Interest on loans taken for the purpose of buying, constructing, or for the purpose of repairs and renovation of the house is exempted under Section 24 (b) of the Income Tax Act. In the act, there is no bar that such loans should be have been taken from the financial institutions. Means it can beRead more
Interest on loans taken for the purpose of buying, constructing, or for the purpose of repairs and renovation of the house is exempted under Section 24 (b) of the Income Tax Act. In the act, there is no bar that such loans should be have been taken from the financial institutions. Means it can be taken from anyone including your friends and relatives. Also, nothing has been prescribed for the rate of interest. However, due care must be taken on the rate of interest it should be reasonable and comparable to those available in the market.
The maximum tax deduction of Rs 2 lakh is available for the payment of interest on housing loan taken for the purpose of purchases or construction of the house, for repair and renovation Rs 30000 is exempted.
Note: Deduction of repayment of the principal amount of loan taken from other than banks & notified financial institutinis not allowed under section 80C.
Bitcoin or any other cryptocurrencies are not legal tenders in India. The Reserve Bank of India (RBI) has not yet granted the status of legal tender. Still, it is not illegal as the supreme court has allowed banks to handle cryptocurrency transactions from traders and exchanges Now come on taxationRead more
Bitcoin or any other cryptocurrencies are not legal tenders in India. The Reserve Bank of India (RBI) has not yet granted the status of legal tender. Still, it is not illegal as the supreme court has allowed banks to handle cryptocurrency transactions from traders and exchanges
Now come on taxation of cryptocurrency.
Since Nature of “cryptocurrency trading” falls under the definition of Section 2(14) of the Income Tax Act of “capital asset”. cryptocurrency is treated as ‘property of any kind held by the assessee whether or not connected with his business or profession’.
Therefore, any gains arising out of the transfer of cryptocurrency must be considered as capital gains, if they are held for investment.
Depending on the duration for which these crypto currencies assets are held for the purpose of investment, they would be taxed as long-term capital gains (20 percent post indexation) or short-term capital gains (taxed as per individual slab rate).
VRS is included in Salary head in Income Tax Act as “PROFIT IN LIEU OF SALARY” u/s 17(3) of the Income Tax Act,1961. Accordingly, the VRS received is taxable in the hands of the employee under the head ‘Income from Salary’. “profits in lieu of salary” includes— the amount of any compensation due toRead more
VRS is included in Salary head in Income Tax Act as “PROFIT IN LIEU OF SALARY” u/s 17(3) of the Income Tax Act,1961. Accordingly, the VRS received is taxable in the hands of the employee under the head ‘Income from Salary’.
“profits in lieu of salary” includes—
the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto.
The benefit of receipt VRS can avail in two ways –
Exemption U/s- 10(10C)
Relief U/s- 89
1.VRS amount received is exempted under Section 10(10C) in the following way: –
Any amount received or receivable by an employee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement of –
(i) a public sector company; or
(ii) any other company; or
(iii) an authority established under a Central, State or Provincial Act; or
(iv) a local authority; or
(v) a co-operative society; or
(vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act,1956 (3 of 1956); or
(vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 (59 of 1961); or
(viia) any State Government; or
(viib) the Central Government; or
(viic) an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazette, specify in this behalf; or
(viii) such institute of management as the Central Government may, by notification in the Official Gazette, specify in this behalf,
Is exempt to the lowest of the following amount:
5.00 lakhs.
Amount equivalent to three months’ salary for each completed year of service.
Amount of salary at the time of retirement for the balance period of months of service left before retirement.
2.However, in place of exemption of sec 10 (10c) assess can claim relief under Section 89 for the amount of VRS received by him due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed. Relief under section can be calculated as per following steps.
The Computation of relief is as follows: –
Step 1.: – Compute the Tax payable during the previous year in which the compensation is received.
Step 2.: – Compute the rate of tax on total income during the previous year in which the compensation is received.
Step 3.: – Compute the tax on total income by adding the 1/3rd of VRS amount received in each of the three preceding previous years immediately preceding the year in which the VRS is received.
