DEDUCTION ON REPAYMENT OF HOUSE LOAN UNDER SECTION 80C 1. Deduction for house loan /instalment available up to Rs 150000/- under section 80C (earlier limit was Rs.100000 /-) 2. The limit of Rs 150000 as above is total limit u/s 80C for all type of savings, plus section 80CCC(pension policy) plus u/s 80CCD (Contributory Pension Plan). Means the aggregate amount of deduction under above referred sections cannot exceed Rs. 1,50,000. 3. The payment of loan should be made towards cost of purchase/construction of new residential house property. 4. The house property income should be assessable in the hand of assessee in simple term assessee should be the owner of the house property. 5. The house loan should not be for addition or alteration to,or renovation or repair of house property 6. House construction must be completed before the end of the previous year (read details here) Completion of house means 1. completion certificate in respect of the house prope…

Interest on borrowed fund for self-occupied property

Source Interest on borrowed capital for self-occupied property The maximum amount of interest permissible in cases of  self-occupied property is Rs 200000 wef Ay 2015-16 (Rs.1,50,000 up to AY 2014-15) (in respect of funds borrowed on or after 01.04.1999). Please note that there is no upper (maximum) limit for interest on house loan claim for let out house property of deemed to be let out house property. If person have more than one house then only one house may be treated as self-occupied. Where a person has occupied more than one house for residential purposes, only one house, as chosen by him will be treated as ‘self-occupied’ and all other houses will be deemed to be let out .In regard to one house treated as used for own residential purposes throughout the year, Section 23 (2) (a) prescribes that annual value of such house shall be taken to be nil, if the conditions mentioned below are satisfied: •the property (or part thereof) is not actually let during w…

Income Tax Provisions at a Glance

Source Income Tax Provisions at a Glance as being circulated among the Members and being refreshment of the Income Tax Provisions: 1.Detailed information of Income Tax is available on 2.As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and Other Sources. 3.Salaried person must obtain Form 16 from his Employer Every Year. 4.Income Tax Return should be filed by considering Form 16 and other Income. 5.Transport Allowance is exempt up to Rs.1,600 per month. 6.30% Standard deduction is available on Income from House Property. 7.Income to be considered as deemed let out on second House property. 8.For self-occupied house property, deduction of Interest on Housing Loan is allowed up to Rs. 200,000/- and for other house property actual expenditure of Interest on Housing Loan is allowed. 9.Repayment of Principal amount of Housing Loan is deductible u/s 80C up to Rs. 150,000/-. 10.Tax A…

The concept and Tax effect of Switching in Mutual Funds

The concept and Tax effect of Switching in Mutual Funds Investing in Mutual Funds and their respective Tax effects
What is Switching? It is withdrawal of money from one scheme of Mutual Fund and investing in the other scheme of Mutual Fund without actually bringing withdrawal money to the Bank. Switching can ONLY be done among various schemes of a Mutual Fund Company, thus, only intra-Switching can be done in Mutual Funds. Example: If one has invested in some scheme of Reliance Mutual Fund then Switching of that amount can only be done among other schemes of Reliance Mutual Fund and NOT from one scheme of Reliance Mutual Fund to a Scheme of HDFC Mutual Fund.
As Switch Out is treated as redemption of Mutual fund and a switch in is treated as fresh investment in the Mutual Fund scheme.
Benefits of Switching: 1.You just need to submit a duly filled and signed Transaction form for the same. 2.No need to wait for Money to get credited to your Bank account because, in Switching, money is tra…

Must components in your Salary to minimize Income Tax

What does, however, ‘salary’ includes? Salary includes basic salary, bonus, wages, pension, fees, commission, gratuity, and encashment of leave salary, advances and arrears, profits in lieu of salary, allowances and perquisites.Salary income is taxable in the hands of an individual in the year of receipt or earning of salary income, whichever is earlier. Here are some of the safe components of your salary structure which can minimse your tax burden and help you plan your Salary Structure –
• If you live in a rented an accommodation and are entitled to a house rent allowance (HRA), the same is exempt to the extent of least of the following; 50 per cent of the basic salary, excess of rent paid over 10% of basic salary, actual HRA received. However, you cannot take benefit of HRA, if you live in a rent-free accommodation or live with your family or in your own house.House Rent Allowance (HRA) taxability, working / calculation
• Provident Fund: Under Section 80C, provident fund contributio…

Income Tax FY 2013-14 for salaried persons

Income Tax FY 2013-14 for salaried persons ASSESSMENT YEAR 2014-2015 RELEVANT TO FINANCIAL YEAR 2013-2014 1. Tax Slab for an Individual (resident & below 60 years) or HUF/AOP/BOI/AJP Income Slabs Tax Rates Total income up to Rs. 2 Lac 0% Tax Total income above Rs. 2 Lac and below Rs.5 Lac 10% on amount exceeding Rs. 2 Lac Total income above Rs. 5 Lac and below Rs.10 Lac 20% on Income exceeding Rs. 5 Lac + Rs. 30,000 Total income more than Rs. 10 Lac 30% on Income exceeding Rs. 10 Lac + Rs. 1,30,000 * u/s 87A the Individual having taxable income up to Rs. 5 Lac , can claim rebate, on the Actual Tax amount subject to a maximum of Rs.2,000 Where the Taxable Income exceeds Rs. 1 crore, Surcharge @ 10% of Income tax is applicable 2. Tax Slab for an Individual (resident & above 60 years but below 80 years)