Tax provisions & necessary proofs Exhibit ‘C’

Provisions under the act and proofs to be submitted

Sr. Provision as per Income Tax Act O/ Proofs to be submitted as per Rules to Income Tax
P Act
The employee should submit documents mentioned
1. Leave Travel Concession (LTA) – in 1 and 2 below:
O 1. Declaration - In the declaration, employee
LTA is a concession granted to the employees and R should mention; (Refer note No. 4):
their families of travelling to any place in India. I a. period during which he was on leave
G b. number of persons travelled with him, their
You can claim LTA exemption if you fulfil following I names;
criteria:- N c. relationship with them and
A d. the person travelling (other than spouse and
1. You should actually travel to any place in India. L children) are dependant on him
International travel is not valid. Travel fare till S 2. Proof for travel expenses - If journey is
the destination and back to origin is only performed by;
allowed for exemption. Any inter-city travelling a. Air: Original air ticket & boarding pass, etc.
expenses, hotel, lodging and boarding expenses Exemption: The maximum exemption shall
do not qualify for exemption. be an amount not exceeding the economy
fare of the national carrier by shortest route
2. You can either travel alone or with your family. to the place of destination.
If your family travels without you, no LTA can be b. Train : Original train ticket
claimed. You have to make the trip, either by Exemption: Air conditioned 1st class rail fair
yourself or, if claiming for your family, you by shortest route to the place of destination.
should travel with them. The air conditioned 1st class rail fare should
* Family for this provision means: be provided by employee if not travelled by
a. spouse & children AC 1st Class.
b. Parents, brothers & sisters of the c. Other mode: Original ticket, actual cost,
employee wholly and mainly distance travelled, quote / fare of train
dependent on him. ticket.
Exemption:
3. LTA is exempt twice in a block of four calendar i. If recognised public transport system
years. Presently the block is applicable is from (RPTS) exists, first class or deluxe class
January 2018- December 2021. fair by the shortest route to the place of
destination.
4. If you produce proof of travel, it will not be ii. If RPTS does not exist, an amount
taxable to the extent your proof of travel equivalent to AC First Class rail fair for
covers. If you do not submit any of the proofs the distance of the journey by the
mentioned in next column, you will get your shortest route.
LTA but will have to pay tax on it. The air conditioned 1st class rail fare
should be provided by employee if not
travelled by AC 1st Class

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Tax provisions & necessary proofs Exhibit ‘C’

Sr. Provision as per Income Tax Act O/ Proofs to be submitted as per Rules to Income Tax
P Act
O
2. House Rent Allowance (HRA) – R
I • Original Receipts of rent paid for all the
Employee can claim HRA exemption to the extent G months for which employee is claiming
provided in Sec 10(13A) read with Rule 2A. To claim I exemption. Leave and License Agreement is
HRA exemption, the rent should have been actually N required mandatory along with Landlord
paid by the employee for the period for which he A PAN Number.
occupied such house. L • Only rent towards accommodation can be
S considered for benefit. Rent towards
Note that the HRA exemption will be granted only furniture & other services are not entitled
for such relevant period for which HRA is received. for HRA benefit.
• The rent receipts shall show the complete
(Note: As per Circular No. 17/2014: If annual rent address of the leased premises and of Land
paid by the employee exceeds Rs 1,00,000 per Lord / owner with PIN Code.
annum, it is mandatory for the employee to report • Employee should be in India & should have
PAN of the landlord. occupied that property.
(Note: It is proposed that individuals paying
rent of INR 50,000 or more for a month /
part of the month should withhold income
tax @5% in the last month of the year or last
month of the tenancy )

3. Medical Reimbursement – O • Standard deduction of INR 40,000 is

R introduced by the government in lieu of
I transport and medical reimbursements.
G
I
N
A
L
S

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Tax provisions & necessary proofs Exhibit ‘C’

