TAX IMPLICATIONS FOR LOAN AGAINST SALARY, OR ADVANCE AGAINST SALARY

Tax implications for loan against salary, or advance against salary

Loan is different from salary. When employee takes any loan from his employee, which is repayable in certain specified installments, the loan amount cannot be brought to tax as salary of the employee.

Similarly, advance salary is different from advance

Salary. It is an advance taken by the employee from his employer. This advance is generally adjusted with his salary over a specified time period. It cannot be taxed as salary

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KNOW WHAT INCLUDE IN YOUR SALARY

KNOW WHAT INCLUDE IN YOUR SALARY

THE TERM SALARY IS VERY WIDE. IT INCLUDE MONETARY AS WELL AS NON MONETARY ITEMS

FOR THE PURPOSE OF CALCULATING INCOME UNDER HEAD SALARY AS DEFINED UNDER SECTION 17 OF INCOME TAX ACT, 1961, FOLLOWING INCLUDE IN THE SALARY

1. WAGES
2. ANY ANNUITY OR PENSION
3. ANY GRATUITY
4. ANY FEES, COMMISSION, PERQUISITE OR PROFITS IN LIEU OF OR IN ADDITION TO ANY SALARY OR WAGES
5. ANY ADVANCE OF SALARY
6. ANY PAYMENT RECEIVED IN RESPECT OF ANY PERIOD OF LEAVE NOT AVAILED BY HIM I.E. LEAVE SALARY OR LEAVE ENCASHMENT
7. THE PORTION OF THE ANNUAL ACCRETION IN ANY PREVIOUS YEAR TO THE BALANCE AT THE CREDIT OF AN EMPLOYEE PARTICIPATING IN A RECOGNIZED PROVIDENT FUND TO THE EXTENT IT IS TAXABLE AND
8. TRANSFERRED BALANCE IN RECOGNIZED PROVIDENT FUND TO THE EXTENT IT IS TAXABLE
9. THE CONTRIBUTION MADE BY CENTRAL GOVERNMENT OR ANY OTHER EMPLOYER IN THE PREVIOUS YEAR TO THE ACCOUNT OF AN EMPLOYEE UNDER PENSION SCHEME REFERRED TO IN THE SECTION 80CCD

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HAVE YOU RECEIVE ANY MEDICAL FACILITY, THEN KNOW YOUR TAX IMPLICATIONS

HAVE YOU RECEIVE ANY MEDICAL FACILITY, THEN KNOW YOUR TAX IMPLICATIONS

ALOMOST EVERY EMPLOYER PROVIDE MEDICAL FACILITIES SAY MEDICAL PERQUISITE TO THEIR EMLOYEES FOR HEALTHY ENVIRONMENT AT THEIR WORKPLACE

IF ANY EMPLOYEE RECEIVES ANY MEDICAL FACILITY FROM HIS EMPLOYEE WHETHER IN THE FORM OF REIMBURSEMENT OR ANY FREE MEDICAL FACILITY IS TAXABLE AS PER INCOME TAX ACT, 1961

THE MEDICAL FACILITY MAY PROVIDE IN INDIA OR IN FOREIGN COUNTRIES, IN BOTH THE CASES THE TAX IMPLICATIONS ARE DISCUSSED BELOW,

1. IN CASE MEDICAL FACILITIES/TREATMENT PROVIDED IN INDIA

1. EXPENDITURE INCURRED OR REIMBURSED ON ANY MEDICAL TREATMENT PROVIDED TO AN EMPLOYEE OR ANY MEMBER OF HIS FAMILY IS FULLY EXEMPT WITHOUT ANY LIMIT FOR TREATMENT IN ANY HOSPITAL, DISPENSARIES etc. MAINTAINED EITHER BY EMPLOYER, GOVERNMENT, ANY LOCAL AUTHORITIES, IN HOSPITALS APPROVED BY GOVERNMENT OR APPROVED HOSPITALS FOR ANY SPECIFIED DISEASE LIKE CANCER HOSPITALS
2. HEALTH INSURANCE PREMIUM INCURRED OR REIMBURSED FOR INSURANCE ON HEALTH OF EMPLOYEES OR NAY MEMBER OF HIS FAMILY IS FULLY EXEMPT WITHOUT LIMIT.
3. REIMBURSEMENT BY THE EMPLOYER OF ANY AMOUNT ACTUALLY SPENT BY EMPLOYEE FOR OBTAINING HIS OR HIS FAMILY MEMBER’S TREATMENT IN ANY HOSPITAL OTHER THAN ABOVE, NURSING HOME OR IN A CLINIC IS NOT TAXABLE BUT UPTO MAXIMUM OF Rs 15,000 OR 20,000 I CASE OF SENIOR CITIZEN

DEDUCTIONS WHICH ARE ALLOWED UNDER INCOME TAX ACT, 1961

DEDUCTIONS WHICH ARE ALLOWED UNDER INCOME TAX ACT, 1961

FOLLOWING ARE THE EXPENSES WHICH ARE ALLOWED AS DEDUCTION

1. IN RESPECT OF INTEREST, IF ANY EXPENDITURE IS INCURRED BY WAY OF COMMISSION OR REMUNERATION FOR REALISATION OF SUCH INCOME.
2. IN RESPECT OF FAMILY PENSION, 33.33% OF PENSION OR Rs 15,000 WHICHEVER IS LESS IS ALLOWED AS DEDUCTION
3. IN RESPECT OF INCOME FROM LETTING, DEDUCTION OF REPAIR, INSURANCE AND DEPRECIATION IS ALLOWED
4. ANY OTHER EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING SUCH INCOME

IF ANY INCOME IS EARNED AND IF ANY (AS DESCRIBED ABOVE) EXPENSES IS INCURRED IS ALLOWED AS DEDUCTION AS PER INCOME TAX ACT, 1961

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DEPOSIT UNDER CAPITAL GAIN SCHEME AND SAVE TAX!!!!

