income tax

The following post is a sponsored post.

Filing income tax is a procedure which requires individuals to be aware of latest income tax slab and various tax saving investment options as well. Filing ITR without paper is possible only for individuals with digital signatures. Taxpayers without a digital signature need to post a physical copy of the returns to the Central Processing Center (CPC) in Bengaluru within 120 days of completing filing their returns online.

The Central Board of Direct Taxes (CBDT) issued a notification on 13th July 2015 in relation to the use of Electronic Verification Code to verify the electronically filed ITR. Taxpayers who verify their ITR through this EVC are not required to send physical copies through the post.

Understanding EVC

The EVC helps in the verification of the person’s identity known as the verifier and can be generated on the e-filing site of the IT department. This code can be used for verifying ITR 1, 2, 2A, 3, 4, 4S, and Karta of an HUF. Every assessee will need to generate a unique EVC related to his or her Permanent Account Number (PAN) and can be used to verify only one ITR irrespective of the Assessment Year (AY) or type of return (revised or original). This code is valid for 72 hours and stored against the assessee PAN. Verifiers can generate multiple EVC and use more than one mode for its generation.

EVC generation modes

The CBDT, to simplify the process of filing income tax returns online provides 4 methods to verifiers to generate the EVC. Assesses are advised to ensure their e-mail address and mobile number is registered with the CBDT to enable the generation of the code.

E-filing website: This is the simplest and fastest way to generate the electronic verification code. You will simply need to follow the steps on the e-filing website and the EVC is sent to your registered mobile number and e-mail address. You will need to login using your PAN, click the e filing returns online tab and select Generate to receive the EVC.

Linking AADHAR card to your PAN: After logging in, click on the “Profile Settings” tab. A drop-down menu providing an option of Linking AADHAR to PAN will open. After filling the necessary details, you can click to complete the process and generate the EVC.

Through Bank ATM: You will have to use the ATM card of the registered bank with the income tax department. To generate the EVC, you will have to select “generate EVC for ITR filing” tab that appears on the ATM screen. The code will be sent to your registered mobile number

Net Banking: For using this method you will need to route the income tax returns online filing process through the registered bank. Assesses must login to their net banking account to be redirected to the e-filing website to generate the EVC, which will be received on the registered mobile number.

Using EVC to verify the ITR
The EVC is usable while uploading the returns through net banking, returns that are already uploaded, or uploading the ITR without net banking facility. The entire procedure is simple and well-outlined on the e-filing website and can be easily used by most users to make filing online returns easy and convenient.

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A Super Useful Mutual Fund Taxation Cheat Sheet

by Vinaya HS on January 7, 2013

in Finance

Stumbled upon this really handy mutual fund taxation reference sheet (2012 — 2013).

I also took the liberty of creating this easy-to-print PDF version.

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The following is a guest post by Mr. Aashish Ramchand. Aashish is a Chartered Accountant by qualification and the co-founder of makemyreturns.com, an online tax advisory and filing site. He is very passionate about Indian taxes and loves to write articles about the Indian tax system. He has worked with KPMG and JRC advisory both in international and domestic taxation respectively. His cumulative experience in taxation is 5-years. He has also completed Level 1 of CFA (USA) exam. If you need to connect with Aashish you can reach him at aashish@makemyreturns.com. You can also follow him on twitter through the handle @aashishjr.

I’m personally interested in the topic of ESOP (Employee Stock Option Plans) Valuation and Taxation since D has this option at work and we’re actively participating. I’d been meaning to read-up on this topic when luckily for me Aashish was kind enough to write-up a whole guest post on this topic. Aashish has also kindly agreed to answer any questions that you may have through the comments section below. So, feel free to ask your questions, clarifications, and doubts on this topic through the comments section on this post.

Now, over to Aashish.

Sweat Equity SharesProvisions with respect to valuation of sweat equity shares as a perquisite in the hands of an employee.

Sweat equity shares means “equity shares issued by a company to its employees or directors at a discount or for a consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions by whatever named called. These sweat equity shares must be transferred on or after April 1 2009. If these securities were transferred during April 1 2007 and March 31, 2009, then the employer is liable to pay fringe benefit tax. As mentioned above these shares are allotted directly either or indirectly by the employer to the employee either free of cost or at a concessional rate.

