I made a web-based contribution to the nationwide pension system (NPS) on 29 March however this was mirrored within the NPS account assertion solely on 4 April, implying that the contribution is for the monetary 12 months (FY) 2022-23. Since my checking account was debited throughout FY2021-22, will I get revenue tax (I-T) exemption underneath part 80 for FY2021-22?
—Ravichandran
As per provisions of the I-T Act of 1961, a person employed by the Central Government (on or after 1 April 204)/every other employer or every other particular person tax payer, who has paid or deposited any quantity in his account throughout the monetary 12 months in the direction of notified pension schemes (together with NPS), shall be eligible for a deduction (as much as specified quantity) within the computation of revenue.
Based on the literal studying of the provisions, plainly the deduction could also be allowed to the person within the 12 months through which the quantity is paid or deposited by him into his NPS account. Accordingly, in your case, because the quantities have been paid/contributed into your NPS account on 29 March 2022, a deduction must be allowed for FY 2021-22.
However, within the absence of any particular directions/clarifications, this can be scrutinized by the tax authorities which can then should be substantiated primarily based on the above provisions and the proof of cost i.e., debit of the quantity paid and contribution receipt generated for 29 March 2022.
I’m a central authorities worker and my taxable revenue falls underneath the fundamental exemption restrict (lower than ₹5 lakh). However, I’ve obtained ₹6,000 as prize cash from my college for academic efficiency. How do I report this extra revenue?
— Name withheld on request
Assuming that you’re under 60 years of age, as per the provisions of the I-T Act 1961, the utmost quantity not chargeable to tax (fundamental exemption restrict) relevant in your case is ₹2.5 lakh. However, please be aware within the case of a person being resident in India having taxable revenue as much as ₹5 lakh, tax aid u/s 87A of the Act (as much as ₹12,500) is accessible as a result of which no tax legal responsibility is required to be deposited if taxable revenue is as much as ₹5 lakh.
Since the prize cash from the state college is just not within the nature of any scholarships granted to satisfy the price of training, the quantity so obtained can be taxable in your fingers as “Income from different sources”.
If your complete taxable revenue (together with the prize cash) doesn’t exceed ₹5 lakh, then there is not going to be any tax legal responsibility. In case your complete taxable revenue exceeds ₹5 lakh, aid u/s 87A is not going to be obtainable and you’ll be required to pay the taxes as per the relevant slab charges (which might depend on your alternative of tax regime i.e. outdated tax regime or the brand new tax regime). In both of the eventualities, you shall be required to file a return of revenue, if taxable revenue exceeds ₹2.5 lakh.
Parizad Sirwalla is companion and head, world mobility companies, tax, KPMG in India.
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