Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees under Section 10, Section 24, Section 89(1), Chapter VIA, and Section 87A.
Income Tax Rate 2016-17
TAXABLEINCOME RANGE
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RATE OF INCOME TAX
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Up to RS.2,50,000
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NIL
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Rs.2,50,001 to Rs.5,00,000
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10% of the amount by which the income exceeds Rs.2,50,000
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Rs.5,00,001 to Rs.10,00,000
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Rs.25,000 plus 20% of the amount by which the income exceeds Rs.5,00,000
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Above Rs.10,00,001
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Rs.1,25,000 plus 30% of the amount by which the income exceeds Rs.10,00,000
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Education Cess
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3% on Total Income Tax Payable
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Section 10 (13A) – Exemption in respect of HRA:
Under Sec. 10(13A), an employee who is in receipt of House Rent Allowance (HRA) can claim exemption, if he does not live in his own house, and pays rent in excess of 10% of his salary for his residential accommodation.
Exemption u/s 10(13A) is the least of the following
1. Actual amount of HRA received
2. 50% (for Chennai, Mumbai, Kolkata, and Delhi) / 40% (for other places) of the Salary for the relevant period
3. Rent paid Less 10% of Salary for the relevant period.( Click here to Download Automatic H.R.A.Exemption Calculation U/s 10(13A)
Download and prepare at a time 100 employees Income Tax Form 16 Part A&B for the Financial Year 2016-17.[This Excel Utility can prepare at a time 100 employees Form 16 Part A&B. Who have not able to download the Form 16 Part A from the TRACES Portal they can use this Excel utility]
Section 87A – Rebate of Income Tax for Taxable income up to Rs. 5 Lakh
Finance Act 2016 provides for a rebate of Income up to Rs. 5000/- in respect of Persons who have Taxable not exceeding Rs. 5 lakh.
Section 10(14) – Transport Allowance and Children Education Allowance
Under Section 10(14), the Budget FY 2016-17 lets you claim Rs. 19,200 tax exemption as transport allowance and Rs. 2,400 tax exemption as Children Education Allowance (CEA) in a financial year.
Section 24(b) – Home Loan
If you have taken a Home Loan, then you can claim a tax deduction on the interest component of the loan under Section 24(b). For self-occupied properties, you can benefit from deductions of up to Rs. 2,00,000.
Section 89(1) – Income Tax relief in respect of Arrears of Salary pertaining to previous years ( Download Automated Arrears Relief Calculator with Form 10E for F.Y.2016-17]
If arrears of salary has been received in the financial year 2016-17 related to previous years then Relief of Income Tax can be claimed u/s 89(1) by accounting income from arrears in respective years on the notional basis.
Deductions allowed under Chapter VI-A of Income Tax Act
Deduction Limit – Sec 80CCE. As per Section 80CCE, the deduction can be claimed up to Rs. 1,50,000 for the payments / contributions made under Sections 80C, 80CCC and 80CCD
Section 80C – Subject to the overall limit of Rs. 1,50,000 under Section 80CCE, Additional deduction U/s 80CCD(2) & U/s 80CCD(1B)
For investments in specified schemes, saving instruments etc.
1. Life insurance premium for policy:
a) in the case of an individual, on the life of assessee, assessee’s spouse and any child of assessee
b) in the case of HUF, on the life of any member of the HUF
a) in the case of an individual, on the life of assessee, assessee’s spouse and any child of assessee
b) in the case of HUF, on the life of any member of the HUF
2. The sum paid under a contract for a deferred annuity:
a) in the case of an individual, on the life of the individual, individual’s spouse and any child of the individual (however, the contract should not contain an option to receive a cash payment in lieu of annuity)
b) in the case of HUF, on the life of any member of the HU
a) in the case of an individual, on the life of the individual, individual’s spouse and any child of the individual (however, the contract should not contain an option to receive a cash payment in lieu of annuity)
b) in the case of HUF, on the life of any member of the HU
3. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]
4. Contributions by an individual made under Employees’ Provident Fund Scheme
5. Contribution to Public Provident Fund Account in the name of:
a) in the case of an individual, such individual or his spouse or any child of such individual
b) in the case of HUF, in the name of any member thereof
a) in the case of an individual, such individual or his spouse or any child of such individual
b) in the case of HUF, in the name of any member thereof
6. Contribution by an employee to a recognized provident fund
7. Contribution by an employee to an approved superannuation fund
8. Subscription to any notified security or notified deposit scheme of the Central Government.
For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction. An amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.
