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Tax Computed Sheet

While Finance Minister termed Budget 2015-16 as a growth oriented one with due attention to common and poor in India, there were not much changes as far as Income Tax 2015-16 in respect of salaried employees concerned. Personal Income Tax Rates were untouched and as a result Salaried Class will have to pay same Income Tax that they paid last year.

However, following changes have been effected with regard to deductions / exemption allowed from total income of Salaried Employees under various Sections Income Tax Act by which quantum of Income Taxpayable this year may get reduced if an employee is eligible for such deduction / exemption.

Sukanaya Samriddhi Scheme made eligible for deduction under Section 80C Max Rs. 1.5 Lakh

Individuals who are subjected to Personal Income Tax Provisions can now save Sukanaya Samriddhi Scheme, a newly started savings scheme with a view to encourage savings in the name of girl child’s education and marriage, for the purpose of claiming deduction under Section 80C

Additional Income Tax Exemption in respect of Health Insurance Premium under Section 80 D:

Medical expenditure is getting increased day by day and however awareness towards Health Insurance is very minimal in India. In order to make Health Insurance Schemes more attractive and to cover entire health insurance premium paid by an employee for the purpose of deduction under Section 80 D, limits of Health Insurance Premium for covering individual and a senior citizen for the Income Tax Exemption have been increased to Rs. 25,000 and Rs. 30,000 respectively.

Moreover, as far as very senior citizens (aged 80 years or more) are concerned any payment made on account of medical expenditure up to Rs. 30,000 would be eligible for deduction under Section 80D.

More Deduction under Section 80DD for very senior citizens (increased from Rs. 50,000 to Rs. 80,000)

While an individual is eligible to deduct up Rs. 50,000 which was spent towards medical expenditure under Section 80DD, budget 2015 has brought out an additional provision under this section to allow deduction of Rs. 80,000 for very senior citizens.

The condition of producing certificate from a medical doctor under Section 80DDB has been relaxed and it is enough the tax payer produces a prescription from a specialist doctor.

Additional Income Tax Exemption for Persons with disability under Section 80U:

In view of the rising cost of medical care and special needs of a disabled person, it is proposed to amend section 80DD and section 80U so as to raise the limit of deduction in respect of a person with a disability from Rs. 50,000 to Rs. 75,000.

It is also to raise the limit of deduction in respect of a person with severe disability from Rs. 1 lakh to Rs. 1.25 lakhs.

Limit under Section 80CCD and Section 80CCC for contribution in NPS and other pension funds raised

An additional deduction under section 80CCD to the extent of Rs. 50,000 has been introduced for contributions under the National Pension Scheme.

Deduction towards Transport Allowance increased Rs. 1600 per month

The long due increment in the monthly travel allowance has now finally materialized. In order to commensurate with the increased costs of transportation, it is now proposed to be double the original transport allowance and it shall stand at Rs. 1,600 per month. And more than 80% Rs. 3200/- P.M.

On September 19, 2015 by www.taxexcel.net

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Under Section 80C :-

As per the Income Tax Act and further amended Income Tax Department's time to time Notification and amended Section Under Section 80C is given below:-

The total limit under this section is Rs 1.5 lakh. Included under this heading are many small savings schemes like NSC, PPF and other pension plans. Payment of life insurance premiums and Sukanya Samriddhi Account  are also eligible for deduction under Section 80C

Most of the Income Tax payee try to save tax by saving under Section 80C of the Income Tax Act.  However, it is important to know the Section in toto so that one can make best use of the options available for exemption under income tax Act.   One important point to note here is that one can not only save tax by undertaking the specified investments, but some expenditure which you normally incur can also give you the tax exemptions.

Besides these investments, the payments towards the principal amount of your home loan are also eligible for an income deduction. Education expense of children is increasing by the day. Under this section, there is provision that makes payments towards the education fees for children eligible for an income deduction

Sec 80C of the Income Tax Act is the section that deals with these tax breaks. It states that qualifying investments, up to a maximum of Rs. 1.5 Lakh, are deductible from your income. This means that your income gets reduced by this investment amount (up to Rs. 1.5 Lakh), and you end up paying no tax on it at all!

 80 C Deduction at a glance as per Finance Budget 2015

 

Provident Fund (PF) & Voluntary Provident Fund (VPF)and (PF) is automatically deducted from your salary. Both you and your employer contribute to it. While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF). Current rate of interest is 8.5% per annum (p.a.) and is tax-free.

