The Excel-based Income Tax Calculator serves to compute taxes on various sources of income, including salary, pension, gifts, fixed deposits, bank interest, house rent, and capital gains (both short and long-term).
New Tax Regime Scheme (Section 115 BAC)- Income Tax rates for the financial year 2025-26/2026-27
| For Everyone | |
| Upto Rs. 4,00,000 | Nil |
| Rs. 4,00,001 to Rs. 8,00,000 | 5 per cent |
| Rs. 8,00,001 to Rs. 12,00,000 | 10 per cent |
| Rs. 12,00,001 to Rs. 16,00,000 | 15 per cent |
| Rs. 16,00,001 to Rs. 20,00,000 | 20 per cent |
| Rs. 20,00,001 to Rs. 24,00,000 | 25 per cent |
| Above Rs. 24,00,000 | 30 per cent |
New Tax Regime Scheme (Section 115 BAC)- Income Tax rates for the financial year 2024-25
| For Everyone | |
| Upto Rs. 3,00,000 | Nil |
| Rs. 3,00,001 to Rs. 7,00,000 | 5 per cent |
| Rs. 7,00,001 to Rs. 10,00,000 | 10 per cent |
| Rs. 10,00,001 to Rs. 12,00,000 | 15 per cent |
| Rs. 12,00,001 to Rs. 15,00,000 | 20 per cent |
| Above Rs. 15,00,000 | 30 per cent |
Old scheme: Income Tax rates for the financial year 2018-19/ 2019-20/ 2020-21/ 2021-22/ 2022-23/ 2023-24/ 2024-25/ 2025-26/ 2026-27
| For Men | |
| Upto Rs. 2,50,000 | Nil |
| Rs. 2,50,001 to Rs. 5,00,000 | 5 per cent |
| Rs. 5,00,001 to Rs. 10,00,000 | 20 per cent |
| Above Rs. 10,00,000 | 30 per cent |
| For Women | |
| Upto Rs. 2,50,000 | Nil |
| Rs. 2,50,001 to Rs. 5,00,000 | 5 per cent |
| Rs. 5,00,001 to Rs. 10,00,000 | 20 per cent |
| Above Rs. 10,00,000 | 30 per cent |
| For a resident individual of 60 years or above (Senior Citizens) | |
| Upto Rs. 3,00,000 | Nil |
| Rs. 3,00,001 to Rs. 5,00,000 | 5 per cent |
| Rs. 5,00,001 to Rs. 10,00,000 | 20 per cent |
| Above Rs. 10,00,000 | 30 per cent |
| For a resident individual of 80 years or above (Very Senior Citizens) | |
| Upto Rs. 5,00,000 | Nil |
| Rs. 5,00,001 to Rs. 10,00,000 | 20 per cent |
| Above Rs. 10,00,000 | 30 per cent |
Kindly access the Income Tax Calculator through the provided links, tailored to your specific financial year/assessment year. This tool is designed to be user-friendly, and suitable for individuals with basic proficiency in Microsoft Excel.
