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<ul><li><keyword id="115182" type="General" weightage="100" keywordseo="hra" source="Orion">HRA</keyword> exemption is available only if you are living in a rented house and opt for the old tax regime. </li><li>If the rent is more than ₹1 lakh per annum, then the PAN of the landlord must be submitted. </li><li>You can claim both HRA and deduction on home loan interest if you fulfil certain conditions.</li></ul> If you are a salaried employee, you may be receiving a house rent allowance (HRA) as part of your salary. If you live in a rented house, you can claim an HRA exemption from taxes. However, remember that the tax exemption is available only if you choose the old tax regime. <cmsannotation type="cmsannotation" annotationid="How is tax exemption under HRA calculated" comment="subhead" text="How is tax exemption under HRA calculated">How is tax exemption under HRA calculated</cmsannotation> The deduction available is the minimum of the following: <ul><li>Actual HRA received</li><li>50% of basic salary for those living in metro cities (Delhi, Kolkata, Mumbai or Chennai) and 40% for those living in non metros</li><li>Actual rent paid minus 10% of basic salary </li></ul>To calculate your HRA deduction, you may use the HRA deduction <a href="https://incometaxindia.gov.in/Pages/tools/house-rent-allowance-calculator.aspx">calculator </a>available on the <keyword id="65338" type="General" weightage="50" keywordseo="income-tax-department" source="Orion">Income Tax Department</keyword> website. <cmsannotation type="cmsannotation" annotationid="Documents required to claim HRA tax exemption" comment="subhead" text="Documents required to claim HRA tax exemption">Documents required to claim HRA tax exemption</cmsannotation> In order to claim a deduction for house rent allowance, the employee needs to provide her employer with documents such as rental agreements and rent receipts. “If the payment of rent is more than ₹1 lakh per annum, then the permanent account number (PAN) of the landlord must be submitted. Based on these proofs, employers will provide exemption for HRA in Form 16,” says Archit <keyword id="6356160" type="General" weightage="50" keywordseo="gupta" source="Orion">Gupta</keyword>, founder and chief executive officer of fintech company Clear. <cmsannotation type="cmsannotation" annotationid="You can claim deduction even when your employer doesn’t pay HRA" comment="subhead" text="You can claim deduction even when your employer doesn’t pay HRA">You can claim deduction even when your employer doesn’t pay HRA</cmsannotation> If an individual pays rent for living in a residential accommodation but does not receive an HRA from her employer, she can still claim the deduction under section 80GG of the <keyword id="6354751" type="General" weightage="50" keywordseo="income-tax" source="Orion">Income Tax</keyword> Act. However, some conditions need to be fulfilled to claim this deduction. First, you must be self employed or salaried and must not have received HRA any time during the year in which you are claiming 80GG. “The other condition is that you or your spouse or your minor child do not own any residential accommodation at the place where you currently reside, perform duties of office, or employment or carry on business or profession,” says Gupta. <cmsannotation type="cmsannotation" annotationid="You can claim HRA if you live with parents" comment="subhead" text="You can claim HRA if you live with parents">You can claim HRA if you live with parents</cmsannotation> If you are living in your parent’s house, you can also claim HRA. “To claim HRA, you have to enter into a rental agreement with your parents and transfer money to them every month as rent. Your parents need to report the rent received from you as income in their income tax returns,” says Gupta. If their other income is below the basic exemption limit or taxable at a lower tax slab, they can save tax on the family income. <cmsannotation type="cmsannotation" annotationid="You can claim both HRA and deduction of home loan interest" comment="subhead" text="You can claim both HRA and deduction of home loan interest">You can claim both HRA and deduction of home loan interest</cmsannotation> If you have a home loan, you can claim both HRA and also the tax benefits that you are eligible to claim if you have a home loan, even if both the houses are in the same city. “For this, you need to prove that the house for which you are paying rent and the house for which you are paying home loan are at different places,” says <keyword id="16333858" type="General" weightage="50" keywordseo="suneel-dasari" source="Orion">Suneel Dasari</keyword>, founder and CEO, EZtax.in, a tax portal. There must be sufficient reasons for not residing in a self-owned house. The possible reasons could be that you have availed a loan for a house but live in a rented accommodation in another city. You may also live in the same city in a rented accommodation for reasons such as work or children’s schooling. Also, the home you have purchased can be under construction and you may be living on rent elsewhere. You may also have rented out your own house and live elsewhere. Such claims are frequently scrutinised by Income Tax officials, who may reject part of the claim if they are dissatisfied, particularly if the claimed amount is relatively high. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/mobile/news/the-vivo-zeiss-story-how-a-covid-time-collab-led-to-the-creation-of-the-x90-series/articleshow/100013619.cms">The Vivo-Zeiss story: How a Covid-time collab led to the creation of the X90 series</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/sensex-nifty50-tumble-over-1-on-sell-off-in-hdfc-twins/articleshow/100013793.cms">Sensex, Nifty50 tumble over 1% on sell-off in HDFC twins</a>