Sr. Provision as per Income Tax Act O/ Proofs to be submitted as per Rules to Income Tax
P Act
4.
Loss From House Property - Self Occupied P
H Interest certificate from bank or financial institution
Interest payable on loan for the purpose of O and a copy of the registered -purchase deed /
T possession receipt / any other ownership document.
1. Acquisition or construction or O
2. Renovation, repairing or reconstruction can be C If interest for the year is above Rs 30,000/- employee
claimed as deduction. O should provide,
P
Maximum deduction on account of interest that can Y • Date of loan taken
be claimed for self occupied property is Rs 30,000. • Date of acquisition or completion with a
However, if loan is taken for the purpose of certificate to that effect
acquisition or construction of self occupied property
on or after 01st April, 1999 and construction or If house property and the loan has been taken jointly
acquisition is completed within 3 years from the end by the employee with any of his family member/s,
of the financial year in which loan is taken then then the co-owner’s declaration is required to be
interest up to “Rs 200,000” can be claimed as a submitted by the employee if the registered -
deduction. The limit of 200,000 also applies for purchase deed / possession receipt / any other
payment of interest on loan taken to repay such ownership document does not specify the share of
loan taken after 01st April, 1999. each co-owner. (See Note. 5 below)

1. Provisional Certificate from bank Please Note :

2. Possession Letter / Completion certificate from • The employer shall grant the deduction in
Builder / Sale deed or any ownership respect of the interest on housing loan only
document (light bill, municipal bill - house tax to the extent of the share of the employee in
bill, land line telephone bill) the co-ownership / joint property.
• If the house is transferred within a period of
5 years then no deduction u/s.80C is
available and the deductions allowed in the
earlier years shall be added to the income of
the year in which the said transfer takes
place.

Loss / Income from House property – Let Out The employee needs to furnish the following
information:
In case of let out house property, if the net result of
computation of income under the head ‘house • Gross Annual Value
property’ is a loss, the same can be claimed as a • Municipal Taxes paid
deduction against salaries. • Deduction to be claimed for interest
• Address of the property
• Amount of loan taken
• Name and address of the lender
Employee should provide the above calculation duly
certified by a Chartered Accountant.
Restriction of set off of loss from house property
Under the existing provisions, loss from house
property is allowed to be set off against any other
income (without any limit). It is now proposed to
limit such set off to INR 200,000. Any unabsorbed
loss from house property can be carried forward to
set off against income from house property up to
eight years.

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Tax provisions & necessary proofs Exhibit ‘C’

Sr. Provision as per Income Tax Act O/ Proofs to be submitted as per Rules to Income Tax
P Act

5. Deductions under Chapter VIA – P • For item i to v, photo copy of premium paid
Deduction u/s 80C ,80CCC & 80CCD H or investment/contribution made, and the
Maximum limit of Rs. 150,000. O amount of actual insurance cover in case of
T a life policy.
1. Eligible contribution/subscription u/s 80CCC & O • For item ii,
80C: C 1. If the amount of premium paid in a financial
i. Contribution to pension plan policy O year for a policy is in excess of 20% of the
P actual capital sum assured, then deduction
ii. Life insurance premium paid for self, Y will be allowed only for premiums upto 20%
spouse or children of the sum assured
.
iii. Contribution to Public Provident Fund (PPF) 2. For insurance policies issued on or after April
for self, spouse or children. Max limit Rs. 01st 2012, deduction is allowed for only so
150,000/- much of the premium payable as does not
exceed 10% of the actual capital sum assured.
iv. National Saving Certificate (NSC) Proposal Deposit not allowed.

v. Fixed deposit for a term of 5 or more years 3. Further, for insurance policies issued on or
with a scheduled bank after April 01st 2013, in case insurance is on
life of any person who is –
vi. Contribution to Sukanya Samriddhi Account a) a person with disability or severe
disability as referred in section 80U
b) Suffering from disease or ailment as
specified in the rules made under section
80DDB
Deduction is allowed for only so much of
the premium payable as does not exceed
15% of the actual capital sum assured.
Please provide copy of insurance policy detailing the
amount of actual capital sum assured. In case of
claim under point 3 please provide certificate from
appropriate medical authority for the person
covered under the policy.

