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.

Want to save more of your hard-earned money? Keep reading BankingOnTips Blog.

During Budget 2020, Finance Minister Nirmala Sitharaman had announced that a new Form 26AS will replace the older one. Now, a new Form 26AS has been released by the Income Tax Department, and it will contain more information than ever. The information embedded in the Form 26AS is very vital, but unfortunately, only a few know about it.

Here is all you need to know about the new form:

What's New?

In the older version of Form 26AS, only a few personal details were provided. like PAN number, full name, and address. While now, additional information like Phone Number and email address. The Income Tax Department now sends all the new information and notifications through emails and texts on the phone number. Till now, you may have ignored updating your phone number when changing the sim card but not anymore.

Apart from email address and phone number, the new Form 26AS now also includes your birthdate for unknown reasons.

Taxes And Proceedings

The new Form 26AS will have all the details of taxes that deducted by your company and collected by your bank. In addition to that, the details of advance tax or self-assessment tax will also be included in it.

If some tax filing is missing from your new Form 26AS, you can call your employer and bank in the court. This also works the other way around.

The outstanding demands will also be enlisted on the new Form 26AS. This will help you in knowing if the demand is really outstanding or should you raise a dispute on it.

Details About Taxes And Proceedings

In addition to that, your pending income tax proceedings will also be mentioned in the new Form 26AS. Both the taxpayer and the Income Tax Departement will have to go to just one single place to look up for all pending cases and their details. It's a win-win situation for both parties.

Until now, Form 26AS only had a few info included in it about your financial transactions. But from now on, various details like banks, listed companies, mutual funds, registrar, stock exchanges, etc. will also be included in the Form 26AS, as they were already available to the department.

If your transactions for credit cards, foreign exchange, shares, and bond purchases exceed a certain threshold, the details of all these transactions will also be written on Form 26AS.

To understand it in simple words, the Income Tax Department has made sure that Form 26AS become the one-stop-shop for taxpayers.

For More Such Updates And News, Keep Reading BankingOnTips.

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.