Slash your Tax this year.
Assessment Year 2015-16
Assessment Year 2015-16
TAX is indeed every citizens responsibility but we keep on finding way to evade it. On the other hand, there are certain ways by which we can save good amount of our income from paying to government.
There are
deduction that are eligibile under Section 80 of the Income Tax act.
Here I will
not take your time in illustrating all those sub-sections of Income Tax Act,
rather I will show you some ways by which we can save substantial part of our
income.Section 80C
This section has
been introduced by the Finance Act 2005. Broadly speaking, this section
provides deduction from total income in respect of various investments /
expenditures / payments.
·
Life Insurance Premium for individuals. The
policy must be in the assesse's or spouse's or any child's name. For a HUF, it
may be on life of any member of HUF. The 80C deduction is valid on insurance
policies purchased after 1st April, 2012 only if the premium is less than 10%
of sum assured. Benefits for existing purchased policies continue.
·
Sum paid under contract for deferred annuity
for an individual on the life of the assesse, spouse or any child.
·
Sum deducted from salary payable to Govt.
Servant for securing deferred annuity for self-spouse or child Payment limited
to 20% of salary.
·
Contribution made under Employee's Provident
Fund Scheme.
·
Contribution to PPF for individual can be in
the name of the assesse, the spouse or any child. For a HUF, it can be in the
name of any member of the family.
·
Contribution by employee to a Recognised
Provident Fund.
·
Sum deposited in 10/15 year account of Post
Office Saving Bank
·
Subscription to any notified
securities/notified deposits scheme. e.g. NSS
·
Subscription to any notified savings
certificate, Unit Linked Savings certificates. e.g. NSC VIII issue.
·
Contribution to Unit Linked Insurance Plan of
LIC Mutual Fund e.g. Dhanrakhsa 1989
·
Contribution to notified deposit
scheme/Pension fund set up by the National Housing Scheme.
·
Payments of instalments or part payments of
loan taken for buying or constructing residential house property. However, if
the property is transferred before the expiry of 5 years from the end of the
financial year in which possession of such property is obtained by him, the
aggregate amount of deduction of income so allowed for various years shall be
liable to tax in that year.
·
Contribution to notified annuity Plan of LIC
(e.g. Jeevan Dhara) or Units of UTI / notified Mutual Funds.
·
Note if in case of such contributions the
deduction under Section 80CCC has already been availed, the rebate under
Section 88 would not be allowable.
·
Subscription to units of a Mutual Fund
notified u/s 10(23D).
·
Subscription to deposit scheme of a public
sector, company engaged in providing housing finance.
·
Subscription to equity shares/ debentures
forming part of any approved eligible issue of capital made by a public company
or public financial institutions.
·
Tuition fees paid to any school, college,
university or other educational institution situated within India for the
purpose of full time education of any two children.
·
An additional deduction upto a maximum of Rs.
20,000/- will be available from Assessment Year 2011-12 (FY 2010-11) for
investment in Infrastructure Bonds.
"Deduction in respect of Premium Paid for
Annuity Plan of LIC or Other Insurer
Payment of premium for annuity plan of LIC or
any other insurer Deduction is available upto a maximum of Rs. 100,000.
The premium must be deposited to keep in
force a contract for an annuity plan of the LIC or any other insurer for
receiving pension from the fund. under construction.
Section 80CCD:
Deduction in respect of Contribution to
Pension Account
Remember: The limit for maximum
deduction available under Sections 80C, 80CCC and 80CCD (combined together) is
Rs. 1,50,000/- (Rs. one lac fifty thousand only).
Deductions on Savings Bank
Account
Section 80 TTA:
Deduction from gross total income in respect
of any Income by way of Interest on Savings account
Deduction from gross total income of an individual
or HUF, upto a maximum of Rs. 10,000/-, in respect of interest on deposits in
savings account ( not time deposits ) with a bank, co-operative society or post
office, is allowable w.e.f. 1st April 2012 (Assessment Year 2013-14).
Deductions on House Rent
Section
80GG:
Deduction in respect of House Rent Paid
Deduction available is the least of
·
Rent paid minus 10% of total income
·
Rs. 2000/- per month· 25% of total income, provided
· Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
· He should not be in receipt of house rent allowance.
· He should not have self occupied residential premises in any other place.
Deductions on Loan for
Higher Studies
Section 80E:Deduction in respect of Interest on Loan for Higher Studies
Deduction in respect of interest on loan
taken for pursuing higher education. The deduction is also available for the
purpose of higher education of a relative w.e.f. A.Y. 2008-09
Deductions on Rajiv Gandhi
Equity Saving Scheme (RGESS)
Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)
The Rajiv Gandhi Equity Saving Scheme (RGESS)
was launched after the 2012 Budget. Investors whose annual income is less than
Rs. 10 lakhs can invest in this scheme (up to Rs. 50,000) and get a deduction
of 50% of the investment.
So, if you invest Rs. 50,000 (maximum amount
eligible for income tax rebate is Rs. 50,000), you can claim a tax deduction of
Rs. 25,000 (50% of Rs. 50,000).
Deductions on Medical
Insurance
Section 80D:Deduction in respect of Medical Insurance
Deduction is available up to Rs. 20,000/- for
senior citizens and upto Rs. 15,000/ in other cases for insurance of self,
spouse and dependent children. Additionally, a deduction for insurance of
parents (father or mother or both) is available to the extent of Rs. 20,000/-
if parents are senior Citizen and Rs. 15,000/- in other cases. Therefore, the
maximum deduction available under this section is to the extent of Rs. 40,000/-.
From AY 2013-14, within the existing limit a deduction of upto Rs. 5,000 for
preventive health check-up is available
Deductions on Medical
Expenditure on Self or Dependent Relative
Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative
A deduction to the extent of Rs. 40,000/- or
the amount actually paid, whichever is less is available for expenditure
actually incurred by resident assessee on himself or dependent relative for
medical treatment of specified disease or ailment. The diseases have been
specified in Rule 11DD. A certificate in form 10 I is to be furnished by the
assessee from any Registered Doctor
Deductions on Medical
Expenditure for a Handicapped Relative
Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative
Deduction of Rs. 50,000/- is available on:
- expenditure incurred on medical
treatment, (including nursing), training and rehabilitation of handicapped
dependent relative.
- Payment or deposit to specified scheme
for maintenance of dependent handicapped relative.
Note: A person with 'severe disability' means
a person with 80% or more of one or more disabilities as outlined in section
56(4) of the 'Persons with disabilities (Equal opportunities, protection of
rights and full participation)' Act.
Deductions on Person
suffering from Physical Disability
Section 80U: Deduction in respect of Person suffering from Physical Disability
Deduction of Rs. 50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 100,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D
Deduction for donations
towards Social Causes
Section 80G: Deduction for donations towards Social Causes
The various donations specified in Sec. 80G are eligible
for deduction upto either 100% or 50% with or without restriction as provided
in Sec. 80G. 80G deduction not applicable in case donation is done in form of
cash for amount over Rs 10,000.
Donations with 100% deduction without any qualifying
limit:
·
National Defence Fund set up by the Central
Government
·
Prime Minister’s National Relief Fund
·
National Foundation for Communal Harmony
·
An approved university/educational
institution of National eminence
·
Zila Saksharta Samiti constituted in any
district under the chairmanship of the Collector of that district
·
Fund set up by a State Government for the
medical relief to the poor
·
National Illness Assistance Fund
·
National Blood Transfusion Council or to any
State Blood Transfusion Council
·
National Trust for Welfare of Persons with
Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
·
National Sports Fund
·
National Cultural Fund
·
Fund for Technology Development and
Application
·
Chief Minister’s Relief Fund or Lieutenant
Governor’s Relief Fund in respect of any State or Union Territory
·
the Army Central Welfare Fund or the Indian
Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh
Chief Minister’s Cyclone Relief Fund, 1996
·
The Maharashtra Chief Minister’s Relief Fund
during October 1, 1993 and October 6,1993
·
Chief Minister’s Earthquake Relief Fund,
Maharashtra
·
Any fund set up by the State Government of
Gujarat exclusively for providing relief to the victims of earthquake in
Gujarat
·
Any trust, institution or fund to which
Section 80G(5C) applies for providing relief to the victims of earthquake in
Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
·
Prime Minister’s Armenia Earthquake Relief
Fund
·
Africa (Public Contributions — India) Fund
Donations with 50% deduction without any qualifying
limit.
·
Jawaharlal Nehru Memorial Fund
·
Prime Minister’s Drought Relief Fund
·
National Children’s Fund
·
Indira Gandhi Memorial Trust
·
The Rajiv Gandhi Foundation
Donations to the following are eligible for 100%
deduction subject to 10% of adjusted gross total income
·
Government or any approved local authority,
institution or association to be utilised for the purpose of promoting family
planning
·
Donation by a Company to the Indian Olympic
Association or to any other notified association or institution established in
India for the development of infrastructure for sports and games in India or
the sponsorship of sports and games in India.
Donations to the following are eligible for 50% deduction
subject to 10% of adjusted gross total income
·
Any other fund or any institution which
satisfies conditions mentioned in Section 80G(5)
·
Government or any local authority to be
utilised for any charitable purpose other than the purpose of promoting family
planning
·
Any authority constituted in India for the
purpose of dealing with and satisfying the need for housing accommodation or
for the purpose of planning, development or improvement of cities, towns,
villages or both
·
Any corporation referred in Section 10(26BB)
for promoting interest of minority community
·
For repairs or renovation of any notified
temple, mosque, gurudwara, church or other place.
Deductions on Income by way
of Royalty of a Patent
Section 80RRB: Deduction in respect of any Income by way of Royalty of a Patent
Deduction in respect of any income by way of
royalty is respect of a patent registered on or after 01.04.2003 under the
Patents Act 1970 shall be available upto Rs. 3 lacs or the income received,
whichever is less. The assessee must be an individual resident of India who is
a patentee. The assessee must furnish a certificate in the prescribed form duly
signed by the prescribed authority.
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