Step 4.: – Compute the rate of tax for each preceding three years separately.
Step 5.: – Compute the average of rate of tax for three preceding years.
Step 6.: – Amount of relief = VRS amount X [Step 2 – Step 5]
KEYNOTE: –
As per Income Tax Act,1961 both the sections are mutually exclusive, i.e. an assessee can claim either exemption u/s 10(10C) or relief u/s 89 whichever is most beneficial to him. And if an exemption or relief is claimed in any assessment year, it cannot be claimed again in any other assessment year.
The relief and the exemption in relation to VRS can be claimed once in a life time.
Hi, The answer is a big No. If you are paying rent but not receiving house rent allowance then you are allowed to claim deduction under section 80GG subject to your spouse or children are not owning a house property in the place of employment. And, in case you are paying rent and receiving HRA, thenRead more
Hi,
The answer is a big No.
If you are paying rent but not receiving house rent allowance then you are allowed to claim deduction under section 80GG subject to your spouse or children are not owning a house property in the place of employment.
And, in case you are paying rent and receiving HRA, then you can claim a deduction of such HRA as per section 10(13A).
Hi, If you are paying rent but not receiving HRA from your employer, then still you can take benefit in Income Tax for the amount of Rent paid. You need to satisfy the following conditions: You are self-employed or salaried You have not received HRA at any time during the year for which you are claiRead more
Hi,
If you are paying rent but not receiving HRA from your employer, then still you can take benefit in Income Tax for the amount of Rent paid.
You need to satisfy the following conditions:
You are self-employed or salaried
You have not received HRA at any time during the year for which you are claiming 80GG
You or your spouse or your minor child or HUF of which you are a member – do not own any residential accommodation at the place where you currently reside, perform duties of office, or employment or carry on business or profession.
The deduction can be claimed under Section 80GG as follows:
The lowest of the following can be claimed as a deduction:
1
Rs 5,000 per month;
2
25% of adjusted total income*;
3
Rent paid minus 10% of adjusted total Income*
*here Adjusted Total Income means Total Income minus long-term capital gain, short-term capital gain and deductions 80C to 80U.
If you own any residential property at any place other than the place mentioned above, then you should not claim the benefit of that property as self-occupied. The other property would be deemed to be let out in order to claim the 80GG deduction.
Here the relationship of employer and employee exists between the seconded employee and subsidiary Company and thus the same is out of the meaning of service. Accordingly GST is not leviable on secondment of employees. In a similar case, Comm. Appeal Jaipur EXCISEST/VAT held that no Service Tax wouRead more
Here the relationship of employer and employee exists between the seconded employee and subsidiary Company and thus the same is out of the meaning of service.
Accordingly GST is not leviable on secondment of employees.
In a similar case, Comm. Appeal Jaipur EXCISEST/VAT held that no Service Tax would be levied on reimbursement made by the Indian Company to its parent company for employee secondment. It was held that there exists an employer and employee relationship between the seconded employee and Indian Company and thus the same is out of the meaning of service as defined under section 65B(44) of the Finance Act, 1994 and thus not exigible to Service Tax. Please refer below case laws
Hi, Pension received by a family member is taxed under the head “income from other sources”. It is taxed in the hands of the receiver. Commuted Pension i.e lump sum amount of pension is not taxable. uncommuted pension received by a family member is exempt to a certain extent. Rs. 15,000 or 1/3rd ofRead more
Hi,
Pension received by a family member is taxed under the head “income from other sources”. It is taxed in the hands of the receiver.
Commuted Pension i.e lump sum amount of pension is not taxable.
uncommuted pension received by a family member is exempt to a certain extent. Rs. 15,000 or 1/3rd of the uncommuted pension received – whichever is less is exempt from tax.
