Income Tax Reliefs for The Common Person 2017-18
The financial budget is one of the most awaited events especially for the salaried class that is eager to know about the Income Tax reliefs. Though it may sound confusing, Income tax professionals can surely help you make things simple by explaining a few basics:
The income sources
There are 5 main sources of income – i) the salary including the perks that you draw from an employer; ii) a net gain or loss from any profession or business that you may be engaged in; iii) any profit or loss that you make from a house or any other real estate that you own; iv) any profit or loss made when you sell a capital asset like property, jewellery, shares or mutual fund units; and iv) any other source of income.
Tax deductions available
The major Income tax deductions are available on HRA, Medical Expenses Reimbursement, Conveyance Allowance and the LTA among others. The deduction is also available on 30% of your income after you pay the house tax and also the interest that you pay on the loan taken for building or buying a house. Any expenditure, loss that you may have incurred from the previous financial years from any business or profession is also deductions that you get.
Relief on perks
For the salaried, the LTC within India does not incur a tax as long as you are traveling by the economy class though the hotel bills and local conveyance do not receive exemptions. The leave encashment up to 3 Lakhs receives exemption from IT. Perks like the categories of reimbursement, children’s education and car perquisites with clauses are exempt from the IT. Employee Provident Fund withdrawn after 5 years of service is tax-free.
Some taxable categories
The categories that are taxable are income through investments earned the name of minors, spouse and letting out a property.