To start with, let the explain what exactly has changed in terms of taxation from the year (i.e.AY 2016-17) As per Budget 2015:
- Tax slabs have not changed
- investment limit under sec. 80C also same as previous year
All changes this budget have been beneficial for the tax payer. If you are
already aware of all the provision for saving income tax, you can skip the
remaining part and download Advance income taxcalculator for FY 2015-16 to compute your income tax liability (or TDS) basis your
salary or business income. Others, do read on to know all the different tactics
you can use to save on income tax.
Income Tax Slabs for the Financial Year 2015-16
Income tax slabs have been changed this year. Standard deduction limit has
been raised to Rs. 2,50,000 for both Male and Female assesses.
1) In Case of General Assesses (Both Male & Female):
Income Bracket
|
Rate
|
0 to Rs. 2,50,000
|
0 %
|
Rs. 2,50,001 to Rs. 5,00,000
|
10 %
|
Rs. 5,00,001 to Rs. 10,00,000
|
20 %
|
Above Rs. 10,00,000
|
30 %
|
2) In Case of Senior Citizens (Age above 60 years but below 80
years):
Income Bracket
|
Rate
|
0 to Rs. 3,00,000
|
0 %
|
Rs. 3,00,001 to Rs. 5,00,000
|
10 %
|
Rs. 5,00,001 to Rs. 10,00,000
|
20 %
|
Above Rs. 10,00,000
|
30 %
|
3) In Case of Very Senior Citizens (Age 80 years and above):
Income Bracket
|
Rate
|
0 to Rs. 5,00,000
|
0 %
|
Rs. 5,00,001 to Rs. 10,00,000
|
20 %
|
Above Rs. 10,00,000
|
30 %
|
Income Tax Exemptions:
1) Section 80 C Limit – Unchanged this year (Max Rs. 1,50,000)
- Deduction on premium paid for a life insurance policy, taken after 1 April 2012, will be allowed only if yearly premium is less than 10% of sum assured. If its more than 10% then it will be not eligible for deduction u/sec. 80C
- ELSS (Mutual Fund)
- PPF (upto Rs. 1,50,000)
- EPF
- FD for 5 years
- Pension Plans
- NSC
- Sukanya Samriddhi Account ( Minor Girl Child Scheme) Max Rs. 1.5 Lakh
- Post Office SB
- Infrastructure Bonds
- Expenditure on Children Education (For upto 2 children only for full time education)
- Tuition fees Maximum allowed is Rs. 1,50,000
- Housing loan principal
- Deferred Annuity
- Approved Super Annotation Fund
- 80CC Raised Up to Rs. 1,50,000 [ Pension Fund ]
2) Section 80CCD - Changed this year
Deduction under this section can be claimed only if the contribution to your
NPS account is made by your employer and the
deduction is limited to a maximum of 10% of your basic salary. Returns on
NPS are tax free, but withdrawal is still taxable. The deduction under sec
80CCD is over and above the deduction available under sec 80C Max Rs.1.5 Lakh
3) Section 80 D –Changed this year
Deduction under section 80D
- Deduction of Rs. 25000/- is allowed if the same is paid as premium for Medical Insurance taken for self / dependents or towards preventive health check-up (max Rs. 5000). In case any of self / dependents is a senior citizen, the deduction allowed is Rs. 30000/-
4) Section 80DD – Unchanged this year
Deduction under section 80DD
- Exemption given for expenditure made for a disabled dependant towards Medical Treatment/Training/Rehabilitation. It also includes the LIC/Insurance premium paid towards maintenance of such dependant.
- Maximum deduction allowed is Rs. 50,000/- in case of normal disability and Rs. 1 Lakh in case of severe disability.
5) Section 80DDB - Unchanged this year
Deduction under section 80DDB
- Exemption given for expenditure incurred on specified disease or ailments such as cancer/aids.
- Maximum deduction allowed is Rs. 40,000/-. In case of Senior Citizens, maximum deduction allowed is Rs. 60,000/-
List of ailments covered:
(i) Neurological Diseases where the disability level has been
certified to be of 40% and above,
- Dementia ;
- Dystonia Musculorum Deformans ;
- Motor Neuron Disease ;
- Ataxia ;
- Chorea ;
- Hemiballismus ;
- Aphasia ;
- Parkinsons Disease ;
(ii) Malignant Cancers ;
(iii) Full Blown Acquired Immuno-Deficiency Syndrome
(AIDS) ;
(iv) Chronic Renal failure ;
(v) Hematological disorders :
- Hemophilia ;
- Thalassaemia.
6) Section 80E - Unchanged this year
Deduction is allowed for repayment of interest component
of Higher Education loan. All education after Class 12 is allowed, either
vocational or Fulltime. But should be from a school/institute/university
recognized by the government.
7) Section 80G - Unchanged this year
- Contribution to exempt charities – 25/50/75/100% depending on the charity and as per approval
- 100% exemption on donation to political parties
8) Section 80U - Changed this year
- Deduction upto Rs. 75,000/- is allowed in case of Permanent Disability.
- In case of Permanent Disability exceeding 80%, maximum deduction allowed is Rs. 1,00,000/-.
9) Section 24B & Section 80EE - Unchanged this year
- Housing loan interest. Maximum allowed limit raised to – Rs. 2,00,000 (for loans taken after 1 April 1999. For loans before that Maximum Investment Limit was 30,000).
- Additional deduction of Rs. 1 lac will be applicable to persons taking first home loan of up to Rs. 25 lacs for property worth upto Rs. 40 lac. For such persons, the total deduction will be Rs. 2.5 lacs (Rs. 1.5 lac available under section 24(1)(vi) and Rs. 1 lac available under this new section 80EE).10) Superannuation - Unchanged this year
Any contribution made by a company to superannuation fund upto Rs. 1,00,000
tax free in the hands of the employee.
11) Conveyance/Transport Allowance - Changed this year
Any Conveyance / Transport Allowance given to an employee is tax free upto
Rs. 1600 /- P.M.
12) Medical Allowance - Unchanged this year
Any Medical Allowance given to an employee is tax free upto Rs. 15,000 /-
(Supporting Bills required).
13) HRA - Unchanged this year
Any House Rent Allowance given to an employee is tax free upto the minimum
value of the following conditions (subject to – when an employee can produce
rent paid receipts from landlord for the period and if the employee has not
availed of tax exemptions for home loan interest / principal repayment):
- 50% of Annual Basic (40% of Annual Basic in case of non-metros)
- Actual HRA received
- Rent Paid – (10% of Annual Basic)
14) Professional Tax - Unchanged this year
Any Professional Tax deducted from an employee’s salary can be reduced from
the annual salary income to arrive at taxable salary.
15) Provident Fund - Unchanged this year
Provident Fund contributions (under section 80 C and subject to an overall
investment limit of Rs. 1,50,000 ) deducted from an employee’s salary are tax
exempt.
16)Sukanya Samriddhi Account for Monor Girl Child under 12 years - Newly Include this deduction U/s 80C, Max Limit Rs. 1,50,000/-
As per the Finance Budget 2015 newly include in the Section 80C in the name Sukanya Samriddhi Account which only availed below 12 years Girl Child.
17) Section 80TTA – Savings Bank Interest - Unchanged this year
No tax will be charged on interest earned on balance in savings bank account
subject to a maximum of Rs. 10,000 per year.