- FY 2026-27 (AY 2027-28):
Income Tax Calculator for financial year 2026-27 (151.5 KiB, 2,893 hits)
- FY 2025-26 (AY 2026-27):
Income Tax Calculator for financial year 2025-26 (151.5 KiB, 31,993 hits)
- FY 2024-25 (AY 2025-26):
Income Tax Calculator for financial year 2024-25 (150.5 KiB, 31,035 hits)
- FY 2023-24 (AY 2024-25):
Income Tax Calculator for financial year 2023-24 (149.5 KiB, 26,867 hits)
- FY 2022-23 (AY 2023-24):
Income Tax Calculator for financial year 2022-23 (148.5 KiB, 14,188 hits)
- FY 2021-22 (AY 2022-23):
Income Tax Calculator for financial year 2021-22 (147.5 KiB, 10,838 hits)
- FY 2020-21 (AY 2021-22):
Income Tax Calculator for financial year 2020-21 (141.5 KiB, 24,643 hits)
- FY 2019-20 (AY 2020-21):
Income Tax Calculator for financial year 2019-20 (125.0 KiB, 57,963 hits)
- FY 2018-19 (AY 2019-20):
Income Tax Calculator for financial year 2018-19 (125.0 KiB, 75,040 hits)
- FY 2017-18 (AY 2018-19):
Income Tax Calculator for financial year 2017-18 (117.5 KiB, 47,199 hits)
- FY 2016-17 (AY 2017-18):
Income Tax Calculator for financial year 2016-17 (136.5 KiB, 41,346 hits)
- FY 2015-16 (AY 2016-17):
Income Tax Calculator for financial year 2015-16 (263.0 KiB, 55,296 hits)
- FY 2014-15 (AY 2015-16):
Income Tax Calculator for financial year 2014-15 (136.0 KiB, 85,348 hits)
- FY 2013-14 (AY 2014-15):
Income Tax Calculator for financial year 2013-14 (130.5 KiB, 60,077 hits)
- FY 2012-13 (AY 2013-14):
Income Tax Calculator for financial year 2012-13 (119.0 KiB, 95,056 hits)
- FY 2011-12:
Income Tax Calculator for financial year 2011-12 (116.0 KiB, 198,880 hits)
- FY 2010-11:
Income Tax Calculator for Financial Year 2010-2011 (97.5 KiB, 162,703 hits)
- FY 2009-10:
Income Tax Calculator for Financial Year 2009-2010 (72.0 KiB, 71,416 hits)
- FY 2008-09:
Income Tax Calculator for Financial Year 2008-2009 (71.5 KiB, 28,692 hits)
Changes in FY 2020-21 (Budget Feb 2020):
- Optional new tax regime – No change in the existing tax slab rates, but a new tax regime has been proposed. If individuals don’t take exemptions and deductions, they would be taxed at reduced tax rates.
- Additional 1.5 lacs deduction available u/s 80EEA on home loan interest subject to the following conditions:
a) The loan must be taken between April 1, 2019, and March 31, 2021;
b) The value of house property must not exceed Rs 45 lakh; and
c) Individuals should not own any house on the date of sanctioning of the loan.
Changes in FY 2019-20 (Budget July 2019):
- Additional 1.5 lacs deduction available u/s 80EEA on home loan interest subject to following conditions:
a) The loan must be taken between April 1, 2019, and March 31, 2020;
b) The value of house property must not exceed Rs 45 lakh, and
c) Individual should not own any house on the date of sanctioning of the loan. - 15% surcharge between 1 to 2 crores of taxable income, 25% between 2 to 5 and 37% above 5 crores.
Changes in FY 2019-20 (Interim Budget Feb 2019):
- Full tax rebate (u/s 87A) for taxable income (after all deductions/exemptions) upto Rs 5 lakhs.
- Standard deduction increased for salaried persons from 40,000 to 50,000.
- No notional rent for second self-occupied house property under income from house property.
- TDS deduction on fixed deposits threshold increased from existing 10,000 to 40,000.
- Section 54 exemption is applicable for up to two house property purchase (once a life) if capital gains are less than or equal to 2 crores.
- Income tax slabs remain the same as the previous year.
- Anonymous and online system for assessments: Within the next 2 years, scrutiny to be done without any physical interface between taxpayer and tax officer and to be done electronically without disclosing each other’s identity. We wrote it as one of our suggestion in Open Letter to Narendra Modi in Dec 2016.
Changes in FY 2018-19:
- Removal of conveyance allowance and medical reimbursement and Addition of standard deduction of Rs 40,000
- Cess on tax increased from 3% to 4% (education and healthcare cess)
- LTCG introduced @ 10%, for gains exceeding 1 lakh earned from listed stocks/equity-linked mutual funds
- Section 80D now allows up to Rs 50,000 deduction for plan taken for senior citizens
- New section 80TTB added for senior citizens which allow up to Rs 50,000 deduction for income from saving bank interest or income from fixed/recurring deposits. But 80TTA (10,000 deductions for saving bank interest) and 80TTB cannot be applied together. Under section 194A the threshold for deduction of tax at source on interest income for senior citizens has been raised from Rs. 10,000 to Rs. 50,000
- Capital gain bonds u/s 54EC duration increased to 5 years from 3 years
Changes in FY 2017-18:
- The reduced income tax rate on income between Rs. 2.5 lakh and Rs. 5 lakh to 5 per cent from 10 per cent.
