Click here to download All in One TDS on Salary for Govt and Non-Govt employees for the FY 2014-15 with all new amended Income Tax Section and new Slab ( This Excel Utility can use both of Govt and Non-Govt Employees and this utility can prepare at a time Tax Compute Sheet + Individual Salary Structure + Individual Salary Sheet for Print + HRA Calculation + Automatic Form 16 Part A&B and Form 16 Part B for the Financial Year 2014-15)

taxexcel.net: Tells you all about Income Tax section 80C and various investment options and deductions available in easy to understand graphical format

           

As the end of financial year approaches investors are suddenly woken up to the existence of Income Tax department. If you haven’t done the tax planning in advance then this is the time to carefully select the investment products under section 80C. A wise investment will not only lessen the tax burden but also give some good returns.

          

What is Section 80C?

Under section 80C of the Income Tax Act, certain investments are deductible (up to a maximum of Rs 1.5 lakh) from gross total income. This tax exemption is available across individual tax slabs. If you earn Rs 5 lakhs per annum and make investments of Rs 1.5 lakh in 80c instruments then the taxable amount will be Rs 3.5 lakhs. It is not at all complicated and the following chart simplifies even more.

  

   

Fixed Income instruments, which offer fixed returns, are suitable for risk averse investors who want to protect their investment from the uncertainties of the market. All these instruments are backed by the Government and hence they are risk free. But the returns may just  beat the inflation and you should not expect any meaningful appreciation in investments. Per annum returns will vary from 6% to 10% depending upon the instrument you choose.

Market Linked: Market linked products are ELSS (Equity Linked Saving Scheme) and ULIPs (Unit Linked Insurance Plan). These instruments invest the money in equities (Except some debt based ULIPs) and hence there is an inherent market risk. However it has been seen that over a long period return from equities beat inflation by a comfortable margin and create wealth for the investor.

ELSS is similar to mutual fund except that it has a lock in period of 3 years. The money is invested into diversified stocks by a fund manager/AMC. On the other hand ULIPs are a form of life insurance where a part of the premia is invested into equity or debt market (or combination of two). ULIPs usually have longer lock-in periods.

  

ELSS: ELSS has some advantages over other investments and people with moderate to high risk appetite should consider them seriously. Some key features of ELSS are:

  

· Lock-in period of 3 years.

· SIP (Systematic Investment Planning) available

· Diversified equity investments

· Different funds for different risk profiles in terms of exposure to large cap, mid cap and small cap

· Dividend paid out is tax exempt

· At maturity the proceeds are exempt from long term capital gains tax

Here is the list of best ELSS (Tax Saving Mutual Funds)  to invest this financial year. If you are looking for something new to try in terms of trading, trading foreign currency may be a fun idea. FXCM provides an easy to use, state art forex trading platform.

To sum up

Section 80C benefit has been provided to encourage long term savings and investments. You should choose a combination of fixed income and market linked investments depending on your age and risk profile. For example if you are in your 20s, give a higher allocation to ELSS whereas if you are nearing retirement, concentrate more on fixed income investments.

  

But remember that Investment is to be done keeping your overall financial situation and future goals. Tax advantage is just an add-on benefit. Never make investments just for saving tax.

On September 16, 2014 by www.taxexcel.net

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Click here to Download the Automated All in One TDS on Salary for Central & State Employees ( Prepare at a time Tax Calculation + Individual Salary Sheet + Salary Structure + HRA Exemption + Form 16 Part A&B and Part B for the Financial year 2014-15)

Income Tax 2014-15 – what are all the changes affecting Salaried Employees ? – Highlights of Changes announced in Budget 2014 and Finance Bill 2014 as far as Income Tax Provisions relating to Salaried Employees, Tax Rebate Rs. 2,000/-U/s 87A is available in the Financial Year 2014-15 and up to Rs. Ten Thousand can get relief from Savings Bank Interest also.Extend the Limit of Section 80 C from 1 lakh to 1 lakh and fifty thousand from this Financial Year.

