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Thursday, 26 July 2018

Are you paying extra Income tax for arrear payments of previous years like 7th CPC recommendation?


Finish your E-filing before 31st August 2018.  
You do not pay more taxes if there was a delay in payment to you and you were in a lower tax bracket (5 or 10 lakh) for the year you received the money. If you already submitted your return without 10E you may submit Revised IT Return.

If an employee or his family receives pension arrears or salary arrears, he or she can claim tax relief under Section 89(1). 
Salary is usually taxable when it is due or when it actually received, whichever is earlier. Arrears are usually announced from a back date and therefore cannot be taxed when due. Receiving salary or pension in arrears might change your tax situation. You may fear it's going to move you up a tax slab. Or tax rates may be higher in the year arrears are received as compared to the year to which they belong. To protect you from any additional tax burden, due to delay in receiving income, the tax laws allow a relief under Section 89(1) read along with Rule 21A. 

Relief under Section 89(1) is also allowed to those who receive family pension in arrears. The calculation is the same as mentioned below.
 

Income Tax Slab for Individual in INDIA

Annual Income Range (in Rupees)
Tax Rate (in %)
FY 2016-17
FY 2017-18
FY 2018-19
Zero – 2,50,000
Nil
Nil
Nil
2,50,000-5,00,000
10%
05%
05%
5,00,000-10,00,000
20%
20%
20%
Above 10,00,000
30%
30%
30%

Less: Rebate u/s 87A – It is only applicable to resident individuals with income up to Rs 3,50,000. The maximum amount of rebate allowed is Rs 2,500 for FY 2017-18; with income up to Rs 5,00,000. The maximum amount of rebate allowed is Rs 5,000 for FY 2018-19.

Add: Surcharge for FY 2017-18 – A surcharge @ 10% of tax is applicable if income lies between Rs 50 lakh to Rs 1 crore, but if it exceeds Rs 1 crore then the surcharge will be payable @ 15%. However, surcharge is subject to marginal relief as stated:
  • If income exceeds Rs 50 lakh or Rs 1 crore as the case may be, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs 1 crore.
Surcharge for FY 2018-19 – A surcharge @ 15% of tax is applicable if income exceeds Rs 1 crore. However, surcharge is subject to marginal relief as stated:

  • If income exceeds Rs 1 crore, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs 1 crore.


Add for FY 2017-18: “Education Cess” and “Secondary and Higher Education Cess” shall be levied at the rate of 2% and 1% respectively, on the amount of tax computed, inclusive of surcharge.

Add for FY 2018-19: “Education Cess” and “Secondary and Higher Education Cess” will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax computed, inclusive of surcharge.

Suppose an employee's annual salary is Rs. 9.50 lakh and receives Rs. 1 lakh as arrears, of which Rs. 50,000 is for the previous fiscal year. His/her tax slab will change. The total income for this year will be Rs. 10.50 lakh as against Rs. 10 lakh (including the arrears of this year). Income of individuals above Rs. 10 lakh is taxed at the rate of 30 per cent while income between Rs. 5 lakh and Rs. 10 lakh is taxed at the rate of 20 per cent.


The Income Tax Department has made it mandatory to file Form 10E if you want to claim relief under Section 89(1). As per Section 89(1), tax relief is provided by recalculating tax for both the years; the year in which arrears are received and the year to which the arrears pertain. Your taxes are adjusted assuming arrears were received in the year in which they were due.
Your employer may ask for confirmation of submission of Form 10E before adjusting your taxes and allowing tax relief. It is not mandatory to submit this form to the employer. You can claim tax relief by filing this form at the time of submitting your tax returns.


Let's understand this calculation in detail. for example:


Step by step process to get the benefit of reimbursement tax amount paid.

An amount of ₹ 1,00,000 in FY 2017-18 as arrears which, I was supposed to get in FY 2015-16.

My earning in FY 2017-18 including arrears is  5,28,000, tax paid for FY 2017-18 is ₹ 32,150. On the other hand, my earning in FY 2017-18 excluding arrears is  4,28,000, tax paid for FY 2017-18 is ₹ 22,350.
Subtracting the value of both the tax paid amount is ₹ 9,800.

In FY 2015-16 my earning including arrears is  3,51,000, tax paid for this FY is ₹ 18,780 and in FY 2015-16 my earning excluding arrears is  2,51,000, tax paid for FY is ₹ 12,780. After Subtracting the value of both the tax paid amount is ₹ 6,050.

