) of income tax act 1961. Employees in India, receive house rent allowance from their employer every month as a part of their terms and conditions of employment. As per the Income Tax Act provision, HRA is partly exempted if certain terms and conditions … [Read more...] about House rent Allowance or HRA Exemption U/S 10 (13A)