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Tax provisions & necessary proofs Exhibit ‘C’

Sr. Provision as per Income Tax Act O/ Proofs to be submitted as per Rules to Income Tax
P Act
• For item vi, photo copy of tuition fees paid.
vii. Payment of tuition fees of two children Tution fees, Term fees, Examination fees, Computer
fees allowed. The deduction is not available for any
donation or development fees paid.
(University, College, School or other educational
institution situated within India for full-time
education)

viii. Repayment of housing loan principal • For item vii, photo copy of certificate from
bank or financial institution.

ix. Subscription to specified mutual fund • For item viii, Xerox copy of certificate of
scheme or to any approved equity shares allotment, acknowledgements slip, etc.
or debentures.
• For item ix & x, receipt for contribution/ for
x. Contribution to senior citizen scheme rules, deposit.
2004
• In case of Bank deposit with bank, bank
xi. 5 year time deposit in an a/c under post should specify on the deposit receipt that the same is
office time deposit rules,1981 eligible for 80C benefit.

• For item xi, photo copy of Index II

xii. Stamp duty and registration fee.
Note: Benefit is available to the person who makes
the payment.

6. Mediclaim premium paid (Sec 80D) P Photo copy of premium paid/ fees paid for preventive
Medical insurance premium paid or payment for health check up, Declaration of dependency if
preventive health check up of expenses incurred for relatives
(a) for self, spouse and dependant children
(b) for parent/parents Note: Senior Citizen means above 60 yrs.
is allowable.
The deduction of Rs. 25,000/- (50,000 in case of Mode of Payment:
senior citizens) is available. (i) Cheque or in a mode otherwise than by cash – for
For payment of preventive health check up Mediclaim insurance
maximum deduction of Rs.5000/- is available.
(ii) Cash or cheque – for Preventive health checkup
7. Medical Expenses on handicapped dependent (Sec P Certificate from medical authority in
80DD). Form 10IA along with proof of expenses incurred.
Dependant includes spouse, children, parents,
brother or sister.
8. Deduction in case of person with disability (Sec Certificate from medical authority in
80U) Form 10IA

Deduction allowed of Rs.75,000/- for a person with

disability and of Rs.1,25,000/- for a person with
severe disability

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Tax provisions & necessary proofs Exhibit ‘C’

Sr. Provision as per Income Tax Act O/ Proofs to be submitted as per Rules to Income Tax
P Act
9. Medical Expenses on Specified Disease (Sec P Certificate from medical authority in
80DDB). Form 10I along with proof of expenses incurred.
Dependant includes spouse, children, parents, Prescription from a specialist doctor
brother or sister.
Deduction towards medical treatment for-
Individual (up to 59 years): Rs. 40,000
Senior Citizen (60 to 79 years) and Super senior
citizens (80 years or more): Rs 100,000.
10. Other deductions (80E, etc) P Appropriate certificate / proofs of payment / interest
certificate from financial institution etc.
Deduction allowed to the extent of interest paid on
loan taken for the purpose of higher education of
self or relative. Relative means the spouse and
children of the individual or the student for whom
the individual is the legal guardian
11. 80CCD 1(B) P The deduction allowed under section 80 CCD(1B) is
an additional deduction in respect of any amount
paid in the NPS upto 50,000.

12. Deduction for Donation U/s 80 G P As per master circular, the benefit for donation to
charitable purposes cannot be considered for
working out the tax liability by the employer.
Employee can claim tax benefit on such donation in
his Personal Income Tax Return.

