Click here to Download All in One Master of Form 16 Part B for Govt & Non-Govt Employees for the Financial Year 2014-15 & Ass Year 2015-16 ( This Excel utility can prepare at a time 50 employees Tax Compute Sheet + Individual Salary Structure + Individual Salary Sheet Form 16 Part B)

Each year most of the people eagerly wait for the budget proposals to be announced for various reasons.

One of the significant reasons is to know what all instruments of investments and deductions / exemptions have been included in the Section 80C of Indian Income Tax for employees, so that they can plan their tax savings according to the same, and maximize the benefits.

As income tax is major component of the salary, the changes / additions in 80C Section has major impact on the savings and expenses of salaried employees as they have a fixed source of income. The 80C Section deductions are introduced to boost savings of employees on one side and save tax on the other side.

Actually, Section 80C replaced the earlier Section 88 which was available till 1^st April 2006. The Deductions permitted in the 80 C Section of Indian Income Tax is more or less the same investment mixes that were available in Section 88. Even the section 80CCC on pension scheme contributions was merged with the above 80C. However, this new section has allowed a major change in the method of providing the tax benefit. Section 80C of the Income Tax Act allows certain investments and expenditure to be tax-exempt. One must plan investments well and spread it out across the various instruments specified under this section to avail maximum tax benefit. Unlike Section 88, there are no sub-limits and is irrespective of how much you earn and under which tax bracket you fall.

The most important aspect that needs to be kept in mind is that the total exemption limit under section 80c is revised from Rs 1,00,000 to Rs 1,50,000 in the budget presented by Finance Minister Arun Jaitley on July 10th 2014. 

Now see in details those deductions that are permissible under section 80C in this section. The following is section 80c deductions / exemption list mainly.

Provident Fund (PF) deduction under section 80C

Any contributions to Provident Fund, Voluntary provident Fund (VPF) or savings made in Public Provident Fund (PPF Account) are eligible for income tax deduction under section 80C of Indian Income Tax Act. The PF limit has been increased to 1.5 Lakhs from 1.0 Lakh earlier

Life Insurance Premiums

Any Life Insurance premiums (for one or more insurance policies) paid by you for yourself, your spouse or your children is eligible under income tax deduction under section 80C of Indian Income Tax Act.

ELSS Equity Linked Saving Schemes

Any investment made in certain Mutual Funds called equity linked saving schemes qualifies for section 80C deduction. Please note that not all mutual fund investments are eligible for this deduction. Some examples of ELSS funds are – SBI Magnum Tax Gain, HDFC Tax Saver, HDFC Long term advantage, etc.

ULIP – Unit Linked Insurance Plan

Investments made in certain ULIPs of Unit Trust of India and LIC of India are eligible for 80C deduction.

Bank Fixed deposits or Term deposits of term greater than 5 years

According to a relatively new provision amount saved in fixed deposits of term at least five years is eligible for income tax deduction under section 80C of Indian Income Tax Act.

Principal part of EMI on Housing Loan deduction under section 80C

If you are paying EMI on a housing loan, you would be aware that the EMI (equated monthly installments) consists of two parts – principal part and interest part. The principal part of the EMI on your housing loan is eligible for income tax deduction under section 80C. The interest part is also eligible for tax deduction, however not under section 80C but section 24.

Tuition Fees deduction under section 80C

Amount paid as tuition fee for the education of two children of the employee / Tax Payer is eligible for deduction under section 80C of Indian Income Tax Act.

Public Provident Fund (P.P.F.)under section 80C

The maximum limit of P.P.F. is now available up to Rs. 1.5 Lakh

 Other 80C deductions

Amount saved in National Saving Certificate (NSC),  amount paid as stamp duty and registration charges while buying a new home are eligible for income tax deductions under section 80C of Indian Income Tax Act.

Click here to Download All in One Master of Form 16 Part B for Govt & Non-Govt Employees for the Financial Year 2014-15 & Ass Year 2015-16 ( This Excel utility can prepare at a time 50 employees Tax Compute Sheet + Individual Salary Structure + Individual Salary Sheet Form 16 Part B)

On August 25, 2014 by www.taxexcel.net

Share It

No Comments

Read More

Download All in One ( TDS on Salary ) for Non-Govt employees for the Financial Year 2014-15 (as per the new Finance Budge Income Tax Slab)

Updated list of deductions available Chapter VI-A while calculating Income Tax for Individual & also helpful for tax planning.   

Section 80C:

Under this section deduction from total income in respect of various investments/ expenditures/payments in respect of which tax rebate u/s 88 was earlier available. The total deduction under this section (alongwith section 80CCC and 80CCD) is limited to Rs. 1.5 lakh only.( As per the Finance Budget 2014-15 the Max Limit of U/s 80 C HAS RAISED UP TO RS. 1.5 LAKH) 

1.     Life Insurance Premium For individual, policy must be in self or spouse's or any child's name. For HUF, it             may be on life of any member of HUF.  

2.     Sum paid under contract for deferred annuity For individual, on life of self, spouse or any child .   

3.     Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child               Payment limited to 20% of salary.  

4.     Contribution made under Employee's Provident Fund Scheme.  

5.     Contribution to PPF For individual, can be in the name of self/spouse, any child & for HUF, it can be in the           name of any member of the family.  

