I am a salaried employee of a multinational company. I moved to USA on [deleted] and will be there for at least 3 years. Trying to calculate my income tax liability in India for FY 2019-20. I need guidance on the following - 1, Will I get the house rent rebate for the period I was in India i.e. for months Apr, May, June and July 2019. 2. In my full and final settlement of Indian salary, I also received some money as leave encashment for my unutilized leaves. Will it be taxable? I know that normally it is tax free. Since I was not in India for more than 181 days in the FY and therefore, I'll be considered as NRI for this income-tax filing. I tried to use online income tax filing utility from e-filing website of income tax authority of India but not able to find ways to exempt tax on the above two components. Both these components are shown to be tax exempt on my form-16. 3. Is it required to make a gift on a stamp paper for the cash (above 10lakh) I gifted to my parents/In-laws in this FY?
Yes if your company was providing your HRA.
I it normally tax free upto Rs. 3 lakh.
When did you leave India?
I can assist you in filing your return.
Was it literal cash or you transferred the money online?
Is it not mandatory to have gift deed but recommended.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
1. Yes, you will get HRA deduction.
2. It depends upon many factors. It can be partially taxable and partially exempt. Basically, minimum of the folly shall be tax exempt:
3. You cannot take cash above 2 lacs as a gift. There could be penalty implications.
We can help you in filing tax return.
I moved to USA in Mid-July. So I will be treated as NRI and I was not sure if NRI can get HR rebate and tax free Leave Encashment (I got HRA component on my India salary slip). Thanks for clarifying that I will get tax benefit on both of these. The 3rd question is actually about online bank transfer to my parents/in-laws and not the literal/hard cash. How much would be CA's fees to file the income tax. My income include only 3.5 months salary, bonus, leave encashment and interest on a small FD and on savings account. Thanks
1. Yes you will get House rent rebate.
2. Least of the following is exempt for leave encashment and balance is taxable. Leave encashment is exempt under Sec 10.
(a) Cash equivalent of unutilized earned leave (earned leave entitlement can not exceed 30 days for every year of actual service)
(b) 10 months average salary
(c) Leave encashment actually received. This is further subject to a limit of Rs 3,00,000
Whatever income is earned in India will be taxable.
HRA is also exempt under Sec 10.
Yes you need to make a gift deed for the gift made to parents.
Our fees for ITR filing is 1500+( 18% GST). You may share the docs over mail at [deleted]
Hello,
1. Yes, you will get the HRA exemption
2. It can be partially taxable and partially exempt. Tax exemption for leave encashment u/s. 10(10AA) is the least of the following.
3. Though it is not compulsory, however, advisable to create a gift deed.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
For the preparation and filing of the income tax return, you can contact us directly or take a phone consultation.
Regards,
CA Hunny Badlani
Dear Sir,
Hope you are doing well !!
1.Yes, you will get the HRA for the same.
2.It depends on many factors:
(i) Leave Encasement during service is fully taxable in all cases, relief u/s 89(1) if applicable may be claimed for the same.
(ii) Any payment by way of leave encashment received by Central & State Govt. employees at the time of retirement in respect of the period of earned leave at credit is fully exempt.
(iii) In case of other employees, the exemption is to be limited to the least of following:
(a) Cash equivalent of unutilized earned leave (earned leave entitlement can not exceed 30 days for every year of actual service)
(b) 10 months average salary
(c) Leave encashment actually received. This is further subject to a limit of Rs 3,00,000 for retirements after 02.04.1998.
3. It is advisable to prepare a gift deed for the same. However, it is not mandatory.
We may assist you in ITR filings & entire procedure.
It is advisable to take a phone consultation for the same.
Hi
1. Yes you will get deduction of HRA.
2.
Formula for computing leave encashment exemption of Non-government employees:
Particulars
Amount
Leave encashment received (A)
XXXXX
Less: Exemption under Section 10(10AA) – (B)
Least of the following:
XXXX
Amount notified by the Government
Rs 3,00,000 (C)
3,00,000
Actual leave encashment amount (D)
XXXX
Average salary of last 10 months (E)
XXXX
Salary per day unutilised leave (considering maximum 30 days leave per year) for every year of completed service (F)
XXXX
Leave encashment taxable – (A) – (B)
It requires a detailed discussion you can have a phone consultation for the same.
3. Gift deed is not mandatory but recommend to draft it.
Hi
We can assist you in filling ITR.
Gift deed won't be mandatory. You may prepare notarized declarations for documentation. The receipt of gifts should be reported as exempt income in ITR.
You may contact personally for filing purposes.
We can have a one to one consultation to decide about your fees and other requirements.