Section 80 CCD (2): Deduction under section 80 CCD (2) can only be claimed if an individual's employer (government or private) contributes to the individual's NPS account. The maximum deduction that a private sector employee can claim is 10% of his/her salary where salary means basic plus dearness allowance (DA). Government employees can claim up to 14% of salary as a deduction under section 80 CCD (2).
There is also another condition which is employer's contribution to NPS, EPF and a superannuation fund is eligible for deduction only up to Rs 7.5 lakh in a financial year. If the total contribution by the employer exceeds Rs 7.5 Lakh in a financial year, then the excess contribution would be taxable in the employee's hands as perquisites and any interest or dividend earned on it will also be taxable in employee's hand.
The 80CCD (2) deduction is available under the new and old tax regime
Deductions and exemptions available under the Income-tax Act, 1961 for FY 2023-24!
1. Tax Regimes:
- New tax regime is default.
- Old regime requires specific opt-in.
- Different deductions/exemptions available under each.
2. Section 80C:
- Max deduction: Rs 1.5 lakh/year.
- Investments and certain expenses qualify.
3. Section 80CCD(1B):
- Max deduction: Rs 50,000.
- Additional to 80C.
4. Section 80CCD(2):
- Max deduction based on employer's contribution to NPS, EPF, and superannuation fund.
- Limit set for employer's contribution.
5. Section 80D:
- Deduction for health insurance premium.
- Additional deduction for senior citizen parents.
- Further deduction for preventive health check-ups.
6. Professional Tax Deduction:
- Available under old regime only.
- Limitless deduction if paid by the employer.
7. Leave Travel Allowance (LTA):
- Exemption for domestic travel expenses.
- Available under old regime only.
8. House Rent Allowance (HRA):
- Exemption based on rent payment and HRA component.
9. Leave Encashment Deduction:
- Government employees have no monetary limit.
- Non-government sector has specified calculation.
10. Home Loan Interest Deduction:
- Max deduction: Rs 2 lakh/year.
- Available under old and new regimes with limitations.
11. Section 80E:
- Deduction for interest on educational loan.
- No maximum limit.
- Available under old regime only.
12. Section 80EEB:
- Deduction for interest on electric vehicle loan.
- Loan period: April 1, 2019 - March 31, 2023.
13. Standard Deduction:
- Rs 50,000 deduction for salaried individuals.
- Available under both old and new regimes.
Source : ET Article
https://youtu.be/B_K3FTT7NJg
The great epic Ramayana has some amazing Financial Lessons. Lets learn some
https://youtu.be/a8vnT_iWx0s?si=KO4LhNdu2NyM3G6l
Where to invest in 2024 ?https://youtu.be/a8vnT_iWx0s?si=KO4LhNdu2NyM3G6l
Where to invest in 2024 ?
CBDT releases key Direct Tax statistics
Net Direct Tax Collections increase 160.52% from Rs 6,38,596 crore in FY 2013-14 to Rs 16,63,686 crore in FY 2022-23.
Gross Direct Tax Collections of Rs 19,72,248 crore in FY 2022-23 register increase of over 173.31% compared to Gross Direct Tax Collections of Rs 7,21,604 crore in FY 2013-14.
Direct Tax to GDP ratio increases from 5.62% in FY 2013-14 to 6.11% in FY 2022-23.
Cost of collection down from 0.57% of total collection in FY 2013-14 to 0.51% of total collection in FY 2022-23.
Total number of ITRs filed increase of 104.91% to 7.78 crore in FY 2022-23 against 3.80 crore filed in FY 2013-14
*Budget 2024: ICRA predicts these changes for markets, mutual funds and taxation*
ICRA Analytics anticipates several potential changes in the upcoming Interim Union Budget for the fiscal year 2025. The Budget will be announced on February 1, 2024. Since the general elections will be held in May, this will be the Interim Budget and a new Budget will be presented in July.
Here's a list of changes ICRA expects from the upcoming Budget:
*_Taxation_*
```1. Removal of Security Transaction Tax (STT)```: According to ICRA, the markets have had this demand for removal of STT for a few years now and as the GST collection went up, this demand has again gained traction. The move, if considered, will attract more investors to invest in domestic equity markets.
```2. Double taxation on dividends
*_Pension and Insurance_*. Raising the minimum pension amount under APY```: The rating agency also predicted that the government may consider raising the pension floor for the unorganised sector workers under its flagship scheme, the Atal Pension Yojana (APY), as the current amount may not attract enough potential subscribers to enroll.