How HRA exemption can help you save tax in 2023-24

<ul><li>The enhanced allocation for PM Awas Yojana is a boost for affordable housing, which was flagging, says <keyword id="6420759" type="General" weightage="50" keywordseo="anuj-puri" source="Orion">Anuj Puri</keyword>, chairman of Anarock Group. </li><li>The new tax regime forgoes deductions on housing loans, and cannot be positive for home buying sentiment, says <keyword id="16333859" type="General" weightage="50" keywordseo="akash-pharande" source="Orion">Akash Pharande</keyword>, managing director of Pharande Spaces. </li><li>The Budget gave a boost to rail and air infrastructure, which most experts hope will be a catalyst for real estate demand. </li></ul>This Budget, the government has given a much expected boost to affordable housing – the only segment in the real estate market that did not gain from the pandemic boom. The finance minister <keyword id="129243" type="General" weightage="50" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> increased allocation to PM Awas Yojana (PMAY), the scheme earmarked for it, by a massive 66% to over ₹79,000 crore. “This (affordable housing) supply will definitely gain momentum along with the Urban Infrastructure Fund and boost development in the surrounding areas of MMR (Mumbai Metropolitan Region) as well as Tier 2 and Tier 3 cities. Ultimately, this will bring in a good supply of affordable housing and drive up the demand in terms of PMAY, thus overall benefitting the housing sector,” Dhaval Ajmera, director at Ajmera Realty &amp; Infra India told Business Insider India. According to an Anarock Consumer Sentiment Survey, in 2022, the demand for affordable housing sunk precariously. “The enhanced allocation for PM Awas Yojana is certainly a boost for affordable housing, which was flagging due to increased input costs and also because the buyers in this segment, mostly from the unorganised sector, were still reeling under the impact of the pandemic,” said Anuj Puri, chairman of Anarock Group. Only 26% of property seekers were looking for ‘budget’ properties that cost below ₹40 lakh, falling from 39% in 2018. All other properties, including premium and others, saw robust demand as well as supply during the year. “This move will give impetus to affordable housing in the country by providing a better housing subsidy to economically weaker sections and lower-income groups,” said <keyword id="16333860" type="General" weightage="50" keywordseo="devanshu-bansal" source="Orion">Devanshu Bansal</keyword>, director, UK Realty. Deducing the effect of the new tax regime The finance minister has made the new tax regime very attractive in Budget 2023-24, by doing away with income tax for those earning below ₹7 lakh and reducing the number of tax slabs. However, the new regime which will now also be the default regime, does not provide any deductions for interest paid on housing loans. “One of the major changes is the introduction of a new tax regime, which offers lower tax rates for individuals who forgo exemptions and deductions. However, this regime also foregoes the previous deductions on housing loans - one of the most popular incentives for middle-class homebuyers. This cannot be seen as positive for homebuying sentiment,” said Akash Pharande, managing director of Pharande Spaces. On the other hand, <keyword id="16333858" type="General" weightage="50" keywordseo="suneel-dasari" source="Orion">Suneel Dasari</keyword>, founder of EZTax.in tells Business Insider India that savings in general are higher in the new tax regime, even without deductions. Ram Raheja, managing director at S Raheja Realty agrees and says, “The personal tax regime revisions will result in a rise in disposable funds due to lower deductions.” The extra income in the hands of the taxpayers is good news for the realty sector as real estate is generally the preferred investment vehicle. “Surplus of liquidity in the hands of the taxpayers will aid in more real estate buying because of their preference for real estate over other asset classes. This move will boost the demand and gain momentum for the real estate industry, specifically in the affordable and mid-luxury segments,” says Ajmera. Luxury homes &amp; capital gains tax The FM capped the deductions that can be availed on capital gains arising from sale of residential houses at ₹10 crore. That means if a home owner earns over this limit via a home sale, it would be taxed. This won’t have too much impact, experts say. “The intention is to deter tax exemption for extremely high-value transactions in the residential space. However, we believe that most of the transactions in the luxury segment would fall within the ambit of the ₹10-crore cap,” says Anshuman Magazine, chairman &amp; CEO-India, South-East Asia, Middle East &amp; Africa, CBRE. For this category of buyers – that’s high-networth individuals (HNIs) and ultra HNIs – there is much to be gained in terms of a 4% reduction in the overall tax rate that was announced in the Budget for the highest tax slab, leaving more liquidity in their hands, Magazine adds. Pharande too says that while this is a dampener, those buying or upgrading to luxury homes primarily for lifestyle improvement would not be too concerned. “I don't see the negative impact spreading much beyond MMR and Delhi,” he says. Puri and Pharande say that there is nothing specific in the budget that would boost consumer sentiment towards the sector in a high interest rate regime where housing prices too are on the upswing due to rising input costs. The Budget gave a boost to infrastructure with announcements like the highest ever railway outlay at ₹2.4 lakh crore; increased regional connectivity via 50 additional airports, helipads, water aero drones and advanced landing grounds – all of which will boost affordable regional connectivity. This, most experts hope, will be a catalyst for real estate demand. SEE ALSO <a href="https://www.businessinsider.in/budget/news/indias-rich-to-shell-out-more-for-luxury-cars-global-travel-but-may-have-more-to-invest/articleshow/97551072.cms">India’s rich to shell out more for luxury cars, global travel but may have more to invest</a> <a href="https://www.businessinsider.in/budget/news/budget-2023-24-nirmala-sitharaman-speech-highlights-and-updates/articleshow/97512649.cms">Budget 2023-24 highlights: Those with income below ₹7 lakh a year need not pay income tax</a>

Budget to aid flagging affordable home segment, boosts demand with infra push

<ul><li>The <keyword id="548629" type="General" weightage="20" keywordseo="new-tax-regime" source="Orion">new tax regime</keyword> offers reduced <keyword id="6403501" type="General" weightage="20" keywordseo="tax-rates" source="Orion">tax rates</keyword> and slabs, but most common tax <keyword id="891931" type="General" weightage="20" keywordseo="deductions" source="Orion">deductions</keyword> under the <keyword id="8706677" type="General" weightage="20" keywordseo="old-tax-regime" source="Orion">old tax regime</keyword> are not available under the new regime </li><li>However, there are deductions under the new tax regime, which can be a part of the employee’s CTC and have to be agreed upon between the employer and the employee </li><li>It is crucial to comprehensively understand the inclusions and exclusions pertaining to exemptions and deductions under the new tax regime </li></ul>Budget 2020 introduced the new tax regime for FY 2020-21 in addition to the old tax regime. FY 2020-21 onwards the taxpayer can choose the optimum tax regime based on the tax saving potential, practicality, and immediate needs. The new tax regimes have reduced tax rates and slabs, but many of the common tax deductions that were available under the old tax regime are not available under the new tax regime. “Under the new tax regime, deductions under Sections 80C, 80D, and 80E, interest on home loans (Section 24b), leave travel concession, house rent allowance, entertainment allowance deduction, SEZ unit exemption, and various other deductions under Sections 32AD, 33AB, 33ABA, 35AD, and 35CCC are not available,” says Abhishek Soni, CEO, Tax2Win, an income tax portal. Deductions available under the new tax regime However, the following deductions are available under the new tax regime. <ul><li>W.e.f Apr 01st 2023, Standard Deduction of ₹50000 if you have salary or pension income. </li><li>Deduction u/s 80CCD (2) (Employer contribution to NPS) </li><li>Deduction u/s 80JJAA (Additional employee cost). This applies to profits and gains from a business. </li><li>Transport <keyword id="196851" type="General" weightage="20" keywordseo="allowances" source="Orion">allowances</keyword> in case of Specially abled persons </li><li>Travelling Allowance granted to meet the cost of travel on tour or transfer u/s 10(14) </li><li>Daily allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty </li><li>Conveyance Allowance granted to meet the expenditure incurred on conveyance in the performance of duties of the office </li></ul>It is important to note that many of these are a part of the employee’s CTC and have to be agreed upon between the employer and the employee. If these are added to the income of the employee, these would remain tax-free and the employee will not need to pay any tax on these. Under the new tax regime, the taxpayer need not worry about the documentation and compliances as most of the exemptions and deductions are not applicable. “Whereas the taxpayers under the old regime need to have all the proofs, and in many cases, the employee needs to submit such proofs to the employer for claiming deductions and exemptions,” says Suneel Dasari, CEO and founder, EZtax.in, a tax portal. Making a decision Although certain tax benefits have been removed under the new regime, it's worth noting that some deductions are still retained. “Hence, it becomes crucial for taxpayers to possess a comprehensive understanding of the inclusions and exclusions pertaining to exemptions and deductions in the new tax regime,” says Soni. By gaining clarity on these aspects, taxpayers can optimise their tax planning strategies and ensure compliance with the revised regulations.

