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Before making investment declaration know the tax rules
Posted on: 17/Dec/2013 2:33:15 PM
Many individuals will be in the process of finalizing their tax-saving investments and other deductions they intend to claim this financial year. Here`s a list of some new tax rules and deductions you need to be aware of while submitting your declarations this year:
PAN of landlord is mandatory
Perhaps this is the most important change in rules this year that could impact many salaried persons who claim house rent allowance. As per IT department`s circular, you have to mention the PAN of your landlord, if you are paying an annual rent of more than Rs 1 lakh.
If your monthly rent is more than Rs 8,333, it is mandatory to quote the PAN of landlord. If the landlord doesn`t have a PAN, a declaration to stating this along with the name and address of the landlord should be filed. The new rule could be bothersome for many individuals paying rent, as landlords may refuse to part with their PAN.
Extra benefit for first-time home buyers
First-time home buyers can look forward to some additional tax savings this year. However, the loan amount has to be under Rs 25 lakh to claim the benefit. Also, the value of the residential house should not exceed Rs 40 lakh. In addition, the deduction is available, only if the assessee does not own any residential house property on the date of sanction of the loan. If you have obtained a home loan this year (financial year 2013-14), you can claim an additional tax deduction of Rs 1 lakh on the interest paid on that loan under section 80EEE. Moreover, if interest paid during the year is less than Rs 1 lakh, the unclaimed deduction can be utilised in the subsequent year.
Additional tax relief for lower income categories
If your annual taxable income is below Rs 5 lakh, you will be entitled to a tax rebate of Rs 2,000 this year. The lower of Rs 2,000 or the entire tax liability (tax payable) will be allowed as a rebate under section 87A of the Income tax Act.
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