- Reduced Section 87A rebate from Rs. 5,000 to Rs. 2,500. And no rebate will be applicable for taxpayers having income above Rs. 3.5 lakh.
- Additional Surcharge of 10%, if taxable income is above 50 lakhs.
- Max loss from house property for let out property can be 2 lakhs.
- Period for applicability of long term capital gains for house property reduced to 2 years from 3 years, and base year changes to April 2001 for indexation computation.
- Individual and HUF taxpayers to deduct tax at source @ 5% of the rent paid by them in case the amount of the rent exceeds Rs. 50,000 per month.
Changes in FY 2016-17:
1. Rebate increased to 5000 from 2000 u/s 87A
2. Like NPS, tax deduction also available for APY (Atal Pension Yojana)
This excel calculator supports the inclusion of the following components, explanation for each is also provided along:
House Rent Allowance (HRA): Rent receipts can be shown for taking tax benefit for living in a rented house. Income tax exemption for HRA will be least of the following:
- The actual amount of HRA received as a part of the salary.
- 40% (if living in non-metro area) or 50% (if living in metro area) of (basic salary+Dearness allowance (DA)).
- Rent paid minus 10% of (basic salary+DA).
In some cases, the deduction for both HRA and home loan interest (u/s 24) can be taken together in case owned house is not in the same city or not at a commutable distance to office.
Transport/Conveyance allowance: Rs 800 per month is non taxable if salary has this component. This would not be exempted in case of employee also avail of car reimbursement. No proofs/bills required to submit for this exemption.
Children education allowance: Per school-going child 1200 per annum is non-taxable. Maximum for 2 children, so max 2400 per annum becomes non-taxable.
Grade/Special/Management/Supplementary Allowance: That’s a general component in the industry to complete CTC amount after putting 35-40% into basic and 20% in HRA. This is not an expense, but this head is kept just to put the rest of the CTC amount into some component.
Arrears: Generally arrears are fully taxable, but the employee may claim exemption u/s 89(1). One would need to compute income tax on the arrears if it would have been received in the actual year. Now the difference of income tax between payment year and actual year would be allowed for deduction.
Gratuity: If the amount is received before completion of five years of service with the employer, it should be taxable. Else it would be non-taxable up to Rs 10 lakh in the case of non-government servants. In the case of Government service employees, it would be fully non taxable.
Leave travel allowance (LTA): Two trips on a block of four years can be claimed for exemption for travel done inside India. The following amount would be non-taxable:
- Where journey is performed by rail; railway-fare in first AC class by shortest route to the destination.
- Where places of origin and destination are connected by rail but the journey is performed by any other mode than first AC class fare by the shortest route to the place of destination.
- Where the place of origin of journey and destination, or part thereof, are not connected by rail and journey is performed by any other transport; then (i) If a recognised public transport system exists between such places the first class or deluxe class fare of such transport by the shortest route, or, (ii) If in other case, first AC class fare for the distance of the journey by the shortest route, as if the journey has been performed by rail.
- The actual amount received
- The cash equivalent of leave balance (max 30 days per year of service)
- Maximum of 10 months of leave encashment, based on last 10 months average salary
- Rs. 3 Lakh
Performance Incentive/Bonus: This component would be fully taxable.
Medical allowance/Reimbursement: This component is on-taxable up to 15000 per year (or Rs 1250 per month) on producing medical bills.
Food Coupons – Non-taxable up to 50 Rs per meal. So a 22 working month and one meal per day would make Rs 1100 as non taxable. Sodexo or Accor ticket coupons may also be provided by the employer for the same.
Periodical Journals: Some employers may provide a component for buying magazines, journals and books as a part of knowledge enhancement for business growth. This part would become non-taxable on providing original bills.
Professional Development Allowance: If original bills are submitted to the employer, this allowance may become non-taxable. Generally payment done towards any technical course fee, certification etc done to enhance professional knowledge can be reimbursed.
Uniform/Dress Allowance: Some sections of employees mat get an allowance for the purchase of office dress/uniform. In such a case, the component would become non-taxable.
