How to claim HRA exemption at the time of filing income tax returns
House Rent Allowance (HRA) has been a confusing head for most salaried individuals when it comes to claiming exemptions on House Rent Allowance (HRA) while filing Income Tax Returns (ITR). It is important to keep in mind that the tax benefits on HRA are applicable only if an individual is residing in a rented house. The tax benefit is not applicable for individuals who live in their own houses.
The exempted HRA amount will be reflected in the tax projection statement way before the Form 16 is given out. The employer deducts the HRA from the salary. The deduction can be viewed in Part B of Form 16. The following steps are to be followed to claim House Rent Allowance (HRA) exemption at the time of filing the Income Tax Returns (ITR).
Declaration of the rental to the employer: This is the best and the most effective way to get exemptions in regards to HRA. Mentioning the amount of exemption in the declaration form provided by the employer to the employee at the beginning of a financial year. The Director of Deloitte Haskins and Sells LLP, Aarti Raote said that it is advisable for the employees to claim HRA through the payroll as it will help avoid the mismatch between the actual tax returns and Form 26AS.
Claiming at the time of filing yearly tax returns: In case an employee is not able to claim the tax exemptions on the HRA through the employer, he or she can do the same at the time of filing the annual Income Tax Returns (ITR). On this context, Raote said that this can be done by calculating the amount of exemption for HRA and furnishing the same in the designated place provided in the return form under the salary appropriate schedule.
20 July 2018
Higher education in India gets a Rs.8,000 crore boost
The Union Cabinet has recently approved a proposal for expanding the scopes of Higher Education Financing Agency (HEFA). This lead to the expansion of the capital base of HEFA to Rs.10,000 crore which will now enable it to mobilise Rs.1 trillion by the end of 2022. The decision was taken to increase the investment in higher educational institutions.
While addressing the reporters after the end of the Cabinet meeting chaired by Prime Minister Narendra Modi, the Union Minister Ravi Shankar Prasad said that the government wants to increase the investments in higher education. The announcement for the same was made in the last budget and HEFA was established pertaining to that. Prasad further said that the authorised capital has increased from Rs.2,000 crore to Rs.10,000 crore with the view of extending benefits to the central government universities and other new varsities through Higher Education Financing Agency (HEFA). Earlier, these universities did not receive the advantages and thus, this decision was taken at the cabinet meeting.
In the Union Budget 2018, the then Finance Minister Arun Jaitley had made an announcement of a new initiative of the government - ‘Revitalising Infrastructure and Systems in Education (RISE)’. It was announced with the aim of setting up investments in research and related infrastructure in premier educational institutions. The estimated schematic budget of the government for expenditure on health, education, and social protection is Rs.1.38 trillion for 2018-19, as opposed to the expenditure of Rs.1.22 trillion for 2017-18.
12 July 2018
GST on jet fuel: Airlines can earn Rs 5,220 crore input tax credit
In a meeting chaired by Mr. Jayant Sinha, the minister of state for civil aviation, top executives at Indian carrier has given an assessment which shows that airlines will be able to earn a combined input tax credit worth Rs.5,220 crore if Goods and Services Tax (GST) is applied on jet fuel . This input is 5 times the present input.They also assessed that the government will not lose tax revenue if jet fuel comes under the GST regime. Rather, it will earn Rs.10,353 crore which is 7% more than what it is getting presently.
28 May 2018
Salary Restructuring Could Be On The Cards Due To GST
The AAR (Authority of Advance Ruling) recently issued an order according to which when your employer offers you food and recovers the cost by subtracting it from your salary, it qualifies as an outward supply. As such, GST will be charged on the same. Although the rate of GST applicable on the same has not been set, it will soon be confirmed, according to sources. Since the compliance is increasing along with tax payments, employers are expected to deduct GST from employees’ monthly salaries. If so, employers will have to increase their employees’ CTC so that these tax payments can be made.
17 April 2018
24% Increase in GST Registered by Haryana
Although most of the states in India have recorded a decline in tax revenue following the implementation of the Goods and Services Tax in July 2017, Haryana’s revenue has risen by 24.1% in the previous financial year from the previous tax regime. Haryana also recorded an increase of 8% in revenue collection from excise on liquor over the same period of time when other states recorded decreases in revenue owing to an order that banned the grant of licenses close to national highways, issued by the Supreme Court. Between the 1st of April and the 30th of June 2017, CST and VAT were applicable, and GST came into effect from the 1st of July. In comparison with the previous financial year, collections from excise of liquor in FY 2017-18 was recorded at Rs.5,028.11 crore – a considerable increase from the Rs.4,655.84 crore recorded in FY 2016-17.
11 April 2018
Property Tax Increment Not a Hike, In Fact a Rateable Value
Municipal Commissioner, Tukaram Mundhe recently stated that the hike that was recently instituted on properties was in fact a rateable value. Furthermore, he added that the properties that are already in existence will not go through an astronomical increase, as claimed by a BJP official!
Tukaram Mundhe further explained that every property tax consists of two main components. The first one being the building and the second one being the land - both non-agriculture and agricultural land.
The tax for agriculture is levied on the product whereas the property tax is applied on the land.
6 April 2018
Income Tax Returns’ Unanticipated Surge Spreads Wave of Cheer
With an increase in the number of tax filers, the total number of income tax returns filed with accuracy hiked enormously to 6.84 crore, which is a 26% increment as compared to previous year’s numbers.
This has happened because of the IT Department’s continual efforts in carefully scrutinising non-filers via means such as statutory notices, warnings, emails, and outreach programmes. This statement was made by the Central Board of Direct Taxes or CBDT.
In the financial year 2018-19, the total number of individuals filing income tax returns has risen to 99.45 lakh.
4 April 2018
Collection of Property Tax Gains Momentum
The financial year is coming to a close and the collection of property has been gaining momentum. Rs.165 crore has been collected so far this year, but the demand is Rs.193 crore. Around 9,000 new assessments have come under the tax ambit over the course of the year. A further 13,000 have changed their tax category from residential to commercial, revealed R.Somannarayana, the Deputy Commissioner (Revenue). Collection of water tax, however, has not been up to par. Only Rs.22 crore has been realised out of the overall demand of Rs.42 crore.
29 March 2018
Kerala finance minister highlights disparity in tax allocation
The finance minister of Kerala, Thomas Isaac, has invited the finance ministers of the states in South India on 10th April for a discussion on the tax allocation disparity witnessed recently. He said that all the finance ministers and finance secretaries of the states have confirmed their attendance.
There was friction over the division of funds after the Central government recommended to the 15th Finance Commission that the population data for the 2011 Census should be considered for distribution of the central tax revenues, instead of the 1971 Census. Isaac said that this will worsen the Central-State fiscal imbalance. He also mentioned that the use of the population from 2011 instead of 1971 will punish states that followed the national family planning policies to control the growth of the population.
Andhra Pradesh CM Chandrababu Naidu had earlier made a comment on southern states contributing maximum tax revenue that were getting diverted to the North Indian states for development.
28 March 2018
Highlights of the 2018 Punjab Budget
Amarinder Singh, the Chief Minister of Punjab, was in attendance as Manpreet Singh Badal, the Finance Minister of the state recently presented the budget proposals for FY 2018-19. The main focus areas of the state will be farmer welfare and agriculture along with industry, students, employees and health. The overall size of the budget was Rs.1,29,698 crore and its effective size is Rs.1,02,198 crore. A proposal made in the budget was to raise Rs.1,500 crore via extra resource mobilisation measures. The state is also expected to offer free text-books to students between Class I and Class XII among other initiatives.
27 March 2018