Opted for the new tax regime? Here are the allowances and deductions you can still avail

<ul><li>Investing in <keyword id="103549" type="General" weightage="20" keywordseo="elss" source="Orion">ELSS</keyword> not only aids in tax reduction but also offers the opportunity for wealth accumulation through equity exposure. </li><li>Investing in PPF provides a secure avenue for long-term savings, with a fixed tenure of 15 years and the option to extend in blocks of 5 years.</li><li>Investors opt for 5-year FDs due to their stability and assured returns, making them suitable for those seeking low-risk investment options. </li></ul>Now that we have stepped into the new year, there are just three months left before the current financial year draws to an end. Those who have made investment declarations to their employees to save funds under section <keyword id="6381499" type="General" weightage="20" keywordseo="80c" source="Orion">80C</keyword>, would have another month or two to show proof of investments to their employers. One needs to give evidence of investments to his/her employer by a certain time. This helps your employer calculate your taxable income and the amount of tax to deduct from your salary. “If you forget to submit the proof of investments to your employer, you can still claim those investments when you file your income tax return. Just make sure the investments were made before the end of the financial year,” says Archit Gupta, Founder and CEO, Clear, a fintech company It always helps to plan early, but in case you have not, here is a guide on how you can invest to avail section 80C tax deductions. Remember, that would apply to you only if you have opted for the old tax regime. Before making 80C investments, it is important to remember that the maximum deduction that you can avail is ₹1.5 lakh. Your contribution to the employee provident fund (EPF) is eligible for 80C deductions. So are your insurance premiums. If you have a home loan, the amount you pay towards the principal component of the home loan is also eligible for deductions under section 80C. So, when planning for 80C investments you need to first understand the amount you need to invest, which would in most cases be less than ₹1.5 lakh. Let us take a look at 5 investment options to avail 80C deductions in 2024. Equity Linked Savings Scheme Equity Linked Savings Schemes (ELSS) serve as a tax-saving avenue under section 80C of the Income Tax Act, offering benefits like a lower lock-in period of three years compared to other tax-saving instruments. ELSS primarily invests in equity and equity-related instruments, providing potential for higher returns over the long term. “ELSS helps you save tax and grow money at the same time,” Suneel Dasari, CEO, EZtax.in. However, it's essential to acknowledge the risks inherent in equity investments, including market volatility and fluctuations. The returns aren't guaranteed and can vary based on market performance. ELSS funds as a category have given returns of 26.57%, 19.55% and 17.13% in one, three and give years respectively. Public Provident Fund The Public Provident Fund (PPF) is a government-backed long-term savings scheme offering tax benefits under Section 80C. It allows contributions up to ₹1.5 lakh annually, making the invested amount tax-deductible. Investing in PPF provides a secure avenue for long-term savings, with a fixed tenure of 15 years and the option to extend in blocks of 5 years. It offers a 7.1% rate compounded annually. The risks associated with PPF are notably low due to its government backing, ensuring safety and stability. However, the lock-in period of 15 years and limited liquidity might pose constraints for individuals seeking shorter-term investment options. National Pension Scheme The National Pension System (NPS) is a voluntary retirement savings scheme offering tax benefits of up to ₹1.5 lakh under Section 80C and an additional ₹50,000 under Section 80CCD (1B), providing substantial tax savings. Investing in NPS is ideal for retirement planning, offering a choice of investment options across equities, corporate bonds, and government securities. Its unique feature includes two accounts: Tier I (non-withdrawable till retirement) and Tier II(withdrawable at any time). While NPS provides the opportunity for market-linked returns, it also carries market risks associated with investment in equity and debt instruments. Additionally, the Tier I account has a lock-in period until retirement, restricting liquidity. “Tax benefits will be applicable only to the investments under Tier 1 NPS Accounts. Tier 2 NPS accounts are not eligible for tax benefits,” says Dasari. Tax saving FDs A 5-year Fixed Deposit (FD) offers a secure investment avenue with a fixed interest rate for the specified tenure, typically ranging from banks to post offices. The invested amount is eligible for deduction under section 80C. Investors opt for 5-year FDs due to their stability and assured returns, making them suitable for those seeking low-risk investment options. However, these FDs may have lower returns compared to market-linked instruments like equity-based investments. Additionally, the lock-in period of 5 years limits liquidity and flexibility. Sukanya Samriddhi Yojana Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme designed for the financial security of the girl child. It offers tax benefits under Section 80C of the Income Tax Act, allowing contributions up to ₹1.5 lakh annually to be tax-deductible. Investing in SSY provides a dual advantage of tax savings and creating a corpus for a girl child's future expenses like education or marriage. The scheme offers an attractive interest rate(8.2%) and has a maturity period of 21 years from the date of account opening or until the girl child reaches 18, whichever is earlier. “For higher education purposes you can withdraw 50% of the amount deposited,” says Dasari. The risks associated with SSY are minimal as it's a government-backed scheme.

