Friends,
The financial year 2012-13 is going to complete. Everyone of us is planing "How to Save Income Tax" by making some investment in different schemes. One can make saving under various section of Income Tax Act to save Income Tax. The sections are 80 C, 80 CCF, 80 CCD, 80 D, 80 DD,80 DDB, 80E, 80 G, 80 GG, 80 U, 80TTA, 89(1) etc. There are different limits to invest in each section. Like there is a maximum limit of Rs. 1,00,000.00 to be invested under Section 80C. If one has received arrears of Salary in this financial year which relates to previous years, the rebate u/s 89(1) can be claimed by filling details on Form 10 E. A new deduction has been started from this financial year which is the interest earned by any individual on a saving bank upto 10,000/- is exempted. Like wise other details are given below :
Section 80 C : Limit Unchanged (Rs. 1,00,000)
Deduction on life insurance policy, taken after 1 April 2012, will be allowed only if yearly premium is less than 10% of sum assured. This is a new change from c.y. earlier it was 20%. If its more than 10% then not eligible for deduction u/sec. 80C
- ELSS
- PPF
- EPF
- Tax Saving FDR for 5 years
- Pension Plans
- NSC
- Post Office SB
- Infrastructure Bonds
- Expenditure on Children Education (Upto Rs. 200 per month for upto 2 children)
- Tuition fees (Only Tuition fees excluding Development Fees, Donations, etc. )
- Housing loan principal
- Deferred Annuity
- Approved Super Annuation Fund
Section 80 CCF – Additional Rs. 20,000 on investments towards approved Infrastructure bonds has been withdrawn from this financial year.
Section 80CCD: Deduction under this section can be claimed only if the contribution to your NPS account is made by your employer and the deduction is limited to a maximum of 10% of your basic salary. Returns on NPS are tax free, but withdrawal is still taxable. The deduction under sec 80CCD is over and above the deduction available under sec 80C.
Section 80 D - Deduction under section 80D of Rs. 15000/- is allowed if the same is paid as premium for Medical Insurance taken for self / dependents or towards preventive health check-up (max Rs. 5000). In case any of self / dependents is a senior citizen, the deduction allowed is Rs. 20000/- Additional Rs. 15000/- is allowed as deduction if the same is paid as premium for Medical Insurance taken for parents. In case the parent is a senior citizen, the deduction allowed is Rs. 20000/-
Section 80DD - Deduction under section 80DD - Exemption given for Expenditure made for a disabled dependant towards Medical Treatment/Training/Rehabilitation. It also includes the LIC/Insurance premium paid towards maintenance of such dependant. Maximum deduction allowed is Rs. 50,000/- in case of normal disability and Rs. 1 Lakh in case of severe disability.
Section 80DDB - Deduction under section 80DDB - Exemption given for expenditure incurred on specified disease or ailments such as cancer/aids. Maximum deduction allowed is Rs. 40,000/-. In case of Senior Citizens, maximum deduction allowed is Rs. 60,000/-
Section 80E - Deduction under section 80E - Deduction is allowed for repayment of interest component of Higher Education loan. All education after Class 12 is allowed, either vocational or Fulltime. But should be from a school/institute/university recognized by the government.
Section 80G - Contribution to exempt charities – 25/50/75/100% depending on the charity and as per approval 100% exemption on donation to political parties.
Section 80U - Deduction under section 80U - Deduction upto Rs. 50,000/- is allowed in case of Permanent Disability. In case of Permanent Disability exceeding 80%, maximum deduction allowed is Rs. 1,00,000/-
Section 24(1)(vi) Housing loan interest.Maximum Investment Limit – Rs. 1,50,000 (for loans taken after 1 April 1999, for loans before that Maximum Investment Limit 30,000).
Superannuation – Any contribution made by a company to superannuation fund upto Rs. 1,00,000 tax free in the hands of the employee.
Conveyance/Transport Allowance – Any Conveyance / Transport Allowance given to an employee is tax free upto Rs. 9,600 /- (No Supporting Bills required).
Medical Allowance – Any Medical Allowance given to an employee is tax free upto Rs. 15,000 /- (Supporting Bills required).
House Rent Allowance – Any House Rent Allowance given to an employee is tax free upto the minimum value of the following conditions (subject to – when an employee can produce rent paid receipts from landlord for the period and if the employee has not availed of tax exemptions for home loan interest / principal repayment):
a) 50% of Annual Basic (40% of Annual Basic in case of non-metros)
b) Actual HRA received
c) Rent Paid – (10% of Annual Basic)
Professional Tax – Any Professional Tax deducted from an employee’s salary can be reduced from the annual salary income to arrive at taxable salary.
Provident Fund – Provident Fund contributions (under section 80 C and subject to an overall investment limit of Rs. 1,00,000 ) deducted from an employee’s salary are tax exempt.
80CCG – Direct Equity Investment – Under ‘Rajiv Gandhi Equity Savings Scheme‘ – a new equity investor will be able to claim 50% of his investment in direct equity as deduction subject to maximum investment of Rs. 50,000 and provided his taxable income is below Rs. 10 lacs. The investment will be subject to 3 years lock-in. Government has notified this scheme (RGESS). Mutual funds and ETFs that invest in BSE100 or CNX 100 stocks or PSUs which are Navratna, Maharatna and Miniratna will qualify under this scheme. These investments can be traded over stock exchange after 1 year of investment. New equity investor has been defined as someone who has opened a Demat account but has not bought any securities till date of notification of this scheme (22 Sep 2012).
Section 80TTA – Savings Bank Interest - No tax will be charged on interest earned on balance in savings bank account subject to a maximum of Rs. 10,000 per year.
Further the Tax Slab Rates for Financial Year 2012-13 are as under:
Tax Slabs
1) In Case of General Assesses (Both Male Female):
Income Bracket Rate
0 to Rs. 2,00,000 0 %
Rs. 2,00,001 to Rs. 5,00,000 10 %
Rs. 5,00,001 to Rs. 10,00,000 20 %
Above Rs. 10,00,000 30 %
2) In Case of Senior Citizens (Age above 60 years but below 80 years):
Income Bracket Rate
0 to Rs. 2,50,000 0 %
Rs. 2,50,001 to Rs. 5,00,000 10 %
Rs. 5,00,001 to Rs. 10,00,000 20 %
Above Rs. 10,00,000 30 %
3) In Case of Very Senior Citizens (Age 80 years and above):
Income Bracket Rate
0 to Rs. 5,00,000 0 %
Rs. 5,00,001 to Rs. 10,00,000 20 %
Above Rs. 10,00,000 30 %
* On final tax amount, a surcharge of 3 %
**No surcharge above 10 lacs.Tax
