Landlord’s PAN details required for HRA exemption – Mandatory Provision

PAN of Landlord is a must if your total annual rent paid exceeds Rs. one Lakhs during the financial year. If rent is equal or less than one lakh rupees then you need not provide PAN details of your landlord to your employer. As per recent notification issued by CBDT, to claim HRA exemption employees … Read More » "Landlord’s PAN details required for HRA exemption – Mandatory Provision"

House Rent Allowance Tips to lower your taxes – HRA

House rent allowance is a grant provided by the employer to the employee to meet the cost of living in a rented house. Its also referred to as HRA allowance. Such allowance forms part of salary that the employee receives from the employer every month. Income tax act provides tax exemption under section 10(13A) due … Read More » "House Rent Allowance Tips to lower your taxes – HRA"

Lunch and refreshment paid at office places are taxable

Employers in India are providing sodexo coupons or ticket restaurant coupons to their employees which can be used by such employees at eating points. Lunch, dinner or refreshment allowance paid by employer to employee is chargeable to income tax. Allowances provided at remote or offshore place Food and non alcoholic beverage provided by an employer … Read More » "Lunch and refreshment paid at office places are taxable"

Transfer of movable property to employee is taxable

Any movable property transferred by the employer to employee directly or indirectly is taxable in the hand of employee. If such movable property is transferred to any member of his/her household then also this provision will be applicable and the value of such movable asset will be treated as perquisite in the hands of employee. … Read More » "Transfer of movable property to employee is taxable"

Car expenses paid by employer to employee is taxable

Income tax liability on the employee’s car expenses are derived based on the purpose and ownership of the car. Followings are the provisions of income tax to calculate taxable amount of perquisite in the hands of employee. Car is owned by the employee and expenses are met by employer Where the car is owned by … Read More » "Car expenses paid by employer to employee is taxable"

How to derive Residential Status of an individual – section 6 of income tax act

Residential status of an individual decides whether the person is taxable or not in our country. You need to determine residential status of each year to know whether you are taxable in that year or not. To determine residential status you need to first find out whether you are a resident or non resident. If … Read More » "How to derive Residential Status of an individual – section 6 of income tax act"

Joining bonus – Income tax liability for receiving joining bonus

Joining bonus is an amount paid to a new employee by a company as an incentive to join them. Normally employer pays a lump sum amount at the time of joining to lure experienced peoples from the competition. According to income tax act, joining bonus will be treated as profit in lieu of salary and … Read More » "Joining bonus – Income tax liability for receiving joining bonus"

Income Tax Liability On Your Education Allowance

Any education allowance you received for your children will be exempted to the extent of following; Rs. 100 per month per child up to a maximum of 2 children to meet the cost of education and Rs. 300 per month per child up to a maximum of 2 children as hostel expenditure. If you have … Read More » "Income Tax Liability On Your Education Allowance"

What is profit in lieu of Salary – Section 17(3) of Income Tax Act

Any payment received or due in addition to your salary or wages from your employer is called profit in lieu of salary. Section 17 (3) of income tax act defines profit in lieu of salary as follows; “Profits in lieu of salary” includes— (i) the amount of any compensation due to or received by an … Read More » "What is profit in lieu of Salary – Section 17(3) of Income Tax Act"

VRS (Voluntary Retirement Scheme) – exemption from income tax

Voluntary retirement scheme (VRS) is an early retirement option given by the employer to its eligible employee by compensating them for taking a early retirement. Most of the public sector banks, PSU and private companies opted for voluntary retirement scheme (VRS) in past to restructure there organization. Voluntary retirement scheme (VRS) is also accepted by … Read More » "VRS (Voluntary Retirement Scheme) – exemption from income tax"