Skip to main content

Rules get tighter for claiming HRA, LTA I- T department has introduced a new format to claim tax rebate

By
To check falsity by salaried taxpayers in claiming deductions, the income tax ( I- T) department has introduced a new form that all employees will need to give their employers this financial year onwards.
Along with the new declaration (From 12BB), employees will also need to furnish evidence and information related to the deductions they claim. According to the government notification, if an individual claims housing rent allowance (HRA) of over ? 1 lakh, he or she will need to furnish name, address and permanent account number ( PAN) of the house owner. Those claiming leave travel allowance/ concession ( LTA or LTC) will need to give ‘ evidence of expenditure’.
And, if you have a housing loan and claim deduction on the interest, you will need to provide PAN of the lender, along with its name and address. Similarly, relevant proof is needed for claiming deductions under Chapters VI- A ( A) and VI- A, which cover Sections 80C, 80CCC, 80CCD, 80E, 80G, 80TTA, et al. These rules take effect from June 1.
“In the 2015 Budget, the Finance Act had introduced Section 192( 2D) of the Income Tax Act. According to it, the person responsible for making payment of salary ( employer) was cast with an obligation to collect the necessary evidence or proof. However, the relevant rules and form were yet to be prescribed, which the government has done now,” says Kuldip Kumar, partner, PwC India. He says details such as PAN of the house owner would help the authorities to track fudged claims. The authorities can also verify whether rent received by the owner was duly disclosed in his or her I- T return.
“The details for claiming HRA and LTA were provided earlier as well but not in this specified format. In some cases, they have asked for more details. Furnishing PAN details of lender for those claiming deductions on interest of home loan, for example, is new,” says Amarpal Chadha, tax partner at EY.
The circular, however, doesn’t specify the documents needed to support the deduction claimed. According to Jiger Saiya, partner at BDO India, the existing documents that employees provide should hold good. So, you can continue to give rent receipts for HRA and boarding pass and tickets for LTA or LTC.
Other than these changes, the government has also made a few changes to help individual taxpayers. In the same notification, the Central Board of Direct Taxes, has extended the time limit for depositing tax deducted at source on transfer of immovable property from seven days to 30 days.
Business Standard New Delhi ,05 May 2016

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more