FINANCE

Employer's contribution for provident fund, NPS and superannuation worth more than 7.5 lakh a year will be taxable The new income tax rules affects only those in a high salary bracket Those with high salaries might soon have to shell out income tax on employers contribution under employees' provident fund (EPF), National Pension System (NPS) and superannuation fund. In the  Union Budget 2020 , finance minister Nirmala Sitharaman has introduced a cumulative upper ceiling of  ₹ 7.5 lakh for the three investments which give tax benefits. With effect from 1 April, 2021, the combined upper limit of  ₹ 7.5 lakh in respect of employer's contribution in a year to NPS, superannuation fund and recognised  provident fund  and any excess contribution will be taxable. The Budget has also proposed that even interest and dividend earned during the previous year would also be taxable. Interest is treated as perquisite to the extent it relates to the employer’s contributio...

The new tax rates announced in Budget 2020 will be optional The maximum gain is ₹78,000 under the new income tax regime "In order to provide significant relief to the individual taxpayers and to simplify the Income-tax law, I propose to bring a new and simplified personal income tax regime wherein income tax rates will be significantly reduced for the individual taxpayers who forgo certain deductions and exemptions," Finance Minister Nirmala Sitharaman said in her Budget 2020 speech as she proposed new income tax rates and slabs for those forgoing exemptions and deductions The new tax rates will be optional. Instead of actually simplifying, tax experts say that the dual tax rates might create confusion for individuals since they will have to calculate tax under both the regimes to see which is more beneficial. Further, an individual will have an option to switch between the two rates on a year to year basis. But those with business income can only chose to switch once. Th...

Tax experts say that individuals will have to check if they will have greater benefit under the new tax rates Finance Minister Nirmala Sitharaman today announced new income tax rates and slabs But these new tax rates are optional and will be applicable for those foregoing exemptions and deductions Budget 2020, Finance Minister  Nirmala Sitharaman  announced new income tax rates and slabs for those earning up to  ₹ 15 lakh a year. These new tax rates are optional and will be applicable for those foregoing exemptions and deductions. The finance minister also proposed to remove dividend distribution tax on companies. These new income tax related proposals will come into effect from financial year 2020-21. 1) It is to be noted that the new income tax rates and slabs will be applicable for those who forego exemptions and deductions. The deductions include Standard deduction, Section 80C, Section 80D, LTA, HRA, interest on housing loan on self-occupied property among oth...