Download Automated Master of Form 16 Part A&B for FY 2014-15 [This Excel Utility can prepare at a time 50 employees Form 16 Part A&B for FY 2014-15 with all amended Tax Slab and Section]
Brief the tax section with deduction
Entertainment Allowance:
The first deduction which you claim from salary is Entertainment Allowance. Entertainment allowance received is first included in the employee’s income and then a deduction is allowed in case of government employees, for a sum equal to 1/5th of salary (excluding all allowances, benefits and other perquisites) or Rs. 5,000, whichever is less.
Professional Tax:
Tax on employment by whatever name called, levied by a State under Article 80C 276 of the Constitution shall be allowed as a deduction. [Sec. 16(iii)]
Deductions Permissible under Chapter VI-A:
Certain deductions are available from the gross taxable income, under sections 80C to 80U. Important deductions are:
Deposit/Contribution to Life Insurance Premium, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, bank deposits under notified scheme, 5 years POTD, Senior Citizen Saving Scheme, etc. [Sec. 80C]
Contribution to LIC Pension Plan (Jeevan Suraksha) or Pension Fund of other insurance companies. [Sec. 80CCC]
Contribution to notified Pension Scheme by employees of Central Government or any other employer or by any other individual. [Sec. 80CCD]
Investment in listed equity shares (w.e.f 1-4-2014) A.Y.2014-15 [or listed units of equity-oriented mutual funds] under Rajiv Gandhi Equity savings Scheme. [Sec. 80CCG]
Payment of Medical Insurance Premia (Mediclaim) or contribution to Central Government Health Scheme. [Sec. 80D]:
Deductible upto a maximum of Rs. 15,000 (Rs. 20,000 in case the person insured is a senior citizen). Besides, an additional deduction upto Rs. 15,000 (Rs. 20,000 in case the person insured is a senior citizen) [The age limit for a senior citizen from A.Y.2013-14 is 60 years or more] shall be allowable in respect of medical insurance premium for parent(s).
W.e.f. A.Y. 2013-14, deduction can also be availed for any payment for preventive health check-up of the assesses, his family and parents, subject to a limit of Rs. 5,000 within the aforesaid ceilings.
Expenditure on medical Treatment etc. and deposit for maintenance of handicapped dependents. [Sec. 80DD]:
A deduction is allowed to compensate for any expenditure incurred by an assesses, during a year, for the medical treatment (including nursing), training and rehabilitation of one or more handicapped relatives wholly dependent on him, and for amount deposited in an approved scheme of LIC or UTI, for the benefit of a handicapped dependent. A fixed deduction of Rs. 50,000 is allowable, in aggregate for any or both the purpose specified above, irrespective of the actual amount of expenditure incurred.
Expenditure or Medical Treatment of assess/dependant relative [Sec. 80DDB]:
Deduction for the amount of expenditure incurred or Rs. 40,000, whichever is less, is allowable for any year during which expenditure is actually incurred for the medical treatment of specified diseases or ailments for the assesses himself or a dependent relative. If the patient is a senior citizen the deduction allowable shall be the expenditure incurred or Rs. 60,000 whichever is less. Besides, any amount received under a medical insurance policy shall be reduced from the amount of deduction allowable.
Interest on Loan taken for Higher Education. [Sec. 80E]:
Any amount paid by way of interest on a loan taken from any financial institution or any approved charitable institution for the purpose of pursing his higher education, is deduction without any limit.
Interest on Loan taken for first residential house. [Sec. 80EE]:
Deduction is allowable for interest on housing loan from a bank/housing finance company, for allowable is Rs. 1, 00,000, subject to specified conditions. The deduction is allowable for A.Y. 2014-15 and A.Y. 2015-16 only.]
Donation for Charitable Purposes [Sec. 80G]:
There are a number of donations in respect of which deduction is permissible under Sec. 80G. Deduction @ 50% is available for donation to Jawaharlal Nehru Memorial Fund, Prime Minister Drought Relief Fund, [National Children’s Fund] Indira Gandhi Memorial Trust or Rajiv Gandhi Foundation etc. 100% deduction is allowed for donations to National Defense Fund, Prime Minister’s National Relief Fund, [National Children’s Fund,]National Foundation for Communal Harmony, Chief Minister’s/Lt. Governor’s Relief Fund etc. Deduction is granted subject to the prescribed maximum ceiling and on furnishing of appropriate certificate from the done organization.
Donation of a sum exceeding Rs. 10,000 shall be eligible for deduction, only if it paid by a mode other than cash.
Expenditure on Rent. [Sec. 80GG]:
Rent paid by an assesses not owning a house and not in receipt of house rent allowance u/s 10(13A) for residential accommodation whether furnished or unfurnished, is deductible subject to the prescribed ceilings. [w.e.f 1-4-2014, for A.Y. 2014-15]
Donations to specified institutions/associations for Research or for Rural Development [Sec. 80GGA]:
Donation of a sum exceeding Rs. 10,000 shall be eligible for deduction, only if it paid by a mode other than cash.
Physical Disability [Sec. 80U]:
Rs. 50,000 for disability and Rs. 1, 00,000 for severe disability.
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