6.     Contribution by employee to a Recognised Provident Fund.  

7.     Sum deposited in 10 year/15 year account of Post Office Saving Bank  

8.     Subscripttttion to any notified securities/notified deposits scheme. e.g. NSS  

9.     Subscripttttion to any notified savings certificate, e.g. NSC VIII issue.   

10.   Unit Linked Savings certificates.   

11.   Contribution to notified deposit scheme/Pension fund set up by the National Housing Scheme.   

12.   Certain payment made by way of installment or part payment of loan taken for purchase/construction of residential house property. Condition has been laid that in case the property is transferred before the expiry of 5 years from the end of the financial year in which possession of such property is obtained by him, the aggregate amount of deduction of income so allowed for various years shall be liable to tax in that year. 

  

13.  Contribution to notified annuity Plan of LIC(e.g. Jeevan Dhara) or Units of UTI/notified Mutual Fund. If in respect of such contribution, deduction u/s 80CCC has been availed of rebate u/s 88 would not be allowable.

14.  Subscripttttion to units of a Mutual Fund notified u/s 10(23D).

   

15.  Subscripttttion to deposit scheme of a public sector, company engaged in providing housing finance.

   

16.  Subscripttttion to equity shares/ debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions.

17.  Tuition fees paid at the time of admission or otherwise to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children. Available in respect of any two children   Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer Payment of premium for annuity plan of LIC or any other insurer Deduction is available upto a maximum of Rs. 150,000/-. 

The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.     Section 80CCD: Deduction in respect of Contribution to Pension Account Deposit made by a Central government servant in his pension account to the extent of 10% of his salary. Where the Central Government makes any contribution to the pension account, deduction of such contribution to the extent of 10% of salary shall be allowed. Further, in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year. 

  

18.  Section 80CCG: Rajiv Gandhi Equity Saving Scheme As per the Budget 2012 anouncements, a new scheme Rajiv Gandhi Equity Saving Scheme (RGESS) will be launched. Those investors whose annual income is less than Rs. 10 lakh can invest in this scheme up to Rs. 50,000 and get a deduction of 50% of the investment. So if you invest Rs. 50,000 (maximum amount eligible for income tax rebate is Rs. 50,000), you can claim a tax deduction of Rs. 25,000 (50% of Rs. 50,000).  

19. Section 80D: Deduction in respect of Medical Insurance Deduction is available upto Rs. 20,000/- for senior citizens and upto Rs. 15,000/ in other cases for insurance of self, spouse and dependent children. Additionally, a deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 20,000/- if parents are senior Citizen and Rs. 15,000/- in other cases. Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000/-. From AY 2013-14, within the existing limit a deduction of upto Rs. 5,000 for preventive health check-up is available.   

20. Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative Deduction of Rs. 50,000/- w.e.f. 01.04.2004 in respect of ü Expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative. ü Payment or deposit to specified scheme for maintenance of dependent handicapped relative.   Further, if the defendant is a person with severe disability a deduction of Rs. 100,000/- shall be available under this section. The handicapped dependent should be a dependent relative suffering from a permanent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist. Note: A person with 'severe disability' means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the 'Persons with disabilities (Equal opportunities, protection of rights and full participation)' Act.   

21. Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative   A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.   

Section 80E: Deduction in respect of Interest on Loan for Higher Studies Deduction in respect of interest on loan taken for pursuing higher education. The deduction is also available for the purpose of higher education of a relative w.e.f. A.Y. 2008-09.   

Section 80G: Deduction in respect of Various Donations The various donations specified in Sec. 80G are eligible for deduction upto either 100% or 50% with or without restriction as provided in Sec. 80G   Section 80GG: Deduction in respect of House Rent Paid Deduction available is the least of 1.          Rent paid less 10% of total income 2.          Rs. 2000/- per month 3.          25% of total income, provided   o    Assessee or his spouse or minor child should not own residential accommodation at the place of employment. o    He should not be in receipt of house rent allowance. o    He should not have self occupied residential premises in any other place.

22. Section 80U: Deduction in respect of Person suffering from Physical Disability   Deduction of Rs. 50,000/- to an individual who suffers from a physical disability(including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 100,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D. Section 80RRB: Deduction in respect of any Income by way of Royalty of a Patent Deduction in respect of any income by way of royalty is respect of a patent registered on or after 01.04.2003 under the Patents Act 1970 shall be available upto Rs. 3 lacs or the income received, whichever is less. The assessee must be an individual resident of India who is a patentee. The assessee must furnish a certificate in the prescribed form duly signed by the prescribed authority.   Section 80 

23. TTA: Deduction from gross total income in respect of any Income by way of Interest on Savings account Deduction from gross total income of an individual or HUF, upto a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account ( not time deposits ) with a bank, co-operative society or post office, is allowable w.e.f. 01.04.2012 (Assessment Year 2013-14).  

24. 80 EE. Additional House Building Loan Interest up to Rs. 1,00,000/- will be admissible who have paid the HBL Interest w.e.f. 1/4/2013 (Excluding the Section 24 B)

On July 26, 2014 by www.taxexcel.net

Share It

No Comments

Read More