Telephone reimbursements – In some cases, companies may provide a component for telephone bills. Employees may provide actual phone usage bills to reimburse this component and make it non-taxable.
Internet Expenses – Employer may also provide reimbursement of internet expenses and thus this would become non taxable.
Car expense reimbursements – In case the company provides a component for this and employee use the self-owned car for official and personal purposes, Rs 1800 per month would be non-taxable on showing bills for fuel or can maintenance. This amount would be Rs 2400 in case the car is more capacity than 1600cc.
Driver salary – If the employee pays the driver salary for a self-owned or company-owned car, Rs 900 per month may become non-taxable if the employer provides a component for it.
Gift from relatives vs non relatives: Gifts from relatives would be non-taxable with no limits attached. Following relations are covered under the non-taxable rule:
- Spouse of the individual
- Brother or sister of the individual
- Brother or sister of the spouse of the individual
- Brother or sister of either of the parents of the individual
- Any lineal ascendant or descendant of the individual
- Any lineal ascendant or descendant of the spouse of the individual, Spouse of the person referred to in clauses (2) to (6).
If gifts received from non-relative persons is worth more than Rs.50000, one is liable to pay the tax on whole value. Gift can be in form of a sum of money (in cash/cheque/bank draft/electronic transfer) or any articles.
Agricultural Income: If one has only only agricultural income, then it is fully exempt from income tax. If other income also there, a rebate on agricultural income would be provided at a 10-30% rate depending on the actual amount of agricultural income.
House rent Income: 30% of the rental income can be reduced as a standard deduction for repairs, maintenance etc. irrespective of the actual amount spent.
Bank/Fixed deposit/Post Office/NSC/SCSS interest: Interest earned on bank account, fixed deposits, post office, debt mutual funds/fixed maturity plans(kept less than one year) would be added to taxable income and taxed as per slab rates.
Short Term Gains from Share Trading/Equity Mutual funds: if stocks/equity mutual funds are sold before one year, 15% tax would be payable on such gains. STT should have been on transaction.
Long term gains from Share Trading/Equity Mutual funds: If stocks/equity mutual funds are kept for more than a year before the sale, it would be long term gains and such gains would be fully exempt from income tax. Securities transaction tax (STT) must have been paid on transactions for availing this exemption.
Section 80C, 80CCD and 80CCC deductions– One can claim his investments/payments under section 80C, 80CCC and 80CCD, up to 1.5 lakh (1 lakh before FY 2014-15) combined limit. Amount can be invested in:
- Tax saving mutual funds (ELSS) with three years lock-in
- Five-year tax-saver bank Fixed deposits
- Public provident fund (PPF)
- National Savings Certificate (NSC) or National Service Scheme (NSS)
- Employer contribution into New Pension Scheme (NPS) (Section 80CCD)
- Life insurance/Unit Linked Insurance Plan (ULIP) premium
- Employee’s contribution towards Employee provident fund (EPF)
- Home loan principal amount payment (only if you have got possession of the house)
- Senior citizen savings scheme (SCSS), if your age is more than 60 years
- Post office tax-saving deposit or tax saving bonds
- Pension scheme/Retirement plans (Secion 80CCC)
- Tuition fees paid for children education
- Sukanya Samriddhi Scheme
Section 80D : Maximum deduction of up to 25,000 (15,000 before FY 2015-16) under medical or health insurance offered by life insurers taken for self and family. An additional deduction of up to 15,000 for buying cover for dependent parents. If parents/assessee are senior citizens, they can claim a deduction of up to Rs 30,000.
Section 80DD : Deduction of 75,000 for maintenance of a disabled dependent. If the disability is severe, the deduction amount will be 125,000.
Section 80E : Tax relief on interest payments on education loan taken for higher studies for self, spouse or child. There is no maximum limit on this deduction.
Section 80G: The eligibility is 50% or 100% of the donation amount subject to an overall ceiling of 10% of your gross total income to certain funds and charitable institutions.
Section 24/Home loan interest payment : The maximum limit is of 1.5 lakh on interest payments of a home loan for a self-occupied house. There is no ceiling on the amount of deduction if the house is let out or deemed to be let out. House rent would need to show in income in case house is not self-occupied.
