ABP FY 10-12

Income Tax related Financial Information

Payroll and Trust Management

ABP FY 10-12

Slabs of Personal tax rates

• The total income < 200000 Nil• 200001 - 500000 10%• 500001 - 1000000 20%• 1000001 & above 30%• Education cess is 2% of income tax• Secondary & higher education cess is 1% of income tax

ABP FY 10-12

Tax Exemptions

• HRA • LTA • Children’s Education/Hostel Allowance • Conveyance Allowance, • Telephone Reimbursement,• Medical Reimbursement,• Gratuity, • Leave Encashment,• Self education expenses.

ABP FY 10-12

Components constituting Flexi Pay

• H R A – max 50% of Basic p.m. • Residential Telephone Reimbursement – as per grade• Conveyance – max Rs.800/- p.m.• Domiciliary Medical Reimbursement Rs.15,000/- p.a. • Education Subsidy- Rs.100 p.m. (max two children)• Hostel Subsidy – Rs.300/- p.m. (max for two children) • Leave Travel Assistance – As per the Income Tax Rules• Self education expenses as per Income Tax Rules

ABP FY 10-12

HRA exemption (Sec 10(13A))

• The least of the following is exempt– 40% of the salary (50% of the salary for Metro Cities)– HRA received by the employee.– Rent paid minus 10% of the salary (Basic + DA)

• Documents to be submitted for HRA exemption are as under:– Co’s application form.– The copy of Agreement.– Rent receipts.

ABP FY 10-12

LTA Exemption (Sec 10(5))

• Only two journeys in a block of four calendar years is exempt. Current Block is 2010-2013. For Claiming LTA a minimum of one day of Privilege leave is to be availed.

• Exemption is available in respect of – Actual fare– By the shortest route– For employees & family– To any place in India while on leave

ABP FY 10-12

Children’s Education /Hostel Allowance

• Education amount exempt is limited to Rs. 100 per month per child up to a maximum of two children.

• Hostel allowance is exempt from tax to the extent of Rs. 300/- per month per child up to a maximum of two children.

ABP FY 10-12

Conveyance / Transport Allowance (Sec 10)

• This allowance is granted to an employee to meet the expenditure for the purpose of commuting between the place of his residence and the place of his duty.

• It is exempt up to Rs.800 per month.

• Employees who are provided Company maintained Car are not eligible for this exemption

ABP FY 10-12

Telephone & Medical reimbursement

• Telephone Bill Reimbursement

The amount is paid to an employee as per his grade & is deducted from Taxable Income on submission of phone bills. This amount is also set aside from the Flexi Pay.

• Medical Reimbursement

The amount is paid to an employee and is deducted from Taxable Income on submission of bills. This amount is also set aside from the Flexi Pay.

ABP FY 10-12

• Gratuity Exemption – Life time limit is Rs. 10,00,000/- maximum u/s 10(10) – (i.e. gratuity received from more than one employer in earlier

years)

• Leave Encashment Exemption – Life time limit is Rs. 3,00,000/- maximum u/s10(10AA)(ii) – (i.e. leave encashment received from more than one employer in

earlier years)

Exemptions (Contd…)

ABP FY 10-12

Form 12B

• Earnings and Deductions from the previous organization is to be declared in Form 12B.

• Employee can also submit Form 16 for the current financial year of previous organization.

ABP FY 10-12

Tax saving instruments u/s 80C of Income Tax Act.

• Overall limit is Rs.1,00,000/- qualifies for deduction from income.

• Some of the popular saving instruments are as follows.

• PPF (Rs.100,000/-), PF, Life Insurance Premium, NSC, Payment of Tuition Fees (paid to registered Institution ), Equity linked Mutual Fund (tax saving scheme, lock in period is 3 years), Infrastructure Bonds, Bank Term Deposit (5years minimum), repayment of housing loan.

ABP FY 10-12

Mediclaim

• The premium for the employee and his family is borne by the Company

• The employee can cover his parents also for which the Company shall bear 50% of the premium. The balance 50% is borne by the Employee and is recovered from his salary on a quarterly basis.

• The rebate is considered on the premium paid by the employee under section 80D

• Mediclaim insurance premium by the employee for spouse and family is deductable u/s 80D with the maximum limit of Rs.15,000/- and parents (Senior citizen) the maximum limit is Rs.20,000/-.

ABP FY 10-12

• Deduction u/s 80D is allowed in respect of any payment made by an assesse on account of preventive health check-up of self, spouse, dependent children or parent up to a limit of five thousand rupees within the existing limits prescribed in the section.

• Deduction in respect of interest on deposits in savings bank accounts is allowed to individual tax payers under section 80TTA

• Deduction u/s 80E is allowed in respect of any payment made by an assesse towards the interest on education loan taken for self education or education of child from financial institution or approved charitable institution.

ABP FY 10-12

Basis of exemption for Self occupied property

• The employee/assesse should be owner of the property.

• The property should not be used by the owner for the purpose of any business of profession carried on by him.

• Interest on capital is deductible if capital is borrowed for following purposes.

• A) Purchase of house

• B) Construction of house

• C) Repairs/ renewal of the house

ABP FY 10-12

Deduction allowed for self occupied property

• Loan taken after 1-4-1999 – Maximum limit is Rs.1,50,000/- for housing loan interest.

• Principal payment is allowed u/s 80C• This rebate u/s 24(b) of I T Act is granted only on submission

of following documents.1. Company’s Form2. Provisional certificate from Bank indicating interest

& principal bifurcation3. Occupancy certificate from builder / Possession

letter.

ABP FY 10-12

Computation of income from Second House Property

• Computation of income/loss from second House Property is determine after taking in to consideration following points.

• Gross Annual Rent / Value

• Municipal Taxes paid by the owner

• Deduction claimed for Interest paid

• Other deduction claimed

• Address of the property

• Amount of loan

• Name & address of the lender (Loan Provider)

ABP FY 10-12

Requirement of PAN

• It is mandatory to quote your PAN while filing returns with the Tax authority.

• U/S (5B) of section 139A of the Income Tax Act 1961, the person issuing TDS certificate is required to quote the PAN on the TDS certificate.

• If PAN is not provided by the deductee then rate as per the slabs given or 20% which ever is higher is to be charged u/s 206AA

ABP FY 10-12

For any Queries

Contact Persons :

• Payroll – Mr. Deb Narayan Sarkhel• Taxation – Ms. Usha Rajput

• Escalation : Mr. R G Joseph - Head Payroll & Trust Management

Thank you