Tax Exemption of Interest on Housing Loan – Sec 24B and U/s 80EE, With Automated All in One Tax TDS on Salary for F.Y.2016-17

Download All in One Income Tax Preparation Excel Based Software for Bihar State Govt employees for F.Y.2016-17 [ This Utility can prepare at a time Individual Tax Compute Sheet + Automatic H.R.A.Exemption Calculation + Automatic Form 16 Part A&B and Form 16 Part B for F.Y.2016-17]


Section 24 & 80EE of the income tax act provides deduction in respect of home loan interest.

Important points U/s 24B & U/s 80EE 

1) Interest on housing loan is allowable as the deduction on accrual basis not on paid basis (even if account books are kept on the cash basis) if capital is borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the house property. The deduction can be claimed for two or more housing loans.
2)Interest includes service fees, brokerage, commission, prepayment charges etc.
3)Interest/penalty on unpaid interest shall not be allowed as deduction.
4)The deduction shall be allowed irrespective of the nature of loan whether it is housing loan or personal loan from any person/institution.
5) If a person instead of raising a loan from a third party pays sale price to the seller in installments along with interest than such interest is also allowable.
6) Interest on borrowed money which is payable outside India shall not be allowed as deduction under section 24(b), unless the tax on the same has been paid or deducted at source and in respect of which there is no person in India, who may be treated as an agent of the recipient for such purpose.
7) For claiming deduction under this section, the assessee must be the owner or deemed owner of the house property and loan shall be in the assessee name.

Maximum Limit of deduction under section 24B

These limits of deduction are applicable assessee wise and not property wise. Therefore if an assessee owns two or more house property then the total deduction for that assessee remain same.
1) In Let Out Property/Deemed to be Let Out – No maximum limit
2) Self Occupied House (SOP) – Rs. 2,00,000. (1,50,000 for A.y 2014-15 and before)
In the following cases, the above limit of Rs 2,00,000 for SOP shall be reduced to Rs. 30,000
– Loan borrowed before 01-04-1999 for any purpose related to house property.

– Loan borrowed after 01-04-1999 for any purpose other than construction or acquisition.

– If construction/acquisition is not completed within 5 years from the end of the financial year (3 years till the financial year 2015-16) in which capital was borrowed. For example, a loan is obtained for construction/acquisition on 28 Oct 2011 then the deduction limit should reduce to Rs 30,000 if the construction/acquisition completes after 31 March 2017.


Also  Extra Deduction of Rs. 1,50,000 on Home Loan Interest under Section 80EE w.e.f. 1/4/2016

Interest for pre-construction/acquisition period

Interest for pre-construction/acquisition period is allowable in 5 equal installments beginning from the year of completion of house property. This deduction is not allowable if the loan is utilized for repairs, renewal or reconstruction.
Pre-Construction/Acquisition period starts from the date of borrowing and ends on the last day of preceding Financial Year in which the construction is completed. For example, if house property is completed on 21st March 2012 then the deduction is allowed from Financial Year 2011-2012 to 2015-16.

Deduction in case of Co-borrower

If the home loan is taken on joint names then the deduction is allowed to each co-borrower in proportion to his share in the loan. For taking such deduction it is necessary that such co-borrower must also be co-owner of that property. If the assessee is a co-owner but is repaying the full loan himself, then he can claim the deduction of full interest paid by him.

The limit of deduction in case of Self occupied property applies individually to each co-borrower . In other words, each co-borrower can claim deduction up to Rs. 2 lakh/Rs. 30,000. No limit is  applicable to let out property.


Interest Deduction with HRA

HRA  under section 10(13A) and interest deduction can be availed simultaneously even if house property is in the same city in which you resides on rented property.

