Wednesday, May 4, 2016

Submit proof of travel for claiming income tax deduction on LTC: CBDT

Submit proof of travel for claiming income tax deduction on LTC: CBDT

The Income Tax Department has brought out a new form making it mandatory for salaried taxpayers to furnish proof of travel for claiming income tax deduction on LTC.

The Central Board of Direct Taxes (CBDT) has brought in a Form 12BB form requiring employees to furnish to their employers with evidence in relation to house rent allowance (HRA) if it exceeds Rs 1 lakh in an assessment year.

The details to be furnished include name, address and PAN of landlord where the aggregate rent paid exceeds Rs 1 lakh, according to a CBDT order.

For claiming deduction of interest on home loan, the name, address and PAN of lender will have to be furnished.

Similarly, for claiming income tax deduction on leave travel concession (LTC), the new rule makes it mandatory for employee to furnish to his employer evidence for travel expenditure.

Also evidence of investment or expenditure will have to be provided for claiming tax deduction under Chapter VI-A.

Chapter VI-A pertains to allowable deductions under Section 80C, Section 80CCC, Section 80CCD as well as other sections like 80E, 80G and 80TTA.

These are part of new Rule 26C and Form 12BB that require employees to furnish to the employer, evidence/particulars in relation to house rent allowance (HRA), leave travel concession (LTA), deduction of interest under the head ‘income from house property’ and deduction under Chapter VI-A.

CBDT, in the same order, also extended the time limit for depositing tax deducted at source (TDS) on transfer of immovable property from 7 days to 30 days.

Also, the due date for filing quarterly TDS returns in Form 24Q, 26Q and 27Q was extended by 15 days.
The amended rules will be applicable from June 1, 2016, CBDT said.

Under section 80C, a deduction of Rs 1.5 lakh can be claimed from total taxable income if invested/spent in PPF, employee’s share of PF contribution, life insurance premium payment, children’s tuition fee, principal repayment of home loan, Sukanya Samridhi Account among others.

Section 80CC provides for deduction on amount deposited in annuity plan of LIC or any other insurer for pension while Section 80CCD is for the same purpose on contribution to Pension (Section 80CCD).

Deduction under Section 80GG is available on House Rent paid where HRA is not received and the taxpayer or his spouse or minor child does not own residential accommodation at the place of employment.
Deduction available on the count is the minimum of rent paid minus 10 per cent of total income or Rs 5000 per month or 25 per cent of total income.

Section 80E provides for deduction of interest on loan taken for pursuing higher education.

An additional deductions on home loan interest of Rs 50,000, over and above Rs 2 lakh allowed under Section 24, is allowed for first time home owners under Section 80EE is available if the value of the property purchased is less than Rs 50 lakhs and home loan is less than Rs 35 lakhs.

Section 80D provides for deduction for premium paid of up to Rs 25,000 for medical insurance.



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