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Friday, 15 November 2013

The new and revised income tax slabs for the financial year (FY) 2013-14 and assessment year (AY) 2014-15

The new and revised income tax slabs and rates applicable for the financial year (FY) 2013-14 and assessment year (AY) 2014-15  are mentioned below:
New Income tax slab for fy 2013-14 / ay 2014-15
New Income Tax Slabs for ay 14-15 for Resident Senior Citizens above 60 years (FY 2013-14)
S. No.Income RangeTax percentage
1Up to Rs 2,50,000No tax / exempt
22,50,001 to 5,00,00010%
35,00,001 to 10,00,00020%
4Above 10,00,00030%
New Income Tax Slabs for ay 14-15 for Resident Senior Citizens above 80 years (FY 2013-14)
S. No.Income RangeTax percentage
1Up to Rs 5,00,000No tax / exempt
25,00,001 to 10,00,00020%
3Above 10,00,00030%
New Income Tax Slabs for ay 14-15 for Resident Women (below 60 years) (FY 2013-14)
1Up to Rs 2,00,000No tax / exempt
22,00,001 to 5,00,00010%
35,00,001 to 10,00,00020%
4Above 10,00,00030%
New Income Tax Slabs for ay 14-15 for Others & Men (FY 2013-14)
1Up to Rs 2,00,000No tax / exempt
22,00,001 to 5,00,00010%
35,00,001 to 10,00,00020%
4Above 10,00,00030%
Income Tax Exemption on Housing Loan
Tax rebate on home loans means that you can benefit and save significant part of your tax liability if you have taken a home loan.

It works in following manner.
Interest paid on the home loan
In the budget presented on 28th feb 2013 the interest limit on housing loan has been increased from RS 1.5 L to 2.5 L  for claiming income tax exemption

As per Sec 24(b) of the Income Tax Act, 1961 in India a deduction up to Rs. 150,000 can be claimed as tax exemption on housing loan. This deduction is claimed towards the total interest that we pay on the home loan towards purchase or construction of house property while computing the income from house property.

The interest payable before you acquire home or start the construction work would be deductible in five equal annual installments commencing from the year in which the house has been acquired or constructed.

In case of self- occupied property, housing loan tax benefit is allowed only for one such self – occupied property. The interest towards home loan taken for purchase, construction, repairs, renewal or reconstruction of house property is eligible for deduction under section 24(b).

Principal repayment of the home loan
As per the newly introduced Sections 80C read with section 80CCE of the Income Tax Act, 1961 the principal repayment up to Rs. 1,00,000 on your home loan will be allowed as a deduction from the gross total income subject to fulfillment of prescribed conditions.

Let us consider a hypothetical example.
As per Finance ministers budget speech on 28th Feb 2013:

Your taxable Income: Rs 8,50,000

Principal repayment for the same year: Rs 1,10,000 and Interest payable for the year: Rs 2,60,000

Total Deductions allowed: Rs 3,50,000 (Rs 2,50,000 towards interest payable & Rs 1,00,000 for principal repayment of the loan)

Thus, your taxable income will reduce to Rs 5,00,000 (Rs 8,50,000 – Rs 3,50,000)

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