Form 12BB is to be filed with employer if you want your employer to take deduction under this section into consideration and thus deduct lower TDS

Download All in One Income Tax Preparation Excel Based Software for Bihar State Govt employees for F.Y.2016-17 [ This Utility can prepare at a time Individual Tax Compute Sheet + Automatic H.R.A.Exemption Calculation + Automatic Form 16 Part A&B and Form 16 Part B for F.Y.2016-17]


Section 24 & 80EE of the income tax act provides deduction in respect of home loan interest.

Important points U/s 24B & U/s 80EE 

1) Interest on housing loan is allowable as the deduction on accrual basis not on paid basis (even if account books are kept on the cash basis) if capital is borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the house property. The deduction can be claimed for two or more housing loans.
2)Interest includes service fees, brokerage, commission, prepayment charges etc.
3)Interest/penalty on unpaid interest shall not be allowed as deduction.
4)The deduction shall be allowed irrespective of the nature of loan whether it is housing loan or personal loan from any person/institution.
5) If a person instead of raising a loan from a third party pays sale price to the seller in installments along with interest than such interest is also allowable.
6) Interest on borrowed money which is payable outside India shall not be allowed as deduction under section 24(b), unless the tax on the same has been paid or deducted at source and in respect of which there is no person in India, who may be treated as an agent of the recipient for such purpose.
7) For claiming deduction under this section, the assessee must be the owner or deemed owner of the house property and loan shall be in the assessee name.

Maximum Limit of deduction under section 24B

These limits of deduction are applicable assessee wise and not property wise. Therefore if an assessee owns two or more house property then the total deduction for that assessee remain same.
1) In Let Out Property/Deemed to be Let Out – No maximum limit
2) Self Occupied House (SOP) – Rs. 2,00,000. (1,50,000 for A.y 2014-15 and before)
In the following cases, the above limit of Rs 2,00,000 for SOP shall be reduced to Rs. 30,000
– Loan borrowed before 01-04-1999 for any purpose related to house property.

– Loan borrowed after 01-04-1999 for any purpose other than construction or acquisition.

– If construction/acquisition is not completed within 5 years from the end of the financial year (3 years till the financial year 2015-16) in which capital was borrowed. For example, a loan is obtained for construction/acquisition on 28 Oct 2011 then the deduction limit should reduce to Rs 30,000 if the construction/acquisition completes after 31 March 2017.


Also  Extra Deduction of Rs. 1,50,000 on Home Loan Interest under Section 80EE w.e.f. 1/4/2016

Interest for pre-construction/acquisition period

Interest for pre-construction/acquisition period is allowable in 5 equal installments beginning from the year of completion of house property. This deduction is not allowable if the loan is utilized for repairs, renewal or reconstruction.
Pre-Construction/Acquisition period starts from the date of borrowing and ends on the last day of preceding Financial Year in which the construction is completed. For example, if house property is completed on 21st March 2012 then the deduction is allowed from Financial Year 2011-2012 to 2015-16.

Deduction in case of Co-borrower

If the home loan is taken on joint names then the deduction is allowed to each co-borrower in proportion to his share in the loan. For taking such deduction it is necessary that such co-borrower must also be co-owner of that property. If the assessee is a co-owner but is repaying the full loan himself, then he can claim the deduction of full interest paid by him.

The limit of deduction in case of Self occupied property applies individually to each co-borrower . In other words, each co-borrower can claim deduction up to Rs. 2 lakh/Rs. 30,000. No limit is  applicable to let out property.


Interest Deduction with HRA

HRA  under section 10(13A) and interest deduction can be availed simultaneously even if house property is in the same city in which you resides on rented property.

Form 12BB is to be filed with employer if you want your employer to take deduction under this section into consideration and thus deduct lower TDS

Complete Details about-Public Provident Fund (PPF)

Public Provident Fund (PPF) – Complete Details. Hi Friends Here we are providing Full Details for PPF Account. In this article you can find everything about  PPF Account like – Meaning of PPF, What is Public Provident Fund (PPF) account, Who can open a PPF Account, Documents Required for PPF Account, Where we can open PPF Account, P.P.F. account in S.B.I., P.P.F.f account balance, P.P.F.account calculator etc. Now you can scroll down below and check complete details regarding  Public Provident Fund (PPF).