Public Provident Fund (PPF):  Maximum Limit raised up to Rs. 1.5 Lakh

Life Insurance Premiums: Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. Please note that life insurance premium paid by you for your parents (father / mother / both) or your in-laws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) – even insurance bought from private players can be considered here.

Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C.

Home Loan Principal Repayment: The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.The principal component of the EMI qualifies for deduction under Sec 80C. Even the interest component can save you significant income tax – but that would be under Section 24 of the Income Tax Act. Please read “Income Tax (IT) Benefits of a Home Loan / Housing Loan / Mortgage”, which presents a full analysis of how you can save income tax through a home loan.

Stamp Duty and Registration Charges for a home: The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.

National Savings Certificate (NSC): National Savings Certificate (NSC) is a 6-Yr small savings instrument eligible for section 80C tax benefit. Rate of interest is eight per cent compounded half-yearly, i.e., the effective annual rate of interest is 8.16%. If you invest Rs 1,000, it becomes Rs 1601 after six years. The interest accrued every year is liable to tax (i.e., to be included in your taxable income) but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.

Pension Funds – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it maeans that the total deduction available for 80CCC and 80C is Rs. 1.5 Lakh.This also means that yourinvestment in pension funds upto Rs. 1.5 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed Rs. 1.5 Lakh.

5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.

Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. Current rate of interest is 9% per annum payable quarterly. Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax.

5-Yr post office time deposit (POTD) scheme: POTDs are similar to bank fixed deposits. Although available for varying time duration like one year, two year, three year and five year, only 5-Yr post-office time deposit (POTD) – which currently offers 7.5 per cent rate of interest –qualifies for tax saving under section 80C. Effective rate works out to be 7.71% per annum (p.a.) as the rate of interest is compounded quarterly but paid annually. The Interest is entirely taxable.

Sukanya Samriddhi Account :- Newly introduce in the Budget 2015 for Minor Girl Child below 10 Years. 

Children Education Fees :- children’s education expense (for which you need receipts), that can be claimed as deductions under Sec 80C max Rs. 1,00,000/- p.a.

On June 09, 2015 by www.taxexcel.net

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No changes the income tax rates or increasing the exemption limits for individuals, Union finance minister Mr. Arun Jaitley on Saturday proposed increasing the range of tax deductible investments/spend.

Presenting the budget proposals for 2015-16 in the Lok Sabha, Mr.Jaitley said the government is proposing to rationalise various tax exemptions and incentives to reduce tax disputes and improve tax administration.

The proposals mentioned by the finance minister made clear the government's focus on enlarging the tax-exempt investments/spend.

Mr.Jaitley said the proposals would result in tax deductions to the tune of around Rs 440,000 crore.

Mr.Jaitley said in order to encourage savings and to promote health care among individual tax payers, it is proposed to increase the limit of deduction on account of health insurance premium from Rs.15,000 to Rs.25,000 - for senior citizens this limit is to be increased from Rs.20,000 to Rs.30,000.

For senior citizens above the age of 80 years - who are not eligible to avail of health insurance - deduction will be allowed for medical expenses up to Rs 30,000.

The deduction limit of Rs 60,000 on expenditure on account of specified diseases -- like cancer -- will be enhanced to Rs 80,000 in the case of senior citizens.

TheTax Section 80U have raised up to Rs. 75,000/-  for differently-abled persons, increasing the limit from Rs 50,000 to Rs 75,000.

It is also  increase the limit of tax deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.

According to Jaitley, investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C of the income tax and any payment from the scheme shall not be liable to tax.

Limit on deduction on account of contribution to a pension fund and the new pension scheme is  increased from Rs 1 lakh to Rs 1.5 lakh. Additional deduction of Rs 50,000 will be allowed for contribution to the new pension scheme under section 80 CCD of Income Tax Act -- increasing the exemption from Rs 1 lakh to Rs 1.5 lakh.

Mr.Jaitley also doubled the transport allowance exemption to Rs 1,600 per month.

According to him, the details of tax deductions proposed are as follows:

Deduction u/s 80C - Rs.150,000; Deduction u/s 80CCD - Rs.50,000; Deduction on account of interest on house property loan (Self-occupied property) - Rs.200,000; 

Deduction u/s 80D on health insurance premium - Rs.25,000; Exemption of transport allowance - Rs 19,200/-

On March 27, 2015 by www.taxexcel.net

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