1
*_Markets_*. Cryptocurrency```: Markets seek a more comprehensive policy on cryptocurrency regulation. ICRA expects a regulatory framework by the government to include more participation in the crypto market.
1
*_Mutual Funds_*1. Parity in taxation```: As per the rating agency, the government may consider addressing the difference in tax treatment between equity mutual funds and Unit-linked Insurance Plans (ULIP). Also, an equity Fund of Fund needs to be at par with equity-oriented mutual funds for taxation.
`: The tax amendment to the Finance Bill last year created a level playing field between bank deposits and debt mutual funds. However, an investor in fixed deposits pockets assured returns irrespective of interest rate movements while a debt fund investor is exposed to not only interest rate risk, but credit risk as well in case the issuer defaults.
Читать полностью…
*Probably not the best time to buy a house... prices have been rising in India.* (Mint)
Читать полностью…
Follow this link to join the WEALTH OF WISDOM WhatsApp community:
https://chat.whatsapp.com/BF6fLMvy1AeCXigMiT3fd6
or
join our TELEGRAM channel
Best ideas shared to create Mountains of Wealth on our Telegram channel
WEALTH WISDOM
https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg
*Just in*
🔥Awesome provision under income tax. 🔥
section 43B(h) is going to be biggest buzz word for this year ending 31.03.2024 and upcoming years also
Look at whole provision in simple language below
section- 43B(h)-
For Year ending creditors/suppliers those who have udyam Aadhar Number , one has to take care for making payment within specified time limit ( 💥45 days in most case), otherwise WHOLE EXPENSSE/PURCHASE will DISALLOW I in that year.
Means if you have purchased goods or services the payment must be made within 45 days of invoice or term of payment whichever is earlier. Even your supplier has given credit for more than 45 days you have to make payments before 31st March, to avoid disallowance of whole expenses .
💥Applies to all Big/small/Audietd/Non-audited taxpayer.💥
*📮5 New Income Tax Rules that will impact you in 2024*
*1. Revised Tax Slab*: To make the new tax regime more attractive, adjustments were made to the income tax slabs within this framework.
- No tax on income up to ₹3 Lakhs
- 5% for income between ₹3 Lakhs to ₹6 Lakhs
- 10% for income from ₹6 Lakhs to ₹9 Lakhs
- 15% for income from ₹9 Lakhs to ₹12 Lakhs
- 20% for income from ₹12 Lakhs to ₹15 Lakhs
- 30% for income exceeding ₹15 Lakhs
*2. Tax exemption limit in the new tax regime*: The tax exemption limit has been increased in the new tax regime. People adopting the new tax system will get tax exemption on income of up to ₹3 Lakhs, which until now was available only up to ₹2.5 Lakhs. That means tax exemption on additional ₹50,000 will be available from this year.
*3. New tax regime becomes default*: The new tax regime has been made the default regime. That is, while filing an ITR, it will by default show the new tax regime. If you want to go with the old tax system, you will have to select it manually.
*4. Increase in Tax Rebate*: Under Section 87A of the Income Tax Act, the Rebate limit has been increased from ₹12,500 to ₹25,000 in the new tax regime.
*5. Standard deduction of ₹50,000*: Till last year, employees and pensioners paying income tax used to get tax deductions of ₹50,000 only under the old tax system. From this year, employees and pensioners who choose the new tax regime will also get a standard deduction of ₹50,000.
No LTCG benefit in debt mutual funds: Investments made in debt mutual funds after March 31, 2023 are not eligible for Long Term Capital Gains taxation on withdrawal. This means that capital gains on debt mutual fund units held for 3 years or more would no longer be eligible for taxation as LTCG with indexation.
Impact: For debt mutual fund investments made after March 31, 2023, any capital gains-short or long term-would be taxed the same as interest earned from fixed deposits. This means that income tax rate on these gains will be applicable as per your income slabs. Previously, debt mutual funds had an edge over bank FDs due to the LTCG tax benefit available on capital gains on the former.
The small relief is that for investments in debt mutual funds made till and on March 31, 2023, old LTCG tax rules will be applicable.
Income tax rebate hiked in new tax regime: Another change in the new tax regime is the hike in rebate amount under section 87A. The rebate amount has been hiked by Rs 12,500, i.e. from Rs 12,500 earlier to Rs 25,000 in new tax regime. This means that an individual opting for the new tax regime and having taxable income of Rs 7 lakh will be eligible for rebate under section 87A.
Impact: An individual opting for the new tax regime and having taxable income of up to Rs 7 lakh will not be required to pay any taxes at the time of filing ITR. Earlier, the rebate under section 87A was available for taxable income up to Rs 5 lakh in the new tax regime. Hence, in 2024 when you file ITR for FY2023-24 (AY 2024-25) and opt for the new tax regime with taxable income not exceeding Rs 7 lakh, then no taxes will be payable.
