investmentdeclarationnotes2013_14

7/30/2019 InvestmentDeclarationNotes2013_14

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INVESTMENT DECLARATION FORM FOR THE FINANCIAL YEAR 2013 - 14

IMPORTANT

1. Please note that investments /payments made during the year April 2013- March

2014 alone will be considered.

2. Please note that investment in Kisan Vikas Patra (KVP) is not eligible for deduction u/s

80C.

3. Donations to Charitable or Religious Trust: Sec.80 G benefit can be claimed only at

the time of filing your Income Tax returns. The employer cannot give the benefit at

the time of deducting Salary TDS.

4. Section 80 DDB (Deduction for Medical Treatment): Section 80 DDB benefit can be

claimed only at the time of filing your Income Tax returns. The employer cannot give the

benefit at the time of deducting Salary TDS.

5. Interest paid on Housing Property Loan: The construction of the house should be

completed and the house should be occupied (either by self or let out) within thefinancial year in order to get the benefit under Sec.24.

6. In case the investment declaration forms are not received by the due date, TDS will

be deducted based on the assumption that there is no investment.

Relevant provisions of the Income Tax Act, 1961 with reference to Salary Income

DEDUCTIONS AVAILABLE UNDER INCOME TAX ACT FOR SALARIED EMPLOYEES

1.HRA Exemption u/s 10(13A):An employee who owns a house in his/her name is not eligible to claim this exemption.

An employee who does not pay rent for his/her accommodation is not eligible to claim HRAexemption. Exemption under this section is allowed for those employees who pay rent for

their accommodation. The exemption is restricted to a minimum of:

i. Actual HRA receivedii. Actual Rent paid Less 10% of the salaryiii. 50% of the salary if the rented house is situated at Mumbai, Chennai, Kolkata and

Delhi and 40% of the salary in any other case.

HRA received, which is in excess of the above limits, is taxable.

Salary for this purpose means, Basic, DA, ADA, FDA, VDA.


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Documents required to avail HRA Deduction

Copy of House Lease Agreement orRent receipts given by LandlordProof Of Rent Paid Should Give Details Of:

Name and address of landlordAddress of rented premises for which rent paidPeriod for which rent paid & the amount or Lease AgreementNote :

If the Annual Rent paid by the employee exceeds Rs.2,00,000 per annum, it is mandatory forthe employee to report the PAN Number of the Landlord.

In case the landlord does not have a PAN Number, a declaration to this effect from the

Landlord, along with the Complete Name and Address of the Landlord should be filed by the

employee.

2. Interest paid on Housing Loan for self-occupied property u/s 24

Interest paid on housing loan can be set off against salary income. To avail thisbenefit, the house should not be vacant throughout the year.

House property should be in the name of the employee who claims this deduction. If the capital for acquisition/construction of house is borrowed before 01-04-1999 the

salary income can be set off against interest paid subject to maximum of 30,000 per

annum. If the capital for acquisition/construction of house is borrowed on or after 01-04-1999

and the construction/purchase is completed before 01/04/2013, the salary incomecan be set off against interest paid subject to maximum of 1,50,000 p.a.

If the loan taken for reconstruction or repairs or renewal of existing house, then themaximum deduction can be allowed only to the extent of 30,000 per annum.

3. Interest paid on housing loan for let out property u/s 24

Rent received from let out property should be disclosed as an income. From

the above income following deductions can be claimed.

Property tax paid during the year for the let out property. 30% of Net Annual Value (Rental Income less Property tax) can be claimed for repairs

and maintenance of the house irrespective of the expenses incurred. Interest payable on housing loan for let out property can be claimed as deduction

without any upper limit.

Employer has to set off the loss from house property with the salary income whilecalculating the tax liability of the employee.

Documents required for availing Interest Deduction:

Statement/Certificate from Financial Institution / Bank for the interest payable onhousing loan giving the breakup of interest and principle repayment and the date of loansanction.

Dully Signed Declaration Form with details of House Property whether it is self-occupiedor let out.


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4. Deductions allowed under Section 80 C:

a. Payment of Life Insurance Premiums for Self/Spouse/Children.b. Contribution to Public Provident Fund for Self/Spouse/Children.c. Contribution to Unit Trust Of India by Self.d. Investments in National Savings Certificate only in the name of Self.e. Interest accrued on National Savings Certificate (Copy of NSC Certificates of the

previous years have to be submitted to get rebate on NSC accrued Interest).f. Principal repayment on Housing Loan and Stamp Duty / Registration Charges paid for

the House property during the first year of investment.g. Contribution (including Voluntary Cont.) to Employee Provident Fund.h. Investments in National Savings Scheme (NSS).i. Tax Saving Bonds / Infrastructure Bonds.

j. Investments in Mutual Fund or Equity Linked Saving Scheme / Systematic InvestmentPlan (SIP).

k. Child Education Expenditure.l. Tax Saving Fixed Deposits (With Minimum Lock in period of 5 Years).m.Investment in Post Office Time Deposits (With Minimum Lock in period of 5 Years).n. 14. Senior Citizen Saving Scheme 2004

o. Post Office Time Deposit Accountp. New Pension Scheme (NPS)Maximum investments under the above investment schemes are restricted to1,00,000 per year.

Documents required to claim rebate:

Copy of Proof of Investment made during the current financial year.5. Investment in Pension Scheme of LIC or any other insurer (eg Jeevan Suraksha

of LIC or any other Pension Plan) u/s 80 CCC

Premium paid for pension scheme is allowed as deduction from Total Income.

