Vipin Kumar Mool Chand & Co.-Chartered Accountants

29/05/2021

10/06/2020

NPS contribution: Latest income tax rules explained

Due to the coronavirus pandemic, the government has extended the date till June 30 for making various investment/payment for claiming deduction for FY 2019-20. It includes National Pension Scheme (NPS) and other Section 80C investments like PPF and NSC. From April, new income tax rates came into effect. However, the old tax slabs will also remain in effect, giving a choice to the individual to opt between the two.

Under the new tax rates, there is zero tax for income up to Rs. 2.5 lakh; 5% for income between Rs. 2.5 lakh and up to Rs. 5 lakh; 10% for income between Rs. 5 lakh and up to Rs. 7.5 lakh; 15% for income between Rs. 7.5 lakh and up to Rs. 10 lakh; 20% for income between Rs. 10 lakh and up to Rs. 12.5 lakh; 25% for income between Rs. 12.5 lakh and up to Rs. 15 lakh; 30% for income above Rs. 15 lakh.

1) You will not be eligible for some of the tax benefits on NPS contribution if you opt for the new tax rates.

2) If you opt for the new tax rates, you can still claim income tax deduction on employer contribution towards employee’s NPS account. If your employer is contributing towards your NPS account, a deduction of up to 10% of salary (basic + DA) irrespective of any limit qualifies for income tax deduction under Section 80 CCD(2).

3) Central government employees enjoy a higher limit of 14% of the salary. For others, the limit is 10%.

4) This benefit is also available if you stick to the old income tax regime.

5) If you stick to the old income tax regime, you can claim exclusive deduction of Rs. 50,000 under Section 80CCD (1B).

31/03/2020

*CLARIFICATIONS* *ON* 𝗖𝗢𝗡𝗙𝗨𝗦𝗜𝗡𝗚 𝗬𝗘𝗔𝗥 𝗘𝗡𝗗 𝗠𝗔𝗥𝗖𝗛 𝗩𝗦 𝗝𝗨𝗡𝗘

This is the biggest confusion in the minds of the taxpayers. Following points clarifies some of the issues:

1) FY 2019-20 is not at all extended till 30th June, only the date is extended for some compliances.

2) Belated returns or Revised returns for the FY 2018-19 can be filed till 30th June.

3) In the FY 2019-20, income is taxable till 31st March only and not upto 30th June, i.e. for taxability of income financial year is considered till 31st March only.

4) Deductions under 80C, 80D, etc. can be claimed by investing till 30th June.

5) New LIC, mediclaim, PPF, NPS, etc. policies taken till 30th June will be eligible for the deduction for the FY 2019-20.

6) Payment of Premium of old policies of LIC, mediclaim, PPF, NPS, etc. due upto 31st March can be claimed as deduction even if paid till 30th June.

7) Housing loan interest is eligible for deduction on accrual basis, so interest accrued till 31st March will be eligible for the deduction in FY 2019-20. However Installments due upto 31st March can be claimed as deduction ever if paid till 30th June.

8) Tds deducted during the month of March can be deposited upto 30th April 2020. If tds is not deposited before due date, interest will be charged @ 9 % p.a instead of earlier 18% p.a

31/03/2020

*CLARIFICATIONS* *ON* 𝗖𝗢𝗡𝗙𝗨𝗦𝗜𝗡𝗚 𝗬𝗘𝗔𝗥 𝗘𝗡𝗗 𝗠𝗔𝗥𝗖𝗛 𝗩𝗦 𝗝𝗨𝗡𝗘

This is the biggest confusion in the minds of the taxpayers. Following points clarifies some of the issues:

1) FY 2019-20 is not at all extended till 30th June, only the date is extended for some compliances.

2) Belated returns or Revised returns for the FY 2018-19 can be filed till 30th June.

3) In the FY 2019-20, income is taxable till 31st March only and not upto 30th June, i.e. for taxability of income financial year is considered till 31st March only.

4) Deductions under 80C, 80D, etc. can be claimed by investing till 30th June.

5) New LIC, mediclaim, PPF, NPS, etc. policies taken till 30th June will be eligible for the deduction for the FY 2019-20.

6) Payment of Premium of old policies of LIC, mediclaim, PPF, NPS, etc. due upto 31st March can be claimed as deduction even if paid till 30th June.

7) Housing loan interest is eligible for deduction on accrual basis, so interest accrued till 31st March will be eligible for the deduction in FY 2019-20. However Installments due upto 31st March can be claimed as deduction ever if paid till 30th June.

8) Tds deducted during the month of March can be deposited upto 30th April 2020. If tds is not deposited before due date, interest will be charged @ 9 % p.a instead of earlier 18% p.a.

10/03/2020

Anyone having as registered bank with department and applied for , please change it, otherwise your money may get unnecessarily blocked if refund is credited in that account.

01/02/2020

Key Highlights of Budget 2020


Income Tax Slab: 10 per cent for 5 to 7.5 lakh, 15 per cent for 7.5 lakh to 10 lakh, 20 per cent for 10 lakh to 12.5 lakh, 25 per cent for 12.5 lakh to 15 lakh and 30 per cent for above 15 Lakh.

Dividend Distribution Tax is removed and dividends are taxable.

100% Tax Exemption for Foreign Sovereign wealth Fund Investments in India.

Tax on Cooperative societies proposed to be reduced to 22 per cent plus surcharge and cess, as against 30 per cent at present.

Exempts co-operative societies from Alternate Minimum tax.

New proposed tax slabs that will be voluntarily for taxpayers but subject to not claiming any deductions.

Tax Audit threshold limit increased Rs. 5 cr from 1cr.

Section 50C and 45CA limit extended to 10% from 5%.

Income Tax Act to be amended to facilitate e-appeal.

Section 80G -Donations allowed as a deduction will be pre-filled in ITR forms now onwards.

Additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021.

Vivad se Vishwas’ scheme for direct taxpayers whose appeals are pending at various forums.

Govt to set up investment clearance cell to entrepreneurs.

Changes in Companies Act – Criminal liabilities to be substituted by Civil liabilities.

Strengthen the role of PFRDAI; an amendment to be carried out in Pension Fund in PFRDAI.