Please Relax, It is Just Tax

Even though we have said it umpteen number of times, we would keep saying it.



It is that time of the year when everyone is a “little worried” about filing IT returns and paying tax as the date closes in. Well, Fintuned would like to help there. So, here is a quick 5 slide on how we can help. 



Cost of Ignorance is Greater Than The Cost of Insurance

This post has been written by our guest contributor Tarun Bachhawat, with help from the Fintuned Editorial team.

“If you live each day as if it were your last, someday you will most certainly be right” – Steve Jobs

When I sat down to write an article on insurance policies (just because I recently bought one) a strange but hard-hitting thought donned upon me. I wondered how to tell people about the significance of insurance, the tax benefit people get from paying premiums etc. A second later, I rubbished all the thoughts.

WANT TO KNOW WHY? Because I realized something – buying an insurance policy is the simplest of decisions one has to take and whether you like it or not, it is absolutely naive to ignore it. Think about it. When questions like – “What will happen to my family when I am not there”, “What if I meet with an unfortunate accident” etc. come to your head, how can you ignore taking an insurance policy??


Honestly, you don’t need articles or someone like me to tell you about the significance of purchasing insurance. You just need to have compassion and common sense. That’s it.

But, there is a problem…

Continue reading “Cost of Ignorance is Greater Than The Cost of Insurance”

Because Wealth Is a Matter Of Choice, Not Chance.

This post has been contributed by our guest contributor Mohit Arya with help from the Fintuned Editorial team.Most people fail to realize that in life, it’s not how much money you make. It is how much money you keep,” writes Robert Kiyosaki in the personal-finance classic, “Rich Dad Poor Dad.” scrooge-mcduck

On this note, I am glad to share my first post on how a salaried people should aim at creating wealth. Let me clear it first. Putting money in savings account giving you 4% or 6% return does not count as an INVESTMENT, at least a smart investment. The interest you get is too nominal to make your dreams come true.

Continue reading “Because Wealth Is a Matter Of Choice, Not Chance.”

Everything There Is To Know About HRA

An exhaustive FAQ with respect to HRA that everyone needs to keep handy.

  1. What is HRA?

HRA or House Rent Allowance is a grant provided by employer to employee to meet the cost of living in a rented house at the employer’s work location. Such HRA forms parts of the salary that employee receives from employer every month.

  1. What is the tax exemption available in relation to HRA?

Least of the following is exempted:

  •  Actual HRA received from the employer
  •  Rent paid – 10% of the salary
  •  50% of Salary, in case the employee resides in metro cities, otherwise 40% of salary
  1. I stay with my parents/relatives. Can I take HRA benefit?

Of course, you can! However, this is only possible if you have entered into an agreement with them and actually make the payment every month, preferably by cheque.

*Quick tip*: Avoid claiming tax benefits on rent payments made to the spouse as the arrangement can be characterized as a sham transaction, say experts.

  1. Can I pay rent by cash?

Yes, you can. However, it is advisable to make bank transfers or cheque payments for future references.

  1. How does HRA flow back to the owner/parents?

Owner/Parent will taxed for the rental income after a 30% deduction.  If they are retired and do not derive any significant taxable income, the rent would be tax free in their hands.

*Quick tip*: It gets better if the property is jointly owned by both parents. Then you can divide the rent two-ways so that the tax liability gets split between the two individuals.

*Quick tip*: If their income exceeds the basic exemption limit, you can help them save tax by investing in their name under Section 80C options

  1. Can I claim HRA and Home loan deduction at the same time?

Yes, only where you are staying and paying rent as well. One of the cases this is frequently seen is where home is bought are in 2 different cities.

  1. I am a self-employed person, Can I claim HRA?

No, as you are not receiving a formal salary. However, you can claim a deduction under section 80GG of the Income Tax Act for the rent incurred on the residence.

  1. What is considered as an evidence that I am paying rent?

Rent agreement or rent receipts is the proof. Please note that you will have to submit copies of rent receipts or rent agreement, depending on what your organisation stipulates.

  1. Is there any role of PAN card number here?

Yes, if rent paid by you is more than Rs. 1 lac per year, you need to submit pan card details of the owner. In case the owner do not have Pan Card, a declaration will do.

  1. Is there any particular format for rent receipt?

No particular format for rent receipt has been specified, but please ensure it mentions the following relevant information:

  • Amount of rent paid
  • Period/month
  • Mode of payment (Cheque/Cash)
  • Your name
  • Landlord’s name
  • Landlord’s signature
  • Residential address
  • Date & Place
  • A revenue stamp of Rs 1 for payment (both cash/cheque) exceeding Rs 5,000

If there are any further doubts that you may have, please reach out to us.



