S R Reddy (C.A) (60 Points)
18 September 2018Dear sir,
I understand that for the F.Y.2018-19( A.Y.2019-20), Standard deduction upto 40,000/-P.A from salary income and exemption from interest income(Whether Savings or FD interest) upto Rs 50,000/-P.A.is applicable for Government servants. Please clarify ,if these provisions are applicable for PENSIONERS too.
Thanking you.
S R Reddy
reddysr14 @ gmail.com
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160971 Points)
Replied 18 September 2018
Yes.... for pensioners standard deduction upto max. 40,000/- while Deduction u/s. 80TTB upto 50,000/- for senior citizens.......
SHIRISH S S
(Proprietor)
(1016 Points)
Replied 18 September 2018
Rambhia sir - I have the option to take salary from one of my clients and no GST.
so from Salary 40k - 50% profits from professional receipts u/s 44ADA and 50k u/s 80TTB as a senior citizen. But salary only below 80k will be useful for me. For my client GST any way he is claiming credit. Whether my perception is correct.??
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160971 Points)
Replied 18 September 2018
1. Salary form one of the client...... upto 80K....... deduction upto 40K u/s. 16(ia) ..... OK...
2. Professional income from others ......... declared u/s. 44ADA... OK (check GST liability/applicability)
3. If you are more than 60 years age & have FD/sav acc interest from bank.... deduction upto 50K u/s. 80TTB .... OK
SHIRISH S S
(Proprietor)
(1016 Points)
Replied 18 September 2018
I was hinting that any professional fees above 80k say 1.2 lakhs My income subject to tax is 60k u/s ADA . But if it is salary 1.2 lakh - 40k i.e 80k income is subject to tax so not advantageous. So for a salary or professional income of say 70 k (less than 80k) salary will be beneficial and any professional income above 80k 44ADA will be beneficial.
IS MY THINKING CORRECT?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160971 Points)
Replied 18 September 2018
In rare ocassion salary below 80K, and one cannot have salaries from different employees with SD from all the employees.......... so, in most of the cases 44ADA is preferable.......
But otherwise, its correct.........
S R Reddy
(C.A)
(60 Points)
Replied 18 September 2018
Dear Rambhia Sir,
Thanks a lot for your timely clarification. I hope this clarification will help all other pensioner cases which I come across.
Sincerely,
S R Reddy.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160971 Points)
Replied 18 September 2018
Press Information Bureau
Government of India
Ministry of Finance
05-April-2018 13:55 IST
The Central Board of Direct Taxes (CBDT) has clarified that the pension received by a taxpayer from his former employer is taxable under the head “Salaries”. The Finance Act, 2018 has amended Section 16 of the Income–tax Act, 1961(“the Act”) to provide that a taxpayer having income chargeable under the head “Salaries” shall be allowed a deduction of Rs 40,000/- or the amount of salary, whichever is less, for computing his taxable income. Accordingly, any taxpayer who is in receipt of pension from his former employer shall be entitled to claim a deduction of Rs 40,000/- or the amount of pension, whichever is less, under Section 16 of the Act.
Earlier, the representations were received seeking clarification as to whether a taxpayer, who receives pension from his former employer, shall also be eligible to claim this deduction.
CAclubindia