Tax saving countdown – With 2 months to go, options to consider under 80C

<ul><li>The redesigned website has a user-friendly interface, new functionalities, and a mobile-responsive design. </li><li>There is a guided virtual tour with button indicators to make navigation easy. </li><li>There is a section called ‘<keyword id="5693984" type="General" weightage="20" keywordseo="taxpayer-services" source="Orion">Taxpayer Services</keyword>’ which makes it easy to navigate to the information you are looking for. </li></ul>The new and revamped <a href="https://www.incometax.gov.in/">income tax portal</a> is here and a visit shows a completely new look design which is easy on the eyes, user friendly and clutter-free. It is noteworthy that this is not a website to file your taxes but the official website of the Income Tax Department. We look at five ways in which the new <keyword id="7520099" type="General" weightage="20" keywordseo="income-tax-portal" source="Orion">income tax portal</keyword> is different and how it can benefit you. <cmsannotation type="cmsannotation" annotationid="User friendly interface and mobile-responsive design" comment="subhead" text="User friendly interface and mobile-responsive design">User friendly interface and mobile-responsive design</cmsannotation> The website does not look complex and invites you to get in and explore. It is clutter-free and has lots of white space and is hence pleasing to the eye. “The redesigned website provides tax payers with a user-friendly interface, new functionalities, and a mobile-responsive design,” says Suneel Dasari, founder and CEO, EZTax.in. <cmsannotation type="cmsannotation" annotationid="Guided virtual tools" comment="subhead" text="Guided virtual tools">Guided virtual tools</cmsannotation> There is a guided virtual tour with button indicators to make navigation easy. There is a search bar where you can search for any topic you want information on and many ‘how’ to videos which explains how to file <keyword id="6374875" type="General" weightage="20" keywordseo="itr" source="Orion">ITR</keyword> offline, how to resolve errors when linking Aadhaar with PAN, how to update tax returns, and so on. <cmsannotation type="cmsannotation" annotationid="subhead" text="Access a wealth of tax related information">Access a wealth of tax related information</cmsannotation> All tax-related information was always there on the website but it was not easy to find. “Now, taxpayers can access a wealth of tax information, including statutes, regulations, circulars, and notifications, in one location,” says Dasari. You can also compare different tax sections, acts and rules. For example the desktop site has a section Individual/HUF- Salaried Employees- Deductions under which I can get tax benefits, which explains in detail the different deductions available under all the sections. It is easier to find tax <keyword id="6425452" type="General" weightage="20" keywordseo="forms" source="Orion">forms</keyword> and locate relevant information which will make it easier to get a grasp on tax matters. <cmsannotation type="cmsannotation" annotationid="Taxpayer services module" comment="subhead" text="Taxpayer services module">Taxpayer services module</cmsannotation> There is a section called ‘Taxpayer Services’ which has sections like ‘return preparation made easy,’ ‘tax tools,’ ‘got a problem’ and others, which makes it easy to navigate to the information you want. What’s more, you can also play a ‘Tax Gyaan’ game to test your knowledge about taxes! <cmsannotation type="cmsannotation" annotationid="Due date reminder feature" comment="subhead" text="Due date reminder feature">Due date reminder feature</cmsannotation> The due date reminder feature is a tool that mentions all due dates for submission of different taxes with the number of days remaining for a certain due date, and also has a tax calendar which highlights all the important dates, so that you do not miss any tax payment deadline. "Due date reminder is a feature of the redesigned website that assists taxpayers in maintaining compliance,” says Dasari. There are also links to the tax filing portal so that you can file your taxes as and when necessary. Overall, the revamped website is impressive and should make the subject less dreary and thus invite more to visit the website.

Revamped income tax portal: Five new features we like the most

<ul><li><keyword id="1673591" type="General" weightage="20" keywordseo="indian-residents" source="Orion">Indian residents</keyword> are required to report their foreign investments, which may include holdings in foreign <keyword id="6354298" type="General" weightage="20" keywordseo="stocks" source="Orion">stocks</keyword>, bonds, or other financial instruments. </li><li>Ownership of foreign real estate, whether residential or commercial, must be reported to Indian tax authorities. </li><li>If you possess ESOPs from a foreign company, you are required to disclose these foreign holdings when filing your <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword> return. </li></ul>Recently, the IT Appellate Tribunal of Mumbai imposed a penalty of ₹10 lakh per year on <keyword id="59866" type="General" weightage="20" keywordseo="taxpayers" source="Orion">taxpayers</keyword> who failed to report <keyword id="466213" type="General" weightage="20" keywordseo="foreign-assets" source="Orion">foreign assets</keyword> under schedule FA of the income tax return (ITR) form. The penalty was levied under black money Act. Compared to the Income Tax Act, the penalty under the black money act is enormous. "The ITAT decision is a wake-up call for many working professionals and NRIs regarding the complexity of tax compliance in India; even if the taxpayer has paid their taxes, mere non-disclosure results in hefty penalties,” says Suneel Dasari, CEO and founder, EZtax.in. Here's a breakdown of the key foreign assets and income that must be disclosed in the income tax returns. <cmsannotation type="cmsannotation" annotationid="Foreign investments" comment="Subhead" text="Foreign investments">Foreign investments</cmsannotation>: Indian residents are required to report their foreign investments, which may include holdings in foreign stocks, bonds, mutual funds, or other financial instruments. This reporting extends to income generated from these investments, such as dividends, interest, or capital gains. Individuals need to disclose the nature and value of these investments in their tax returns. For example, if you have invested in shares of Microsoft or Apple, the investments and any income from them, need to be disclosed when filing your tax returns. <cmsannotation type="cmsannotation" annotationid="ESOPs" comment="subhead" text="ESOPs">ESOPs</cmsannotation>: If you possess employee stock ownership plans (ESOPs) from a foreign company, you are required to disclose these foreign holdings when filing your income tax return, typically under schedule FA. “In India, when an Indian employee is allotted shares of a foreign parent company as a part of their compensation or as an employee stock option plan (ESOP), it is considered an investment in foreign assets,” says Abhishek Soni, CEO, Tax2Win.in, a tax filing platform. Foreign bank accounts: Any foreign bank accounts, whether savings, current, or fixed deposit accounts, must be reported. This includes accounts held individually or jointly, along with details such as the name of the bank, account numbers, and the highest balance maintained during the financial year. <cmsannotation type="cmsannotation" annotationid="Foreign real estate" comment="Subhead" text="Foreign real estate">Foreign real estate</cmsannotation>: Ownership of foreign real estate, whether residential or commercial, must be reported to Indian tax authorities. This includes details about the property's location, current market value, and any income generated from it, such as rental income. “Any rental income or capital gains from selling these assets may be subject to taxation,” says Soni. <cmsannotation type="cmsannotation" annotationid="Financial or beneficial interest in overseas entities" comment="Subhead" text="Financial or beneficial interest in overseas entities">Financial or beneficial interest in overseas entities</cmsannotation>: In case an individual possesses a financial or beneficial stake in any overseas entity, such as serving as a partner in an overseas limited liability partnership (LLP) or firm, or receiving benefits from a foreign private trust, it is imperative to disclose this interest in accordance with tax regulations. “Residents in India with foreign income from ESOPs, or the voluntary purchase of foreign stock or other non-tangible instruments are at risk due to country or central bank level reciprocity agreements that would allow the Indian government access to information that would otherwise be unavailable,” says Dasari. Non-declaration also revokes your right to claim relief under the double taxation avoidance agreement for your foreign income. Hence it is critical to disclose such foreign assets in the schedule FA of ITR.