PPF is the acronym of “Public Provident”.This was initially started by the Government to provide retirement benefits to self-employed individuals and workers in the unorganized sector.As the income of people in this sector is very low and moderate ,they can’t invest something for their future…. So the government of India introduced this scheme so that compulsory savings obligation can be effective for these class of employees.This was framed under the PPF Act of 1968.

Who Can Open a PPF Account ?
President individuals can open this account. And PPF account can also be opened by a parent under the name of a minor. However, each person is eligible for opening one account in their name.

Who are not eligible ?

Non-resident Indians are not eligible to open an account., Hindu Undivided Family can NOT open an account under the scheme ,Since 13th May 2005. But accounts opened prior to that date may continue subscription to their account till maturity. If a resident of India becomes NON-Resident during the period mentioned by PPF act can operate their account till its maturity.

Documents Required for PPF Account:

1. Form A for opening the account.
2..Copy of PAN card.
3. proof of residence i. e, Passport / Electricity Bill.
4. Photograph of passport size.


Where can it be opened :


1.State bank of India

2.Subsidiaries of SBI.

3.Any Nationalized  banks which were given authority to operate the account.
4.Authorized banks by the R.B.I.
5.Post Office.

Important features :

1.One person – One account :

No one is allowed to have More than at any point in your life
you are allowed to have only one PPF account in your name. If at any time it is found that you have more than one account in your own name, the second account will be immediately deactivated, and you will be eligible to get the only principal amount.


2.No premature closure :
premature closure of the account is not allowed. Only in the case of the death of a customer, their nominee or legal successor can close the account by submitting the required documents as said by the Ministry of Finance.

3.Nomination :
PPF Scheme facilitates nomination for one or more persons to receive the amount standing to the subscriber’s credit in case of death. However, no nomination is possible in case of minor account. A subscriber of PPF is allowed to change the previous nomination by applying fresh on nomination form H.

4.Maturity :
PPF is a 15 years scheme. Thus, as per rules of PPF scheme Public Provident Fund account gets matured after the completion of 15 years from the end of the year in which the account was opened. However, on maturity, this period can be extended to any number of times. But it’s for a block of 5 years each time. This can be done by furnishing Form H within one year from the date of maturity.

5.Minor child :
An account can be opened in the name of a Minor child by the parents or guardian of the child.

6. Taxation :
The amount deposited into this scheme is allowed as the deduction up to 1,50,000 from the total income of an assessee under section 80c of income tax act ,1961.Contributions to PPF accounts of even the spouse and or children are also eligible for tax deduction.
7.Interest from PPF :
The amount of return earned in the form of interest from PPF is exempted from tax.
Public Provident Fund (PPF) – Complete Details. Hi Friends Here we are providing Full Details for PPF Account. In this article you can find everything about  PPF Account like – Meaning of PPF, What is Public Provident Fund (PPF) account, Who can open a PPF Account, Documents Required for PPF Account, Where we can open PPF Account, P.P.F. account in S.B.I., P.P.F.f account balance, P.P.F.account calculator etc. Now you can scroll down below and check complete details regarding  Public Provident Fund (PPF).

PPF is the acronym of “Public Provident”.This was initially started by the Government to provide retirement benefits to self-employed individuals and workers in the unorganized sector.As the income of people in this sector is very low and moderate ,they can’t invest something for their future…. So the government of India introduced this scheme so that compulsory savings obligation can be effective for these class of employees.This was framed under the PPF Act of 1968.

Who Can Open a PPF Account ?
President individuals can open this account. And PPF account can also be opened by a parent under the name of a minor. However, each person is eligible for opening one account in their name.

Who are not eligible ?

