Monday, January 06, 2014


With Christmas and New Year, we hear Bells ringing not only from Santa with bag full of Surprises, but also from each companies HR department for submission of Declaration on Investments and IT Declaration for A.Y.14-15 or F.Y.13-14.
Most of us try and scramble few pages on net and start searching for the budget, or some for rules on I.T..Most of us feel jittery and few have some of the following queries:

** What is the max I can save on Taxes?
** How much Tax I need to pay this yr.?
** How am I paying more tax than my Boss, Who has higher income to me?
** Everyone is Talking about 80 CCC,80 E,80 G,80@#@##_,so What is all about 80s?
** PPF, Insurance or FD for Tax Saving?
** How much benefit can I get from Home and Education loan?
** Can I get both HRA and Home loan Tax Saving advantage?
** How do I know about my Investment and Taxes?
any many many more.....

 I understand all this and hence am trying to list out few Important points and Sections ,with short explanations. Truly speaking I am also using here one of the companies details given to their employees, which I liked in some sense. I am hereby reproducing few of those and adding few ones and also explanations for all to understand easily and implement immediately.
Rules & Instructions                                                                     

1 Submission of Final Declaration Form should reach the HR/Payroll Department before 16/02/2014

2 For New Joinies or Late submissions of declarations, the forms recd. before 15th of a month will be considered for Tax calculations effective that month.                                                

3 All required details should be neatly/correctly filled in the form, else the same will not be considered.                                                      

4 Proofs/attachments are not required to be attached with Form, except the “Provisional Certificate/Statement” for Interest & Principal paid/payable in F.Y. 2013-14 for Housing Loan and “Medical / Institute Certificates” for the specified deductions U/s 80DD,80DDB,80U,80E      

5 Permanent Account No. (PAN) must be quoted on the Form. Please Note that Forms without PAN, will not be considered for Tax calculations.                                                         

6 Tax once deducted cannot be refunded by Payroll Department/Employer. Refund if any, has to be claimed by the employee from the Income Tax Department at the time of filing the Income tax return
7 Housing Loan Interest repayment deduction can only be claimed by the husband or the wife, based on an undertaking in case of joint properties/loans.  Both HRA exemption and Housing Loan Interest repayment exemption cannot be availed simultaneously except in following cases:
            1. If it is first year of construction completion & you have not yet occupied the said property for your residence. In such case both can’t be claimed simultaneously but only for a part of the year.                                                           

            2.Loan is taken to acquire a house property and the employee is unable to occupy it due to employment at a different place and is residing in a rented premises.                                                   

8 The effective age of Senior Citizen to avail the benefit under Section 80D, 80 DDB has been uniformly reduced to Sixty Years.                                                    

9 Section 80CCG: Rajiv Gandhi Equity Saving Scheme                                                         

   1. Scheme is applicable only to Individuals.                                                

   2. The maximum deduction will be 50% of investment up to Rs.50,000/- during the FY 2013-14

   3.The deduction will be at the rate of 50 per cent of the amount invested in equity shares/ equity oriented mutual fund.                                                   

  4.The Gross Taxable Income of the individual should not exceed Rs.15 lakhs.                  

  5.The assesse should be new retail investor in shares                                                         

  6. The investment based deduction will be available for 3 (Three) consecutive assessment years.
  7. There would be lock-in period for 3 years.          
10  Section 80D: Deduction under Section 80D is restricted upto Rs.15,000/- in respect of insurance premium of self , spouse & dependent children and a further deduction for Rs.15,000/- or (Rs.20,000 in case of Senior Citizen) is allowed for buying health insurance policy in respect of parents.                                                                                                                                                            Further, a deduction for Rs.5,000/- is also available from FY 2012-13 in  respect of preventive health checkup of self, spouse,  dependent children and parents of the assesse. However, deduction under this provision will be within the overall limit as prescribed above. Deduction for Rs.5,000/- could be claimed even if payment is paid in cash provided the overall limit of Rs.15,000/- is maintained.                                                