Section 80U (Disabled/Handicapped person): Deduction can be claimed if a person has a disability. The allowed dedudtion for Rs 75,000. This deduction goes up to Rs. 100,000 in case disability is severe.
Section 80DDB deduction (Medical treatment expenses): Expenses done for medical treatment for self, spouse, dependent children, parents, brothers and sisters. Maximum deduction can be Rs 40,000 (goes up to 80,000 in case the patient is a senior citizen). Deduction is only allowed in the case of following diseases:
- Neurological Diseases where the disability level has been certified to be of 40% and above,
(a) Dementia
(b) Dystonia Musculorum Deformans
(c) Motor Neuron Disease
(d) Ataxia
(e) Chorea
(f) Hemiballismus
(g) Aphasia
(h) Parkinson’s Disease - Malignant Cancers
- Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)
- Chronic Renal failure
- Haematological disorders :
(a) Hemophilia ;
(b) Thalassaemia.
Professional tax: Professional tax deducted from salary by employer should be removed from taxable salary before computation of income tax.
Employer contribution of EPF/New pension scheme(NPS): Employer contribution does not become part of employee’s income and hence income tax is not payable on this part.
Tax deducted at Source (TDS) deduction: As per income tax rules, all payment which is taxable in nature should be done after deduction of taxes at the source itself. Hence employer computes income tax on salary payment and deducts it every month. This TDS is based on employee’s saving/investment declaration at the start of year. If investments for tax saving is not done, large amount may be deducted in the last few months.
In-Hand monthly salary: After deduction of all components like TDS, EPF etc in hand monthly salary is computed.
In-Hand monthly salary without reimbursements: Some of the employees get reimbursements components separately in a different payment other than salary, So this figure shows in hand salary w/o reimbursement components like medical, telephone, internet bills, driver salary etc.
Total income this year: This figure shows the whole year’s income from all sources combined.
Advance tax schedule: As per income tax rules, 30% of income tax should be paid by 15th Sept, 60% by 15th Dec and the rest by 31st March. If its not followed one may be charged interest penalty u/s 234C.
If you want to use a simple web based calculator, you may try, official income tax calculator by income tax department
Disclaimer: We are not responsible for any inaccuracies in the income tax computed by this tool. If one finds any issue, they can report same to us through contact us page and we would try to fix the problem as soon as possible.
respected sir
plz help me,its right that person showing house rent more then 8000 per month should attach his house owner pan card copy along with other documents.
or wht can we do is the same is not avalible
@Amit
If annual rent paid by the employee exceeds Rs 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer. In case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address of the landlord should be filed by the employee.
Please check page 25, last paragraph under section 5.3.9 in income tax department circular issued on 10 Oct 2013: http://www.pankajbatra.com/download/65/
respected sir
thanks for your valuabale information and feedback
Sir can u plz provide me simple formate of form 16 as well
thanks sir g
@Amit
You can download sample form 16 from here: http://www.pankajbatra.com/download/64/
The ITO had sent me a notice thro’ his PERSONAL email. I responded to the notice. I had NOT received the papers thro’ postal services or thro’ the IT Dep peon. If I receive another notice thro’ his personal email, is it essential for me to respond ? The university had deducted IT on SOME of the retirement benefits. The IT deptt had refunded. The IT deptt is NOW asking to deposit back the refund. The IT deptt is NOT bothering for the norms at other universities. It wishes to consider us under OTHERS & not under STATE. I wish to file an appeal. I do not wish to deposit at this stage. How much interest I shall have to pay if I lose the appeal ? Is it 12 or 18 % or any other amount at the discretion of the ITO. The amount is around 3 lacs. My colleagues have already received the orders to deposit. I am yet to recive.
@Dr SB Kalidhar
Is notice from official email id (like [email protected] Id)? If not, there is no reason to respond to such emails.
But yes, if you get a notice through postal service, you should definitely take that seriously.
I think, if you loose appeal, you would need to pay interest on amount (should be around 1% pm).
Hi Pankaj, firstly thanks a ton for this app.
I filled all the details but.. at the end it shows “Error”.. what does it mean… should it be “Success”..