Non-resident Indians are not eligible to open an account., Hindu Undivided Family can NOT open an account under the scheme ,Since 13th May 2005. But accounts opened prior to that date may continue subscription to their account till maturity. If a resident of India becomes NON-Resident during the period mentioned by PPF act can operate their account till its maturity.

Documents Required for PPF Account:

1. Form A for opening the account.
2..Copy of PAN card.
3. proof of residence i. e, Passport / Electricity Bill.
4. Photograph of passport size.


Where can it be opened :


1.State bank of India

2.Subsidiaries of SBI.

3.Any Nationalized  banks which were given authority to operate the account.
4.Authorized banks by the R.B.I.
5.Post Office.

Important features :

1.One person – One account :

No one is allowed to have More than at any point in your life
you are allowed to have only one PPF account in your name. If at any time it is found that you have more than one account in your own name, the second account will be immediately deactivated, and you will be eligible to get the only principal amount.


2.No premature closure :
premature closure of the account is not allowed. Only in the case of the death of a customer, their nominee or legal successor can close the account by submitting the required documents as said by the Ministry of Finance.

3.Nomination :
PPF Scheme facilitates nomination for one or more persons to receive the amount standing to the subscriber’s credit in case of death. However, no nomination is possible in case of minor account. A subscriber of PPF is allowed to change the previous nomination by applying fresh on nomination form H.

4.Maturity :
PPF is a 15 years scheme. Thus, as per rules of PPF scheme Public Provident Fund account gets matured after the completion of 15 years from the end of the year in which the account was opened. However, on maturity, this period can be extended to any number of times. But it’s for a block of 5 years each time. This can be done by furnishing Form H within one year from the date of maturity.

5.Minor child :
An account can be opened in the name of a Minor child by the parents or guardian of the child.

6. Taxation :
The amount deposited into this scheme is allowed as the deduction up to 1,50,000 from the total income of an assessee under section 80c of income tax act ,1961.Contributions to PPF accounts of even the spouse and or children are also eligible for tax deduction.
7.Interest from PPF :
The amount of return earned in the form of interest from PPF is exempted from tax.

Save income tax using health insurance, With Master of Form 16 Part A and B for F.Y.2016-17

There is no denying the need for adequate health insurance in your insurance portfolio. If you feel you can’t afford health insurance premium, just imagine how you will afford the treatment cost, if you were to get hospitalized. Even the government wants you to purchase health insurance. Though it won’t pay the premium on your behalf, but the government certainly does its bit to ease the burden on your pocket through tax incentives.
Let’s look at tax incentives for expenses on health insurance and certain specific medical expenses.

Download Automated 50 employees Master of Form 16 Part A&B for F.Y.2016-17 & A.Y.2017-18 [ This Excel Utility can prepare at a time 50 employees Form 16 Part A&B for F.Y.2016-17]


Download Automated 100 employees Master of Form 16 Part A&B for F.Y.2016-17 & A.Y.2017-18 [ This Excel Utility can prepare at a time 50 employees Form 16 Part A&B for F.Y.2016-17]

Section 80D (Health Insurance Premium Payment)

You can claim deduction up to Rs 25,000 per financial year for health insurance premium payment. The premium shall be for self, spouse, and dependent children. If either you or spouse is a senior citizen (60 years and above), the limit goes up to Rs 30,000.

a) Preventive health check-up
You get tax benefit on preventive health check-up. Within the aforesaid limit of Rs 25,000 (or Rs 30,000 as the case may be) undeSection 80D, you can also claim expenses incurred towards preventive health check-up till Rs 5,000 per financial year.

