Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

TAX FREE SAYONARA!

Receive a bouquet of tax benefits when you say good bye

to your employer on retirement or termination of service!

Under the provisions of Section 10(10) of the Income-tax Act, gratuity received by an employee from his employer, on retirement, or becoming incapacitated before retirement, or expiring, or whose services are terminated, is exempt as under: (more…)

TAX FREE RETIREMENT BENEFITS!

Retirement Benefits that can be claimed as fully tax exempt:

  • Gratuity upto Rs.10,00,000
  • Leave Encashment upto Rs.3,00,000
  • VRS Compensation upto Rs.5,00,000
  • Entire PF Balance, without any ceiling (more…)

Minus Social Security : EET=Inequity

Hard Hit Small Salaried Deserve Lower Starting Tax Rates!

Both Employment & Retirement Made More Taxing!

  • Allowances & Perks – no longer exempt: House rent allowance (HRA), leave travel concession (LTC), medical reimbursement, value of free or concessional medical treatment and children’s education & hostel allowance.
  • Puny deductions that will still continue: Professional tax paid, transport allowance to the extent prescribed and prescribed special allowances to meet expenses incurred for official duties.
  • Retirement may not be as relaxing: Leave encashment on retirement, to be fully taxable.
  • VRS compensation, death or retirement gratuity and commutation of pension to be exempt, only if deposited in a Retirement Benefit Account (RBA).
  • However, any amount drawn from RBA (including PF contributions and accretions after 1st April, 2011) under any circumstances to be treated as taxable in the year withdrawal. (more…)

Not the Common Man’s Tax Code!

Small Salaried & Investors To Feel Soar!

 

Amar Bhatt, a middle class employee earning monthly salary of Rs 40,000 (annual Rs 4,80,000), currently manages to maintain a zero tax status by availing tax-free LTC & medical perks of Rs 70,000, deduction of interest on housing loan of Rs 1,50,000 and repayment of such loan of Rs 1,00,000 eligible for deduction u/s.80C.He is bound to be shocked when he gets to know that with the elimination of the exempt perks and scrapping of housing deductions as proposed under the new Direct Tax Code, his taxable income of Rs 4,80,000 will attract a straight tax of Rs 32,000. (more…)

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