FAQ

For Employees

For Employers

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FAQ for Employees

  • What is the Tax Slab for the year - 2010-11?

    For Male taxpayers, the income slabs are as under:

    Fin. Year 2008-09 2009-10 2010-2011
    Slab 1,50,000 1,60,000 1,60,000
    Tax Rate 0 0 0
    Tax Payable 0 0 0
    Slab 1,50,001-3,00,000 1,60,001 - 3,00,000 1,60,001 - 5,00,000
    Tax Rate 10% 10% 10%
    Tax Payable 15,000 15,000 15,000
    Slab 3,00,001 - 5,00,000 3,00,001 - 5,00,000 5,00,001 -8,00,000
    Tax Rate 20% 20% 20%
    Tax Payable 15,000 + 40,000 14,000 +40,000 34,000 +60,000
    Slab 5,00,001 5,00,001 8,00,001
    Tax Rate 30% 30% 30%
    Tax Payable 55,000 + 30% 54,000 + 30% 94,000 + 30%

    For lady taxpayers, the income slabs are as under:

    Fin. Year 2008-09 2009-10 2010-2011
    Slab 1,80,000 1,90,000 1,90,000
    Tax Rate 0 0 0
    Tax Payable 0 0 0
    Slab 1,80,001-300,000 1,90,001 - 300000 1,90,001 - 5,00,000
    Tax Rate 10% 10% 10%
    Tax Payable 12,000 11,000 31,000
    Slab 3,00,001 - 5,00,000 3,00,001 - 500,000 5,00,001 -8,00,000
    Tax Rate 20% 20% 20%
    Tax Payable 12,000 + 40,000 11,000 +40,000 31,000 +60,000
    Slab 5,00,001 5,00,001 8,00,001
    Tax Rate 30% 30% 30%
    Tax Payable 52000 + 30% 51,000 + 30% 91,000 + 30%

    For senior citizens, the income slabs are as under:

    Fin. Year 2008-09 2009-10 2010-2011
    Slab 2,25,000 2,40,000 2,40,000
    Tax Rate 0 0 0
    Tax Payable 0 0 0
    Slab 2,25,001- 3,00,000 2,40,001-3,00,000 2,40,001-3,00,000
    Tax Rate 10% 10% 10%
    Tax Payable 7500 6000 6000
    Slab 3,00,001 - 5,00,000 3,00,001 - 5,00,000 5,00,001 -8,00,000
    Tax Rate 20% 20% 20%
    Tax Payable 7500 + 40,000 6,000 +40,000 26,000 +60,000
    Slab 5,00,001 3,00,001- 500,000 8,00,000
    Tax Rate 30% 30% 30%
    Tax Payable 47,500 + 30% 46,000 + 30% 86,000 + 30%

    In addition to the tax, an education cess of 3% is also payable by all assessees.

  • How is my exemption on House Rent Allowance calculated?

    House Rent Allowance: Sec 10(13A):- This exemption is not allowed where an employee lives in his/her own house, or in a house for which he/she does not pay any rent.

    So, if he/she is paying a rent, Least of the following is exempt from Income Tax

    a) 40 % of Basic Salary for Non Metro Cities 50% of Basic Salary for Metro Cities

    b) Actual HRA

    c) Excess of rent paid over 10 % of Basic Salary

  • What is Section 80C?

    Finance Minister had introduced the Act in the year 2005-06. Section 80C seeks to compensate the taxpayers for the deletion of the various rebates from tax.

    Under the section 80C, a taxpayer gets a deduction from income . The deduction is in respect of various items of investments made by the taxpayer during the year. The upper limit for this deduction in the FY 2010-11 is Rs. 1 lakh towards various instruments and Rs 20,000 exclusively in Infrastructure Fund.

  • What are the exemptions available under Chapter VI A

    Exemptions under Chapter VI A

    Section 80D - Medical Insurance premium -towards the Insurance premium paid towards the Mediclaim policy on the health of Self and dependant family members.

    Section 80 DD - Maintenance including medical treatment of a handicapped dependent sho is a person with disability.

    Section 80 DDB - Expenses incurred towards the medical treatment (chronics illness like Cancer, Cardiac related problems, Kidney related problems) of the assessee himself or wholly/mainly dependent spouse, children, parents, brothers and sisters.

    Section 80 E - Repayment of loan taken for higher education.

    Section 80G - Docations to certain ufnds, charitable institutions etc.

    Section 80 U - Deduction in case of a person with disability

  • What all are the Tax Saving Instruments ?