If the above mentioned provisions are satisfied, the perquisite will be chargeable to tax in the hands of the employee in the assessment year relevant to the previous year in which shares or securities are allotted to the employee For the purpose of valuation of the perquisite one has to find out the fair market value of shares. The fair market value of the shares will be calculated on the date on which the employee exercises the option. Amount actually recovered from the employee in respect of the shares shall be deducted.

In case where on the date of exercising the option, the share in the company is listed on a recognized stock exchange in India, the fair market value shall be the average of the opening price and the closing price of the share on that date on the said stock exchange. When however on the date of exercising the option, the share is listed on more than one recognized stock exchange, the fair market value shall be the average of opening price and closing price of the share on the recognized stock exchange which records the highest volume of trading of the shares. Where on the date of exercising the option, there is no trading in the share on any recognized stock exchange in India; the fair market value shall be the closing price of the share on any recognized stock exchange on a date closest to the date of exercise of the option and immediately preceding such date.

In a case where on the date of exercise of option, the share in the company is not listed on a recognized stock exchange in India, the fair market value shall be such value of the share in the company as determined by a merchant banker on the specified date. Specified date means date of exercise of option or any date earlier than the date of exercise of option not being a date which is more than 180 days earlier than the date of exercise of option.

Let me explain the entire concept by means of an illustration (click on the image if you need to see a larger version) —

Image of ESOP grant illustration

In the above illustration, perquisite will be taxable in the hands of Mr. Mark, as shares are allotted on or after April 1, 2009. The value of the perquisite will be Rs. 2, 68, 000 i.e. 400 shares x 670 [700-30(being pre-determined price)]. The cost of acquisition in the hands of Mr. Mark for the purpose of determining capital gain at the time of transfer of these shares will be Rs. 700 per share i.e. the fair market value on the date of exercise of option.

A quick reminder — Aashish has kindly agreed to answer any questions that you may have through the comments section below. So, feel free to ask your questions, clarifications, and doubts on this topic through the comments section on this post.

And to wrap-up, a quick note about Make My Returns

Make My Returns is the brainchild of three entrepreneurs with vast experience in the internet and tax domain specifically in income tax returns and income tax efiling space. We are a team of young, enthusiastic guys who want to make taxes that much easier for everyone else. Our core product offering through Make My Returns is a simple and easy income tax efiling service for online filing of income tax in India. Efiling of income tax returns online has never been more simpler and stress-free. We have different packages to suit your needs like do it yourself, expert help and also a specific online income tax return package for NRIs.

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If there was one thing I really sucked at in the last financial year, it was to plan for in advance for paying the self-assessed portion of my income tax liability. The result — I ended up paying a big chunk of of money as income tax due plus penalty plus interest just before filing my income tax return. Sucks! Really.

Thanks again, to the parked emergency fund, which hadn’t been used since quite some time, I was able to bail out of the situation without a hassle.

Going forward though, here’s my simple strategy for handling this situation –

  • At the start of each financial year (that is, in April), assess, and for all practical purposes this will be a close enough approximation, the self-assessment income tax due. But for this financial year, I’ll have to start from September.

  • Treat this as just another “annual expense.” My approach for saving towards annual expenses has worked very very successfully over the past few years.

  • Pay the saved amount in chunks at the start of each quarter so that some of the weird advance income tax rules are complied with.

  • I will either end up overpaying a bit or underpaying a bit — since my assessment of the income tax due is an approximation. And this should be OK because if I overpaid I’d later get a refund and if I underpaid I can pay the final balance due without attracting any penalty plus interest.

That should work. But how about you? If you’re in the same situation, how are you handling things?

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A few years back, in the good old bull run, someone advised D to invest in a couple of Equity Linked Savings Schemes (ELSS) in order to avoid having to pay income tax. Taking the advise in good faith, D invested Rs 75,000 in two ELSS mutual funds. Today, after about four plus years, their combined value is a mere Rs 60,000.

Back then, an amount equal to Rs 7,500 (75,000 x 10%) was saved from being paid as income tax, but today, the loss is exactly double of that.

On the other hand, if that income tax was paid and the remaining Rs 67,500 (75,000 – 7,500) was simply kept in a fixed deposit or even just left to idle in a savings account, I wouldn’t be writing this post today.

