INCOME TAX CALCULATIONS & ITS RULES- 80C AND OTHERS

 

INCOME TAX CALCULATIONS & ITS RULES- 80C AND OTHERS

I have tried to explain two slot of income tax saving schemes. First under 80 C & Second beyond 80 C.

All references are taken from Income Tax Saving Rules section-wise. From here you can see all rules. Here the post is divided into 4 parts.

The tabular form of Ist & 2nd part is showing various schemes & general investment values.3rd & 4th part describes various rules mentioned in tabular form.

NOTE:-I have tried to make the errorless article, But there is a chance of a mistake. So before any type of investment, it has been advised to take advice from your financial planner. For your investment, this blog doesn’t take any responsibility.

I. TAX SAVING SCHEME UNDER 80 C (PART-I )

Sl.Schemes under 80 CValue
1.NPS ( Employee contribution to National Pension Scheme )Rs. 60,000.00
2.GISRs. 0
3.LIC & INSURANCE (20,000 in LIC + 10,000 in Term Insurance)Rs. 30,000.00
4.NSC (National Saving certificate)Rs. 0
5.Interest on NSCRs. 0
6.HBA (House Building Advance)Rs. 0
7.MUTUAL FUND @ 3000/monthRs. 36,000.00
8.PPF @ 2000/monthRs. 24,000.00
9.Child TTution FeesRs.0
10.ULIP- Unit Linked Investment PlanRs. 0
11.PLIRs. 0
12.CITDRs.0
13.Total under 80CRs. 1,50,000.00

 

II. Tax Saving Schemes other than 80C ( Part II )

Sl.Schemes other than 80 CValue
1.Govt. Contribution in NPS- 80CCD(2)Rs. 60,000.00
2.Infrastructure Bond- 80CCERs. 0
3.Mediclaim- 80DRs. 15,000.00
4.Interest on Education Loan on Self- 80ERs. 0
5.Treatment of Handicapped Person- 80DDRs. 0
6.Donation for Scientific R&D Development- 80GGARs. 0
7.Medical Treatment of Serious Illness- 80DDBRs.0
8.Premium Paid for Annuity (Pension) Plan of LIC or Other Insurer- 80CCCRs.0
9.Deduction for House Rent Paid Where HRA is not Received.Rs.0
10.Contribution by individuals to political parties ( 80 GGC)Rs. 0
11.Contribution to NPS Tier II ( 80CCD(1B))Rs.50,000.00
12.Deductions on Income by way of Royalty of a Patent- 80RRBRs. 0
13.Section 80QQB permits tax deductions on royalty earned from the sale of books.Rs.0
14.A deduction of Rs 10,000 can be claimed against interest income from a savings bank account-80TTARs.0
15.Total other than 80CRs. 1,25,000

 

i) Net saving from schemes of 80C= Rs. 1.5 lakh

ii) Net saving from schemes of other than 80C= Rs. 1.25 lakh

iii) Net Taxable Income = Rs. 8.4 lakh – Rs. 1.5 lakh – Rs. 1.25 lakh = Rs 5.65

iv) Income above Rs.5 lakh= Rs. 0.65 lakh

v) Tax Rebate upto Rs.5 lakh= Rs. 2.5 lakh

vi) Tax Rate upto Rs.5 lakh= 5 % of income

vii) Tax Rate above Rs.5 lakh to Rs. 10 lakh= 20 % of income

So, Tax upto Rs. 5 lakh = Rs. 12,500.00

Again, Tax above Rs. 5 lakh = Rs. 13,000.00

Further, Ed & other cess & taxes = Rs. 800.00

Grand Total of payable Tax to Government = Rs. 26,300.00

 

III. DESCRIPTION OF TAX SAVING UNDER 80 C (PART III )

I) Contribution by an employee to an approved superannuation fund or in NPS.

ii) 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]

iii) Life insurance premium for policy.

iv) Contributions by an individual made under Employees’ Provident Fund Scheme

v) Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]

vi) Certain payments for purchase/construction of residential house property(HBA)

vii) There are three ways.

a) The principal amount re-paid in the current financial year is included under Section 80C, offering a deduction up to Rs. 1,50,000.

b) The interest portion offers a deduction up to Rs. 1,50,000 separately under Section 24.

c) If you took your first home loan, you can get another loan for the second house.The best thing, there is no limit on income tax deduction on the interest payment o the second home loan.

viii) Contribution to Public Provident Fund Account

ix) 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

x) Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)

xi) Contribution to notified unit-linked insurance plan such as PLI,by UTI etc

xii) 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]

xiii) 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 21.01.2015.

 

IV. BRIEF INFORMATION ABOUT TAX SAVING SCHEMES BEYOND 80 C (PART IV )

1. 80CCD(2):-

Govt. Contribution on Rebate (NPS) :- An additional deduction for investment up to Rs. 50000.00 in NPS( Tier-I account) has been provided under section 80CCD(1B). This is over and above the deduction of Rs.1.5 lakh available under 80CCE. It means that you can save total 2.0 lakhs.

2. 80CCF:-

Infrastructure Bond (Max Rs. 20,000.00):-Upto Rs.20,000 deduction for the subscription of long-term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government.

 

3. 80D:-GIC Mediclaim Premium:-

i) Upto Rs. 15,000 deductions per annum in case of premium paid for yourself, wife & kids (Rs. 20,000 if you are a senior citizen)

ii) Additional deduction for premiums you are paying for your parents (Rs. 20,000 if they are senior citizens, Rs. 15,000 if they are not).

 

4. 80E:-Interest on Education loan:-

There is no upper limit on the amount. The education loan for higher studies is applicable for the deduction if taken for self, spouse or children and the student for whom the individual is the legal guardian.

 

5. 80DD:-Treatment of Handicapped dependent:-

(i) Upto Rs.75,000 deduction for medical treatment of a dependant in case of normal Disability.

(ii) Upto Rs.1,25,000 deduction for maintenance including medical treatment of a dependant in case of severe Disability.

 

6. 80GGA:

Donations for Scientific R & D Development:-Deduction in respect of certain donations for scientific research or rural development are being governed by various sections of the Income Tax Department such as Section 35, 35AC, 35CCA & 35CCB.

 

7. 80G:-

Various types of Donations:-Deduction in respect of donations to certain funds, charitable institutions, etc. are being governed by Section – 80G, Income-tax Act, 1961-2016. There are various types of donations to different types of funds. If u are more interested go to this section.

 

8. 80U:-Physically Handicapped Person:-

(i) Upto Rs.75,000 deduction for maintenance including medical treatment of a dependant in case of normal Disability.

(ii) Upto Rs.1,25,000 deduction for maintenance including medical treatment of a dependant in case of severe Disability.

 

9. 80DDA: Maintenance of Handicapped dependent:-

(i) Upto Rs.75,000 deduction for maintenance including medical treatment of a dependant in case of normal Disability.

(ii) Upto Rs.1,25,000 deduction for maintenance including medical treatment of a dependant in case of severe Disability.

 

10. 80DDB:-Medical Treatment:-

(i) Upto Rs.40,000 deduction.

(ii) Upto Rs. 60,000 deductions in case of Senior Citizen (more than 60 years)

(iii) Upto Rs. 60,000 deductions in case of Very Senior Citizen (more than 80 years), For actually paid Medical Bills for such medical treatment from a neurologist, an oncologist, a urologist, a hematologist, an immunologist or such other specialist, as may be prescribed.

 

DISCLAIMER

Above shown images used for illustrative purposes only. No Copyright infringement intended.

 

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