For example – If a family member receives a pension of Rs 1,00,000 during the year then the exemption available is least of – Rs 15,000 or Rs 33,333 (1/3rd of Rs 1,00,000). Thus the taxable family pension will beRs.85,000 (Rs 1,00,000 – Rs 15,000)
Hi, Under Defined-benefit Plan a defined sum of the amount is paid after the retirement of the employee when the employee becomes a pension member. For this Employer and Employee choose to contributes to a pension fund for paying pension to its employees. It's called funded pension plan. It can alsRead more
Hi,
Under Defined-benefit Plan a defined sum of the amount is paid after the retirement of the employee when the employee becomes a pension member. For this Employer and Employee choose to contributes to a pension fund for paying pension to its employees. It’s called funded pension plan. It can also be unfunded means the benefits are paid for by the employer by himself at the time of retirement.
Under Defined-contribution Plan, An annuity is paid to the member of an investment scheme. The contribution is made by employee from his salary or by the employer into a pension fund. This pension fund works as an investment fund. At the time of retirement, the pension will be paid out from this fund’s return. Unlike to defined benefit plan, the annuity is not fixed and guaranteed. It may vary as per the performance of the pension plan.
Hi, The taxability of Pension depends on two factors. First Type of Pension and second type of Employee. The pension is taxable under the head of “Salary” in the hands of the receiver and in the year of receipt and tax is calculated in the following manner: Uncommuted pension i.e. periodical pensionRead more
Hi,
The taxability of Pension depends on two factors. First Type of Pension and second type of Employee. The pension is taxable under the head of “Salary” in the hands of the receiver and in the year of receipt and tax is calculated in the following manner:
Uncommuted pension i.e. periodical pension
It is fully taxable in the hands of all employees, whether government or non-government.
Commuted Pension
a) Government employee or employee of local authorities or statutory corporation: Fully Exempted [section 10(10a)(i)]
b) Non-Government Employee
Any commuted pension received is partially exempt from tax in the following manner:
If the employee is in receipt of gratuity
Exemption = 1/3 X (100% of Commuted Pension*) *if the employee has commuted the whole of the pension.
If the employee does not receive a gratuity
Exemption = 1/2 X (100% of Commuted Pension*) *if the employee has commuted the whole of the pension.
Caution: Exemption shall be allowed to the extent it is allowed to be commuted and the balance uncommuted Pension received periodically will be fully taxable.
For example:- Mr. A is drawing a salary of Rs. 20,000 p.m. at the time of retirement and retires from service and becomes entitled to receive a pension of Rs 10,000 p.m. He gets half his pension commuted and receives Rs. 1,50,000/- as lump sum payment. Henceforth, he shall be entitled to a pension of Rs. 5,000 p.m. (If Ram commute his full pension then he will receive Rs 3,00,000)
Taxability:-
Uncommuted Pension of Rs 5000 P.M is fully taxable.
Commuted Pension of Rs 1,50,000/-
If A is a Government Employee: Rs 1,50,000 is fully exempted.
If A is a non-Government Employee and also receiving Gratuity:
Exempted pension will be = Rs 1,00,000 (1/3 X 3,00,000) and the taxable amount will be Rs 50,000/-
If A is a non-Government Employee and not receiving Gratuity:
Then Exempted pension will be = Rs 150,000 (1/2 X 3,00,000) and the taxable amount will be Rs Nil.
Yes, Companies can conduct AGM due in the year calendar year 2021 through video conferencing. In view of the COVID-19 pandemic, MCA vide circular no. 02/2021 dated 13.01.2021 has allowed companies whose AGM is due to be held in the year 2021 to hold AGM on or before 31st December 2021 through VideoRead more
Yes, Companies can conduct AGM due in the year calendar year 2021 through video conferencing.
In view of the COVID-19 pandemic, MCA vide circular no. 02/2021 dated 13.01.2021 has allowed companies whose AGM is due to be held in the year 2021 to hold AGM on or before 31st December 2021 through Video Conferencing (VC) or Other Audio-Visual Means (OAVM) i.e. in accordance with the requirements as provided in paragraphs 3 and 4 of the General Circular No. 20/2020 dated 5th May 2020.
