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 General Union Budget 2014-15


 General Union Budget 2012-13


 Main Features of Income Tax rates of FY 2014-15


 Main Features of Income Tax rates of FY 2012-13 (Part -1)


 Main Features of Income Tax rates of FY 2012-13 (Part -2)


 Main Features of Income Tax rates of FY 2012-13 (Part -3)


 Main Features of Income Tax rates of FY 2012-13 (Part -4)


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Part -2 : Main Features of Income Tax Rates for financial year 2012-2013 (Assessment year: 2013-14)

Following other components of Income & Expenses have different impact over Income Tax filing for FY 2012-13.

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 following:
  • The actual amount of HRA received as a part of 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, deduction for both HRA and home loan interest (u/s 24) can be taken together in case owned house is not in 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 employee also avail 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/Supplemementary Allowance: Thatís general component in 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 CTC amount into some component.

Arrears: Generally arrears are fully taxable, but 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 actual year. Now difference of income tax between payment year and actual year would be allowed for deduction.

Gratuity: If amount is received before completion of five years of service with employer, it should be taxable. Else it would be non-taxable up to Rs 10 lakh in case of non-government servants. In 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. Following amount would be non-taxable:
  • Where journey is performed by rail; railway-fare in first AC class by shortest route to destination.
  • Where places of origin and destination are connected by rail but the journey is performed by any other mode then first AC class fare by shortest route to the place of destination.
Where 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 recognized public transport system exists between such places the first class or deluxe class fare of such transport by 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.

Leave encashment: Payment by way of leave encashment received by Central & State Govt. employees at the time of retirement in respect of the period of earned leave at credit is fully exempt. In case of other employees, the exemption is to be limited to minimum of all below:
  • 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
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@ All the Income tax slabs details are collected from different information sources. There may be some difference in actual Tax calculation.

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