Complete Guide to Determine Income Tax for Salaried Class Employees
Here we provided a detailed guide for income tax 2013-14- Assessment year 2014-15 applicable to Salaried Class Employees. There are three important changes brought by government that are relevant to salaried class employees in the finance bill 2013-14. They are given below:
1. Individual having total income up to Rs. 5 lakhs, income tax rebate of Rs 2000.
2. Deduction of interest on housing loan up to Rs 2.5 lakhs in respect of housing loan up to Rs.25 lakhs obtained during the year 2013-14, as against the deduction allowed up to Rs. 1.5 lakh in normal Total cost of construction shall nor exceed Rs. 40 lakhs in this case.
3. In respect of life Insurance Policies covering the life of persons with disabilities defined in Section 80U and section 80DDB, deduction of premium up to 15% of sum assured.
Exemption Under Section 10 (13A) in respect of HRA – Calculation Method:
1. Allowance received as actual house rent or
2. Rent paid in excess of 10% of Pay in Pay band and Grade Pay or
3. If the employee is in Chennai/ Mumbai/Kolkata/Delhi, 50% of Pay band and Grade Pay and Pay for the employees is in other places.
4. If the employees resides in his/her own house or in a house for which he/she does not pay any rent, no HRA exemption is available.
Changes In The Budget 2012-13 relating to Deductions Under Chapter VI
1. Deduction for preventive health check-up
A deduction of Rs. 5,000 is allowed under section 80D for expenditure incurred during the year by a tax payer on account of preventive health check-up of self, dependent children or parents.
2. Deduction for interest on saving account
Under section 80TTA deduction upto Rs 10,000 proposed to be allowed in respect of interest on deposits in a savings account with a banking company, co-operative society engaged in banking business and post office.
3. Deduction for life insurance premium
Under section 80C deduction in respect of premium paid on life insurance policy issued on or after 1 April 2012 is proposed to be allowed provided premium payable for any of the years does not exceed 10% of actual capital sum assured. Corresponding amendment brought in Section 10D.
4. Deduction Under Chapter VIA in relation to donation payment
Under section 80G and 80GGA deduction in respect donation in excess of Rs 10,000 is proposed to be allowed only if such sum is paid by any mode other than cash.