In the Final step:
Subtracting both the differences (₹9,800 - ₹6,050) we get ₹ 3750/=

That is the amount we can get relief under section 89(1) by filling of form 10E. You must submit Form 10E before filing your income tax return otherwise received a notice from IT department for non-compliance.

Taxpayers who have claimed relief under section 89(1) but have not filed Form 10E have received an income tax notice from the tax department with the following lines –
The relief u/s 89 has not been allowed in your case, as the online form 10E has not been filed by you. The furnishing of Online form 10E is required as per sec.89 of the Income Tax Act

Many taxpayers are confused about which assessment year to choose while filing Form 10E.
Arrears may pertain to earlier years; however, one has to choose the assessment year in which arrears have been received. For example, if arrears are received in financial year FY 2015-16, choose assessment year as AY 2016-17.

Form 10E has to be submitted online and no copy is required to be attached with your tax return. However, you must file and keep all documents safely in your records.

How to file Form 10E
Form 10E can be filed online. Here are the steps to file Form 10E online

Step 1: Login to https://incometaxindiaefiling.gov.in/ with your User ID (PAN) and password along with Captcha Code (Date of birth is not required now).

Step 2: After you have logged in, click on tab named ‘e-File’ and select ‘Income Tax Forms’.


 Step 3: The below screen shall appear. Select Form 10E, the assessment year “2018-19” and the submission mode “Prepare and Submit Online” from the drop-down.




Step 4: The below screen shall appear with instructions on how to file Form 10E and enter the details in blue tabs provided.




  

Step 5: On completing the Form, click on ‘Preview and Submit’.



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Saturday, 21 April 2018

A tale of real story to visit Mount Bromo for Free & without conducted tour by a solo family traveller

This post is a part of our full tour of Malaysia, Indonesia and Singapore. We (husband, wife and two sons) are preparing ourselves from August 24, 2017 for this journey which is already posted in this blog as "Believe me. Visit Singapore, Java and Bali of Indonesia via Johor-Bahru of Malaysia together at the cost of Domestic Tour and without any Travel Agent".   If these documents will be used as a travelers guide of any one then we feel happy.

The most exiting part of this total tour was Mount Bromo, active volcano tour. We found that International tour operators are usually concentrated on Bali tour of Indonesia and the volcano tours are not so popular but this volcano tour was our life time achievement to observe active volcano so closely.

240 steps remains to climb bromo crater.

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This tour was start from Johor Bahru(JB) city of Malayasia at 18th March 2018, Sunday and bye bye to Bali on 22th March 2018, Thursday morning by a flight of Scoot Air from Denpasar Airport Bali to Singapore.  We found that many solo tourists are going volcano Mount IJEN Blue Fire Trekking tour with this Bromo tour which was more tough and skipped by us due to time constrain. 
New regulation: Citizens of the 169 countries are allowed to enter Indonesia without a Visa.

Currency of Indonesia: IDR= Indonesia Rupiah
conversion rate on March 2018:  
A. 1 USD = 13,767 IDR, B. 1 SGD = 10,500 IDR, C. 1 Indian rupee(Rs.) = 211 Rupiah (Rp.) but actual market rate to buy IDR is very high. We purchased it from Kolkata, India Rs.1=Rp 180 and found rate in Bali is Rs 1 = Rp 170
So we purchase small amount of IDR for Indian and purchased USD or SDG to change it in Indonesia.

# Please note that Johor Bahru city is the 2nd largest city of Malaysia and the gateway of Singapore.  Johor Bahru Sentral city is in the border of Singapore of Malayasia and from Senai aorport to singapore it is 48 to 50km by road via JB Sentral Emigration Centre.

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Booking.com    

Mount Bromo: Most popular active volcano (reaching the summit could be effortless).

Our AirAsia flight reached Juanda Airport, Surabaya of East Java at 12 noon from Senai International Airport of Johor Bahru, Malayasia. After clearing entry stamp by Emigration department of Indonesia Government we came to the arrival lounge of airport. Then and then some touts of airport asked us about taxi and mobile sim card of Singapore. We want to go to Bungurasih Bus terminal Purabaya of Surabaya and also requird a local SIM card.  There was no booth of telephone co. and no man in taxi booth so we asked one of them for SIM card and purchased  IM3 Ooredoo SIM by IDR 80,000 with 3GB data and IDR 2,000 talk time. We knew the price was high but at that time we were not sure about the availability of SIM for foreigners.  Then we asked another tout for taxi fare to Terminal Purabaya and he asked 70,000 IDR. We convinced the tout for 60,000 for 4 because we came to know from the website that DUMRI bus will take 15K per head, but it was an old rate. DUMRI buses are provided by the local government (no tout) to deliver passengers to Surabaya with IDR 25,000 per head. Fixed tariff taxis are available to various destinations in Surabaya and surrounding areas.