Documents required:

Copy of current year premium receipt6. Investment in pension scheme created by Government of India u/s 80CCD

Note:

The maximum investment limit allowed under the above sections 80C, 80CCC, 80CCD is1,00,000 per year.


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7. Rajiv Gandhi Equity Saving Scheme (RGESS) u/s 80 CCG

Salient features of this scheme:

Deduction is available to a resident individual, if his gross total income does notexceed 12 lakhs

The assesse is a new retail investor The investment is locked-in for a period of 3 years

The maximum Investment permissible under the Scheme is Rs. 50,000 and the investorwould get a 50% deduction of the amount invested from the taxable income for that year.

The amount of deduction is 50% of amount invested in equity shares. However, the amount of

deduction under this section cannot be more than Rs.25000.

8. Mediclaim Insurance u/s 80 D

Medical Insurance premium is exempt up to 15,000/- per year for self, spouse &dependent children. An additional 15,000/- is exempt towards premium for parents (evenif they are not dependent). If the parent(s) are above 60 years of age, an extra 5,000/-

can be claimed.Note:Preventive Health Checkup for self, spouse, dependent children or parents are alsoallowed to the extent of Rs.5,000/- per year (which is part of overall above limits).

Documents required:

Current Year Receipt for payment of mediclaim insurance premium.9. Deduction in respect of maintenance, including medical treatment, of a disabled

dependant u/s 80 DD

The amount of deduction is

50,000 to a person with disability, and 1,00,000 to a person with severe disability

10. Deduction in respect of person with disability u/s 80U

Deduction is allowed to a person suffering from a permanent physical disability or mentalretardation under sec 80U. The amount of deduction is:

50,000 to a person with disability 1,00,000 to a person with severe disability.

11. Repayment of Education Loan u/s 80E

The total amount of interest paid for self and dependents towards education loan takenfor higher education extended to all courses pursued after Senior Secondary Examination willbe allowed as deduction over a period of 8 years or until the interest is paid by the assesse infull, whichever is earlier.

Documents required to claim deduction:

Proof for repayment of educational loan for the amount claimed


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Introduction of new section 80EE:

Additional deduction of interest on housing loan of up to Rs.100000 to first time home buyers

Section 80EE is proposed to be enacted so as to allow to an individual, a deduction of up to Rs.100000 in

respect of loan taken from a financial institution (banking company or housing finance company) of up to

Rs.2500000 between 1st April, 2013 and 31st March, 2014 to acquire a residential property valued up to

Rs.4000000, provided assesse does not own any residential house property as on the date of sanction of loan

It is also proposed that if the deduction entire of Rs.100000 as above could not be claimed in FY 2013-14,

then the balance can be claimed in FY 2014-15.

It may be noted that the above deduction is over and above the existing entitlement of housing loan interest

deduction of Rs.150000. However, while the existing deduction of up to Rs.150000 can be of interest on

housing loan taken from anyone, the aforesaid deduction can be allowed only on housing loan taken from

financial institution.

The following conditions are to be satisfied to claim deduction under section 80EE:-

The loan is sanctioned by the financial institution during the period beginningon 1st April, 2013 and ending on 31st March, 2014

The amount of loan sanctioned for acquisition of the residential house propertydoes not exceed twenty-five lakh rupees;

The value of the residential house property does not exceed forty lakh rupees;The assessee does not own any residential house property on the date of sanction of the loan.

Introduction of new section 87A:

Rebate of Rs.2000 for individuals having total income up to Rs.500000

(87A) An assessee, being an individual resident in India, whose total income does not exceed

Rs.500000, the rebate shall be equal to the amount of income tax payable on the total incomefor any assessment year or an amount of Rs.2000, whichever is less.

Consequently any individual having income up to Rs.220000 will not be required to pay any tax

and every individual having total income above Rs.220000 but not exceeding Rs.500000 shall

get a tax relief of Rs.2000.


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The following are the amendments made in the Finance Bill, 2013 for Salaried ClassAssessees:

The Revised Tax Slabs are:

Inco me Slab

Up to 2,00,000

From 2,00,001 - 5,00,000

From 5,00,001 - 10,00,000

Above 10,00,000

Rates of Income Tax

NIL

10% of Income over 2,00,00030,000 + 20% of Income over 5,00,000

1,30,000 + 30% of Income over 10,00,000

In the case of Women Assesses, not being senior citizen, the Income Tax Slab is:

Income Slab

Upto 2,00,000

From 2,00,001 - 5,00,000

From 5,00,001 - 10,00,000

Above 10,00,000

Rates of Income Tax

NIL

10% of Income over 2,00,000

30000 + 20% of Income over 5,00,000

1,30,000 + 30% of Income over 10,00,000

In the case of Senior Citizen who is of the age of sixty years or more but less thaneighty years, the Income Tax Slab is:

Income Slab

Upto 2,50,000

From 2,50,001 - 5,00,000

From 5,00,001 - 10,00,000

Above 10,00,000

Rates of Income Tax

NIL

10% of Income over 2,50,000

25000 + 20% of Income over 5,00,000

1,25,000 + 30% of Income over 10,00,000

In the case of Senior Citizen who is of the age of eighty years or more , the IncomeTax Slab is

Income Slab Rates of Income Tax

Upto 5,00,000 NIL

From 5,00,001 - 10,00,000 20% of Income over 5,00,000

Above 10,00,000 1,00,000 + 30% of Income over 8,00,000

Surcharge @ 10% on tax payable has been introduced with effective from FY 2013-14, for the totalincome exceeding Rs.1 crore

Education Cess @ 3% continues on the Total Tax Due