The largest part of India's taxpayer group is of salaried persons. They pay the highest amount of taxes that ultimately help in basic infrastructure like roads and provide good health services and education systems. But this transaction is not only one way. The government also says Thanks by giving them monetary relief.

They are exempted from a portion of the tax for different kinds which are called allowances. If a salaried person takes reimbursements from the employers, a large chunk of money will be saved by the end of the year.

An employer's salary is made up of many components. The total salary package of employers is called Cost to Company (CTC). While the money that gets credited into account is called in-hand salary, which is lower than this CTC. It happens because employers deduct various kinds of taxes imposed by the governed. While some of these taxes are fixed, a few can be reimbursed if employers’ claim for allowances.

Here's a list of major deductions and allowances given by the government:

1.    House rent allowance (HRA)

2.    Telephone reimbursement

3.    Books and periodicals allowance

4.    Meal coupons

5.    Interest on higher studies loan

How to Reimburse Them:

The name of these allowances is pretty explanatory. If an employee is living in a rental house, then he/she is eligible for HRA. The same logic applies to other allowances. What these allowances basically mean is that salaried people should get some relief on their basic needs of working like housing, traveling, reading, and eating.

The process of asking reimbursements of these allowances is very simple. Salaried people have to give bills for using these basic services and commodities.

For HRA, one needs to submit rent receipts including the PAN of the employer (PAN is compulsory if the rental payment is above INR 1 lakh annually). For books and periodicals allowance, one has to submit newspaper bills, bills of books, and magazines. The same rule applies to telephone reimbursement, meal coupons, and Interest on higher studies loans.

However, one allowance that deviates from the same logic is Standard Deduction. In the last budget, it was decided that a standard amount of Rs 50,000 would be deduced from IT for salaried employees. It actually replaced transport allowance and medical reimbursement.

These tax allowances may sound small to a middle-middle-class or a higher- middle-class person. But when all of these allowances are accrued, the sum money almost looks like a monthly saving that has accumulated after a year. Basically, if you get reimbursement for all these allowances, you'll start getting more money than your present in-hand salary.

For more details about the changes in Income Tax exemption, click here.

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Amid the COVID-19 crisis, the Income Tax department has decided to revise its Income Tax Return (ITR) forms. The forms will be changed so that taxpayer citizens can get the benefits that the government has given as relief measures. 

The central finance ministry released an official note on Monday regarding the ITR form changes. It says that the government has given various timeline extensions to the citizens as a relief measure. But to fully avail it for the common people, the income tax department will revise the return forms for the financial year 2019-20 and the assessment year of 2020-21. The changes made will be notified to taxpayers by this month's end. 

The benefits given to taxpayers are for financial transactions made between April 1, 2020, to June 30, 2020. Financial world pundits are also speculating that the department will most likely extend the ITR filing deadline of July 31. 

Once the forms are changed, and the taxpayers notified, the department will also amend the software and return filing utility. All this procedure shall be completed before May 31. 

Talking to the media about this recent announcement, the director of Nangia Andersen Consulting, Mr. Shailesh Kumar, said that there is a small discrepancy in the time-period. While the taxpayers would have to make tax-saving investments by the end of June, the new ITR forms and utilities would be notified to taxpayers by the end of May. Hence there is lesser time for taxpayers to file the Income-tax return by July's end. To make sure every eligible person pays tax, the government will probably extend the ITR filing date. 

Almost every finance-related timelines and deadlines have been extended by the Finance Ministry, including the utilities of the Income Tax department and Reserve Bank of India. 

After announcing the Pan-India lockdown on March 25, the government ruled that the claims for payments that come under Section 80 C, 80D, and 80G (which includes Donations, Mediclaim and LIC, PPF, NSC, and mutual funds, etc.) are extended till the end of June. 

Usually, the ITR forms are notified to taxpayers once the financial year ends, i.e., March 30 or 31. Then the taxpayers have four months to file their Income Tax Returns before the end of July. However, this government broke the norms when it released the new forms called ITR-1 (Sahaj) and ITR-4 (Sugam) in January instead of March. Now, after Coronavirus spread and nationwide lockdown, every rule and norm is being changed as per necessity. 

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The last date of coronavirus lockdown in India is coming near but it is still wrapped in uncertainty and lots of loss for the economy of the country. The cases are rising with every passing day and chances are high that lockdown will be extended.

In this period of crisis, the government is trying to offer relief to the industry. This time, it has announced a big relief for the IT partners.

The Indian government has recently decided to issues all the pending income tax refunds of up to 5 lakh. It is being said that the step will benefit more than 14 lakh taxpayers.

Not just this, the government is also releasing the pending GST and custom refunds. This step will give relief to around one lakh business entities. In the press release, the government has also added Rs 18,000 crore worth of total refund would be granted.

Here is what the Finance Ministry said in the statement:

"In the context of the COVID-19 situation and with a view to provide immediate relief to the business entities and individuals, it has been decided to issue all the pending income-tax refunds up to Rs 5 lakh, immediately. This would benefit around 14 lakh taxpayers,

"It has also been decided to issue all pending GST and custom refunds which would provide benefit to around 1 lakh business entities, including MSME. Thus, the total refund granted will be approximately Rs. 18,000 crore."

These steps have been taken to balance the economic burden that is hanging over the Indian industries in the wake of novel coronavirus. People are welcoming this move and it is being said that the tax refund announcement is going to help large section of traders since they are facing cash flow challenges due to the lockdown.