However, if donations are made to National Fund for

Control of Drug Abuse Fund, Swachh Bharat Kosh
fund, Clean Ganga Fund, Prime Minister’s National
Relief Fund, the Chief Minister’s Relief Fund or the
Lieutenant Governor’s Relief Fund through the
employer, deduction can be allowed under section
80G on the basis of a certificate issued by the
employer

13. Other Income Other income details such as Capital Gain, Business
income and Interest from other sources will not be
considered for working out tax liability on salary
income.
15. Professional Enrichment Allowance O Professional Enrichment:

Eligible employees may request reimbursement for

expenses associated with professional development
such as seminars, books, professionally related dues
etc. for the employees professional or technical
growth. Amount of maximum reimbursement is in
accordance with the employees memorandum of
understanding.

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Tax provisions & necessary proofs Exhibit ‘C’

Sr. Provision as per Income Tax Act O/ Proofs to be submitted as per Rules to Income Tax
P Act
16. Motor / Vehicle Reimbursement

Vehicle Declaration
Form.xls
17 a. Car is used exclusively for official purposes –
fully exempt
Documents –certificate by the employer to the effect
that the expenditure was incurred wholly and
exclusively for the performance of official duties.
17 b. Car is used for personal purposes – fully
taxable
17 c. Car owned by the employer is used both for
official as well as personal purposes
If maintenance and running expenses are met by
employer or reimbursed to employee – (a) If car CC
less than 1.6) Rs.1800 per month (b) If car CC more
than 1.6) Rs.2400 per month and (c) Chauffeur salary
Rs.900 per month.
If expenses on running and maintenance are met by
employee – (a) in case of small car Rs.600 per month
(b) in case of big car Rs.900 per month and (c)
Chauffeur salary Rs.900 per month
17 d. Car owned by the employee is used both for
official as well as personal purposes
Where the car is owned by the employee but
maintenance and running expenses are met by the
employer or reimbursed to the employee, the value
of perquisite shall be determined as the difference
between (a) actual expenditure incurred by the
employer and (b) the amount calculated at the rate
given below –
Big Car Rs.2400 pm
Small Car Rs.1800 pm
Chauffeur Rs.900 pm

Documents need to submit :

Photo copy of RC Book, Petrol Bills, maintenance Bills,
Driver Payment Receipts.

Notes:

1. All the proofs of investment or expenditure mentioned against the specific item above need to be submitted along
with proof submission slip to claim the relevant deduction/exemption.

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Tax provisions & necessary proofs Exhibit ‘C’

2. Recent Amendments in personal tax (Proposed) in Income Tax Provisions:

Tax Rate for Individuals:

The rates are for the Financial Year 2018-19 i.e. Assessment Year 2019-20
For Individuals, Hindu Undivided Family, Association of Persons and Body of Individuals

Income Slab Tax Rates #

Up to Rs.2,50,000 NIL

5%
Rs.2,50,001 to Rs.5,00,000
20%
Rs.5,00,001 to Rs.10,00,000
30%
Above Rs.10,00,000

a) In the case of a resident individual of the age of sixty years to eighty years, the basic exemption
limit is Rs.3,00,000/-.
b) In the case of a resident individual of the age of eighty years or above, the basic exemption limit
is Rs.5,00,000/-.
c) Surcharge @10% on tax payable in case of a person having a total income between Rs.50 lakhs to
Rs.1 crore.
d) Surcharge @15% on tax in case of a person having a total income exceeding Rs.1 crore.
e) Education and Health cess is applicable @ 4% on income tax (inclusive of surcharge, if any).

Tax Rebate:
The Rebate of Rs.2500 under section 87A is available in case of income up to Rs.3.50 Lakhs

Deduction for NPS contribution:

Deduction up to 10% of the gross total income (earlier 10%) for a non-employee contributing to NPS.

Restriction of set off of loss from house property:

Under the existing provisions, loss from house property is allowed to be set off against any other income
without any limit. It is now proposed to limit such set off to INR 200,000. Any unabsorbed loss from house
property can be carried forward to set off against income from house property up to eight years.

Withholding on rent
Individuals paying rent of Rs. 50,000 or more for a month/ part of the month during the year should withhold
income tax at the rate of 5% in the last month of the year or last month of tenancy.

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