Have foreign assets or income? Not disclosing it may lead to heavy penalties

<ul><li>You must disclose income from virtual digital assets (VDA)s such as <keyword id="2420795" type="General" weightage="20" keywordseo="cryptocurrencies" source="Orion">cryptocurrencies</keyword>, non fungible token (NFT)s and more in the ‘schedule VDA’ provided in the <keyword id="6374875" type="General" weightage="20" keywordseo="itr" source="Orion">ITR</keyword> form. </li><li>Schedule VDA requires information such as the acquisition date, transfer date, category of income for taxation, acquisition cost in the case of a gift, and consideration received. </li><li>The donation reference number (ARN), obtained from the form 10BE donation certificate must be included in the ITR to avail 80G deductions. </li></ul>With the <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword> filing deadline less than a month away, you need to ensure you are up-to-date on all the changes that are applicable this year. While modifications in tax and taxability of income from insurance policies (other than ULIPs) are among the most notable changes that have drawn a lot of attention, there are a couple of lesser known changes one should be aware of when filing one’s taxes. We take a look at these changes. The first is about disclosing income from virtual digital assets (VDAs) such as cryptocurrencies. “The taxpayer must disclose income from VDAs such as cryptocurrencies, NFTs, and so on in the "schedule VDA" provided in the ITR form,” says Aashish Sharma, co- founder and litigation head, Lex N Tax, a tax consultancy firm. Schedule VDA requires information such as the acquisition date, transfer date, category of income for taxation, acquisition cost in the case of a gift, and consideration received. “Those who get VDA income are not eligible to file ITR-1 or ITR-4. Such income can instead be declared in ITR 2 or ITR 3. Further, income from VDAs can be taxed either under the head of business income or capital gains,” says Sharma. Budget 2022 had introduced new NFT (non fungible token) and VDA regulations. The transfer of such assets will be subject to an income tax rate of 30% plus a surcharge and a levy beginning April 1, 2022, as per recent regulations. “TDS will be deducted at 1% of the sale price beginning July 1, 2022. This tax will be deducted by the developer, intermediary, broker or donor. The taxpayers cannot set off losses or carry forward the losses within crypto or from different heads,” says Suneel Dasari, founder and chief executive officer at EZTax, a tax portal. <cmsannotation type="cmsannotation" annotationid="Provide details of donation reference number to avail 80G deductions" comment="subhead" text="Provide details of donation reference number to avail 80G deductions">Provide details of donation reference number to avail 80G deductions</cmsannotation> To avail a deduction under <keyword id="1667689" type="General" weightage="20" keywordseo="section-80g" source="Orion">Section 80G</keyword> for donations made to charitable institutions, non governmental organisations or research universities, it is crucial to possess the donation receipt, and the donation certificate in Form 10BE. Taxpayers must provide the necessary information regarding their donations in the relevant 'Schedule 80G' within the ITR form in order to claim the deduction. “All approved u/s 80G charitable institutions, NGOs, and research universities must submit Form 10BD for all donations received during the fiscal year. They must also provide form 10BE to the recipients,” says Dasari. Form 10BE, containing a unique registration number, will be issued to benefactors after form 10BD has been filed by the institution. It is essential to enter donation details accurately in the appropriate table while filing the ITR. There is a new column under Table D for disclosing the donation reference number (ARN) for donations made to eligible entities where a 50% deduction is allowed, subject to the qualifying limit. The ARN, obtained from the form 10BE donation certificate issued by the institutions who received the donation, must be included in the ITR. This has been implemented to match donor and donee records and reduce the prevalence of fraudulent donations claims.

Two new tax rules you should be aware of when filing your taxes

<keyword id="189207" type="General" weightage="20" keywordseo="tax-filing" source="Orion">Tax filing</keyword> season is here. On the income tax website there are various income tax forms available to file your returns. Here, we take a look at the different forms available, and the one you should choose to file your returns. “The applicability of <keyword id="6374875" type="General" weightage="20" keywordseo="itr" source="Orion">ITR</keyword> forms varies depending on the sources of income of the taxpayer, the amount of the income earned, and the category of the taxpayer like individuals, Hindu Undivided Family (HUF), company, etc,” says Archit Gupta, founder, and CEO, Clear, a fintech company. <cmsannotation type="cmsannotation" annotationid="subhead" text="ITR-1 (Sahaj)">ITR-1 (Sahaj)</cmsannotation> You can use this form if you have a total income of up to ₹50 lakh through salary, one house property, and other sources like interest. You can also have agricultural income of up to ₹5000. “However, it will not apply to those who are directors in a company, or own unlisted equity shares. <keyword id="3429498" type="General" weightage="20" keywordseo="itr-1" source="Orion">ITR 1</keyword> does not apply to you for other conditions as well. “If you have income from business or profession, have income under capital gain, or have any foreign income, ITR 1 does not apply to you,” says Gupta. <cmsannotation type="cmsannotation" annotationid="subhead" text="ITR-2">ITR-2</cmsannotation> You can use this form if you have income from salary/pension, and from more than one house property. You can also have agricultural income of more than ₹5,000, and have foreign income or income from capital gains. The total income can be more than ₹50 lakh. “This form can be used by individuals, and HUF who are not eligible to file ITR-1, and whose income is not chargeable under head business or profession,” says Suneel Dasari, founder and CEO, EZtax.in, a tax portal. Agrees Gupta, “This return form should not be used by an individual whose total income for the AY 2023-24 includes Income from business or profession. For declaring these types of income you may have to use ITR-3 or ITR-4.” <cmsannotation type="cmsannotation" annotationid="subhead" text="ITR-3">ITR-3</cmsannotation> ITR-3 is meant for individuals, and HUFs having income from a proprietary business, or profession, or income from partnership firm. The form also applies to you if you are an individual director of a company, or have unlisted equity shares at any time during the financial year. The return may also include income from house property, salary/pension, and income from other sources. “In short, individuals or HUFs who are not eligible to file ITR-1, ITR-2, and ITR-4, should file ITR-3,” says Gupta. <cmsannotation type="cmsannotation" annotationid="subhead" text="ITR-4 (Sugam)">ITR-4 (Sugam)</cmsannotation> ITR-4 Sugam is an income tax return form specifically designed for individuals, and HUFs who have a presumptive business income. It offers a simplified approach to filing taxes by allowing taxpayers to report their income from business or profession based on a presumptive taxation scheme. This form is applicable to taxpayers who have a total income of up to ₹ 50 lakh in a financial year, and have earned income from business or profession, which includes freelancers, small traders, and professionals such as doctors, engineers, and lawyers. It provides a convenient way to declare their income by offering predefined percentages of their turnover, or gross receipts as taxable income, without the need for maintaining detailed books of accounts. “A person adopting the presumptive taxation scheme can declare income at a prescribed rate and, in turn, is relieved from the tedious job of maintenance of books of account,” says Dasari. ITR-5, ITR-6, and ITR-7 do not apply to individuals.

