I am a salaried person. My salary for last year was Rs. 7 lakh and I had contributed Rs 50,000 to the National Pension System (NPS). My employer also contributed the same amount. What is my taxable income for the last financial year?
Answer: The employer’s contribution to your NPS account is treated as your salary and included in your income, but the same can be claimed as deduction under Section 80 CCD(2) of the Income-tax Act, 1961, up to 10 per cent of the salary if you opt for old tax regime. In case you opt for the new tax regime, a higher 14 per cent of salary is allowed in respect of employer’s contribution.
Your own contribution is eligible for deduction under Section 80 CCD (1). So the amount of NPS contribution of Rs. 50,000 each (including yours and your employer’s) will be deducted from your total income, making your taxable income Rs 6 lakh for the year. Your contribution to NPS is available for deduction only if you opt for old tax regime. If you wish to opt for old tax regime, you will have to file your ITR by the due date which is September 15. If you miss this deadline, you have to file your ITR under the new tax regime.
I live in Gurgaon and I am a salaried person. Sometimes, I travel to Delhi from Gurgaon to take classes on weekends. I want to know to what extent I can deduct the charges related to travel, stationary, printing and lunch from the payment that I receive from the coaching institute which I receive after 10 per cent deduction of tax at source (TDS). I usually travel on my own. Do I need to keep the fuel bills for future reference and what other proofs related to stationary, printing, phone calls, lunch do I need to maintain? Can I file my income tax return (ITR) using ITR-1?
Answer: The payment which you receive is taxable as income from other sources, as teaching is not your full time profession. Against the payments received by you from the coaching institute you can claim all the expenses which are related to earning such income. This would include conveyance expenses, printing and stationery expenses etc. You need to preserve the receipts/invoices for such payments in case you want to claim these expenses. There is no limit prescribed under the law for such expenses, but the same should be reasonable and should have been incurred in order to earn such income. In case you wish to claim expenses against the lecture fee received, you will have to file your return using ITR 2.
I am 62 years old and retired from the private sector. I file my ITR using ITR 1 as I am getting Rs 50,000 as superannuation from LIC. I have no other income. Recently I sold my agricultural land (I have been holding it for ages) in my village. The complete sale amount was paid to me in cheque and the same has been deposited in my bank. I wish to know which ITR form I should use?
Answer: Since the agricultural land sold by you is situated in a village, and therefore, is not a capital asset as defined under Section 2(14) of the Income-tax Act, 1961, therefore any profit made on sale of such asset is not an income at all. So, you need not even disclose the same in your ITR. You can continue to file your return using ITR 1.
The author is a tax and investment expert and can be reached on jainbalwant@gmail.com
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