DUMRI and other buses arrival terminal at Bunguraish

Travel from Surbaya to Probolinggo:

Taxi dropped us by the Taxi stand at Bunguraish Bus terminal and we choose one food stall among many, where we found images of different dishes with local name and it helped us to choose our food. We placed our orders for NASI GORENG (fried rice with chicken). In the mean time I went in search of bus to Probolinggo in order to avoid touts for buses and taxis. 
 
Taxi Stand (controlled by touts) is the entrance of Bungurasih Bus terminus




Entered into the Departure terminal from this taxi stand. This is like a market area with various booths at both side of this lane. Then, I found a series of Bus ticket counters with no passengers for long distance buses like Jakarta or Denpasar (main city of Bali). As per the picture men roam about outside the counter and ask people about their destination. To know about the system I asked for the bus to Denpesar. One of them told me that no bus are available now, one sleeper coach will stat at 11PM night. Then I moved straight and found a large AC waiting hall for passengers where very few peoples were waiting. In front of this waiting hall there were several platform with Counter no., Destination and type of Buses written on the top of the platform. All buses were run by private agencies.
Platform no. 9 to 14 of PATAS, Economy and Super Economy buses at Bungurasih bus terminus.
I Found many express buses available for Probolinggo. AC non stop PATAS (Platform 9 and 10) bus fare was IDR 30K, Economy AC bus 25K and Non AC bus 20K. There was a queue of different type of buses waiting to start one by one. Every 5 minutes a bus departs from the bus terminal. Touts were roaming everywhere and they asked us to board any one. I found an AKAS (Co. name) AC bus for Probolinggo with IDR 20K per head which was waiting far away from the queue and the conductor of the bus told me that it will start after 30 minutes. I came back and finished our lunch. Then we all moved towards the bus with our luggage. We found our bus and boarded it. Tickets are bought once you get inside the bus. Our bus started at 13:30 and reached Probolinggo bus terminal at 15:15. 
Entry Gate of Probolinggo Bus terminus

How to go from Probolinggo to Cemoro Lawang (Bromo):

From Probolinggo, a small bus leaves for Cemoro Lawang (the base of Bromo) when it get 15 passengers (5,25,000 IDR per bus).  A lady shop keeper of a stall advised us to move out from the bus terminus and get to the left side of the main road for that bus (200mt). It can also be arranged for 50,000 Rupiah one-way at Toto travel at the Probolinggo bus station. We went there and found one Australian lady waiting for more passengers. At 4pm one young couple came via tout and it was the time to start. So the driver asked us to pay 75K per head for 7. We discussed among us and waited for some more tourist. We waited till 5pm and accumulated 11 tourists with 50K per head. 
Waiting for more tourist in front of Mini Bus (Blue)
Inside of Mini Bus: Driver+2,baggage+helper, 2, 3 , 4

Mini bus started at 5pm. There was heavy rain on the way to Cemoro Lawang. After one hour journey our bus stopped in front of public booth were some young men were collecting 10 thousand IDR per head to develop the village. We all asked for some government permission or any government receipt but they behaved like goons and we all were bound to pay else return back, or wait there till we pay them. The village was small and most of the houses were used as home stay. Conductor asked the names of different home stay and dropped accordingly. The best hostel was Cafe Lava, where no room were available, and one needs to book before 6 months via email. So we booked Home-stay Livia  (2.6km from Mount Bromo) beside Cafe Lava through booking.com with extra paid facilities of private car (jeep) for going to penanjakan (sunrise), the mountain and savanna hills.  The bus conductor helped us to reach home-stay which is one storied house with 3 double bed rooms, a drawing room with sofa, TV and WiFi facilities, one bathroom and a kitchen with gas burner.  We booked 2 rooms and one room was booked earlier by one Australian young Lady (solo traveler) who was staying there from the morning. She had a plan to trek King Kong Hill at 2 am to watch the sunrise. Already she surveyed everything and she went to bed at 7 pm. There was one good restaurant at Cafe Lava and two shops nearby. The manager of that home-stay came to collect room rent for one night stay and offered us to go to visit sunrise by his jeep at Seruni point II. He asked for IDR 2,25,000 but after bargaining we settled for IDR 1,50,00 for four from 4 AM to 6 AM. The temperature was 15 degree centigrade in the evening. We quickly finished our dinner and went to bed early.