@Punit
That’s for debugging purposes.
Please send your file to email: files at pankajbatra.com so that we can identify issues with calculations.
Thanks for your response. I’ll be sending it in some time…
Sir,
Thanks a lot.
hi pankaj.very nice website.I had my pvt co n me n my wife is d director.I m not understanding where to invest to save tax.I want to buy a flat, now I m on a rented flat.So wanted to know how much can I take hl n does car loan is also exempted.
@Mr Punjabi
We don’t have much knowledge on private company taxation. Please consult a CA/Tax professional for same.
Hi Pankaj, A quick query, my current employer has not deducted the TDS correctly and as per my calculations I need to pay 41K more to the IT dept, till now for this FY 185K is already deposited in my PAN account, i want to till when I should deposit this 41K to avoid any penalty/interest..
@Vaibhav
You should pay this amount before 31st March to avoid interest u/s 234B.
Dear Pankaj Batra Ji,
I have been using your tracker/ exel sheet since last 3 years and I just want to drop a note of “Thanks” for your efforts in simplifying IT related stuff to a great extent.
Thanks
Chaitanya Suri
9603959994
@Chaitanya
Thanks sir for the appreciation 🙂
I have a housing loan for house taken for self use. But I am out country for six months. I have kept it vacant. Since it is not occupied can I claim tax exemption for the entire intrest component for six months. If yes, do I need to declare a nominal rental income? Please help on this.
@Kvk
If you show house as not self occupied and show rental income (notional rent in case its not given on rent) for same in your income tax returns, you can claim entire home loan interest without any limit.
Thanks Pankaj. After six months in current financial year, when I occupy it again, I will have to switch to a limit of 1,50,000. How would that work? Can I claim for six months interest without limit and six months with limit of (1,50,000 /2).
@Kvk
I would advise to show as rented out for full year and not for partial period. In case you show house as rented out, whole year notional rent would need to be shown.
There is no such rule of splitting deduction for half year.
Hi Pankaj, you are requested to review & answer the following queries:
1. Is it mandatory to be the owner of any property to avail the Income Tax Benefit for PRINCIPLE-INTEREST against a taken Home Loan?
Is it possible to avail the benefit by just being a borrower or co-borrower?
2. Is there any benefit in case of registration of any property in the name of a Senior Citizen like it happens in case of ladies?
3. Generally, how many joint names can be put/ considered while buying any new property? All will be eligible for the benefits mainly the Income Tax one on the home loan-if taken?
@Prateek
1. Yes, you should be a sole or joint owner of the house property for which principal and interest benefit is availed.
2. Stamp duty and registration rates and policies varies from state to state. Please refer to your state rules for same. e.g. in Haryana, there is no separate rate for senior citizens.
3. There is as such no limit on number of joint owners in a property. To avail income tax benefit on home loan, owner should be co-borrower too.
Thanks Pankaj.
You are requested to tell something about the following query too:
For a under construction property, Income Tax benefit on Interest part (as a deduction under Section 24) of a home loan can only be availed after its procession?
However on Principle part, it can be availed during construction under Section 80C?
@Prateek
For house whose possession has not been taken, home loan interest benefit cannot be availed u/s 24. However all interest paid before possession year can be claimed in five equal instalments starting from possession year.
80C deduction for home loan principal payment can also be availed only after possession year. 80C rules are silent on this, but most of the people follow possession year approach.
My son is serving in Delhi. He pays Rs 13,000 pm as House Rent. The house owner gave the receipts without PAN. The employer did not give the benefit of HR in making calculations for the TDS. The house owner has given the PAN No. now. Is it possible to avail the HR EXEMPTION at the time of filing the Income Tax RETURN ?
@Dr SB Kalidhar
As such, there is no provision in ITR to show HRA exemption.
But while filing income tax return, he should reduce taxable income by self computed HRA exemption. Thus there would be income tax refund payable.
In case IT department send back notice, he can show rent receipts and claim for HRA exemption.
Hi Pankaj Ji,
I have a query on Tax Exemptions, as my employer have only Medical Reimbursement as a tax exemption component and they don’t have any other.