D still has the original account statements and for one of the ELSS funds I found an entry load of Rs 500-plus for an investment amount of Rs 25,000. Seriously! I doubt if these two mutual funds are going to do any better in future and I’m think of recommending to D to cut her losses now.

Reminds me of something I said about 3-years back — investing just to avoid paying income tax is a really bad idea.

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The recent Sodexo Meal Coupon fiasco seems to be causing a whole bunch of stress and heartburn to employees everywhere. Read through this FAQ issued by D’s office to see the kind of thought’s running through employees’ minds –

  • Why are you changing the existing agreement? Why can’t we continue with the same?

The Law has been there since long, but the Income Tax Department has become more stringent in order to minimize issues of non-compliance. Hence, to ensure compliance our finance department has had to change the existing policy. The Income Tax Law states –

The value of free food and non-alcoholic beverages provided by the employer to an employee shall be the amount of expenditure incurred by such employer. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity. Provided that nothing contained in this clause shall apply to free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof either case does not exceed fifty rupees per meal or to tea or snacks provided during working hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.

  • Why just Rs 750 per month and why not more?

As the Law states we need to take into account all of the free snacks, coffee, tea, biscuits etc. that are made available during office hours. Hence, we have set an amount that would be seen as the right amount by the Income Tax Department for extending the tax benefit.

  • Why can’t we trust employees that they would use the physical meal vouchers only in the office?

One of the requirements under the Income Tax Act is that the benefit is to be extended for eating in food joints and during working hours. The change being made would ensure that the tax agencies are satisfied that Company as an employer has put in place clear process requirements to meet the tax requirements. Please note that as an employer, Company has the onus and responsibility to ensure strict compliance with all Income Tax Rules and Regulations as far as an employee’s Company-related income and benefits are concerned.

  • When other companies are continuing with the meal vouchers, why cannot we continue with the meal vouchers?

As mentioned before, we are committed to the compliance of applicable Laws from time-to-time. We did check with other companies of our size and nature and found that they have changed the program or are in the process of changing it. The benchmark results indicated the following –

Companies Surveyed: 20

Number of Companies using Sodexo: 10

– Few of these Companies are considering stopping of Sodexo Meal Vouchers
– Half of these Companies allow the usage of Sodexo Meal Vouchers only in their cafeteria

Number of Companies NOT using Sodexo or any other Coupons: 10

  • How do we know that employees are not misusing other programs such as the Company Leased Car Program or any other benefit?

As a Company we can take all precautions to minimize the risk, if still anyone is misusing the same it is a violation of the code of conduct and appropriate action will be initiated.

  • Tax saving is an employee’s right. Why take that away?

We are not taking away any rights. We are doing what is right from a compliance point of view and in line with the spirit of the Income Tax Rules.

  • Why cannot Company compensate the excess tax that they have to pay due to this change?

All applicable taxes on employee compensation and benefits have to be borne by the respective employee. Company will extend all tax benefits as per Income Tax Rules to employees and is committed to following the Income Tax Rules in letter and spirit.

  • Why cannot I use the Meal Coupons in the eating joints outside of Company office and Campus?

As per Income Tax Rules, the Meal Coupons are meant to be used during office hours and inside the Company premises. Hence, they cannot be used outside.

  • Can the Food Court inside the Company Campus accept the new Swipe Cards?

From the Company’s point, we need to ensure all vendors inside our Company accept these cards. Additionally, we have requested Sodexo to install the machines in the Food Court but it is a decision that Sodexo has to take.

  • Are there other benefits that the Company can give which will offset the loss due to Sodexo plan change?

Company has allowed all tax benefits on Compensation/FBP as allowed by the Income Tax Rules. Any change to the tax rules to allow higher benefits from time-to-time will be extended to our employees.

  • What happens if your Meal Card still has some outstanding balance at the end of March, 2013?

You should utilize/spend the credit before the end of the Financial Year. This is where the Rs 9,000 per annum limit helps. It is not likely to leave balance if used regularly for meals during office hours.

  • What happens if an employee decides to move out of Company and some balance is left in the Meal Card?

The employee should use the balance by the exit date.

