Employees planing to save their taxable income by investments as per sections first we look into slab rates and savings limits.
|Taxable Income range||Income-tax rates||Education Cess||Secondary and higher Education Cess|
|Up to Rs. 2,50,000||Nil||Nil||Nil|
|Rs. 2,50,000 – Rs. 5,00,000||10% on above Rs.2,50,000 income||2% of income-tax||1% of income-tax|
|Rs. 5,00,000 – Rs. 10,00,000||Rs. 25,000 + 20% on Rs. 5,00,000 above income||2% of income-tax||1% of income-tax|
|Above Rs. 10,00,000||Rs. 1,25,000 + 30% on Rs. 10,00,000 above income||2% of income-tax||1% of income-tax|
Savings under various sections
Deductions on Section 80C, 80CCC & 80CCD
The deduction under section 80C is allowed from your Gross Total Income.
Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for this financial year 2015-16.
- Investments in PF (AG GPF/ZP GPF/ Class IV GPF ) and PPF
- Employee's share of PF Contribution (CPS)
- Children Tuition Fee (Tuition fees paid to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children (including payments for play school and nursery).
- Life Insurance Premium Payment
- Investment in Sukanya Samridhi account
- Principal Repayments on Loan for purchase of House Property
- Purchase of NSCs (1.
National Savings Certificate
e.g. NSC VIII issue and IX issue are eligible for deduction in the year of
purchase. These can be bought from designated Post Office. Accrued Interest
(which is considered reinvested) qualifies for deduction during the term of the
NSCs (except the last year).
- ULIPS or Unit Linked Insurance Plan
Section 80CCC: Premium paid to Annuity Plan of LIC
Section 80CCD: Deduction in respect of Contribution to Pension Account
- Total Deduction under section 80C, 80CCC, & 80CCD(1) cannot exceed Rs. 1,50,000
- A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs 50,000
- Therefore for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80CCD(1) and 80 CCD(1B) cannot exceed Rs 2,00,000
Deductions on Savings Bank Account
Section 80 TTA: Deduction from gross total income with respect to any Income by way of Interest on Savings accountDeduction from gross total income up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account with a bank, co-operative society or post office. Section 80TTA deduction is not available on interest income from fixed deposits.
Section 80E: Deduction with respect to Interest on Loan for Higher StudiesDeduction of home loan interest paid for self occupied home up to Rs. 2,00,000 (Rs. 3,00,000 for senior citizens) annually under Section 24 of the Income Tax Act
Deductions on Rajiv Gandhi Equity Saving Scheme (RGESS)
Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)
The Rajiv Gandhi Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors whose gross total income is less than Rs. 12 lakhs can invest in this scheme. Upon fulfillment of conditions laid down in the section, the deduction is lower of - 50% of amount invested in equity shares or Rs 25,000.
Deductions on Medical Insurance
Section 80D: Deduction in respect of Medical Insurance
Self, Spouse, Children limit upto 25,000/-
Depended Parents senior Citizens limit upto 30,000/-
Deductions on Medical Expenditure for a Handicapped Relative
Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative
disability below 80% 75,000/-, disability 80% and above 1,25,000/-