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Monday, February 29, 2016

INCREASE IN HOUSE RENT ALLOWANCE EXEMPTION LIMIT U/S 80GG

As you have seen on various website and TV that House rent allowance limit has been increased from 24000/- from 60000/- but this limit is not applicable for salaried persons getting HRA. 

The existing provisions of Section 80GG provide for a deduction of any expenditure incurred by an individual in excess of ten per cent of his total income towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence if he is not granted house rent allowance by his employer, to the extent such excess expenditure does not exceed two thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less, subject to other conditions as prescribed therein. 


In order to provide relief to the individual tax payers, it is proposed to amend section 80GG so as to increase the maximum limit of deduction from existing Rs. 2000 per month to Rs. 5000 per month.

Detail of deduction for house rent under  section 80GG .

Deduction under section 80GG for house rent paid:

Deduction u/s 80GG is available if following condition are satisfied
  • Deduction is available to Individual Assessee only.
  • He has not received HRA(house rent allownace ) from his employer if he is a salaried person otherwise he should be self employed.
  • He has paid house rent for his own residence.
  • He or his spouse or his minor child or HUF(of which he has a member) should not have a residential house where he ordinarily resides or performs duties of his office or employment or carries on his business or profession;
  • He should not have a house owned by him, which is under his occupation and value of that is not being taken as nil under section 23(2)(a) or 23(4).
  • A declaration on Form 10BA should be submitted .
so if conditions are satisfied then you can claim deduction u/s 80GG for house rent paid

Amount of deduction:Least of the following is deductible u/s 80GG
  • Rs 5000 per month wef 01.04.2016 (2000 per month up to 31.03.2016).
  • 25 % of total income
  • the excess of actual rent paid over 10 % of total income
Total Income means income excluding long term and short term gain under section 111A and income referred to in section 115A or 115D but before making any deduction under section 80C to 80U.


@courtesy http://www.simpletaxindia.net/

INCOME TAX SLABS FY 2016-17 AFTER BUDGET 2016 ON 29-02-2016


The Union Finance Minister Shri Arun Jaitley in his Budget Speech ON 29/02/2016 in Lok Sabha  proposed no change in the rate of personal Income-tax. He announced the tax proposals with no change in the rate of tax for companies in respect of the income earned in the financial year 2016-17 assessable in the assessment year 2017-18.

However rebate under section 87A has been increased to 5000 from 2000/- earlier.But 87A relief is available only to persons having taxable income up to 500000/- (income after all deductions).

So if your Taxable income is more than 5 lakh then no benefit is available to you.

Further if your income is more than one crore then surcharge has been increased to 12  to 15%.





ASSESSMENT YEAR 2017-18 RELEVANT TO FINANCIAL YEAR 2016-17


1. Tax Slab for an Individual (resident & below 60 years) or HUF/AOP/BOI/AJP
Income Slabs
Tax Rates
Total income up to Rs. 2.5 Lac
0% Tax
Total income above Rs. 2.5 Lac and below Rs.5 Lac
10% on amount exceeding Rs. 2.5 Lac
Total income above Rs. 5 Lac and below Rs.10 Lac
20% on Income exceeding Rs. 5 Lac + Rs. 25,000
Total income more than Rs. 10 Lac
30% on Income exceeding Rs. 10 Lac + Rs. 1,25,000

* u/s 87A the Individual having taxable income up to Rs. 5 Lac , can claim rebate, on the Actual Tax amount subject to a maximum of Rs.5,000 (earlier limit was 2000)

Where the Taxable Income exceeds Rs. 1 crore, Surcharge @ 15%(earlier 12%) of Income tax is applicable
2. Tax Slab for an Individual (resident & above 60 years but below 80 years)
Income Slabs
Tax Rates
Total income up to Rs. 3.00 Lac
0% Tax
Total income above Rs. 3.00 Lac and below Rs.5 Lac
10% on amount exceeding Rs. 3.00 Lac
Total income above Rs. 5 Lac and below Rs.10 Lac
20% on Income exceeding Rs. 5 Lac + Rs. 20,000
Total income more than Rs. 10 Lac
30% on Income exceeding Rs. 10 Lac + Rs. 1,20,000

* u/s 87A the Individual having taxable income up to Rs. 5 Lac , can claim rebate, on the Actual Tax amount subject to a maximum of Rs.5,000 (earlier limit was 2000)

Where the Taxable Income exceeds Rs. 1 crore, Surcharge @ 15% (earlier 12%)of Income tax is applicable
3. Tax Slab for an Individual (resident & above 80 years)
Income Slabs
Tax Rates
Total income up to Rs. 5 Lac
0% Tax
Total income above Rs. 5 Lac and below Rs.10 Lac
20% on Income exceeding Rs. 5 Lac
Total income more than Rs. 10 Lac
30% on Income exceeding Rs. 10 Lac + Rs. 1 Lac

Where the Taxable Income exceeds Rs. 1 crore, Surcharge @ 15%(earlier 12%) of Income tax is applicable
EDUCATION CESS
The amount of Income-tax shall be increased by Education Cess of 3% on Income-tax.