Decoding ITR forms: Which one should you use to file your taxes?

<ul><li>The <keyword id="65338" type="General" weightage="20" keywordseo="income-tax-department" source="Orion">Income Tax Department</keyword> issues <keyword id="104359" type="General" weightage="20" keywordseo="income-tax-return" source="Orion">Income Tax Return</keyword> (ITR) forms for filing of returns every fiscal year. </li><li>The Income Tax Department has released the offline utility for the ITR Forms 1 and 4 on 25 April 2023. </li><li>However, the online forms are still to be released by the IT department. </li></ul>The IT department has made available the ITR-1 and ITR-4 forms in an offline format, which can be used for filing income tax returns (ITR) pertaining to the financial year (FY) 2022-23, also known as the assessment year (AY) 2023-24. “The Income Tax Department Issues Income Tax Return (ITR) forms for filing of returns every fiscal year. This year too, the Central Board of Direct Taxes (CBDT) vide Notification No. 04/2023, dated 10 February 2023, and Notification No. 05/2023, dated 14 February 2023, has notified the Forms for furnishing the income-tax returns for the Financial Year 2022-23, corresponding to the Assessment Year 2023-24,” says Sudhakar Sethuraman, Partner, Deloitte India. In this regard, the Income Tax Department has released the offline utility for the ITR Forms 1 and 4 on 25 April 2023. Who is ITR 1 and ITR 4 applicable to? <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;background-color:#ffffff;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">ITR-1 is applicable to </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;background-color:#ffffff;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">● Residents (other than not ordinarily residents) individual taxpayers </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;background-color:#ffffff;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">● having income from salaries or pension, one house property, income under the head other sources (excluding lotteries, betting, gambling but including income from retirement benefit accounts maintained outside India), and agricultural income up to ₹5,000 which in aggregate should not exceed ₹50,00,000. </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;background-color:#ffffff;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">ITR-4 is applicable to </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;background-color:#ffffff;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">● Wider category of Resident taxpayers i.e., individuals, HUFs, and Firms (other than LLP) </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;background-color:#ffffff;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">● Having income from presumptive business, profession or income from goods or carriage which is computed under sections 44AD, 44ADA or 44AE respectively besides category of income specified under ITR-1 which in aggregate should not exceed ₹50,00,000. </td></tr></tbody></table>Source: Deloitte It is possible to file IT returns now “The Income Tax Department has released the excel utilities for ITR 1 and ITR 4 much in advance and way before last quarter's TDS payment deadline. The IT Department is yet to release Java utilities that can work in most computers but are expected to release soon,” says Suneel Dasari, CEO and Founder, EZTax.in. A few changes have been made to the ITR-1 and 4 forms to switch between old vs new tax-regime, additional conditions for filing income tax returns such as turnover from business exceeding ₹60 lakh in the previous fiscal year, turnover from profession exceeding ₹10 lakh in the previous fiscal year, and the TDS deducted in the previous fiscal year, which are introduced in ITR 1 and ITR 4 “Overall, we predict that much of the tax base is expected to prepare and file taxes in the months of May and June compared to earlier years,” says Dasari. How to file IT return? To file an Income Tax Return (ITR), an individual must first download the utility from the official income tax e-filing portal at https://www.incometax.gov.in/iec/foportal. After filling in the necessary income and deduction-related information on the utility form, the form must then be uploaded to the income tax e-filing portal. This is possible right now. If using the online e-filing mode, the individual must input the information directly into the online form available on the e-filing income tax portal. Once the ITR form has been submitted, whether through offline or online modes, the individual must verify it. Failure to verify the ITR form will result in the income tax department not processing the form. However, salaried employees would find it easier to file their ITR after they have received the Form 16 from their employer.

