View quick summary Most taxpayers have the knowledge of the exemptions under the Income Tax Act which help in reducing their taxable income. They are aware that they can claim deduction upto Rs. 1 Lakh under section 80C through investment in NSC, PF, PPF, Life insurance policies, repayment of housing loan, tuition fees. However, what they miss on, are the small but important changes that are introduced through Budget announcement, notifications and circulars each year. Keeping in mind these options while tax planning and submitting declarations leads to more benefits, and your tax battle is half won. An informed taxpayer is a happy taxpayer.
Here is a list of tax changes that are applicable for the current financial year 2013-14:
1. Submit landlord’s PAN: If living as a tenant, salaried individuals have to submit rent receipt from landlords to claim the HRA exemption from their employers. An amendment has been made with regards to submission of PAN of the landlord. It is now mandatory on part of the taxpayer paying an annual rent of Rs. 1 lakh, to report PAN of the landlord to his employer at the time of claiming exemption for HRA. In case the landlord does not have the PAN, a declaration to this effect along with name and address of the landlord is required to be submitted by the taxpayer.
2. New residential property? Claim additional deduction: To cater to the need of affordable housing, especially for those taxpayers who do not own any residential property (i.e first residential property) in their name, a new section 80EE has been introduced to give additional relief of Rs. 1 lakh on fulfillment of certain conditions. The said deduction is over and above of Rs. 1.5 lakh (allowed for self occupied property) as mentioned in section 24 of the Income Tax Act.
Below are the condition specified for claiming additional deduction:
- The loan sanctioned by the financial institution must be during the period 1st April, 2013 to 31st March, 2014
- Amount of loan sanctioned must not exceed Rs. 25 lakh
- Value of the residential house property must not exceed Rs. 40 lakh
- The assessee must not own any other residential property on the date of sanction of the loan
3. Relief measures for lower income bracket taxpayers: Rebate of Rs. 2000 is now allowed vide section 87A to taxpayers having a net taxable income below Rs. 5 lakh per annum.
4. Payment of all taxes due before filing ITR: An amendment has been made to this effect that if the taxpayer will file his return without payment of self assessment tax and interest thereon, his return would be treated as defective under section 139(9).
5. Buying property valued above Rs. 50 lakh? Deduct TDS before making payment: A new amendment states that the buyer is required to deduct TDS @ 1% from the payment made to the seller if the consideration of the property is Rs. 50 lakh or more. However, in case of sales consideration being less than 50 lakh and stamp duty value being the reason of increase in the total figure to above Rs. 50 lakh, TDS deduction is not applicable. The TDS payment is to be paid through form no. 26QB, available at TIN website, wherein information like PAN of buyer as well as seller, personal details, property details need to be mentioned.
Other tax changes that are applicable for the current financial year 2013-14: