The
tax waivers meaning
refers to an exemption or reduction granted by the government on the payment of taxes. It is a legal provision that allows individuals or entities to avoid paying a certain amount or the entirety of their tax liabilities for a specified period or under specific conditions.
Now that I have explained what is a tax waiver, let me share what all it includes
:
Certain incomes, investments, or transactions are exempt from tax. For example, there are specific exemptions for certain agricultural income, income from specified investments like tax-free bonds, etc.
Taxpayers are eligible for deductions from their total income, it reduces the taxable amount. It includes those related to investments, expenses, and contributions.
In some cases, the government provides a tax holiday to certain industries or sectors to encourage economic growth.
During a tax holiday, businesses are not required to pay income tax for a specified period.
So now I hope
tax waivers meaning is clear to you.
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Before understanding tax waiver meaning let us learn what the term 'waiver' means. Basically, the term waiver means that the person does not have to agree to a particular law or a government agrees on giving up a right. So now let us understand what is tax waiver.
While filing for tax we have heard about tax exemption. Our tax gets reduced or deducted for certain if we are able to show papers to the government. This is what is tax waiver means.
Taxes are exempted in India in various categories based on the nature of income.
The most common tax exemption is the HRA exemption. Income Tax ACT allows tax waiver on the basis of the HRA which is paid. According to Section 10 (13A) of the IT Act and Rule 2A of the IT Rules, you can claim for tax exemption. Although we should remember that the entire HRA is not deductible. The employee has to pay rent and he cannot be the owner of the rental property he has rented if he wants to claim HRA. If the employee is living in his own house he/ she cannot claim HRA. The HRA exemption should be the minimum-
The employee must pay the actual HRA
The rent that is paid should be minus 10% of the basic salary
If you are living in the metro city it should be 50% of the basic salary and in other places, it should be 40% of the basic salary.
For more details read the answer on:
Can you claim HRA for rent paid in another city?
Also read:
Can I claim HRA and interest on housing loan?
There are many ways to waive off taxes but I have explained the most common way to waive the tax to make you understand the meaning. You can claim tax deductions while purchasing properties as well. Read more answers on:
How To Claim Tax Benefit For Joint Home Loan?
How To Claim Home Loan Interest In Income Tax Return?
I hope you understand the concept of tax waiver meaning.
What is tax waiver?
Anshuman
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2022-01-24T19:43:56+00:00 2022-01-25T11:56:39+00:00Comment
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