    • Life insurance premium paid by an individual to effect or to keep in force an insurance on his own life, life of the spouse or any child
    • Employee Contribution (not being repayment of loan) made by an individual towards Statutory Provident Fund & Recognised Provident Fund - This is a recovery from Salary.
    • Contribution (not being repayment of loan) made by a person towards the 15-year Public Provident Fund set up by the Government under the Public Provident Fund Scheme, 1968.
    • Employee Contribution by an individual towards an approved Superannuation fund
    • Any sum deposited in a 10 year or 15 year account under the Post Office Savings
    • Subscription to any notified Government security or any notified deposit scheme (ie National Savings Scheme)
    • Any sum paid as subscription to National Savings Certificates, VI & VII Issues & also National Savings Certificates VIII Issue.
    • Contribution made by an individual for participating in the unit-linked insurance plan of Unit Trust of India.
    • Any sum paid (incl. accrued interest) as subscription to Home Loan Account Scheme of the National Housing Bank or contribution to any notified Pension Fund set up by the National Housing Bank.
    • Amount invested in debentures , Tax saving Mutual Fund & equity shares in, a public company engaged in infrastructure including power sector or units of a mutual fund proceeds of which are utilised for the developing, maintaining, etc., of a new infrastructure facility.
    • Housing Loan Principal Amount upto Rs. 100,000/- limit of 80C
    • Investment in Pension Scheme
    • Any sum paid as TUITION FEES whether at the time of admission or otherwise to any University/college/educational institution in India for full time education of any two children of an individual.
    • Amount deposited in a FIXED DEPOSIT for 5 years or more with a scheduled bank in accordance with a scheme framed and notified by the Central Government.
  • LTA

    • What is the criteria for me to claim LTA?

      If you fulfill two criteria, you can claim LTA:

      i) You should have taken leave from your company

      ii) You should actually travel

      iii) You can either travel alone or with your family. However, if your family travels without you, no LTA can be claimed.

    • How frequently can I claim LTA?

      Twice in the block of four calendar years defined by the government.

      Presently the block is 2010-2013 Since it is the calendar year and not the financial year, it will be from January 1, 2010 to December 31, 2010.

    • What proof do we have to submit to the IT department to avail tax benefit on LTA

      You can produce an air, rail or any public transport ticket. You can even submit the bills issued by the car rental company if you rent a vehicle.

      However, the travel is applicable anywhere in India and not abroad. So an international air ticket will not hold.

    • Can both spouses claim LTA?

      Yes, if both spouses are getting the LTA benefit in their work place, they can both claim LTA from their employers and the benefit for four journeys in one block. But they should not have traveled twice during the same year.

    • What kind of expenses get covered in LTA?

      The reimbursement would be restricted to actual travel expenses in any of the following mode of transportation-

      Air travel Economy fare of national carrier
      Rail travel First class AC fare
      Road Public transport - First class or deluxe class. If there is no recognized transport - Equivalent of first class AC fareCar Rental Company Bill

      LTA does not cover the Boarding & Lodging Expense.

  • From when can I start availing the Tax benefit on Housing Loan Interest?

    From the time you get the possession of the house / flat you can avail the tax benefit . Under Section 24, the maximum amount of interest that can be deducted from your income is Rs 1,50,000. As a result, your taxable income decreases by that amount.

    For the amount paid towards Interest (e.g. Rs.200,000) prior to getting the Possession of the house / flat can be claimed in 5 equal installment of 20% each for the consecutive 5 years (Rs 40,000 for 5 years).

  • Can I get both, exemption of HRA as well as deduction in respect of home loan

    There are various scenario which has been captured in the below mentioned table :

    (1)
    Status of Self Owned Housing property    		 (2)
    Location of Self Owned Housing property     		(3)
    Income Deduction for Interest payable on loan taken to acquire/ construct the housing property    		 (4)
    Annual value     		(5)
    Other deductions     		(6)
    Income / Loss from house property will be equal to
    a Rented NA Yes, no Limit Actual rent received less municipal taxes 30% of the annual value (4)-(5)- (3)
    b Used for occasional self occupation by self (also means that the property is in habitable condition ) or lying vacant or unused  maybe, not in habitable condition Another city, different from the city in which you work Yes, up to a maximum of Rs. 1,50,000 NIL 30% of NIL is NIL Always loss equivalent to lower of (3) or Rs. 1,50,000
    c Used for occasional self occupation by self (also means that the property is in habitable condition ) Same City in which you work Yes, up to a maximum of Rs. 1,50,000 NIL
    (see point no. 8 above your HR department may need the case law cited above)     		30% of NIL is NIL Always loss equivalent to lower of (3) or Rs. 1,50,000
    d Lying vacant and unused maybe not in habitable condition Same city in which you work Yes, without any limit Notional rent that you could have derived, had you rented out the property less municipal taxes 30% of annual value (4)-(5)- (3)