1. VOLUNTARY RETIREMENT – 10(10C)
Amount received or receivable (i.e. in installments) by an employee on his voluntary retirement in accordance with any scheme of Voluntary Retirement is exempt to the extent of Rs.5,00,000, provided the VRS is in accordance with Rule 2BA of IT Rules. However no 89(1) relief can be claimed.
2. HOUSE RENT ALLOWANCE EXEMPT U/S.10(13A) – Read with Rule 2A of IT Rules 1962
a) Actual HRA received : Rs.xxxx
b) Rent paid in excess of 10% of Salary : Rs.xxxx
c) 50% of Salary in Metro Cities or
40% of Salary in other cities : Rs.xxxx
Least of a), b), c) is exempt.
NOTE: Here Salary means Basic Salary as well as DA if the terms of employment so provide. According to the notification issued by the Income tax department, now landlord PAN card is must to get tax exemption against HRA allowance. One will have to submit PAN card as a proof if he is applying for more than 15000 per month.
3. CONVEYANCE ALLOWANCE: Any allowance granted to meet the expenditure incurred wholly, necessarily and exclusively on conveyance in performance of the duties of office and so certified by the employer is exempt u/s 10(14).
4. TRANSPORT ALLOWANCE: Any allowance granted to an employee to meet the expenditure for the purpose of commuting between the place of his residence and the place of his duty to the extent up to Rs.800/- per month is exempt u/s.10(14).
5. MEDICAL REIMBURSEMENT: An amount of Rs.15,000 or the actual amount reimbursed by the employer whichever is less is exempt u/s.17(2).
6. PROFESSION TAX : Profession Tax levied by the State Government is allowable as a deduction from Gross Salary provided it has been paid.
DEDUCTIONS FROM HOUSE PROPERTY
1. DEDUCTION U/S 23(1): For let out property, amount actually paid by the owner towards taxes levied by any local authority in respect of the property is deductible from Annual value(taxes pertaining to any previous years).
2. DEDUCTION U/S 24(a): For let out property, deduction of 30% of the Net Annual Value is allowed. No separate deduction for Repairs, Collection Charges, Insurance Premium, Annual Charge and Ground Rent.
3. INTEREST ON BORROWED LOAN(U/S.24(b)):
FOR SELF OCCUPIED PROPERTY
a. If Property is acquired or constructed with loan taken after 01/04/99 and construction is completed within 3 years from the end of the financial year in which the capital was borrowed – Rs.1,50,000 or actual interest paid/payable whichever is less is deductible.
b. If new housing loan is taken for repayment of old loan (old loan taken after 1/4/99) – Rs.1,50,000 or actual interest paid/payable whichever is less is allowed as deduction.
c. If Property is acquired or constructed with loan taken before 01/04/99, Rs.30,000 or actual interest paid/payable whichever is less is allowed as deduction.
d. If loan taken for Repairs, renewal, reconstruction of property, Rs.30,000 or actual interest paid/payable which ever is less is allowed as deduction.
FOR LET OUT PROPERTY, actual interest paid/payable can be claimed as deduction.
ONLY OWNER OF THE HOUSE PROPERTY CAN AVAIL THE ABOVE DEDUCTIONS.
CAPITAL GAINS:
With effect from 01/10/2004, Long Term Capital Gains arising on sale of equity shares or unit of equity oriented fund through recognized stock exchange is exempt if such transaction is chargeable to Securities Transaction Tax (u/s.10(38)).
Short Term Capital Gains arising on sale of equity shares or unit of equity oriented fund through recognized stock exchange is subject to tax at the rate of 15% if such transaction is chargeable to Securities Transaction Tax.
EXEMPTION U/S 54EC:
The Capital Gain arising out of sale of long term capital asset can be invested in National Highways Authority of India, Rural Electrification Corporation Limited, within six months from the date of sale subject to a ceiling of Rs.50 lakh during any financial year. (Lock-in period is 3 years) Cost Inflation Index for the F.Y.2011-12 is 785.
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Read more: https://www.simpletaxindia.net/2011/12/income-tax-rates-2011-12-exemption.html#ixzz1mi1hy6Z7
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Regards
Ankur
CAclubindia