Earlier MCA issued circular no. 20/2020 dated May 05, 2020, that has allowed certain classes of companies to conduct the Annual General Meeting (AGM) of their members through Video Conferencing (VC) or Other Audio-Visual Means (OAVM), during the calendar year 2020 subject to the fulfillment of various requirements as mentioned in the circular.
Whether deduction of Interest on House Loan taken from a private person or close relative is allowed from Income from House property?
Interest on loans taken for the purpose of buying, constructing, or for the purpose of repairs and renovation of the house is exempted under Section 24 (b) of the Income Tax Act. In the act, there is no bar that such loans should be have been taken from the financial institutions. Means it can beRead more
Interest on loans taken for the purpose of buying, constructing, or for the purpose of repairs and renovation of the house is exempted under Section 24 (b) of the Income Tax Act. In the act, there is no bar that such loans should be have been taken from the financial institutions. Means it can be taken from anyone including your friends and relatives. Also, nothing has been prescribed for the rate of interest. However, due care must be taken on the rate of interest it should be reasonable and comparable to those available in the market.
The maximum tax deduction of Rs 2 lakh is available for the payment of interest on housing loan taken for the purpose of purchases or construction of the house, for repair and renovation Rs 30000 is exempted.
Note: Deduction of repayment of the principal amount of loan taken from other than banks & notified financial institutinis not allowed under section 80C.
See lessTax liability on crypto coin
Bitcoin or any other cryptocurrencies are not legal tenders in India. The Reserve Bank of India (RBI) has not yet granted the status of legal tender. Still, it is not illegal as the supreme court has allowed banks to handle cryptocurrency transactions from traders and exchanges Now come on taxationRead more
Bitcoin or any other cryptocurrencies are not legal tenders in India. The Reserve Bank of India (RBI) has not yet granted the status of legal tender. Still, it is not illegal as the supreme court has allowed banks to handle cryptocurrency transactions from traders and exchanges
Now come on taxation of cryptocurrency.
Since Nature of “cryptocurrency trading” falls under the definition of Section 2(14) of the Income Tax Act of “capital asset”. cryptocurrency is treated as ‘property of any kind held by the assessee whether or not connected with his business or profession’.
Therefore, any gains arising out of the transfer of cryptocurrency must be considered as capital gains, if they are held for investment.
Depending on the duration for which these crypto currencies assets are held for the purpose of investment, they would be taxed as long-term capital gains (20 percent post indexation) or short-term capital gains (taxed as per individual slab rate).
Happy crypto trading 🙂
See lessHow Income Tax on VRS amount is calculated?
VRS is included in Salary head in Income Tax Act as “PROFIT IN LIEU OF SALARY” u/s 17(3) of the Income Tax Act,1961. Accordingly, the VRS received is taxable in the hands of the employee under the head ‘Income from Salary’. “profits in lieu of salary” includes— the amount of any compensation due toRead more
VRS is included in Salary head in Income Tax Act as “PROFIT IN LIEU OF SALARY” u/s 17(3) of the Income Tax Act,1961. Accordingly, the VRS received is taxable in the hands of the employee under the head ‘Income from Salary’.
“profits in lieu of salary” includes—
the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto.
The benefit of receipt VRS can avail in two ways –
1.VRS amount received is exempted under Section 10(10C) in the following way: –
Any amount received or receivable by an employee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement of –
(i) a public sector company; or
(ii) any other company; or
(iii) an authority established under a Central, State or Provincial Act; or
(iv) a local authority; or
(v) a co-operative society; or
(vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act,1956 (3 of 1956); or
(vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 (59 of 1961); or
(viia) any State Government; or
(viib) the Central Government; or
(viic) an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazette, specify in this behalf; or
(viii) such institute of management as the Central Government may, by notification in the Official Gazette, specify in this behalf,
Is exempt to the lowest of the following amount:
2.However, in place of exemption of sec 10 (10c) assess can claim relief under Section 89 for the amount of VRS received by him due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed. Relief under section can be calculated as per following steps.
The Computation of relief is as follows: –
Step 1.: – Compute the Tax payable during the previous year in which the compensation is received.