There Is No Free Lunch, Is It?

This article has been contributed by Riddhi Kharkia, with inputs from the entire team.

Okay, so there is an ad that has been playing for long and if you are a big cricket buff (read: IPL devotee), you surely couldn’t have missed it (okay, have you made your guesses). Let me give it away to you because this post wouldn’t begin without the name of the brand behind these advertisements. The ad that I am talking about is “Freecharge”. To be honest, the series of ads conceptualized by Freecharge have brilliantly summarized the significance of this service/brand.

Now, you must be definitely wondering—how on Earth is the Freecharge ad related to money management or this blog. Since it is no quiz and unfortunately you would not be getting points for figuring out the connect, let me give this away as well. Basically, seeing this ad, I thought of citing the incomes that are “free” of “charge” by the Government of India. So, you know what we mean by Freecharge 😉

Coming straight to it, tax is payable on all incomes earned in India by an Indian resident. However, there are some exceptions to this rule and certain categories of income have been specifically exempted from tax. Such incomes are known as Tax-free incomes.

Here, we are presenting the most common tax-free incomes that every tax payer should be aware of. The joy of tax-free income is beyond measure.

  Income Details
1. Interest on Savings Bank Account –   Tax free up to Rs. 10,000
2. Long-term Capital Gain on Sale of Shares/Mutual Funds – Wholly exempted from tax- Shares/Mutual Funds should be held for minimum 12 months

– Security transaction Tax (STT) must be paid while purchasing

3. Interest  or any payment received on PPF/PF –   Wholly exempted from tax
4. Dividends from Shares /Income from Mutual Funds –   Wholly exempted from tax-   Dividend must be received from Domestic company only
5. Educational Scholarships –   Wholly exempt from tax, in the hands of the person who receives it-   Not necessarily a government-financed scholarship
6. Amount received through Will or Inheritance –   Wholly exempted  from tax-   But when the amount is invested, only the income earned on that amount is taxable
7. Amounts received by way of Gift on Marriage –   Wholly exempted  from tax-   Gift can be anything and from any person
8. Money received from your EPF account –   Wholly exempted from tax, provided money is taken out after 5 years of continuous service
9. Money got under Voluntary retirement Scheme (VRS) –   Tax free up to Rs, 5,00,000-   Employees of Public sector companies or an authority established under a Central or State govt are also eligible
10. Leave Travel Allowance (LTA) received from the employer – Tax free up to the amount of bills of travelling provided
11.  Maturity or Claim or Surrender amount received by Life Insurance Company – 100% tax-free provided the premium paid did not exceed 20% of the sum assured.

Well this is it!

If you are aware of some income that we might have missed out in the list, then please mail us/comment on this article and we promise to make the change.

Thank you for your patience.


Frequently Forgotten, No More!

Contributed by Harshita, with inputs from the entire team.

We all like to get gifts, don’t we? And more so because the Valentine day just passed us by, we deserve gifts. So to keep up the tradition that many a teenage hearts have begun, I will shower you with some precious gifts that will do you well in this tax season. So, unlike the gifts that you get on the 14th Feb these gifts are meaningful and precious (Haww, Did I just say that 😛). As the previous articles on this blog, we demonstrate our love for salaried people this time as well. So, here is a list of tax-saving investment options, which you need to keep in mind.

Following is an illustrative list of tax-friendly investment options:

  • Provident Fund (PPF)
  • National saving certificate s (NSC)
  • Equity linked saving schemes (ELSS)
  • Unit linked Insurance plans (ULIP)
  • Post office saving scheme

Duhh, haven’t we covered these already? Yes, most of them in great detail.

In order to break this monotony, we conducted a small research to understand the general composition of deductions. As expected, most of the participants had their 80C sorted. Seeing that, we came up with a thought of shedding some light on the frequently forgotten/unclaimed deductions (Well, you are all champions in 80C). Continue reading “Frequently Forgotten, No More!”

Gratitude, At The Rate of 100 Percent Compounded Perennially!

This article has been contributed by our number cruncher Mr. Rohit Agarwal, with inputs from the entire team.

Do a small exercise. Just type “The importance of saying thank you” on Google. Surely, you will be amazed to see the multitude of articles that modestly unravel the significance of expressing gratitude. Wait, when did we become the philosophers of our generation?

