Income tax rules

Required proof documents

Section wise guidance
TAX REGIME
 Effective April 2020 (FY 2023-24), there are 2 tax rates available to the choice of assessee.
 New optional concessional tax rates called new tax regime has been introduced under section
115BAC and earlier tax rates/rules are known as old tax regime.
 Those who opt for these concessional rates/ new tax regimes, have to forgo some tax
exemptions/deductions.
 Individual/HUF can avail the option each year where individual has no business income; in
other cases, option once exercised shall be valid for all subsequent years.
 Option once exercised cannot be changed during the financial year.
 However, switch is allowed to assesses at the time of filing personal tax return/ITR.
 Tax rates for both old and new tax regime along with conditions to avail new tax regime are
described on next pages.

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DIRECT TAX RATES FOR THE FY 2024-25
Old tax regime New tax regime
For Individual below the age of 60
INCOME TAX SLAB TAX INCOME TAX SLAB TAX
0 to 2,50,000 No tax 0 to 3,00,000 No tax

2,50,001 to 5,00,000 5% 3,00,001 to 7,00,000 5%

5,00,001 to 10,00,000 20% 7,00,001 to 10,00,000 10%

Above 10,00,000 30% 10,00,001 to 12,00,000 15%
12,00,001 to 15,00,000 20%
For Sr. Citizen above the age of 60 but below 80 Above 15,00,001 30%
INCOME TAX SLAB TAX
0 to 3,00,000 No tax

3,00,001 to 5,00,000 5%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

For Sr. Citizen above the age of 80

INCOME TAX SLAB TAX

0 to 5,00,000 No Tax

5,00,001 to 10,00,000 20%

Above 10,00,000 30%

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DIRECT TAX RATES FOR THE FY 2024-25 continued…

After tax is calculated as per tax rates above,

surcharge and cess is added as per following for both
the tax regimes. For New Regime 37% surcharge is
not applicable. Higher tax deduction with no tax credit, in
case PAN is not provided or Aadhaar number
Net Income Range Surcharge (%) is not linked with PAN before 31th M a y 2024.
0 – 50 Lakh NIL
50 Lakh – 1 crore 10%
1 crore – 2 crore 15%
2 crore - 5 crore 25%
Above 5 crore 37%
Standard Deduction for INR 50000
(OLD Regime) & INR 75000 (New
Health & Education Cess of 4% on total tax (tax + Regime) OR Taxable Income whichever
surcharge)
is less, available for both regimes.

Rebate u/s 87A – Under the new income tax regime, the
amount of the rebate under Section 87A for FY 2023-24 (AY 2024-
25) has been modified. A resident individual with taxable income up
to Rs 7,00,000 will receive a Rs 25,000 tax relief. The former tax
regime remains the same, i.e. 12,500 for income up to Rs 5,00,000.

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Conditions to avail new tax regime/benefits not available with new tax regime.

 Leave Travel Concession Sec 10(5)

 House Rent Allowance Sec 10(13A)
 Allowances u/s 10 (14)
 Allowance for income of minor S.10(32)
 Standard Deduction of INR 50000 and PT deduction u/s 16
 Interest on housing loan u/s 24 in respect of SOP/Vacant Property.
 Loss under head income from House Property for RENTED house shall not be allowed to set off
a. nd would be allowed to carry forward.
 Any Deduction under chapter VIA:
Section 80C (LIP, PPF, Mutual Fund, FD, NSC etc.), Section 80CCD (NPS), Section 80D (Medical
insurance), Section 80DD (for dependent handicapped), Section,80DDB (for specified diseases),
Section 80E (Education loan interest), Section 80-EE (specified home loan interest), Section 80EEA
(specified home loan interest), Section 80EEB (Electric vehicle loan interest), Section 80G
(Donation), Section 80TTA & 80TTB (for interest on saving bank account & interest on deposits),
Section 80U (self handicapped) etc.
 No exemption in respect of free food and beverages through vouchers provided to employee.
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Exemptions under Section 10 – House Rent Allowance exemption u/s 10 (13A)
Required proof for claiming HRA benefit:
Rent receipt for each month
Actual HRA Received
OR
copy of bank statement depicting rental transactions along with
rent agreement
40% (non-metro cities) or 50%
(metro cities) of Basic + DA Rent receipt should contain:
 Name of employee
 Period for which rent is paid.
 Rent amount (monthly rent as well as amount paid)
Rent paid minus 10% of Basic + DA
 Address of the rented premises for which rent is paid.
 Name and address of landlord
Least of these 3 would be exempt.  Signature of landlord
 Revenue stamp, if total paid amount exceeds INR 5000
No exemption for HRA if: (except Karnataka state)
 House is owned by employee.  PAN of landlord where monthly rent exceeds INR
 Employee is not residing in the house taken on lease/rent. 8,333 (annual INR 1,00,000)
 No expense against rent is incurred.
HRA exemption can be availed only against rent and not for
 Employee have not paid rent.
following charges/expenses:
Metro cities: Delhi, Mumbai, Kolkata and Chennai  Electricity
Non-metro cities: Bangalore, Hyderabad, Noida, Gurugram, Faridabad,  Water
Ghaziabad, Thane, etc.  Maintenance