Step 2.: – Compute the rate of tax on total income during the previous year in which the compensation is received.
Step 3.: – Compute the tax on total income by adding the 1/3rd of VRS amount received in each of the three preceding previous years immediately preceding the year in which the VRS is received.
Step 4.: – Compute the rate of tax for each preceding three years separately.
Step 5.: – Compute the average of rate of tax for three preceding years.
Step 6.: – Amount of relief = VRS amount X [Step 2 – Step 5]
KEYNOTE: –
- As per Income Tax Act,1961 both the sections are mutually exclusive, i.e. an assessee can claim either exemption u/s 10(10C) or relief u/s 89 whichever is most beneficial to him. And if an exemption or relief is claimed in any assessment year, it cannot be claimed again in any other assessment year.
- The relief and the exemption in relation to VRS can be claimed once in a life time.
See lessCan I claim deduction of rent paid in both section 80GG and 10(13a) HRA?
Hi, The answer is a big No. If you are paying rent but not receiving house rent allowance then you are allowed to claim deduction under section 80GG subject to your spouse or children are not owning a house property in the place of employment. And, in case you are paying rent and receiving HRA, thenRead more
Hi,
The answer is a big No.
If you are paying rent but not receiving house rent allowance then you are allowed to claim deduction under section 80GG subject to your spouse or children are not owning a house property in the place of employment.
And, in case you are paying rent and receiving HRA, then you can claim a deduction of such HRA as per section 10(13A).
See lessHow can I get exemption of rent paid even though I dont receive HRA?
Hi, If you are paying rent but not receiving HRA from your employer, then still you can take benefit in Income Tax for the amount of Rent paid. You need to satisfy the following conditions: You are self-employed or salaried You have not received HRA at any time during the year for which you are claiRead more
Hi,
If you are paying rent but not receiving HRA from your employer, then still you can take benefit in Income Tax for the amount of Rent paid.
You need to satisfy the following conditions:
The deduction can be claimed under Section 80GG as follows:
If you own any residential property at any place other than the place mentioned above, then you should not claim the benefit of that property as self-occupied. The other property would be deemed to be let out in order to claim the 80GG deduction.
See lessIs secondment of employees is considered as service and reimbursement of their salary is chargeable to GST?
Here the relationship of employer and employee exists between the seconded employee and subsidiary Company and thus the same is out of the meaning of service. Accordingly GST is not leviable on secondment of employees. In a similar case, Comm. Appeal Jaipur EXCISEST/VAT held that no Service Tax wouRead more
Here the relationship of employer and employee exists between the seconded employee and subsidiary Company and thus the same is out of the meaning of service.
Accordingly GST is not leviable on secondment of employees.
In a similar case, Comm. Appeal Jaipur EXCISEST/VAT held that no Service Tax would be levied on reimbursement made by the Indian Company to its parent company for employee secondment. It was held that there exists an employer and employee relationship between the seconded employee and Indian Company and thus the same is out of the meaning of service as defined under section 65B(44) of the Finance Act, 1994 and thus not exigible to Service Tax. Please refer below case laws
Imasen Manufacturing India (P.) Ltd.
See less[2021] 128 taxmann.com 255 (Commissioner Appeals – GST- Rajasthan)
Is family pension taxable or not?
Hi, Pension received by a family member is taxed under the head “income from other sources”. It is taxed in the hands of the receiver. Commuted Pension i.e lump sum amount of pension is not taxable. uncommuted pension received by a family member is exempt to a certain extent. Rs. 15,000 or 1/3rd ofRead more
Hi,
Pension received by a family member is taxed under the head “income from other sources”. It is taxed in the hands of the receiver.
For example – If a family member receives a pension of Rs 1,00,000 during the year then the exemption available is least of – Rs 15,000 or Rs 33,333 (1/3rd of Rs 1,00,000). Thus the taxable family pension will beRs.85,000 (Rs 1,00,000 – Rs 15,000)
See lessWhat is the difference between defined contribution plan and defined benefit plan of pension?