IT department releases ITR 1 and ITR 4 offline forms ahead of time

<ul><li>For self occupied property, <keyword id="6397939" type="General" weightage="20" keywordseo="interest" source="Orion">interest</keyword> deduction is restricted to ₹2 lakhs per annum </li><li>For a rented property, the entire interest amount is a deductible expense. </li><li>You can begin claiming your <keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">home loan</keyword> benefits only once you have received possession. </li></ul>Buying a home is undoubtedly one of the biggest financial commitments in one’s life. And since it is a big ticket purchase, one more often than not needs to take a loan to purchase. <keyword id="35547" type="General" weightage="20" keywordseo="tax-deductions" source="Orion">Tax deductions</keyword> on home loans provide an incentive to people to purchase their own home. We take a look at how home loan tax deductions work in different situations and other rules. <cmsannotation type="cmsannotation" annotationid="Home loan tax deduction for self-occupied and rented properties" comment="Subhead" text="Home loan tax deduction for self-occupied and rented properties">Home loan tax deduction for self-occupied and rented properties</cmsannotation> The <keyword id="6370810" type="General" weightage="20" keywordseo="income-tax-act" source="Orion">Income Tax Act</keyword> provides for deduction of interest on home loan as well as for repayment of principal loan borrowed for acquiring house property. “For self occupied property, interest deduction is restricted to ₹2 lakhs per annum whereas for a rented property, the entire interest amount is a deductible expense,” says Shabala Shinde, Partner, Grant Thornton Bharat. Section 80EEA gives additional exemption of ₹1,50,000 on the payment of interest on home loan. This deduction is available if the loan is taken under the affordable housing scheme. “Interest paid on loans taken before April 1 2022 are eligible to be claimed under Section 80EEA,” says Suneel Dasari, founder and CEO, Eztax.in, a tax filing portal. For repayment of principal amount, the deduction is available against total income and is restricted to ₹1.5 lakhs annually irrespective of the property being let out or self-occupied, under section 80C. However, since section 80C also includes investments like public provident fund (PPF), equity linked savings scheme (ELSS), provident fund contributions and payments like life insurance premiums, you may not be able to utilise the full deduction of ₹1.5 for home loan principal payment. You can also claim a tax deduction on registration and stamp duty paid on the property under section 80C. <cmsannotation type="cmsannotation" annotationid="Tax rules to remember" comment="Subhead" text="Tax rules to remember">Tax rules to remember</cmsannotation> <cmsannotation type="cmsannotation" annotationid="Condition to fulfil for claiming maximum tax deduction on interest paid" comment="Subhead" text="Condition to fulfil for claiming maximum tax deduction on interest paid">Condition to fulfil for claiming maximum tax deduction on interest paid</cmsannotation> Here are a few tax rules one should keep in mind regarding tax deduction on home loans. To qualify for the maximum allowable deduction on loan interest, you must complete the purchase or construction of the house within three years of obtaining the loan. If the acquisition or construction takes longer than three years, your deduction is limited to ₹30,000 instead of the full ₹2 lakhs. <cmsannotation type="cmsannotation" annotationid="Home loan tax benefits can be availed only after possession" comment="Subhead" text="Home loan tax benefits can be availed only after possession">Home loan tax benefits can be availed only after possession</cmsannotation> One can begin claiming your home loan benefits only once the construction of the home is complete, and possession has been handed over by the builder. However, what about the instalments you paid during the construction phase or before you received the keys to your house? According to the rules, you cannot claim a deduction for principal repayment during this period. Still, the interest paid can be accumulated and claimed after you take possession of the property. The law allows for a deferred deduction on the interest paid during the pre-construction period. This deduction on such interest can be availed equally over a span of 5 years, starting from the year in which you take possession of the property. <cmsannotation type="cmsannotation" annotationid="Deduction of interest available on accrual basis" comment="Subhead" text="Deduction of interest available on accrual basis">Deduction of interest available on accrual basis</cmsannotation> You can claim interest deduction on your home loan even if you have missed some EMIs, subject to certain conditions. The Income Tax Act allows for the accrual of interest benefits, meaning that you can accumulate the interest paid during the financial year, including any missed EMIs, and claim it as a deduction in your income tax return. However, it's crucial to ensure that you have proper documentation to prove the interest payments made. However, the deduction of property taxes and interest paid on a home loan are available only on a ‘paid’ basis. <cmsannotation type="cmsannotation" annotationid="Home loan deduction applicable only under old tax regime" comment="Subhead" text="Home loan deduction applicable only under old tax regime">Home loan deduction applicable only under old tax regime</cmsannotation> Home loan tax deduction is available only if you opt for the old tax regime. “Note that in case you opt for the new tax regime for FY 2023- FY2024, you will not be eligible for the deduction under section 24 on interest on home loan as well as 80C deduction for repayment of the principal amount of loan,” says says Adhil Shetty, CEO, BankBazaar.com. Also, in that case, you cannot set off the house property loss against any other head of income.

Home loan tax deductions: Self-occupied vs rented, the differences

<ul><li>If you have a <keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">home loan</keyword> you can claim both maximum principal and interest rate deductions, you can save more taxes under the <keyword id="8706677" type="General" weightage="20" keywordseo="old-tax-regime" source="Orion">old tax regime</keyword>. </li><li>Consider consolidated deductions before making a decision. </li><li>Key in your details and available deductions in a tax calculator to know which regime is more suitable. </li></ul>Budget 2023-24 tweaked slabs under the new tax regime and also made it the default tax regime. So, if one wants to stay in the old tax regime and take the benefit of various deductions available, they need to opt for the old tax regime. Employers have now set deadlines for employees to register their choice of a tax regime by the end of April, so those who want to opt for the old tax regime, need to decide soon. While tweaked tax slabs has made the new tax regime more attractive, especially since one does not have to go through the hassle of claiming deductions, when you have a home loan, there is still merit in the old tax regime. A home loan can significantly affect your eligible tax deductions The decision to move to the old tax regime from the new tax regime should be based on a thorough analysis of your overall tax liability under both regimes. “While the new tax regime offers lower tax rates, it does not provide certain deductions and exemptions that are available under the old tax regime, including deductions under section 80C for home loan principal repayment,” says Atul Monga, chief executive officer and co-founder, Basic Home Loan. Under the old tax regime, you can also claim a deduction up to ₹2 lakh on the interest of your home loan if you are self-occupying the house. This will tilt your decision in favour of the old tax regime. “The taxpayer's home loan status has a significant impact on the decision between the old and new tax regimes. The highest amount of home loan interest that can be claimed against any other income, including salary, is ₹2 lakh. If a taxpayer has a home loan, as well as an 80C deduction of ₹1.5 lakh and a standard deduction of ₹50,000, they can save more money on taxes under the old tax regime,” says Suneel Dasari, founder and CEO Eztax.in, a tax filing portal. Consider consolidated deductions before making a decision “You can’t look at just the home loan interest and the principal repayments standalone because the consolidated deductions are to be seen to see whether one regime works better or the other. The level of income also needs to be considered,” says Tapati Ghose, partner, Deloitte India. Let us consider a situation when you do not have any other deduction, but just a home loan for self-occupied property where you can claim ₹2 lakh deduction as interest payment and ₹1.5 lakh as deduction under section 80C on principal repayment. “Here, if you have an income of ₹8 lakh (before considering the standard deduction of ₹50,000, which is available both under the old and new regime), then at a deduction of more than ₹1,62,500, the old regime becomes more beneficial. At ₹10 lakh income, ₹2.5 lakh is the threshold beyond which the old regime becomes more beneficial. At ₹15 lakh, ₹3.58 lakh is the threshold beyond which the old tax regime becomes more beneficial,” says Ghose. Also, in another example, let us consider annual incomes of ₹15 lakh and ₹20 lakh and deduction of ₹2 lakh for interest payment on a home loan under the old tax regime. If we also factor in ₹20,000 as house rent allowance (HRA) deduction, ₹50,000 as standard deduction, ₹1.5 lakh as deduction under section 80C, and a deduction of ₹50,000 under section 80D, one ends up paying ₹19,420 and ₹14,040 less tax respectively when compared to the new tax regime. “Especially in the initial years of taking a home loan, the interest payments are very high and I would have the capacity to exhaust the ₹2 lakh limit, then I would definitely go for the old regime. But as we go towards the end of the tenure of the housing loan, then the interest comes down. Then one needs to look at their income levels and see these thresholds where the old regime is more beneficial,” says Ghose. There are calculators available online where you can key in all the required details and available deductions to arrive at a decision. SEE ALSO <a href="https://www.businessinsider.in/finance/news/rbi-bats-for-borrowers-releases-guidelines-to-lenders-from-levying-penal-interest-on-loan-defaults/articleshow/99461008.cms">RBI bats for borrowers, releases guidelines to prevent lenders from levying penal interest on loan defaults</a> <a href="https://www.businessinsider.in/finance/banks/news/interest-on-home-loans-of-75-lakh-and-above-can-increase/articleshow/99397263.cms">Looking for a home loan of ₹75 lakh or above? The RBI rate hike pause might not bring you relief</a>