To be honest though, these two words carry umpteen significance in our daily lives because they recognize the effort (Well, now you decide if you want to say thank you to Mr Rahul………..:P). However, I am not here to load my readers with all the mystical knowledge behind gratitude. In keeping with that notion, I will head straight to the discussion on the topic “Gratuity”.


Most of us have an idea (not like Abhishek Bachchan of course) that Gratuity is a retirement benefit, but are we absolutely aware of the tax implications of this benefit? If you answered that with a NO, then this post will change your answer in a few minutes.

To begin with, Gratuity is a part of salary that is received by an employee from his/her employer in gratitude for the services offered by the employee in the company (Saying thank you). Gratuity is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee upon leaving his job. An employee may leave his job for various reasons, such as – retirement/superannuation, for a better job elsewhere, on being retrenched or by way of voluntary retirement.

Establishments Covered Under Gratuity Act?

Well, it is extremely important to know if you are covered under the Gratuity Act or not. So, here is an overview of the establishments that are covered under the said act. [Don’t be worried about memorizing it. Just glance through ;)]

  • Every factory, mine, oil field, plantation
  • port, railways, shop & Establishments OR
  • educational institution

Employing 10 or more persons on any day of the preceding 12 months.


As per Sec 10 (10) of Income Tax Act, gratuity is paid when an employee completes 5 or more years of full time service with the employer (minimum 240 days a year). Please note, an employee means those who are on the company’s payroll. Trainees and interns are not eligible for this compensation.

Tax treatment of gratuity

And, here comes the real challenge.

Warning: If you are easily bored by tax laws or they perplex you every single time, then DO NOT just give it to “your CA”. Rather, prepare a good coffee and peruse through the diverse collection of Fintuned’s articles.

The gratuity so received by the employee is taxable under the head ‘Income from salary’. In case gratuity is received by the nominee/legal heirs of the employee, the same is taxable in their hands under the head ‘Income from other sources’.

The tax treatment for an employee varies as per their employers. Here’s a brief idea of the tax treatment of gratuity for each category of employees in detail.

For the purpose of calculation of exempt gratuity, employees may be divided into 3 categories –

(a) Government employees

(b) Non-government employees covered under the Payment of Gratuity Act, 1972

(c) Non-government employees not covered under the Payment of Gratuity Act, 1972

In case of government employees – they are fully exempt from tax on gratuity. So, they have the maximum tax benefit when it comes to gratuity and a good amount is credited in their bank accounts (I have no comments on their work style 😛) and not even a single piece of this pie needs to be shared with the government. (Are you thinking of a career change)

In case of non-government employees covered under the Payment of Gratuity Act, 1972 

Maximum exemption from tax is the least of the list given below:

(i) Actual gratuity received;

(ii) Rs 10,00,000;

(iii) 15 days’ salary for each completed year of service or part thereof


  • Here, salary = basic + DA + commission (if it’s a fixed % of sales turnover).
  • ‘Completed year of service or part thereof’ means: full time service of > 6 months is considered as 1 completed year of service; < 6 months is ignored.
  • Here, number of days in a month is considered as 26. Therefore, 15 days’ salary is arrived as = Salary * 15/26 (This is very very important)

In case of non-government employees not covered under the Payment of Gratuity Act, 1972 –

Maximum exemption from tax is least of the 3 below:

(i) Actual gratuity received;

(ii) Rs 10,00,000;

(iii) Half-month’s average salary for each completed year of service (no part thereof)


  • Well, the definition of salary is similar to the abovementioned one.
  • Completed year of service (no part thereof) means: full time service of > 1 year is considered as 1 completed year of service. < 1 year is ignored.
  • Average salary =10 months’ salary (immediately preceding the month of leaving the job)/10

Note: This Rs 10-lakh ceiling is a lifetime exemption limit, it will be reduced by the tax-free exemption claimed from any previous employment.

As you may have noticed, the calculation of maximum exemption seems a bit complex. However, since we are at your side, you need not be stressed. In order to resolve any doubts, we will come up with a calculated example ASAP (within a day) to give you a broader understanding on tax treatment of gratuity.

Is your coffee over?

While I am not sure of the coffee, this post is certainly over and I sincerely hope that you gained a better perspective on Gratuity. If there are any questions/doubts/comments, please reach out to Or, litter the comments section 🙂


In a State of Tax SOS, Try ELSS!