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Exemptions under Section 10 - Leave Travel Assistance Exemption Section 10 (5)
Exemption is available as per following:
Different Situations Amount of exemption

Amount of economy class air fare of the National Carrier by the shortest
Where journey is performed by air route or the amount spent, whichever is less

Amount of air-conditioned first-class rail fare by the shortest or amount

Where journey is performed by rail spent, whichever is less

Where the places of origin of journey and destination

are connected by rail and journey is performed by any Amount of air-conditioned first-class rail fare by the shortest or amount
other mode of transport spent, whichever is less

Where the places of origin of journey and destination

(or part thereof) are not connected by rail:
First class or deluxe class fare by the shortest route or amount spent,
Where a recognized public transport exists whichever is less

Air-conditioned first-class rail fare by the shortest route (as if journey had
Where no recognized public transport systems exist been performed by rail) or the amount actually spent, whichever is less.

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 Exemptions under Section 10 - Leave Travel Assistance Exemption Section 10 (5) continued…

Required documents/proof for claiming LTA Carry-over option:

exemption:
- If an assesses has not availed travel concession or assistance
• If by Air: Travel ticket with original boarding pass during any of the specified four-year block period, one of the
• If by Train: Original tickets two permitted journeys can be carried over to next block year.
• Any other: Original ticket/bill
- However, exemption for carry over journey can be claimed in
the first calendar year of the next block.
Conditions: - In such a case, the exemption so availed will not be counted
- LTA can be claimed by an employee from the company for the purposes of claiming the future exemptions allowable
for himself/herself and family in connection with his/her in respect of 2 journeys in the subsequent block year.
proceeding on leave to any place in India.
- Family for this purpose is defined as
A. the spouse and children of the individual. The exemption is not available in respect of expenses incurred
B. the parents, brothers and sisters of the individual who for:
are wholly or mainly dependent on him/her. - Boarding expenses
- Tax exemption is allowed twice in a block of 4 calendar - Lodging expenses
years. Current block year is 2022-2025.
- Overseas travel does not qualify for exemption.
- Sightseeing etc.

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 Set-off Income/Loss from House Property
Home Loan Interest Section 24 Up to maximum of INR 2,00,000 if:
 Acquired or constructed on or after 1st April 1999.
 Acquired or construction completed within 5 years of financial
For Aquisition/construction • INR 2,00,000 year from the end of financial year in which capital is borrowed.

For If above 2 conditions are not satisfied,

Rennovation/Reconstruction/Repair/Renewal • INR 30,000 maximum allowable amount of interest is
INR 30,000.

Pre-construction interest (interest prior to year of

possession:
 Deduction is allowable in 5 equal installments for
Unabsorbed Loss can
Maximum allowable loss in next 5 years, along with interest of current financial
be carried over to next
a FY can not exceed INR years (max 8 years). year.
2,00,000 irrespective of the Overall Limit of the  Within overall maximum limit of INR 2,00,000/INR
property status i.e. Self year would remain to 30,000, as the case may be.
Occupied and Let-out be INR 2,00,000 after
Self-occupied property is:
inclusion of carry over
loss also  Occupied by employee for his own residence.
 Can not actually be occupied by employee, by the
reason of the fact that owing to his employment,
business or profession carried on at any other place, he
has to reside at that other place, in a building not
PAN, Name and Address of lender/loan provider should be provided by employee belonging to him.