For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction. An amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.
9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
10. Contribution for participation in unit-linked Insurance Plan of UTI:
a) in the case of an individual, in the name of the individual, his spouse or any child of such individual
b) in the case of an HUF, in the name of any member thereof
a) in the case of an individual, in the name of the individual, his spouse or any child of such individual
b) in the case of an HUF, in the name of any member thereof
11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:
a) in the case of an individual, in the name of the individual, his spouse or any child of such individual
b) in the case of an HUF, in the name of any member thereof
a) in the case of an individual, in the name of the individual, his spouse or any child of such individual
b) in the case of an HUF, in the name of any member thereof
12. Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
13. Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full-time education of any 2 of his/her children
14. Certain payments for purchase/construction of residential house property
15. Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns, and villages, or for both
16. Sum paid towards notified annuity plan of LIC or another insurer
17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
18. Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
20. Subscription to any units of any approved mutual fund referred to in section 10(23D), provided an amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above. 21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.
21. Subscription to notified bonds issued by the NABARD.
22. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
23. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)
Section 80CCC – Subject to the overall limit of Rs. 1,50,000 under Section 80CCE
Contribution to certain specified Pension Funds such as LIC or other authorised Insurance Companies
Section 80CCD(1) – – Subject to the overall limit of Rs. 1,50,000 under Section 80CCE
Deduction in respect of contributions to National Pension Scheme / System (NPS) notified by Central Government
Limit: 10% of salary in case of employees, 10% of gross total income in case of others
Section 80CCD(1B)
Deduction in respect of the deposit under a pension scheme notified by Central Government (NPS) up to Rs. 50,000/-
Section 80CCD(2)
Deduction in respect of employer contributions to NPS – National Pension Scheme / System – This deduction is available over and above the Rs. 1.5 lakh limit
Section 80 CCG
Amount invested in listed shares covered by Rajiv Gandhi Equity Equity Saving Scheme. Deduction of 50% of total investment subject to the maximum of Rs. 25,000 is allowed for 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired
Section 80D
Amount invested in Health Insurance
In the case of Individual, an amount paid: a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen) b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 30,000 if the parent is a senior citizen or very super senior citizen) In the case of HUF, up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen).
The aggregate amount of deduction cannot exceed Rs. 60,000/- in the case of an individual.
The aggregate amount of deduction cannot exceed Rs. 60,000/- in the case of an individual.
Section 80DD
Expenditure incurred for the medical treatment of a dependent (spouse, children, parents, brothers and sisters of the individual) up to Rs. 75,000 (Rs. 1,25,000 in case of severe disability)
Section 80DDB
Expenditure incurred for medical treatment of specified diseases for self, or wholly dependent spouse, children, parents, brothers and sisters up to Rs. 40,000 (Rs. 60,000 in case of senior citizen and Rs. 80,000 in case of very senior citizen)
Section 80E
Interest paid on Educational Loan with no limit
Section 80EE
Interest on loan for acquiring residential house property, sanctioned during the financial year 2016-17. The Housing Loan availed should be up to Rs. 35 lakh and should have been availed in the year 2016-17
Section 80G
Deduction in respect of donations to certain funds, charitable institutions, etc.
Section 80GG
Rent paid for residential accommodation from the income of Tax Payer/assessee who is not in receipt of HRA
Least of the following shall be exempt from tax: a) Rent paid in excess of 10% of total income*;
b) 25% of the Total Income; or
c) Rs. 5,000 per month.
b) 25% of the Total Income; or
c) Rs. 5,000 per month.
Section 80 TTA
Interest on Savings Bank accounts subject to the maximum of Rs. 10,000
Section 80U
Exemption of income tax for an income up to Rs. 75,000 for persons with disability (Rs. 1,25,000 in case of persons with severe disability)
Source: Incometaxindia.gov.in