The man came with his jeep before 4 am and we started for the sunrise point (right side of the road from Cemara Indah Hotel).  Seruni point II is at an altitude of 2361 meters above sea level, which is 2.8 km by jeep and 40 meters trekking. From there one may trek 750 meters upwards to climb King-Kong Hill. There is no motor way to reach King Kong hill  from this side. You may go to Sernui Point by jeep through other side of the hill (12.3 km) to enjoy sunrise. The highest place at Penanjakan Hill is at an altitude of 2700 meters. On Monday when we reached Seruni point II at 4:30AM it was full of cars and tourists, but sunrise was at 5:32AM and we managed to come up front for the sunrise. In the weekend number of tourists increases so its difficult to go near the view point to have a clear view. One tea stall is there and horses are available to go to King-kong Hill. Due to the rain the previous evening there was much water vapour at the bottom of the mount Bromo. We enjoyed fabulous view of Tengger Caldera consist of Cemoro Lawang village, mountain range and volcanoes. Mount Bromo is an active volcano and so smoke comes out from its crater.

Panoramic view of Tengger Caldera with Mr. Bromo, mist and fog in Tengger Sand Sea at the time of sunrise. (3/2018)
Mt. Bromo volcano [Last eruption‎: ‎November 2015 - February 2016, Height: ‎2,329 m (7,641 ft)]  located beside Volcano Mount Batok in East Java, is the active volcano inside the giant 16-km-wide Tengger caldera. It is famous for its magnificent sunrise and panoramic view over the caldera with Semeru volcano in the background. Mist and fog at the morning often limit visibility in this part of the caldera. We were taking some snaps using our mobile phones and came back to home-stay at 6AM. 
Shortest path used by locals.


After taking our breakfast and we started our journey towards the Crater of Mount Bromo.  we have a plan to visit the crater by foot through the shortest downwards trek root (2.5 km) beside the guard booth in front of Cemara Indah Hotel which were using by the local people and horses. 
Already we discover the path last night as per the information collected from the web. Most of the tourist travel by jeep up to jeep parking area, Sukapura which is 1.6 Km away from Mount Bromo creator. There is another option to go there is to hire bike as a pillion rider which is also traveling up to the Hindu temple (Pura Luhur Poten) at the foot of Mount Batok. Horses are available here with IDR 50K to go up to the steps and returns.
 
 So we must trek up to the crater of Bromo of this tour. The pathway was muddy and slippery due to the rain of previous night. We came down within 15 m on the Tengger Sand Sea area. We observed a clear fantastic view of Tengger caldera and moved towards Bromo crater.
Highest point of horse ride: The son helped her to climb horse
The Tengger Sand Sea in Tengger Caldera is a special ecosystem. The area is covered in volcanic sedimentation of sand from Mount Bromo activities. The resulting area is believed to be the only known desert-like area in Indonesia. We moved towards Mt. Bromo by foot and Mt. Batok right infront of our eyes. We are enjoying the scenic beauty of this place much better than seeing it through the window of a jeep or through horse riding. If any one traveled by jeep then also its still quite far to walk towards the bottom of the mountain and hike up the mountain. So those who are coming by jeep are also walking towards Bromo. There are many horses that will take you up and back to your jeep as an alternative. There is a nice Hindu temple of God Bromha (God of fire) on the foot of the hill which was closed at that early morning. We sit-down here for a moment and take some picture of the temple. Only female member of our team was exhausted and we hired a horse for her to go up and down up to the place. Then we are moving towards the crater of Bromo. Smokes are coming from the ground. We are feeling hot and removed our jackets and caps. All horses were stopped but the journey doesn't end there. We still needs to go up the steps, its around 240 steps to go up the crater, we were pretty exhausted, but we went up slowly. This was another magnificent experience, the crater was quite big and gas come out from the middle big hole, but we can't go around it though.  After all the excitement being on top of the mountain which made us feel like a life time achievement, you really feel that you can do anything.

 
Please click here if you are more interested about Bromo Tengger Caldera volcano.


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