 Income Tax 2014-15 (Assessment year 2015-16)

In case of individual (other than II and III below) and HUF

 II. In case of an individual resident who is of the age of 60 years or more at any time during the previous year:-

Income-tax Act relating to deductions from income from house property (section 24)

The existing provisions contained in section 24 provide that in case of a self-occupied property where the acquisition or construction of the property is completed within three years from the end of financial year in which the capital is borrowed, the amount of deduction under that clause shall not exceed one lakh fifty thousand rupees.

It is proposed to amend the second proviso to clause (b) of section 24, so as to increase the limit of deduction on account of interest in respect of property referred to in sub-section (2) of section 23 to two lakh rupees.

Income Tax Exemption under Section 80 C in respect of Savings / Insurance Premium / Housing Loan Principal etc

Clause 27 of the Bill seeks to amend section 80C of the Income-tax Act relating to deduction in respect of life insurance premium, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.

The existing provisions of sub-section (1) of section 80C provide for deduction of Rs.one lakh rupees.

Now, It is proposed to amend sub-section (1) so as to raise the limit of deduction from one lakh rupees to Rs. One Lakh and Fifty Thousand rupees.

Income-tax Act relating to deduction in respect of contribution to pension scheme of Central Government under Section 80 CCD

Clause 28 of the Bill seeks to amend section 80CCD of the Income-tax Act relating to deduction in respect of contribution to pension scheme of Central Government.

The existing provisions contained in sub-section (1) of section 80CCD, inter alia, provide that in the case of an individual, employed by the Central Government or any other employer on or after 1st January, 2004, who has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government, a deduction of such amount not exceeding ten per cent. of salary is allowed.  This is subject to a limit of one lakh rupees provided under section 80CCE.

It is proposed to amend sub-section (1) of the said section so as to provide that an individual employed by the Central Government on or after 1st January, 2004 or, being an individual employed by any other employer shall be allowed a deduction of the amount deposited by him in his account under a pension scheme notified or as may be notified by the Central Government to the extent it does not exceed ten per cent. of his salary.

It is further proposed to insert new sub-section (1A) so as to provide that the amount of deductions shall not exceed One Lakh rupees.

Income-tax Act relating to limit on deductions under sections 80C, 80CCC and 80CCD under Section 80 CCE

Clause 29 of the Bill seeks to amend section 80CCE of the Income-tax Act relating to limit on deductions under sections 80C, 80CCC and 80CCD.

The existing provisions contained in the aforesaid section provide that the aggregate amount of deduction under section 80C, section 80CCC and section 80CCD shall not exceed one and Fifty lakh rupees.

Section 80 D of Income Tax Act:

There is no change in the income Tax Exemption available in respect of Health InsurancePremium which can be deducted at source.

As such, with a maximum limit of Rs.15,000, an individual can deduct at source the Health Insurance premium paid by him / her in a financial year (2014-15)

In addition to Income tax exemption availed for Health Insurance relating to individual and his / her family, health Insurance Premium paid by the individual for covering health of his / her parents can also be deducted from the total income subject to a maximum of Rs. 15,000. In the case of Health Insurance cover in these cases pertains to Senior Citizen then maximum limit of deduction under Section 80D would be Rs. 20,000

Deduction for preventive health check-up

Under Section 80D, a deduction of Rs 5,000 is allowed for expenditure incurred during the year by a tax payer on account of preventive health check-up of self, spouse, dependent children or parents

The above deduction to be within the overall limits of Rs 15,000 / Rs 20,000 prescribed under the said Section of the Act.

Click here to Download the Automated All in One TDS on Salary for Central & State Employees ( Prepare at a time Tax Calculation + Individual Salary Sheet + Salary Structure + HRA Exemption + Form 16 Part A&B and Part B for the Financial year 2014-15)

On July 17, 2014 by www.taxexcel.net

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