May I know, can we show a for Car allowances and Driver Salary exemption while returning the IT returns thru CA ? also can we show the exemption for Telephone reimbursement at the time of IT returns ? Please help me out in this.
Other wise I will be landing paying more tax
@Rekha
There is no provision for car expenses, driver salary and telephone expense deduction in income tax return.
These benefit can only be provided by employer through reimbursements of bills.
Thank you Pankaj Ji for your immediate reply on my query, just one more clarity is required, Under medical reimbursements can we produce the bills for Consultation and Investigation receipts ? also can we produce the bills for Physiotherapy treatments ? otherwise it is only applicable for Medicines Purchase, Please help me out.. Thank you in advance.
@Rekha
Yes, you can show consultation and lab test/investigation expense receipts.
Physiotherapy treatment should also be acceptable.
Good Morning !
Thank you Pankaj Ji for your valuable reply on my query.
Regards,
Hi Pankaji Ji,
Is it required to produce Rent Agreement at the time of declaration ? if Rent is Rs. 15000 per month and what is the limit for where agreement is not required ?
Thank you in advance.. 🙂
@Rekha
Rent agreement is not required at the time of investment declaration.
Either rent agreement or rent receipt is required as rent is 15,000 per month.
A woman employee of State Government plans to take leave for 720 days in 2021 and 2022. In 2014 and 2015, she invests Rs.10Lakhs each, which yields Rs5,25,000 each in the FY 2021 and FY 2022. SInce she would be on leave in these two years, She will have only this income to show, and nothing else. If not on leave , she has to pay tax on these accruals. On leave, permitted by recent SC ruling, how the accruals are taxed?
@Murthy
Also, Its too early to say taxation of 2021 and 2022 now, as income tax rules may change at that time.
But as per current rules, Income tax liability would depend on type of investment.
If its fixed deposits, whole interest would be considered as taxable income and slab rate applicable in 2021,2022 would be applicable.
If its equity mutual funds, gains would be tax free.
If its debt mutual funds/FMP, long term gains would be applicable and tax would be payable @ 20% after indexation.
THanks Pankaj,
I need a clarification.
All these tax saving, HRA, etc. is being concentrated on “Loss from House Property”. WHy should everybody opt for the same?
Is there any provision for not possessing a house? I mean, if I do not opt for a home loan in my entire career, and contnue to save in a conservative manner, I can see a huge amount being accumulated. Recently, the wealth tax limit was increased to 50Crores. Instead of bothering about “Income Tax”, how about preparing ourselves for the “Wealth Tax”?
I think the Government is fooling people.
If you look at the Section 80C, the maximum limit is Rs1,00,000/- , automatically gets exhausted.
PF: 9300 Plus Children Education: 55000 Plus existing insurance premium:36000.(Please treat this as an example).
So, your Principal from EMI Part of a home loan is going beyond 1Lakh limit. Forget about the Section 10, through which you drain your income on “Exemption of Interest amount from Taxable Income”, which goes beyond Rs1.5L, if you opt for a lesser period, and there is a possible case of false claims here…..
Why should the Govt. encourage the housing industry? It is a fact that the Banks are the most benificiaries here, with the “Loanee” getting a “House” after 15 or 20 years. Axis even went a little far, for 30 years.
Coming back to my issue, if I accumulate the post tax amount, without going for an EMI Scheme, @9% , for say 20 years of disciplined behaviour, the power of compounding works out to yield……… that’s a big amount.
Why should it be taxed?
How not to pay tax? Can you advise me on “Tax Avoidance”? I think I am asking a legally valid point. It is not tax evasion. If I pay tax on the “Productive Investment” of getting interest on FDs, etc., is it not double taxation? If it is taxed again?
The point is how many times the tax has to be paid?
I get 10L Income per annum, I pay into my 30% bracket year after year, and still, I need to pay on Accruals? Why should I show the Interest in my annual return? They say they made it SARAL, but if I have post tax income, do I have freedom of using it in whateve way I like?
Look at the HRA Policy. from the days of my childhood, I have the same scenario:
Minimum of i) Actual HRA recieved, ii) Rent paid in excess of 10% of basic salary,iii) 40% of basic salary.
You think it is flawless for more than 25 years? When this principle is introduced?