The deadline is fast approaching. If you still haven’t done your tax planning, it’s time to gear up. There is no need to sweat because we are here just for your help (sounds awful lot like some marketing line, is it). Therefore, in the next three months, we will be focusing on a mix of tax related articles that will help you in efficient tax planning and save you some hard-earned money.

FU Tax!

So let us begin this series with an article contributed by Miss Riddhi Kharkia [ACA], a good friend, on Equity Linked Savings Scheme (ELSS).

First off, what is ELSS?

ELSS or Equity linked savings scheme is a type of mutual fund with a particular mode of making investments. It is a scheme that invests 65% of its corpus in equity and equity-linked products. As you can see, it is almost similar to any other mutual fund scheme with a slight variation in investing style. They are the favorite picks for tax planning because they offer dual benefits. Since the money is invested by the fund in equity i.e stock markets, investors get the benefit of capital appreciation plus dividend (if the scheme is dividend-oriented). In addition to that, investment in ELSS would is eligible for deduction to investors u/s 80C, which is capped to a maximum of Rs 1.5 Lakh. [Happy, huh ;)]

A detailed section on benefits.

When it comes to putting your money in any financial instrument, you want to do it with eyes wide open. So why not with ELSS?

To help you invest in this product with full-awareness, here is an elaborate section on benefits of investing in an ELSS.

  1. Since ELSS invests money in equity, it will help you to grow money when the stock market grows over a period of time. Currently, the SENSEX is on a decline owing to some heavy profit-booking activity and falling crude prices. As such, it is actually a good time to invest in the markets. In the later part of the article, I have provided my top three ELSS picks that could be your beginning point for taking the plunge!
  1. Investing in ELSS can help you in utilising tax exemption of Rs 1.5 Lakh in 80C, in case you have not been able to utilize it fully with traditional weapons like LIC premium and PPF/EPF investments. Take a stab at ELSS funds; you will like it 😉

ELSS comes with a lock-in period of 3 years only, the shortest among all tax saving options under Section 80C. In the case of SIPs, each installment is considered as a separate investment and will have a 3 year lock-in period from the date of such installment. The redemption on maturity is on first in first out basis.

After 3 years, you can remain invested for a longer period if you are pretty impressed with the returns and don’t feel like pulling out your money. A 3 year horizon is pretty decent time to help you grow money after considering market fluctuations as well. Additionally, a SIP gives you the benefit of rupee cost averaging. No, it is not some complex jargon but RCA simply implies that a SIP evens out the volatility in the markets and on an average, each installment gives you a hefty return.

  1. ELSS is the only tax saving investment that provides tax free returns for short period. Any returns received from equity funds after 1 year is tax free. Hence any dividends/returns/capital gains obtained from such funds are tax free.

When should you invest in ELSS?

Unlike a fixed deposit scheme or a regular insurance policy where investors can shell out money in lump-sum, this product requires a more mindful approach. Since it is an equity investment, It is prone to market risks and fluctuations and as such, the timing of the entry and exit is very important.

As I mentioned above, the best way to invest in a mutual fund (in this case, an ELSS fund) is creating a SIP because of its ability to generate steady returns over a specific horizon.

How to pick a winner?

Yes, this is a significant question because no one here wishes to lose money. While there are some definite parameters to look for, let me also point out that since an ELSS fund invests in equity, it has some inherent risk associated with itself. So the parameters you should ideally look out for are

  1. Long term performance of the fund.
  2. A glance at the holdings. (You can just take a look at the sectors it is invested in)
  3. Fund manager and performance of other funds managed by him/her.

Honestly, these parameters will give you a fair idea about the fund but as they say, research is never enough. Considering that, one may definitely divulge into further research on aspects like peer performance, expense ratio, leverage in the fund etc.


In comparison with other products under 80C, ELSS stands out both in terms of liquidity and stability. When compared with PPF, I believe PPF is a good investment option when you have surplus funds and you don’t need money in near future (a 15-year lock-in is huge). ELSS is viable when you want to maximize your returns along with tax savings in a shorter tenure.

As promised, here are my top three picks among ELSS funds that should help you get started in the least!

Note: Mutual funds generally offer two schemes – dividend (profits are given to investors from time to time) and growth (profits are ploughed back into the scheme leading to higher NAV). Here’s a look at the performance of the two types of funds.

*In no particular order*

  1. Reliance Tax Saver (ELSS) fund – Growth
  2. Axis Long Term Equity Fund – Growth
  3. L&T Tax Saver Fun – Cumulative

Disclaimer: It is your money. So, please read and invest!!