Exemption Rules & Tax Deductions

     Exemption Rules & Tax Deductions-House Rent Allowance

Discounted people living in a rented house can claim House Rental Allowance (HRA) to cut taxes. This may be partially or completely exempt from taxes. The reimbursement is for expenses related to the rented apartment. If you do not live in a rented apartment, this allowance is fully taxable.

How is the Tax Exemption From HRA Calculated?

 

The available deduction is at least the following:

  • Current HRA received;
  • 50% of [basic salary + YES] for those living in metro cities (40% for non-metro); or
  • The actual rental pay less than 10% of the base salary + YES

 Can I ask HRA and refusal of interest for a home loan?

Yes, you can claim compensation because it has no impact on your home loan refusal. Both can be argued.

Try our free HRA calculator to determine your HRA off. This calculator shows you which part of your HRA you need to pay taxes – for example, how much of your HRA is taxable and how tax-free.

When do you need a PAN owner?

If you have rented a house and you pay more than £ 100,000 per year – remember to get the owner’s trail or you may lose the HRA exemption. Landlords without a PAN must be prepared to give you a statement regarding circular number 8/2013 of 10 October 2013.

Tenants who pay for the renting of renters to the NRI must remember to seize the TDS of 30% before making a lease payment.

What if my Employer Doesn’t Provide me With HRA?

If you pay for rent for any furnished or non-occupied dwelling occupied by you, but you do not receive an HRA from your employer, you can still request a refusal and it will be under Section 80GG.

Conditions that must be met to request this deduction:

  • You are self-employed or paid
  • You have not received an HRA at any time during the year for which you are looking for 80GG

You or your spouse or your minor child or HUF whose member is – do not have accommodation facilities at the place where you currently live, you perform duties, jobs or do a business or profession.

Illustration

We can better understand the HRA calculation with the following example:

Mr. A, an employee of New Delhi, occupies a rental accommodation for which he pays a monthly rent of 15,000 rubles during the Financial Year (FY) 2017-18, that is, the year of assessment (AY) 2018-19 .. He receives a Basic Salary to Rs 25,000 per month together with the YES of the RS. 2000, which is part of the salary. He also receives an HRA of 100,000 RS from his employer throughout the year. Let us understand the HRA component that would be exempt from income tax during FY 2017-18.

Sl No Particulars Amount (in Rs) Amount (in Rs.)
1 Actual HRA received 1,00,000
2 Rent paid (15000 p.m. * 12 months)
minus(-)
10% of {(250 00p.m.*12) + (2000p.m.*12)} i.e.10% of Basic + DA		 1,80,000 1,47,600
32,400
3 50% of {(25000p.m.*12) + (2000p.m.*12)}(50% is considered as the accomodation is in Delhi) 1,62,000
4 Exempt HRA = lowest of 1,2,& 3 1,00,000

Therefore, in the above example, the entire HRA received from the employer is exempt from income tax.

How to Claim HRA When Living With Parents?

Let’s understand this with an illustration. Samiksha works at a MNC in Bangalore. His company provides him with a housing allowance. But she does not live in rented accommodation, but with her parents. How can she use this allowance? Samiksha can pay the rent to her parents and claim the allowance. All she has to do is make a lease with her parents and transfer money to them every month.

This way Samiksha can make a kind gesture and give back to her parents, and two, save some taxes. But remember: Samiksha’s parents will have to show the rent she paid on their tax returns. But as a family, you will save.

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GST Transitional Claims

GST Transitional Claims of Over Rs 1 Cr to be Scrutinised

While tax collections in July were Rs 95,000 cr, transitional credit claims are Rs 65,000 cr

As much as Rs 65,000 crore out of the nearly Rs 95,000 crore tax collections in July -the first month of GST -have been claimed as transitional credit by taxpayers, prompting the apex indirect taxes body the Central Board of Excise and Customs to order a scrutiny of all cases above Rs 1 crore.

The Goods and Services Tax (GST) regime, which kicked in from July 1, allows tax credit on stock purchased during the previous tax regime. This facility is available only up to six months from the date of GST rollout.

Central Board of Excise and Customs (CBEC)

The Central Board of Excise and Customs (CBEC), the body which deals with formulation and implementation of policy concerning the levy and collection of indirect taxes, in a letter dated September 11 has asked tax officials to verify GST transitional credit claims of over `1 crore. In the transitional credit form TRAN-1  filed by taxpayers along with their maiden returns for July, businesses have claimed a credit of over Rs 65,000 crore for excise, service tax or VAT paid before the GST was implemented from July 1.

As per the GST law, carry forward of transitional credit is permitted only when such credit is permissible under the law.

“The possibility of claiming ineligible credit due to mistake or confusion cannot be ruled out… It is de sired that the claims of ITC (input tax credit) of more than Rs 1 crore may be verified in a time-bound manner,“ the CBEC emphasised. It asked the chief commissioners to send a report to the CBEC by September 20 on the claims made by these companies.

CBEC

To ensure only eligible credit is carried forward in the GST regime, the CBEC has asked field offices to match the credit claimed with closing balance in returns filed under the earlier law. They are also required to check if the credit is eligible under the GST laws.

Till last week, as many as 70 % of 59.57 lakh taxpayers had filed returns for July, amounting to maiden revenue of Rs 95,000 crore under the GST regime.

However, out of this, the input tax credit (ITC) data for Central GST (CGST) claimed in TRAN-1 has shown that registered businesses have claimed over Rs 65,000 crore as transitional credit.

The government, in late August, had come out with form TRAN-1for businesses to claim credit for taxes paid on transition stock.

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Do you wanna Know more About GST returns and due dates?

GST returns and due dates

Assessment forms and their due date for documenting under the GST Law

GST Law: In this article, we will discuss the different returns that are required to be outfitted under the new GST law. What kind of data is required to be documented, who has the onus to record these profits and what are the courses of events for the accommodation of these profits? An arrival is a report that a citizen is required to document according to the law with the assessment regulatory specialists. Under the GST law, an ordinary citizen will be required to outfit three returns month to month and one yearly return. So also, there are separate returns for a citizen enlisted under the creation conspire, citizen enrolled as an Input Service Distributor, a man subject to deduct or gather the expense (TDS/TCS)

GST Returns and Due Dates

In the table beneath, we have given subtle elements of the considerable number of profits that are required to be recorded under the GST Law.

All of these profits are required to be documented carefully online through a typical gateway to be given by GSTN, non-government, private restricted organization advanced by the focal and state governments with the particular command to construct the IT framework and the administrations required for actualizing Goods and Services Tax (GST).