While the second point allows people to go for gullible rent reciepts, the third part is hopeless. totally irrelavent, as it turns out to be always more than the first two.
@Murthy
Tax saving options are small carrots for innocent people so that apart from income tax, they also fuel the government accounts.
Major beneficiary of tax saving schemes is government only, be it PPF accounts, LIC Insurance, EPF or other schemes. Govt wants us to contribute into the economy.
Home loan benefit is also one of such trap, which people fall into. I have seen people buying more and more flats, saving that its good for tax saving. They never enjoy life to the fullest and all the time they have pressure of paying EMIs. They are afraid of picking up a challenging job and remain in a not-so-exciting job throughout their life.
But looking from economy perspective, home loan benefit is good. If people are shown incentives, they would buy. It would help bank, infrastructure companies, material supplier, labourers, electrician and what not. So more buying would mean more jobs creation and better the country is.
But it cannot do good fully until corruption from real estate industry is removed. Most of the house prices are artificially inflated and its becoming almost impossible for a common man to buy his own house.
HRA exemption is fine as it helps people without their own homes. It gives some relief to people paying house rents. I know formula is a bit complex, but I think, it has been tested with time. Lower the salary, higher chances to making your HRA fully non-taxable, higher you go in salary, more taxable it becomes. I think its fine to get more tax from people who earn more.
I also do not have a home loan and never in life wants to take that.
We should not pay attention to tax saving, but creating wealth. Instead of investing one lakh and locking your funds, one can invest into other areas like equities, mutual funds and get more returns in long term.
Regarding tax treatment of accumulated wealth, I would advise not to invest into fixed deposit and such simple avenues. Instead of FDs, look for Fixed maturity plan mutual funds. Indexation rules applies on them and income tax on gains can be made almost zero in most of the cases.
Further more, invest into equity mutual funds (for long term 8-10 years) and there would be not any income tax on gains, no matter is money is doubled or tripled.
I hope I was able to answer all your questions. Do reply back, in case you have further queries.
That’s great Pankaj, you almost replicated my thoughts.
My point of view is the Real Estate Industry is in the hands of Mafia, I prefer to call it , but it is the Government which promotes them. Look at the big-wigs who benifited of late, through manipulation of prices, gullible deals… There are more RajKapoors now compared to the old Shri 420. (You remember the famous quote from the film… Ek hajar me ek ghra nahin bansakta……something like that)….
The other point is why encouraging people to get ENTANGLED in a web of financial woes, just for the sake of a Dwelling? I do not pose myself as an intelligent over all others, but I used to worry when some one asked me earlier….WHEN ARE YOU GOING TO BUY A HOUSE?… now I simply laugh at them. But a slavery of 20 years, will yield just a house, which may or may not appreciate…..still people going for it….. It is amazing! Just to save tax, they pay EMIs throught their career. If not satisfied once, they go for it again….
I just tell people that we are all financially illiterate. I Think at least I still am. I still see some better opportunities, sometimes I wonder about the Asset Quality I am generating. How about getting some light on CASH FLOW?
Say, 10 years back, my friend opted for a house of Rs. 25L, and he paid around Rs.42L in total and now he sits pretty in his OWN HOUSE, that is worth Rs.60L. These 10 years, he got claimed the HOME LOAN BENEFIT, and his taxable income got reduced by at least 20%, year on year. Hence his net out flow used to be EMI-Tax savings: 35,000-15000= Rs.20,000/- (Genuine?) per month. Hence for 10 years, after availing all the benefits, he got a own house, worth 60L(If he can sell it at that price). His total investment is Rs2.4L Per annum and its final value is 60L.
About me?
I have paid almost Rs8.5L towards rent, and Rs5L as Income Tax, and saved Rs.20,000 per month(I Do not have a home loan), for the past 10 years. Now , I have around Rs.50L in cash.
While he had his own house, I have 50L cash. Now I knew that every year, it is going to genreate Rs5L minimum, on which I have to pay tax. Post tax returns per annum are a minimum of Rs.3.5L. This can be converted in terms of Rs30K per month, while his 60L worth of House yields Rs15000PM rent, as he moved out of city. He seems planning another house in another city……..
WHo is better of?