  • As the opt in/opt out scheme is up to September, 2012, what happens to unutilized balance in the Meal Card if employee decides to opt out in September, 2012 for the next 6-monthsperiod?

Even if an employee opts out in September, 2012, the balance in the Meal Card can be utilized till March, 2013.

What a complicated mess. As I’ve mentioned before, I simply asked D to opt out.

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The following is a guest post from reader Nikhil Shah and deals with the intricacies of investing in the soon to close investment opportunity in PFC’s Tax Free Bond Issue along with the income tax angle. Nikhil’s analysis also contains a very interesting perspective on how you can plan for major financial goals through this investment route. A couple of weeks back, Nikhil had also put-up a detailed analysis of NHAI’s Tax Free Bond Issue.

Since I’ve already provided some background information to these tax free bond issues, this time we’ll go straight to the calculations and analysis which you can download from the link below:

Click here to download calculations and analysis for the PFC Tax Free Bond Issue (courtesy Nikhil Shah).

Please let me know if you have any questions by leaving a comment to this post. I will respond to your queries at the earliest.

Disclaimer:

All views and opinions are my own and have no relation whatsoever with any person or firm. The information provided is just for guidance. It may not be absolutely or technically correct. The information could easily be dated. Always check with Fund Company/Brokerage/Financial Advisor/other relevant institution for the correct information. Information provided on this Blog/Web Site is for informational purpose only. It is the reader’s responsibility to ascertain the facts, conditions and risk factors. All investments are subject to market risks. Read all scheme related documents carefully before investing. You are advised to consult your financial advisor before taking any investment decision. Read the prospectus before investing in these bonds.

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The following is a guest post from reader Nikhil Shah and deals with the intricacies of investing in the soon to close investment opportunity in L&T’s Infrastructure Bond issue along with the income tax angle. Earlier this year, Nikhil had also put-up a detailed analysis of the previous L&T bond issue.

Dear All,

The year is coming to an end and it’s time to plan and invest for saving your income tax. Apart from your regular tax saving instruments eligible for deductions of up to Rs 1 lakh, there are long-term infrastructure bonds in the market. These infrastructure bonds are debt instruments wherein an investment up to Rs 20,000 is eligible for individual income tax benefits under section 80CCF.

The yields on Government Securities have been on a downturn in the recent past. Currently the 10 year G-sec is trading at around 8.31% which is 57 bps (basis points) lower than the October closing which was 8.88%. In other words, INFLATION is going down.

So you are requested to please grab this wonderful opportunity and invest in L&T Infra Bond issue which is currently running and closes on 24-Dec-2011. I’ve also created an investment analysis calculator which you can download from the link below.

Link:

Click to download a detailed analysis of L & T Infra Bonds.

Regards,

Nikhil Shah

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(I’d been meaning to write this post for quite some time but only got around to doing it now.)

During the process of filing my Income Tax Returns for the last financial year, I discovered that the TDS (Tax Deducted at Source) Certificate — commonly known as Form 16A — issued by my Bank had a wrong PAN (a “V” instead of a “U” in one of the characters of the PAN). Ouch! I immediately checked the original investment certificates and verified that the PAN was correctly mentioned over there. So this had to be a mistake on the Bank’s side.

Next, I logged in to the Tax Information Network portal and, as you can guess, the TDS credit wasn’t reflected there.

The very next day, I went to the Bank along with the erroneous Form 16A and the original investment certificates. Luckily for me, the Bank immediately accepted this as a mistake on their part (how this mistake happened in the first place in this age of core-banking technology is beyond my understanding), immediately corrected it, and issued a new Form 16A.

To be doubly sure, a couple of days later, I rechecked the Tax Information Network portal and the TDS credit was now correctly reflected there.

Thankfully, the whole process of correction was hassle-free. But there were important lessons learned:

  • Check any TDS Certificate/Form 16A that you receive from a financial institution immediately for data accuracy (name, PAN, investment certificate numbers, etc.).

  • Verify the TDS credits on the Tax Information Network. You can verify the TDS credits from your employment as well.

Have you faced a similar situation before?

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You already know that I’ve made an extremely stupid mistake due to which I’m now looking at an income tax liability in the upper five figures! This means I’ll simply be unable to meet all of my financial goals over the next three months (because I really won’t have much to call as a salary). Since I know that I can’t meet all my goals, I’ll need to prioritize as to which ones I need to continue through this tough period and which ones I can postpone.