Hi, Under Defined-benefit Plan a defined sum of the amount is paid after the retirement of the employee when the employee becomes a pension member. For this Employer and Employee choose to contributes to a pension fund for paying pension to its employees. It's called funded pension plan. It can alsRead more
Hi,
Under Defined-benefit Plan a defined sum of the amount is paid after the retirement of the employee when the employee becomes a pension member. For this Employer and Employee choose to contributes to a pension fund for paying pension to its employees. It’s called funded pension plan. It can also be unfunded means the benefits are paid for by the employer by himself at the time of retirement.
Under Defined-contribution Plan, An annuity is paid to the member of an investment scheme. The contribution is made by employee from his salary or by the employer into a pension fund. This pension fund works as an investment fund. At the time of retirement, the pension will be paid out from this fund’s return. Unlike to defined benefit plan, the annuity is not fixed and guaranteed. It may vary as per the performance of the pension plan.
See lessHow income tax on pension is calculate?
Hi, The taxability of Pension depends on two factors. First Type of Pension and second type of Employee. The pension is taxable under the head of “Salary” in the hands of the receiver and in the year of receipt and tax is calculated in the following manner: Uncommuted pension i.e. periodical pensionRead more
Hi,
The taxability of Pension depends on two factors. First Type of Pension and second type of Employee. The pension is taxable under the head of “Salary” in the hands of the receiver and in the year of receipt and tax is calculated in the following manner:
b) Non-Government Employee
Any commuted pension received is partially exempt from tax in the following manner:
If the employee is in receipt of gratuity
Exemption = 1/3 X (100% of Commuted Pension*) *if the employee has commuted the whole of the pension.
If the employee does not receive a gratuity
Exemption = 1/2 X (100% of Commuted Pension*) *if the employee has commuted the whole of the pension.
Caution: Exemption shall be allowed to the extent it is allowed to be commuted and the balance uncommuted Pension received periodically will be fully taxable.
For example:- Mr. A is drawing a salary of Rs. 20,000 p.m. at the time of retirement and retires from service and becomes entitled to receive a pension of Rs 10,000 p.m. He gets half his pension commuted and receives Rs. 1,50,000/- as lump sum payment. Henceforth, he shall be entitled to a pension of Rs. 5,000 p.m. (If Ram commute his full pension then he will receive Rs 3,00,000)
Taxability:-
If A is a Government Employee: Rs 1,50,000 is fully exempted.
If A is a non-Government Employee and also receiving Gratuity:
Exempted pension will be = Rs 1,00,000 (1/3 X 3,00,000) and the taxable amount will be Rs 50,000/-
If A is a non-Government Employee and not receiving Gratuity:
Then Exempted pension will be = Rs 150,000 (1/2 X 3,00,000) and the taxable amount will be Rs Nil.
See lessCan a Company has Annual General Meeting through Video Conference?
Yes, Companies can conduct AGM due in the year calendar year 2021 through video conferencing. In view of the COVID-19 pandemic, MCA vide circular no. 02/2021 dated 13.01.2021 has allowed companies whose AGM is due to be held in the year 2021 to hold AGM on or before 31st December 2021 through VideoRead more
Yes, Companies can conduct AGM due in the year calendar year 2021 through video conferencing.
In view of the COVID-19 pandemic, MCA vide circular no. 02/2021 dated 13.01.2021 has allowed companies whose AGM is due to be held in the year 2021 to hold AGM on or before 31st December 2021 through Video Conferencing (VC) or Other Audio-Visual Means (OAVM) i.e. in accordance with the requirements as provided in paragraphs 3 and 4 of the General Circular No. 20/2020 dated 5th May 2020.
Circular is available at the link- http://www.mca.gov.in/Ministry/pdf/GeneralCircularNo.02_14012021.pdf
Earlier MCA issued circular no. 20/2020 dated May 05, 2020, that has allowed certain classes of companies to conduct the Annual General Meeting (AGM) of their members through Video Conferencing (VC) or Other Audio-Visual Means (OAVM), during the calendar year 2020 subject to the fulfillment of various requirements as mentioned in the circular.
See less