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Employees allowed to claim I-T exemption on conveyance allowance under new tax regime: CBDT


India

Employees allowed to claim I-T exemption on conveyance allowance under new tax regime: CBDT

New Delhi: The government has allowed individuals under new lower tax regime to claim I-T exemption on conveyance allowance received from employers. The Central Board of Direct Taxes (CBDT) has now amended Income Tax rules to prescribe certain exemptions which can be availed by the employees. These include any allowance granted to meet the cost…

Unique Delhi: The government has allowed other folks beneath original lower tax regime to claim I-T exemption on conveyance allowance got from employers. The Central Board of Suppose Taxes (CBDT) has now amended Revenue Tax guidelines to prescribe obvious exemptions which will seemingly be availed by the workers.

These consist of any allowance granted to meet the worth of commute on tour or on switch, any allowance, whether, granted on tour or all the arrangement by means of toddle in connection with switch, to meet the standard daily bills incurred by an worker on tale of absence from his commonplace spot of accountability.

It additionally contains exemption for any allowance granted to meet the expenditure incurred on conveyance in efficiency of responsibilities of an office or employment of profit, equipped that free conveyance is now not equipped by the employer.

The CBDT has extra clarified that whereas figuring out price of perquisites, no exemption will seemingly be on hand in respect of free food and non-alcoholic beverage equipped by employer by means of paid voucher.

Further, blind, deaf and stupid or orthopedically handicap workers can additionally claim advert-hoc exemption of transport allowance of Rs 3,200 monthly whereas computing salaried earnings.

Offering an optionally available lower rate of earnings tax to other folks, Finance Minister Nirmala Sitharaman in her Funds for 2020-21 proposed original optionally available tax regime beneath piece 115BAC of I-T Act for parents prepared to forego obvious specified deductions or exemptions whereas computing total earnings for tax cause.

Below this, annual earnings as much as Rs 2.5 lakh is exempt from tax. These other folks earning between Rs 2.5 lakh and Rs 5 lakh can pay 5 per cent tax. Revenue between Rs 5 and 7.5 lakh will seemingly be taxed at 10 per cent, whereas these between Rs 7.5 and 10 lakh at 15 per cent.

These earning between Rs 10 and 12.5 lakh can pay tax at the rate of 20 per cent, whereas these between Rs 12.5 and Rs 15 lakh can pay at the rate of 25 per cent. Revenue above Rs 15 lakh will seemingly be taxed at 30 per cent.

The original I-T slabs will seemingly be for parents now not availing obvious specified deductions or exemptions.

Nangia & Co LLP Accomplice Shailesh Kumar stated: “The notification additionally considers that it’s employers’ accountability to provide transport to workers with obvious disabilities and due to this truth exempts allowance given to such workers for commuting to/ from office, even beneath original contrivance”.

The notification considers free meal/ drinks equipped by an employer to workers all the arrangement by means of office hours to be a private back to workers and never an expenditure for reliable applications. As a consequence of this truth, equivalent to other allowances withdrawn beneath original contrivance/ slabs, tax exemption of such free meals/ drinks has been withdrawn beneath the original contrivance, Kumar added.

Taxmann DGM Naveen Wadhwa stated “Allotment 115BAC(2) prescribes checklist of deductions/exemptions which are seemingly to be now not on hand for deduction whereas computing total earnings if taxpayer opts for concessional tax regime. Then again, the provision empowers the CBDT to prescribe obvious exemptions on hand beneath piece 10 which will seemingly be availed by the workers”.

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