Note: Health Insurance premium paid for siblings is not eligible for tax deduction.


b) Health insurance policy for parents
Health insurance premium paid for parents is also eligible for deduction up to Rs 25,000 per financial year. If either of your parents is a senior citizen, the limit goes up to Rs 30, 000 per year. This limit also subsumes Rs 5,000 that can be incurred towards your parents’ health checkup.

c) No tax benefit on cash payment
Health insurance premium shall be made through banking channel (cheque, demand draft, credit and debit cards, net banking etc). The tax benefit is not available for cash payments. However, payment for preventive health checkup can be made in cash.

d) Health insurance for very senior citizens
For very senior citizens (80 years and above) who are uninsured, you can claim deduction up to Rs 30,000 per financial year towards medical treatment. This is not just for own expenses.
If your father is a very senior citizen (and uninsured) and mother is a senior citizen, you can claim deduction up to Rs 30,000 towards your medical treatment for parents, health insurance and check-up of both parents.

Section 80DDB (Treatment of Specified Illnesses)

You can avail deduction up to Rs 40,000 (Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens) for medical expenses incurred for specified ailments such as cancer, chronic renal failure, Parkinson disease etc. A complete list of such ailments is provided in Rule 11DD.
You need to attach a certificate from the specialist doctor while filing income tax returns.
You can claim for self, spouse, parents, children and siblings.

Section 80DD (Treatment of a dependent with disability)

You can claim deduction up to Rs75,000 for expenditure towards medical treatment, nursing, training rehabilitation and maintenance of a dependent with disability (Rs1.25 lakh for severe disability). Dependent can be spouse, parents, children and siblings.

You need to submit a supporting medical certificate.

Section 80U (Person with disability)

A person with the disability can claim a deduction of Rs.75,000 under Section 80U. In the case of severe disability, the limit goes up to ₹1.25 lakh. There is no relation to treatment costs.
There is no denying the need for adequate health insurance in your insurance portfolio. If you feel you can’t afford health insurance premium, just imagine how you will afford the treatment cost, if you were to get hospitalized. Even the government wants you to purchase health insurance. Though it won’t pay the premium on your behalf, but the government certainly does its bit to ease the burden on your pocket through tax incentives.
Let’s look at tax incentives for expenses on health insurance and certain specific medical expenses.

Download Automated 50 employees Master of Form 16 Part A&B for F.Y.2016-17 & A.Y.2017-18 [ This Excel Utility can prepare at a time 50 employees Form 16 Part A&B for F.Y.2016-17]


Download Automated 100 employees Master of Form 16 Part A&B for F.Y.2016-17 & A.Y.2017-18 [ This Excel Utility can prepare at a time 50 employees Form 16 Part A&B for F.Y.2016-17]

Section 80D (Health Insurance Premium Payment)

You can claim deduction up to Rs 25,000 per financial year for health insurance premium payment. The premium shall be for self, spouse, and dependent children. If either you or spouse is a senior citizen (60 years and above), the limit goes up to Rs 30,000.

a) Preventive health check-up
You get tax benefit on preventive health check-up. Within the aforesaid limit of Rs 25,000 (or Rs 30,000 as the case may be) undeSection 80D, you can also claim expenses incurred towards preventive health check-up till Rs 5,000 per financial year.

Note: Health Insurance premium paid for siblings is not eligible for tax deduction.


b) Health insurance policy for parents
Health insurance premium paid for parents is also eligible for deduction up to Rs 25,000 per financial year. If either of your parents is a senior citizen, the limit goes up to Rs 30, 000 per year. This limit also subsumes Rs 5,000 that can be incurred towards your parents’ health checkup.

c) No tax benefit on cash payment
Health insurance premium shall be made through banking channel (cheque, demand draft, credit and debit cards, net banking etc). The tax benefit is not available for cash payments. However, payment for preventive health checkup can be made in cash.

d) Health insurance for very senior citizens
For very senior citizens (80 years and above) who are uninsured, you can claim deduction up to Rs 30,000 per financial year towards medical treatment. This is not just for own expenses.
If your father is a very senior citizen (and uninsured) and mother is a senior citizen, you can claim deduction up to Rs 30,000 towards your medical treatment for parents, health insurance and check-up of both parents.