Do note that the rebate of Rs 12,500 is also available under the OLD Tax Regime but only if the taxable income does not exceed 5 lakh.
Uttar Pradesh has seen the largest decline in share of union tax payment proceeds since 2012-13 followed by Tamil Nadu and Bihar.
Except for Assam, all NE states have seen a rise in share. Most increase for Arunachal and Maharashtra.
You can donate to the Ram Mandir through the Shri Ram Janmabhoomi Teerth Kshetra Trust's website and receive tax breaks. Donations are tax-deductible under Sec 80G (old tax regime)
50% of the amount donated
Take advantage of this opportunity to donate to the cause while also saving money on taxes.
BUDGET: FIN MIN SAYS DO NOT PROPOSE TO MAKE ANY CHANGES IN TAX STRUCTURE
BUDGET: FIN MIN SAYS INVESTMENTS BY SOVEREIGN WEALTH FUNDS, PENSION FUNDS WILL BE TAX FREE FOR ONE EXTRA YEAR
Presumptive Income – Updated! [Section 44AD, 44ADA, 44AE]
Updated on: 16 Jan, 2024 05:49 PM
The option of the presumptive scheme has always been an interesting as well as a confusing issue among taxpayers. With the Budget 2016 coming into effect from the FY 2016-17, there have been some significant additions/deletions to the scheme, which you should be aware of! The presumptive taxation scheme has been framed to give relief to small taxpayers from the tedious job of maintenance of books of account u/s 44AA and getting the accounts audited u/s 44AB. Under the said scheme, the taxpayer can declare income at a prescribed rate and avail of the benefits u/s 44AD, 44ADA, and 44AE.
Budget 2023 increased the threshold u/s 44AD to Rs 3 crores from Rs 2 crores, provided the cash receipts should be less than 5%.
Also, with the removal of earlier indexation benefits, global equity funds, equity funds of funds, gold funds and hybrid funds holding less than 35 percent in equities turned out to be tax-unfriendly and suffered collateral damage. Thus, the tax change might be revisited, it added.
Читать полностью…
Congratulations on doing your part of nation building!
*Net direct tax collection rose 19% to ₹14.7 trn up to 10th Jan.* (BS)
https://finnbuzz.com/new-tax-rules-in-uae-what-indians-going-to-dubai-should-know-7-points/
Читать полностью…
Follow the Mutual Funds Mastery channel on WhatsApp: https://whatsapp.com/channel/0029Va9sxrjHgZWU8UqbDM39
Читать полностью…
https://srikavimoney.blogspot.com/2022/12/evergreen-wealthy-resolutions.html
Why only New year Resolutions?
Follow these EVERGREEN resolutions to become Wealthy and STAY Wealthy always !!https://srikavimoney.blogspot.com/2022/12/evergreen-wealthy-resolutions.html
Why only New year Resolutions?
Follow these EVERGREEN resolutions to become Wealthy and STAY Wealthy always !!
Standard deduction of Rs 50,000 in new tax regime: If you are opting for the new tax regime, then standard deduction of Rs 50,000 will be available from FY 2023-24 (AY 2024-25). This standard deduction of Rs 50,000 is available on salary and/or pension income. Earlier this deduction was available only if individual opted for the old tax regime.
Impact: There will be two deductions available under the new tax regime for salaried individuals. These are standard deduction and deduction under section 80CCD (2) (Employer's contribution to the National Pension System or NPS). With the standard deduction benefit, an individual having taxable income of up to Rs 7.5 lakh will end up paying zero tax. According to the budget 2023 speech, each salaried person with an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500 under new tax regime.
Hike in basic exemption limit under new tax regime: Along with changes in the income tax slabs the basic exemption limit under the new tax regime was hiked to Rs 3 lakh from Rs 2.5 lakh earlier - an increase of Rs 50,000.
Impact: If you opt for the new tax regime for FY2023-24 income tax return filing will not be mandatory if your gross taxable income does not exceed Rs 3 lakh in a financial year. A hike in basic exemption limit will also help in saving up to Rs 15,000 (30% of Rs 50,000) for those who are planning to opt for the new tax regime in FY 2023-24 (AY 2024-25) and at the time of filing ITR. As against this, the basic exemption limit in the old tax regime remains Rs 2.5 lakh. So, clearly a person with gross taxable income between Rs 2.5 lakh and Rs 3 lakh is likely to be better off with the new tax regime.