DEPOSIT UNDER CAPITAL GAIN SCHEME AND SAVE TAX!!!!

WHEN ASSESSEE SELLS ANY PROPERTY WHICH MORE THAN THE VALUE OF INDEXED COST, THE RESULTANT WILL BE THE CAPITAL GAIN. THE CAPITAL GAIN SO EARNED WILL CHARGED TO INCOME TAX IN THE PREVIOUS YEAR IN WHICH PROPERTY IS TRANSFERRED.

THE ASSESSEE IS LIABLE TO PAY TAX ON THE CAPITAL GAI N HE EARNED FROM THE TRANFER OF PROPERTY AS PER TAX SLAB RATE OR THE SPECIFIED RATE AS THE CASE MAY BE, BUT IN ORDER TO SAVE THE CAPITAL GAIN TAX, THE ASSESSEE CAN DEPOSIT THE CAPITAL GAININ THE SPECIAL ACCOUNT KNOWN AS CAPITAL GAIN ACCOUNT SCHEME, THIS ACCOUNT MAY BE OPENED IN SPECIFIED BANKS.

THE AMOUNT SO DEPOSITED WILL NOT BE TAXABLE AS PER SECTION 54 OF INCOME TAX ACT, 1961. TO CLAIM THE BENEFIT OF TAX THE ASSESSEE SHOULD DEPOSIT THE CAPITAL GAIN WHICH WAS UNUTILISED BY ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF ANY PROPERTY, THE ASSESSEE HAVE OPTION WHETHER TO DEPOSIT THE SAID UNUTILISED AMOUNT IN LUMPSUM OR IN INSTALMENTS BUT HE SHOULD DEPOSIT THE SAME AMOUNT BEFORE FILING HIS RETURN OF INCOME.

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RECOVERED ANY UNREALIZED RENT- THEN KNOW YOUR TAX IMPLICATION

RECOVERED ANY UNREALIZED RENT- THEN KNOW YOUR TAX IMPLICATION

WHEN THE ASSESSEE CANNOT REALIZE RENT FROM THE HOUSE PROPERTY WHICH WAS LET OUT TO TENANT AND SUBSEQUENTLY THE ASSESSEE HAS REALIZED ANY AMOUNT IN RESPECT OF SUCH RENT, THE AMOUNT SO REALIZED SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER HEAD HOUSE PROPERTY AND ACCORDINGLY CHARGED TO TAX AS THE INCOME OF THAT PREVIOUS YEAR IN WHICH SUCH RENT IS REALIZED. IN THIS CASE ITS IRRELEVANT WHETHER ASSESSEE IS OWNER OF SAID PROPERTY OR NOT BUT HOWEVER HE CAN CLAIM STANDARD DEDUCTION OF 30% UNDER SECTION 24 OF INCOME TAX ACT, 1961

THE MAIN HIGHLIGHTS ARE AS FOLLOWS

1. ANY RENT RECEIVED WHICH WAS UNREALIZED WILL BE TAXABLE IN THE PREVIOUS YEAR IN WHICH THE RENT IS RECEIVED
2. ITS IRRELEVANT WHETHER ASSESSEE IS OWNER OF SAID PROPERTY OR NOT
3. STANDARD DEDUCTION OF 30% WILL BE ALLOWED

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INCOME DEEMED TO BE RECEIVED IN INDIA

INCOME DEEMED TO BE RECEIVED IN INDIA

THERE ARE CERTAIN INCOME WHETHER YOU ACTUALLY RECEIVED OR NOT, THE GOVERNMENT WILL ASSUME THAT YOU HAVE EARNED AND RECEIVED THAT INCOME.

THE FOLLOWING ARE THE INCOME WHICH THE GOVERNMENT WILL ASSUME THAT YOU HAVE RECEIVED THAT INCOME

1. THE ANNUAL INCREASE IN INTEREST TO THE BALANCE OF AN EMPLOYEE IN RECOGNISED PROVIDENT FUND (PF) IN EXCESS OF 9.5% p.a
2. CONTRIBUTION OF THE EMPLOYER TO RECOGNISED PF IN EXCESS OF 12% OF THE SALARY OF EMPLOYEE
3. TRANSFER BALANCE IN THE RECOGNISED PROVIDENT FUND FROM UNRECOGNISED PROVIDENT FUND.
4. THE CONTRIBUTION MADE BY THE CENTRAL GOVERNMENT OR ANY OTHER EMPLOYER IN THE PREVIOUS YEAR, TO THE ACCOUNT OF AN EMPLOYEE UNDER A PENSION SCHEME TO IN PENSION SCHEME OF CENTRAL GOVERNMENT (80CCD)

 TIP FOR TAX IMPLICATION

THE ASSESSEE OR EMPLOYEE SHOULD KEEP REGULARLY CHECK THE INTEREST RATE TO HAVE CHECK THE IMPLICATION OF TAX AS EXPLAINED AND ALSO REFER SECTION 7 OF INCOME TAX ACT, 1961

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