But, before all that, let’s see what my current set of goals are.

Short-term goals (for me these are less than a year away)

  • Contribute Rs Z into my Travel and Living fund each month.

Medium-term goals (for me these are between one year and three years away)

  • Contribute Rs M each month into my Swift-replacement fund. Period: April, 2010 through March, 2013. (I do a SIP into a Conservative Allocation Mutual Fund for this purpose.)

Long-term goals (for me these are more than three years away)

Goals listed, here’s my thinking.

If I add up my monthly contributions into the Swift-repair fund, the Swift-replacement fund, and the Travel and Living Fund, their sum is more or less equal to the additional income tax that I’d be paying each month up to March. Since these goals aren’t that critical and can be stopped/postponed, I will stop/postpone them. What a lucky coincidence!

PS: I know that I’ve said that Travel is my #1 goal — but I guess paying income tax takes precedence!

For the next three months, I will, however, continue to contribute into my emergency fund and into my Financial Independence portfolio since these are critical goals and can’t be compromised upon.

All this just because I made one stupid mistake!

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My Biggest Financial Mistake in 2010

by Vinaya HS on January 6, 2011

in Finance

I simply can’t believe that I made such a stupid mistake.

Recently, when I changed my job, I ensured that I obtained the final salary settlement statement from my previous employer well before I joined my new job. That was good thing because I was able to submit this statement during the joining formalities at my new employer. And then I completely forgot about it. I didn’t verify even once my income tax computation over the four-odd months that I’ve been at my new job.

Come January, when I received an email from payroll asking for proof of investment for income tax savings, I sat down to take a look at the latest income tax computation. And to my utter horror, the income from my previous employer hadn’t been included in the income tax computation.

I immediately crunched numbers in an Excel spreadsheet and to my dismay I discovered a huge gap in my income tax liabilities. If my calculations are correct, I owe additional income tax somewhere in the upper five figures and this will be deducted from my salary over the next three months.

Ouch!

Last financial year, this ruling ruined my salary.

This year, my own stupidity is going to ruin my salary. With all the goals that I’ve set for 2011, it’s going to be one tough ask.

Another lesson learned the tough way.

When you change your job, make sure that your new salary and income tax computation also include the figures from your previous job.

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Though I advocate against it now, early in my career, I made a couple of investments purely with the objective of reducing my income tax liability. These investments simply don’t fit in with any of my financial goals. That led me to this thought: a “for income tax savings only” investment portfolio.

You could put your National Savings Certificates (NSC), 5-year Fixed Deposits, Infrastructure Bonds, etc. — things you’re doing with the sole objective of reducing your income tax liability — in this portfolio. And when they mature, you could use the proceeds to augment whatever financial goals you have at that point in time.

What do you think?

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Going purely by the numbers I recently highlighted, both D and I ought to put our money into these infrastructure bonds.

But, in my case, I don’t want to invest my money just for the purpose of lowering my income tax. I’d rather pay a marginally higher income tax, improve my cash flow, and invest in line with my ongoing objectives.

In D’s case, she’s OK with investing her money if it can help lower her income tax. ,but she doesn’t have the mandatory Demat account at the moment. As CFO, I’ll let this opportunity pass since more such issues are expected in the pipeline. Since the bonds can now be subscribed to in physical format too, I will get this done for her in the coming week.

That about sums up what we’re doing. How about you?

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Here’s what I suggest. Ignore all those complicated analysis (an example) of yields and returns and comparisons with other fixed-return financial products. Buy these bonds if and only if:

  • Your objective is to lower your income tax, and

  • You fall in one of the highlighted cells below.

IDFC_Bond_Analysis

In such a case, opt for the Series – 4 option. Else, don’t bother. Put your money to better use — get started on that emergency fund or make an extra payment against your loan’s principal.

Contrarian to what everyone else’s saying?

Note: Published this post ahead of its schedule given the issue closing date.

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It’s time to file your income tax returns — by July 31, 2010.

You might find these links useful.

I filed returns for myself and D in the last week of June. I used TaxSpanner this time too — I’ve been using it since three years and always pay through their Net Banking facility.