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Set-off Income/Loss from House Property continued…
Clarifications

Home Loan Interest Benefit can be claimed only if Construction is completed, or Possession is taken

Only 2 properties can be treated as self-occupied. Thus, if an individual owns more than 2 properties,
can choose the properties to be self-occupied, other properties would be Deemed to be Let-out.
Need to submit estimated deemed rental income for the calculation.

Pre-Construction/Pre-Possession Period: Period starting from date of borrowing to the immediately

preceding FY in which Construction is completed or Possession is taken.

Co-owner and Co applicant: Co-owner is the person who has ownership share in the property. Co
applicant not necessary to be owner of the property. Thus, benefit against property can be taken
only if employee do have ownership share in the property.

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Set-off Income/Loss from House Property continued…
Documents required to claim tax benefit

In addition, following
In case of acquisition - Copy of the possession letter/sale also to be submitted
deed
if Property is Let-
In case of construction – Copy of construction completion
certificate/property tax receipt/electricity bill
out/Deemed to be
let-out.

Copy of certificate from the person/Bank/Institution to

whom interest on housing loan has been paid/payable?
Rental income/Deemed income.

In case of joint ownership, the employee will have to

submit a declaration (will be generated online by system
itself, you just need to fill the details and sign/get Copy of Receipt of Municipal taxes paid (if paid in
signed) from the joint owner (s) (the declaration for not current FY)
paying & claiming benefit of interest on housing loan) to
claim benefit of 100% of the amount or more than the
own share.
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Deductions under Chapter VIA – Section 80C Benefit can be availed
only if payments are made
Documents required ( of current Financial Year) to claim tax benefit
by employee.
Investment Allowable for Document Required
Self, Spouse and
LIP Children Copy of premium paid certificate/receipt
Self, Spouse and Benefit under section 80C can be
ULIP Children Copy of premium paid certificate/receipt availed up to maximum of INR
Self, Spouse and Copy of PPF passbook (including front 1,50,000
PPF Children page)/receipt
NSC Self Copy of NSC Deduction not available for LIP if duration of
FD Self Copy of receipt/certificate the policy is less than 5 years
Mutual fund Self Copy of fund statement
ELSS Self Copy of account statement The maximum allowable deduction on premium
paid for a Life Insurance policy is 15% of the sum
Principal repayment of home Copy of certificate from Bank/Financial assured, if the policy is taken on or after 01.04.2013
loan including stamp duty and Institution (employee should have ownership
for a) – person with disability or severe disability as
registration charges Self of the property)
referred in section 80U, or b)- person who is
Tution fee 2 children Copy of receipt suffering from diseases or ailment as specified in
Bonds issued by NABARD Self Copy of Bond investment receipt the rules made under section 80DDB. For all other
Senior Citizen Saving Scheme Self copy of deposit receipt cases - its 10% of the sum assured, if the policy is
For girl child (max 2)
taken on or after 01.04.2012 and 20% of the sum
Sukanya Samriddhi Scheme upto the age of 10 yr copy of deposit receipt assured for all other policies taken before
01.04.2012
PF Self Will be taken automatically from payroll