Have a home loan? You may want to opt for the old tax regime

<ul><li>Increase basic exemption and deduction limits under various sections </li><li>Make more deductions available under the simplified tax regime </li><li>Rationalize capital gains taxes across asset classes and streamline holding period </li></ul>It is that time of the year again. Finance minister Nirmala Sitharaman is all set to deliver the budget on February 1. Like every year, expectations are high that she will come as a messiah for the common taxpayer and deliver a bag of goodies just like Santa Claus. There have been a lot of expectations from the taxpayers because the last significant change that happened for the taxpayer was in 2020 when the simplified tax regime was introduced. “Most of the deductions like 80C, 80D, HRA, and so on have been standard for quite some time. The reason why the taxpayers are hoping that these will be increased is that there has not been any change in the last several years. However, the cost of goods has gone up, the medical premiums are exorbitant and these have now become a big leak from the savings of the common taxpayer, so it is necessary that there is some kind of relief,” says Aarti Raote, Partner Deloitte India. Here are some key expectations taxpayers have from <keyword id="12743893" type="General" weightage="20" keywordseo="budget-2023" source="Orion">Budget 2023</keyword>. Revision of tax slabs and increase in deduction limit “The basic exemption limit has been set to ₹2.5 lakh for almost eight years, now it is high time it should be increased to ₹3-3.5 lakh,” says Archit Gupta, founder and CEO, Clear. There are expectations to increase deduction limits under some of the key sections too. “One of the major expectations of the salaried class taxpayer is to increase the limit of deduction under Section 80C from ₹1,50,000 to ₹2,50,000,” says Akhil Chandana, Partner, Grant Thornton Bharat. Currently, the deduction allowed under section 80C covers a wide range of eligible investments/expenses such as payment of life insurance premium, employee’s contribution to Provident Fund, Public Provident Fund (PPF), National Pension Scheme (NPS), housing loan principal repayment, Equity linked saving schemes (ELSS), etc. “The increase in deduction limit will achieve the dual objective of encouraging savings and reducing tax burden,” says Chandana. Further, the present limit under Section 80D has been set at ₹25,000 per financial year for self (below the age of 60 years), spouse and dependent children in respect of payment of health insurance premium. Further, separate deduction is available for parent’s health insurance up to ₹25,000 (₹50,000 if parents are aged 60 years or above) or medical expenses (in case of no health insurance). “Post the Covid situation and ever-increasing medical cost, it is the need of the hour to relook into these provisions and increase the 80D limits so that the individuals have adequate financial cover under their health insurance plan,” Chandana adds. Making more deductions available under the simplified tax regime The simplified tax regime has also not provided a clear advantage to the taxpayer. “The taxpayers do claim a lot of deductions and exemptions which at times outweigh the reduction in the tax slabs under the new tax regime. This is evident from the fact that only less than 10% of people opt for a simplified tax regime,” says Raote. In fact, the Government has analyzed the reason why the new tax regime is not popular and what can be done to increase adoption. Today, the simplified tax regime has only a few deductions available. Standard deduction is not permitted under the simplified tax regime. Raote says that giving it under the simplified tax regime will be beneficial for everybody as there is no proof required to be submitted for this. Similarly, everybody does a contribution to the provident fund and it requires no evidence because it is an employer-based deduction evident from Form 16, and bringing it under the new tax regime will benefit everybody. Agrees Suneel Dasari, Founder and CEO @EZTax.in, “One can expect the new tax regime to be enhanced with more favourable tax slabs to pave the way for the sunset of the old tax regime and reduce compliance complexity.” Rationalization of capital gains tax rates Presently, long-term capital gains (other than listed shares and units of equity-oriented funds) attract a tax rate of 10%. The long-term capital gains on the sale of other assets attract a tax rate of 20%. Further, short-term capital gains the on sale of listed shares attract a tax rate of 15% and short-term capital gain attracts the tax rate as per the applicable slab. Today the awareness and inclination to invest in the stock markets have increased. “However, you have tax provisions that give you different kinds of tax implications on whether the shares are listed, or not listed, the holding period and tax rates also differ for listed and unlisted shares. All this creates a kind of confusion for the taxpayer.“ It is recommended that the different tax rates are harmonized to simplify the overall tax mechanics. A uniform holding period should be specified to treat a capital asset as short-term or long-term in nature,” says Chandana. He also says that the present limit for long-term capital gain exemption of ₹1 lakh on the sale of listed shares or units of equity-oriented mutual funds (on which STT is applicable) should be increased to boost investments in the capital market. SEE ALSO <a href="https://www.businessinsider.in/budget/article/the-time-for-pli-2-0-is-now-budget-2023-24-needs-to-deliver-if-india-is-to-become-the-factory-of-the-world/articleshow/97175570.cms">The time for PLI 2.0 is now: Budget 2023-24 needs to deliver if India is to become the factory of the world</a> <a href="https://www.businessinsider.in/budget/article/budget-2023-24-what-the-common-man-wants-on-the-personal-tax-front/articleshow/97124204.cms">Budget 2023-24: What the common man wants on the personal tax front</a>

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How HRA exemption can help you save tax in 2023-24

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Budget to aid flagging affordable home segment, boosts demand with infra push

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Opted for the new tax regime? Here are the allowances and deductions you can still avail

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Tax saving countdown – With 2 months to go, options to consider under 80C

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Revamped income tax portal: Five new features we like the most

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Have foreign assets or income? Not disclosing it may lead to heavy penalties

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Two new tax rules you should be aware of when filing your taxes

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Decoding ITR forms: Which one should you use to file your taxes?

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IT department releases ITR 1 and ITR 4 offline forms ahead of time

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Home loan tax deductions: Self-occupied vs rented, the differences

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Have a home loan? You may want to opt for the old tax regime

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Budget Expectations: Time to revise tax slabs and deduction limits for personal tax payers

Anagh Pal

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