How about you?

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In an article on taxation, Outlook Money — June 16, 2010, suggests:

Buy your car in your spouse’s name. Then lease it to your company, which in turn can let you use it as an employer-provided vehicle. [Due to certain deductions, you reduce the amount of income tax that you need to pay.]

I’ve also seen variations of this theme that suggest buying your car in your father’s or mother’s or relative’s name. I honestly believe that it isn’t worth structuring your vehicle ownership this way just so that you can avoid paying a certain amount as income tax. That said, in general, you should never monetarily tie yourself to your employer — be it the mechanism: employer loans, car leases, and such.

Keep the car in your name. Pay income tax. Sleep without worry. That’s what I would advise.

What do you think?

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Here’s an interesting tip I read in Outlook Money, June 16, 2010:

A married and working couple can plan and claim Leave Travel Allowance (LTA) in all four years of a prescribed block. The husband can claim LTA in two out of four years and the wife in the other two.

Have you done this before? I’ve personally never claimed LTA this far in my career but I plan to try this tip over the next four years.

And here’s a great article that explains the ins and outs of Leave Travel Allowance.

Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.

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Each Monday morning, I plan to post my thoughts on Organizing Your Finances. Through this series, I hope to share a tip or two that address a common problem that many of us face in our daily lives — that of organizing our finances. I’d love to hear your thoughts on this initiative and would love it more if you could share a tip of your own. And, as always, do spread the word if you find this useful.

As I have written before, when you file your income tax returns, you’re building a history about yourself — that you exist and earn. Your annual income tax returns are therefore one of the most important documents that you need to keep organized and available on hand.

They’re useful in quite a number of situations. For example:

  • When you apply for a loan from a financial institution
  • When you apply for a visa
  • When you need to answer an income tax audit

Given their significance, here’s what you should do to organize your income tax returns:

  1. Gather all your income tax returns.
  2. Sort them by year — in descending order with the most recent one on top and the earliest one at the bottom.
  3. File them together.
  4. Label this file “Income Tax Returns.”
  5. Subsequent returns go directly to the top of this file.

And in case you can’t find one or more of your returns, here’s what you could do.

What do you think? Do you already have your returns organized? How did you go about it? Share your thoughts in the comments.

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Real-life Lessons: The Value of an Emergency Fund

by Vinaya HS on February 11, 2010

in Finance

There was a recent circular issued by the Central Board for Direct Taxes (CBDT) that reads:

The Finance Act, 2005 introduced a levy namely Fringe Benefit Tax (FBT) on the value of certain fringe benefits as contained in Chapter XII-H (sections 115W to 115WL) of Income-tax Act, 1961. By the Finance (No. 2) Act, 2009 a new section 115WM was inserted to abolish the FBT with effect from assessment year 2010-11. Consequently, benefits given to employees are taxed as perquisites in the hands of employees in terms of amendments to clause 2 of section 17 of Income-tax Act, 1961.

Note the highlighted words — benefits given to employees will now be taxed as perquisites in the hands of employees [in the current financial year]. This means you will now have to pay income tax on benefits such as vehicle fuel and maintenance, communication expenses, etc. — expense items for which you were so far not required to pay income tax since your employer was bearing the tax burden in the form of FBT.

Given that,

  • this change is applicable for the Financial Year 2009 – 10, and
  • there are hardly two months left in the Financial Year,

many of us might find ourselves in a situation where most of our salary would go towards paying this income tax deficit in the months of February, 2010 and March, 2010. That means you might potentially have negligible to no salary for the next couple of months.

This is where an emergency fund proves its worth. With an adequate emergency fund in place, you wouldn’t have to worry about such unforeseen situations. I am affected by this ruling — thankfully, I do have an emergency fund.

How about you? Are you affected by this ruling? If yes, how are you handling it?

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A House Rent Allowance (HRA) Exemption Calculator

by Vinaya HS on December 28, 2009

in Finance

As a follow-up to my wayback post on calculating the income tax exemption on house rent allowance, here’s a simple calculator that tells you how much income tax exemption you can get through the house rent allowance component of your salary.

You can also use this calculator to test various scenarios and ask your employer to structure your salary accordingly.

Download the House Rent Allowance (HRA) Exemption Calculator.

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