Income Tax Query-IN MY MIND

  1. The official website of Income Tax department is

2 . As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and income from other Sources. It sounds so simple but in reality it involves various complexity level in their calculation.

3. Form 16 is taken from Employer is must for an Salaried Employee.

4. A Salaried Employee can file Income Tax Return by using Form 16 and adding  other Sources of Income.

5. From FY 2019-20,The standard deduction that was allowed was equivalent to Rs. 50000 for salaried employee.

6. Individual having taxable income upto Rs. 500000 to get full rebate of tax of Rs. 12500.

7. TDS threshold on interest on bank and post office deposits raised from Rs. 10000 to Rs. 40000.

8. Section 54 Capital Gains exemption now available on two house properties (once in a lifetime).

9. Form 26AS is a summary of taxes deducted on your behalf and taxes paid by you. This is provided by the Income Tax Department. It shows details of tax deducted on your behalf by deductors, details on tax deposited by taxpayers and tax refund received in the financial year. This form can be accessed from the IT Department’s website.

10. The lower your taxable income, the lower taxes you ought to pay. So be sure to claim all the tax deductions and benefits that apply to you. Section 80C of the income tax act can reduce your gross income by Rs 1.5 lakhs. There are a bunch of other deductions under Section 80 such as 80D, 80E, 80GG, 80U etc. that reduce your tax liability.

House Rent Allowance?

What do mean by House Rent Allowance? House Rent Allowance also known as HRA is given by employer to its employee as a part of their salary. This type of allowance proves to be beneficial for an employee as it reduces the tax liability of employee. Employee can get deduction upto 50% of Salary or @40% of salary depending upon the states in which he resides. Employee can only get deduction if he lives or resides in a rental accommodation.

Employers give financial assistance to their employees by giving them Rent allowance. If an employee stays in his or her house then such tax deduction in regards to House Rent Allowance would not be allowed to him or her.

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