11  "Section 80DD : Provides for deduction in respect of maintenance including medical treatment of  handicapped dependent.(Quantum of deduction is Rs.50,000/- in respect of a dependent being a person with disability. In respect of dependent being a person with severe disability (80 % or multiple disability) quantum of deduction is Rs.1,00,000/- as against Rs.50,000/-. The employee is required to furnish a copy of the certificate issued by the medical authority in the prescribed form."  
 12   Section 80DDB : Provides for deduction of Rs.40,000/-( Rs.60,000/- for Senior Citizens) in respect of medical treatment of specified disease or ailment incurred by individual for himself or a dependent .You are required to furnish a certificate in prescribed Form No.10 –I from doctor prescribed in rule 11DD(2)                                                    
13    Section 80U : Provides for deduction to Employee, certified as disabled (handicapped) by medical authority (as per rules),  deduction of Rs.50,000/- (in case of severe disability Rs.1,00,000/- instead of Rs.50,000/-.)                                                      

14    Section 80E : Provides for deduction of total amount of interest paid on “Loan taken for Higher Education” for self, relative or dependent from notified Financial Institutions.                                                          
15    Section 80G: Any donation made for various approved  funds, charitable organizations, etc under this Section shall be claimed by the employee in their return of income. However, employee is eligible to claim deduction in case of donation made to Prime Minister's Relief Fund, Chief Minister's Relief Fund at 100% of the amount contributed towards such funds.                                                    

16     Deduction From Salary Income Under Section 80C/ 80CCC/80CCD (Maximum up to Rs.1,00,000)                                                 

            1. Life Insurance  premium paid by an individual on his/her life or on life of his/her spouse or on life of any child  of such individual. (subject to a maximum of 10% of the assured value)                                                          
            2. Contribution to Public Provident Fund in an account standing in the name of individual, the wife or husband and any child of such individual.                                                       

            3. National Saving Certificate                                                 
            4. Repayment of principal against a loan for purchase or construction of a residential house property. 
            5. Children Education Expenses i.e. full time tuition fees paid at the time of admission or thereafter, to any  university, college or school, excluding any payments towards any development fees or donation.or transportation facility (upto two children)                                                     

            6. Contribution to  Notified Pension Funds                                                     
            7. Fixed  Deposit  scheme  with scheduled  banks with a term not less  than  Five Years  - Account opened in current year eligible.                                                   

            8. Unit linked Insurance plan                                                  
            9. Annuity plan of Life Insurance Companies                                                            

            10. New Pension Scheme contribution                                                           
            11. Any other (please give details)                                                      

17        The maximum amount of deduction for item no.16(1) to 16(11) is Rs.1,00,000/-, Amount invested in excess of these limits is not eligible for  deduction                                                         


1) Additional Surcharges as applicable                                                           
2) Education cess  & Secondary & higher education cess -3% of Income tax.                 

3) Income category is the Net Taxable Income after allowed Deductions.                                  

4) Resident individual having total income upto Rs.5 Lacs will be provided a rebate of Rs.2,000/- or tax payable, which is lower.

 19   It is entirely the Employee’s responsibility to check the details in  Tax Computation Sheet (in the next month of submission of Form) for correctness of the information submitted to HR/Payroll & updated in his Tax computation. In case of any discrepancy he is required to highlight the same to HR & Payroll Dept. immediately. 
20  Few of the above instructions may vary from company to company & the information mentioned above is extracted from the Budget 2013-14 & the IT Act, on best effort basis. Hence, incase of any ambiguity or mis-match between what is stated here and the applicable act/rules, the latter will prevail.  

Please click below if you want standard FREE- "PROVISIONAL INVESTMENT FORM SALARY I.T. for F.Y. 13-14"- (In Excel Format) (alternatively can copy paste this link to browaer)

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