Income Tax Deduction Rules For Salaried Employees F.Y.2019-20 & F.Y.2018-19

Salary means either its money or money’s worth. Anything or any amount which was collected or gained from the employer tax under head salary. There is some exemption for the above said rule it comes under section 10(14) of income tax act 1964.

•  Any expense relating to traveling which was incurred by the employee and the same was reimbursed by the employer would not be taxed under this head
• If the employee gets any allowance for the skill development and the expenditure is genuine then no tax will be collected on that allowances.
• Uniform allowance will not be taxed.

Employees who earn more than 2,50,000 Rupees or above per annum need to file income tax return ITR 1

Income Tax slab rates for salaried employees F.Y.2019-20 :

Slab rates applicable for salaried employee ( < 60yrs) F.Y.2019-20

Slab rates applicable to the salaried employee for Senior Citizen (> 60yrs) F.Y.2019-20 :

Note: Add Health & Education Cess 4 % on Tax

Rebate applicable 12500 for the salaried employee below 5,00,000

The standard deduction of 50,000 for the salaried employee

surcharge 10 % of income tax, who get the income between 50 lakh to1 core

surcharge 15 % of income tax, who get the income more than 1 core

Income Tax slab rates for salaried employees F.Y.2018-19 :

Slab rates applicable for salaried employee ( < 60yrs) F.Y.2018-19

Slab rates applicable to the salaried employee for Senior Citizen (> 60yrs) F.Y.2018-19 :

Note: Add Health & Education Cess 4 % on Tax

Rebate applicable 2500 for the salaried employee below 3,50,000

The standard deduction of 40,000 for the salaried employee

surcharge 10 % of income tax, who get the income between 50 lakh to1 core

surcharge 15 % of income tax, who get the income more than 1 core

Income tax exemption rules for the salaried employee:

A.House rent allowance (HRA) :

HRA under section 10(13a). If the employee is paying the rent and getting the allowance from the employer then

1. Actual rent paid  less 10% of the salary  (or)
2. 40% of actual salary (non-metro) 50% of actual salary (Metro)  (or)
3. Actual received of HRA

B.Agricultural Income :

Usually, agriculture income will not be taxed but the aggregation of  agriculture income with salary makes agriculture income taxed

1. Add agriculture income  with basic exemption limit (2,50,000)
2. Compute tax on the amount in step-1 (using the tax rate given above)
3. Add agricultural income with actual salary computed.
4. Computed tax on step-3
5. Deduct the amount of step-4 from step-2 (step-2 less step-4)
6. Subtract rebate if the income is less then 3,50,000 ( Subtract rebate if the income is less then 5,00,000 W.E.F. f.y.2019-20)
7. Add cess

Form 16 for the salaried employee:

To avail exemption or to file tax return form-16 is mandatory, this form will be given by the employer which contains all the details regarding the employee’s income, deductions under section 80c, investment and tuition fee, medical insurance under section 80d, interest paid on education loan under section 80e. The exemption under section 10.

Also read: How to fill form 16 for ay 2019-20

Income tax deduction rules for salaried employees:

Donations :

To avail deduction under section 80g the following rules to be followed

• The donation should be in  the form of a cheque
•  The society to which the donation is being given should be registered under income tax act
• The main motto should be serviced.

Intrest accrued  on savings and fixed deposit:

Under section 80tta the interest earned on savings and fixed deposit will be exempted up to 10,000 ( exempted up to 40000 w.e.f. F.Y.2019-20) to avail this deduction the employee should submit form 15G or form 15H to the banker.

Medical allowance:

80DDB: For the specified diseases under rule 11dd(1) this section applies.Limits for this section

• 40,000 normal individual
• 1,00,000 for the individual for more than 60 years (Senior Citizens) and 80 years (very Senior Citizens) W.E.F. FY 2018-19

80U: For the individual who is suffering from more than 80 percent disability, and the expenditure made on that person will get a flat deduction 1,25,000. If the disability is less than 80 percent than a flat deduction of 75,000 will be given.

If the returns are not filed within the due date:

• Capital loss cannot be brought forward to the next year under 234F
• A penalty of 5000 will be charged if the return is filed after 31st Aug  but  before 31st Dec
• A penalty of 10000 will be charged if the return is filed after 31st Dec
• A penalty of 1000 will be charged if the amount in the return is less than 5,00,000 irrespective of dates after 31st Aug.