@courtesy http://www.simpletaxindia.net/


Budget 2016-17 surprise: EPF will now be partially taxable

The changes announced by the finance minister in the can reduce your retirement savings significantly when you withdraw it. The FM has made Employee Provident Fund (EFP) and National Pension Scheme (NPS) withdrawals on retirement partially taxable.

The until now followed a exempt-exempt-exempt taxation structure. This means, there was no tax on investment, on interest accrued and on withdrawal. In case of NPS, the funds that you receive in your bank account was taxable.

“In case of superannuation funds and recognised provident funds, including EPF, the same norm of 40 per cent of corpus to be tax free will apply in respect of corpus created out of contributions made on or from April 1, 2016,” finance minister Arun Jaitley said in his Budget speech.

This essentially means when you withdraw from EPF, the 60 per cent of the corpus, accumulated post April 1,2016, will attract tax and the remaining 40 per cent will not. According to the current provisions of the NPS, out of the total corpus, the person needs to buy an annuity plan with the 40 per cent. Of the remaining money that he will get in his bank account, 60 per cent will be taxable.

Pay interest on retained PF or give entire amount: Unions

Trade Unions including RSS-backed Bhartiya Mazdoor Sangh (BMS) have demanded that retirement fund body EPFO shall either allow unemployed subscribers to withdraw their entire PF or give interest on retained amount. 

"We will demand from Labour Minister that either EPFO pays entire amount in PF account or pay interest on the retained amount to unemployed subscribers opting for withdrawal as per new norms," Indian National Trade Union Congress Vice-President and an EPFO trustee Ashok Sing told PTI


Earlier this month, Employees Provident Fund Organisation (EPFO) tightened the norms for withdrawals of PF accumulations for its over five crore subscribers. 


Now the subscribers can withdraw only 90 per cent of their own contributions to PF account and interest earned on that after pleading over two months of unemployment. 



 Earlier they were allowed to withdraw entire PF accumulations after showing two months of unemployment. 


Under the new norms two months unemployment condition shall not apply in cases of women subscribers resigning for getting married or on account of pregnancy or child birth. 



BMS General Secretary Virjesh Upadhyay said, "The EPFO must give interest on the retained amount in case unemployed subscribers opts for withdrawal. They should not make the account inoperative." 


The new norms are silent on crediting interest to such accounts where subscribers opts for withdrawal due to unemployment and does not contributes to his account for a period of more than three years. 

A PF accounts becomes inoperative after no contribution is made for continuous 36 months period. This provision was made in the scheme to avoid parking of funds with EPFO. 

Under the new norms their could be a situation where subscribers opt for withdrawals of his PF accumulation pleading unemployment and does not get a job even after three years. In those cases the account will become inoperative and no interest will be credited. 



 The new norms also provides that subscribers will not be able to claim withdrawal of PF after attaining 54 years of age. They would have to wait till attaining the age 57 years. 




 As per the earlier norms, subscribers were allowed to claim 90 per cent of their accumulations in their PF account at the age of 54 years and their claims were settled just one year before their retirement. 


The big change is that now under this facility, the subscriber would be able to withdraw his contribution and interest earned on it unlike 90 per cent of the total accumulations earlier. 



 In another change, EPFO has made it mandatory to wait till attaining the age of 57 for claiming PF withdrawal for transferring that to the Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana. 



Earlier norms used to allow subscribers to claim 90 per cent of their accumulations for investing in the scheme after attaining the age of 55 years 


@courtesy http://economictimes.indiatimes.com/

Tuesday, February 23, 2016

ESIC Toll Free Helpline Numbers

ESIC Corporation has setup the Public Grievances Redressal Systems at all levels i,e HQRS/Regional/Sub Regional/Divisional/Branch Offices/ESIC Dispensaries /Esi Hospital 

In order to speed up the grievances under the ESIC Schemes various measures have been taken by the corporation it includes a Toll free Helpline Number 1800-11-2526 activated at the qrs Office  besides this in every state the following helpline numbers have been activated 



ESIC Benefits Version 2.0 (2016)














Banking Employees are Covered under the EPF Act

Dear all,

From 10th of Feb 2016 Will apply to all banks who employ 20 or more if they were not covered under Contributory Provident Fund or any other similar scheme.