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Deductions under Chapter VIA – Section 80CCC/80CCD
Contribution to Pension Fund/Scheme Benefit can be availed
only if payments are made
Max allowable by the employee.
Investment Section amount Required Document
INR 1,50,000,
Contribution to within the overall
notified Pension limit of section Copy of contribution Notes:
funds 80CCC 80C statement/payment receipt
 Total amount of deduction allowed u/s 80C, 80CCC
Copy of contribution and 80CCD (employee contribution) is INR
statement/payment 1,50,000.
10% of Basic + DA receipt/Will be taken  Employer contribution u/s 80CCD (2) to NPS will be
Contribution to or INR 1,50,000 automatically from payroll if treated as taxable perquisite and simultaneously
NPS 80CCD(1) whichever is less deducted from payroll be deducted from income.
Employer  Deduction allowable u/s 80CCD (2) and
Contribution to 10% of Basic + DA Will be taken automatically
80CCD(1B) is above the limit of INR 1,50,000.
NPS 80CCD(2) (OLD Regime) and from payroll
14% of Basic + DA  Atal Pension Yojna is covered under National
(New Regime) Pension Scheme.
INR 50,000, over
and above the
limit of INR
Contribution to 1,50,000 under Copy of contribution
NPS 80CCD(1B) section 80C statement/payment receipt

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Deductions under Chapter VIA – Section 80D
Medical/Health Insurance

MAXIMUM ALLOWABLE AMOUNT

Required documents:
Self, Spouse &
Self, Spouse &
Children (if Sr.
Parents not Parents being Sr.  Copy of payment receipt/payment proof
Children
Citizen)
being Sr. Citizen Citizen  Copy of policy schedule/receipt/other doc specifying
insured persons detail along with relationship with
yourself
 Copy of age proof if benefit is claimed for Sr. citizen
INR 25,000 INR 50,000 INR 25, 000 INR 50, 000

Notes:
Preventive health check-up:  Deduction is allowed on actual payment, not on due
 Maximum allowable amount is INR 5,000 payments
 Falls within overall limit of section 80D  Premium should be paid by employee for self, spouse,
 Allowed even if payment is made in cash children and parents.
 Age limit for qualifying as Sr. citizen is 60 years.

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Deductions under Chapter VIA – Section 80DD, 80U & 80DDB
Particulars 80DD 80U 80DDB
Eligible person Resident Individual Resident Individual Resident Individual

Spouse, children, parents, brothers Spouse, children, parents,

and sisters, who are dependent on brothers and sisters, who
Allowable for him/her Self are dependant on him/her
Maximum Allowable Amount where
disability exceeds 40% but less than 80% INR 75,000 INR 75,000
Maximum Allowable Amount where
disability exceeds 80% (severe disability) INR 1,25,000 INR 1,25,000
Actual exepense or INR
Maximum Allowable Amount 40,000 whichever is less
Maximum Allowable Amount where age is Actual expense or INR
above 60 1,00,000 whichever is less
Original bills of expenditure
Form 10IA from Medical and
Required Document Form 10IA from Medical Authority Authority Prescription from a specialist

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Deductions under Chapter VIA – Section 80DD, 80U & 80DDB continued…
Clarifications

Disabled person has not claimed any deduction under section 80U

Disability should not be less than 40%.

Disability means person suffering from blindness, leprosy-cured, hearing impairment, locomotor
disability, mental retardation, mental illness.

Deduction under section 80DDB is available against medical treatment of specified diseases or ailments.

Diseases for the purpose of claiming deduction under section 80DDB are, Dementia, Dystonia
Musculorum Deformans, Motor Neuron Disease, Ataxia, Chorea, Hemiballismums, Aphasia,
Parkinsons Disease, Malignant Cancers, Full Blown AIDS, Chronic Renal Failure, Hematological
disorders- Hemophilla & Thalassaemia

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 Deductions under Chapter VIA – Section 80E
Deduction in respect of Interest on Education Loan taken
Loan must have been taken from any
bank or financial institution or an Required Document: Copy
approved charitable institution approved of certificate indicating
for the purpose of providing educational interest paid
Quantum of
loans.
deduction: no limit
Allowed for the higher education of self,
spouse and children or that student for Principal repayment does not quality for deduction
Principal repayment does not quality for
.
deduction whom the individual is the legal
guardian.
Higher education means all fields of studies (including vocational studies) pursued
after passing the senior Deduction is allowed for continuously 8 years starting from
the year in which employee starts paying the interest or until the above interest is
Deduction is allowed for continuously 8 years starting paid in full, whichever is earlier. secondary examination or its equivalent from any
school, board or university recognized by the central government or state
from the year in which employee starts paying the
government or local authority or by any other authority authorized by the central
interest or until the above interest is paid in full, or state government or local authority to do so.
whichever is earlier.
Deductions under Chapter VIA – Section 80EE
Deduction in respect of Interest on Home loan taken for first house.
Additional deduction up to INR 50,000 in respect of interest subject to below conditions:

 Loan is sanctioned during Financial Year 2016-17

 Loan is taken for the purpose of acquiring residential housing property.
 The amount of Loan Sanctioned doesn’t exceed INR 35,00,000
 The value for Property doesn’t exceed INR 50,00,000
 The assessee doesn’t own any residential housing property on the date of sanction of the
loan

Required documents:
 Copy of Loan Sanction Letter issued by Bank (depicting Loan
amount, Date of Loan sanctioned and value of Property)
 Interest Certificate
 Copy of registry

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Deductions under Chapter VIA – Section 80EEA
Deduction in respect of Interest on Home loan taken for first house.
Deduction up to INR 1,50,000 in respect of interest subject to below conditions:

 The loan has been sanctioned by the financial institution during the period beginning on 01-04-2019 and
ending on 31-3-2022
 Loan is taken from any financial intuition for the purpose of acquisition of residential housing property.
 The stamp duty value of the residential house property does not exceed INR 45,00,000.
 The assesse doesn’t own any residential housing property on the date of sanction of the loan.

Required documents:
 Copy of Loan Sanction Letter issued by Bank (depicting Date
of Loan sanctioned and value of Property)
 Interest Certificate
 Copy of registry

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Deductions under Chapter VIA – Section 80EEB
Deduction in respect of Interest on electric vehicle loan
Deduction up to INR 1, 50,000 in respect of interest on loan taken from financial institution for the purchase
of electric vehicle subject to below conditions:

 The loan has been sanctioned by the financial institution during the period beginning on 01-04-2019 and
ending on 31-3-2023
 Vehicle is powered exclusively by an electric motor whose traction energy is supplied exclusively by
traction battery installed in the vehicle and has such electric regenerative braking system, which during
braking provides for the conversion for vehicle kinetic energy into electric energy.

Required documents:

 Copy of Loan Sanction Letter issued by Bank (Date of Loan

sanctioned)
 Interest Certificate
 Copy of Registration Certificate (RC)

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Previous Employment Income and Income other than salary

Interest on Deposits
Previous Employment Interest on Saving
including Saving Bank Other Income
Income Bank Account
Account Interest

Applicable only for the Would be added to

Employees who have Taxable income as Would be added to
Other Income Taxable income as Any other Income
joined current employer
Other Income like, rental income,
in current FY
fee etc. can also be
submitted so that tax
Deduction under can be deducted
Required Document: section 80TTA would Deduction under along with salary
Copy of tax be provided against section 80TTB would
computation sheet (at it up to max of INR be provided against it
the time of exit/F&F or 10,000 up to max of INR
provisional Form 16 50,000 If any tax is
with seal and signature deducted at source,
Proof of tax
Senior citizen can not deduction is to be
Please do not submit avail deduction under Only Senior citizen
pay slips and projection (Age>60) are eligible
submitted, i.e. Form
this section 16A or Form 26AS
details for it
In the proof submission window will consider the employee declarations for Jan’24 to Mar’24 based on if the
employee updates the declaration by saying he will submit the remaining proof in the remark section and also
fill the declaration form.

If the employee does not fulfill any of the above conditions then the benefit will be provided on an actual basis.

declared proofs will be considered only through the helpdesk during the query window as per the timelines
shared. No proof will be considered via email.

HRA
Rent receipt is required for each month of the current FY. Receipt can be Monthly (12 receipts) or Quarterly to
cover all months (4 receipts) or Half yearly to cover all months (2 receipts) or Yearly (1 receipt). Employees can
submit rent receipts (Cash Payment) or Online payment receipts/bank statements along with the Rent
Agreement.

HRA receipt will not be considered without revenue Stamp.

No need to declare the amount of Mediclaim, NPS,VPF, Meal and gift cards, as they are directly deducted from
Payroll.
Please fill the LTA column in Form 12 BB and create a folder named LTA and upload with the investment proofs.