Blog

Finance Minister Arun Jaitley presented a mix bag of a Budget for the financial year 2018-19. Like every Budget, this one too has its positives and negatives. Positives: Minimum support price for Kharif crops hiked by 1.5 times No TDS for senior citizens on FDs and post office deposits up to Rs 50,000. Rise in custom duty on mobile phones from 15% to 20%. This will help domestic manufacturers. Standard deduction of Rs 40,000 for salaried people re introduced No legal status for crypto-currencies. Package worth Rs 7,100 crore for the textile sector. The government to contribute 12% of wages for new employees for Employee Provident Fund. Free gas connection for 8 crore poor women under Ujwala scheme. Lower tax rate of 25 per cent to companies with a reported turnover up to Rs 250 crore. 100% tax deduction to companies registered as farmer-producer companies with turnover of Rs 100 crore. Infrastructure outlay increased from Rs 4.94 lakh crore to almost Rs 6 lakh crore. Rs 56,000 crore for SCs and Rs 39,000 crore for STs. Ayushman Bharat Programme. Rs 5 lakh/year per family for 10 crore families for health […]

For most employees, House Rent Allowance (HRA) is a common component of their salary structure. Although it is a part of the salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRA gets exempted under Section 10 (13A) of the Income-tax Act, 1961. The amount of HRA exemption is deductible from the total income before arriving at a taxable income. This helps the employee save tax. Remember, the HRA received is fully taxable if an employee is living in his own house or if he does not pay any rent. Who can avail HRA? The tax benefit is available only to a salaried individual who has the HRA component as part of his salary structure and is staying in a rented accommodation. Self-employed professionals cannot avail the deduction. How much HRA is exempted? The exemption for HRA benefit is the minimum of: i) Actual HRA received; ii) 50% of salary if living in metro cities, or 40% for non-metro cities; and iii) Excess of rent paid annually over 10% of annual salary for calculation purpose, the salary considered is ‘basic salary’. In case ‘Dearness Allowance (DA)’ (if […]