Section 80DDB (Treatment of Specified Illnesses)

You can avail deduction up to Rs 40,000 (Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens) for medical expenses incurred for specified ailments such as cancer, chronic renal failure, Parkinson disease etc. A complete list of such ailments is provided in Rule 11DD.
You need to attach a certificate from the specialist doctor while filing income tax returns.
You can claim for self, spouse, parents, children and siblings.

Section 80DD (Treatment of a dependent with disability)

You can claim deduction up to Rs75,000 for expenditure towards medical treatment, nursing, training rehabilitation and maintenance of a dependent with disability (Rs1.25 lakh for severe disability). Dependent can be spouse, parents, children and siblings.

You need to submit a supporting medical certificate.

Section 80U (Person with disability)

A person with the disability can claim a deduction of Rs.75,000 under Section 80U. In the case of severe disability, the limit goes up to ₹1.25 lakh. There is no relation to treatment costs.

D.A from July 2016 in 7th pay Commission is 2% or 3% to the Central Govt employees

DA from July 2016 in 7th pay Commission is 2% or 3% is yet to be confirmed

It seems that the DA from July 2016 in 7th Pay Commission is not yet finalized by Central Government. There is confusion persists on the rate of Dearness Allowance to be paid from 1st July 2016 in revised Pay . The AICPIN average for the year 2015 to be taken as Base Index for calculation of DA in 7th CPC as the DA has been neutralized to arrive the revised Pay.

The actual AICPIN Average for 2015 is 261.33. As per this AICPIN average, the DA to be paid at the rate of 2% from July 2016 in 7th CPC . But the NCJCM has contended that it should be paid at the rate of 3%.

The NCJCM staff side said that as per the practice of fraction is being ignored, 0.75 is ignored from actual DA 125.75 as on 1st January 2016. Since the 125% DA was merged to revise the 7th CPC pay, Accordingly, the AICPIN average of 2015 has to be revised to 260.46 from 261.33 to arrive the exact rate of DA of 125% .

It is obvious that the NCJCM Staff Sides claim has sufficient merits to be considered favorably by the Government. In that case, the DA to be paid from July 2016 will be 3%.

The NCJCM Staff Side should be appreciated for this timely intervention and effort.

The central Government needs to take the decision in this regard soon, as it has been passed the third week of September. Usually the announcement of DA for July every year will be made in the first or second week of September.

Source: http://www.gservants.com


DA from July 2016 in 7th pay Commission is 2% or 3% is yet to be confirmed

It seems that the DA from July 2016 in 7th Pay Commission is not yet finalized by Central Government. There is confusion persists on the rate of Dearness Allowance to be paid from 1st July 2016 in revised Pay . The AICPIN average for the year 2015 to be taken as Base Index for calculation of DA in 7th CPC as the DA has been neutralized to arrive the revised Pay.

The actual AICPIN Average for 2015 is 261.33. As per this AICPIN average, the DA to be paid at the rate of 2% from July 2016 in 7th CPC . But the NCJCM has contended that it should be paid at the rate of 3%.

The NCJCM staff side said that as per the practice of fraction is being ignored, 0.75 is ignored from actual DA 125.75 as on 1st January 2016. Since the 125% DA was merged to revise the 7th CPC pay, Accordingly, the AICPIN average of 2015 has to be revised to 260.46 from 261.33 to arrive the exact rate of DA of 125% .

It is obvious that the NCJCM Staff Sides claim has sufficient merits to be considered favorably by the Government. In that case, the DA to be paid from July 2016 will be 3%.

The NCJCM Staff Side should be appreciated for this timely intervention and effort.

The central Government needs to take the decision in this regard soon, as it has been passed the third week of September. Usually the announcement of DA for July every year will be made in the first or second week of September.

Source: http://www.gservants.com


 
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