Respective notification is enclosed for your ready reference.

PF applies to banks employees

SECTION 80CCD के लिए अटल पेंशन योजना CBDT द्वारा अधिसूचित

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 7/2016 – Income-tax
New Delhi, Date: 19th February, 2016
O. 529(E).- In exercise of the powers conferred by sub-section (1) of section 80CCD of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the ‘Atal Pension Yojana (APY)’ as published in the Gazette of India, Extraordinary, Part I, Section 1, vide number F.No. 16/1/2015-PR dated the 16th October, 2015 as a pension scheme for the purposes of the said  section.
This notification shall come into force from the date of its publication in the Official Gazette.
[F.No.173/394/2015-ITA-I]
Deepshikha Sharma, Director


Monday, February 22, 2016

Indian Government puts limit on early withdrawal from provident fund

Dear all 

As per my earlier blog as in regards to Major 3 Latest Amendments In EPF And EDLI pls find the details in brief:-
===========================================================

In brief The Ministry of Labour and Employment, Government of India, has made a few amendments in the Employees’ Provident Fund Scheme, 1952 (PF Scheme). These are effective from 10 February 2016. Key implications are briefly explained below: 



  • Member employees will no longer be allowed to withdraw the full amount standing to their credit in the fund on cessation of employment from a covered establishment before attaining the age of retirement.
  • The maximum withdrawal on cessation of employment cannot exceed an amount aggregating employee’s own contribution and interest accrued thereon. International workers (IWs) coming from a country with which India has a social security agreement (SSA) in force shall not be governed by this amendment. They can continue to withdraw the full amount standing to their credit in the fund on cessation of employment. 
Subject                  Relevant existing              Amendment made                   Impact provisions
Continuity of PF membership
Explanation to Para 26A provides that the employees membership shall be deemed to be terminated, if he/she withdraws full amount of provident fund (PF) standing to his credit on cessation of employment (applicable to Indian employees).
Explanation to Para
26A has been omitted.
Indian employees will continue to be a member of the fund even if they cease to be an employee of a covered establishment, as the amended withdrawal provisions no longer allow Indian employees to withdraw the full amount of PF on
cessation of employment.
Increase in
age-limit
A member may withdraw upto
90% of PF balance on attaining
54 years of age or within one year before actual retirement, whichever is later. (Para 68NN)
The age now has
been increased from
54 to 57 years.
Members would now be
able to avail this option only on attaining the age of 57 years.


1 Notification no. G.S.R. 158(E), dated February 10, 2016 [F.No. S-35012/5/2015-SS-II]
  

Subject                     Relevant existing                       Amendment made                                   Impact        provisions

Partial withdrawal of PF on cessation of employment


A member who ceases to be in employment and continues to not be employed with a covered establishment for at least two months, may be permitted to withdraw only
his own share of contribution, including interest earned thereon.

The requirement of two months’ period referred above shall not apply in case of female members resigning from the service for the purpose of getting married or on account of pregnancy/
child birth. (Para 68NNNN - new insertion)

With the insertion of the new paragraph, employer’s contribution, including interest thereon, cannot be withdrawn until
retirement.

Amendment in withdrawal provisions

A member may withdraw the full amount standing to his credit in the fund:

·   On retirement from service after attaining the age of 55 years, or in other circumstances as prescribed;

·   On cessation of employment and not being re-employed for at least two months
(Para 69 applicable to Indian employees)





·   The age of retirement has now been increased from
55 to 58 years.


·   Option of full withdrawal on cessation of employment has been done away with.

The retirement age for full withdrawal in case of Indian employees has been aligned with that of IWs. (IWs are governed by a special provision related to withdrawal of PF)

The amendments introduced in the PF scheme will have a wide impact on Indian employees as they will no longer be allowed to withdraw the entire PF contribution on cessation of employment. While this will help members to build funds for their retirement, at the same time, long term availability of funds to thPF authorities might result ibetter returns for the members.


IWs from SSA countries will not be affected on account of these changes; they can apply for a full withdrawal of their PF contribution on cessation of their employment.

Companies may consider updating their employees on these changes by circulating the alert among them.