INCOME TAX 2014-15, ASSESS 2015-16

Income Tax Slabs for  FY 2014-15 ,AY 2015-16

Net income
Income-tax rates Surcharge Education cess Secondary and
higher education
Up to Rs.
Nil Nil Nil Nil
Rs. 2,50,000 –
Rs. 5,00,000

10% of (total income
minus Rs. 2,50,000) [see
Note 1]
Nil 2% of
1% of income-tax
Rs. 5,00,000 –
Rs. 10,00,000
Rs. 25,000 + 20% of (total
income minus Rs.
Nil 2% of
1% of income-tax
Rs. 10,00,000 –
Rs. 1,00,00,000
Rs. 1,25,000 + 30% of
(total income minus Rs.
Nil 2% of
1% of income-tax
Above Rs.
Rs. 28,25,000 + 30% of
(total income minus Rs.
10% of
income-tax [see
Note 2]
2% of
income-tax and surcharge
1% of
income-tax and surcharge

Income included in Salary:

Basic Pay , DA, HRA,  PP,FP, CCA, IR, Increments, Surrender Leave, Pension, Bonus, Honorarium, Tuition Fee. , Reimursement, L.T.C. , Grtuity, commuted  Pension. Educational Allowances etc.

Tax Saving Under Section 80C - Rs. 1,50,000/-

Below items  Under Section 80C 
  1. Employees Provident Fund 
  2. Voluntary Provident Fund 
  3. Public Provident Fund ( PPF )
  4. National Saving Certificate (NSC) 
  5. Tax Saving Mutual Funds 
  6. Insurance Premium Paid 
  7. Savings in Pension Plans 
  8. Tax Saving 5years Fixed Deposit with Banks 
  9. Senior Citizens Savings Scheme 
  10. National Pension System (NPS) 
  11. Children Education Fee 
  12. Housing Loan Principal Repayment/Stamp 
  13. Duty Paid Others (Post Office Saving,ULIP, etc.) 
  • Medical Insurance Premium (sec 80D) 
  • Medical treatment for handicapped dependents (Sec 80DD) 
  • Medical treatment for specified diseases (Sec 80DDB) 
  • Interest on Higher Education Loan(Sec 80E) 
  • Rajiv Gandhi Equity Savings Scheme (RGESS) (Se 80CCG) 
  • Donations to charitable institutions and others (Sec 80G) 
  • Deduction for permanent disability (80U)

        KNOW MORE about DEDUCTION under Section 80-C and chapter VIA  

Section 80C of the Income Tax Act allows certain investments and expenditure to be deduct from total income. 

                  One must plan investments well and spread it out across the various instruments specified under this section to avail maximum tax benefit. There are no sub-limits and is irrespective of how much you earn and under which tax bracket you fall. Most of the Income Tax payee try to save tax by saving under Section 80C of the Income Tax Act.  However, it is important to know the Section in total. so that one can make best use of the options available for deduction under income tax Act. One important point to note that one can not only save tax by undertaking the specified investments, but some expenditure which you normally incur can also give you the tax exemptions.

Provident Fund (PF) & Voluntary Provident Fund (VPF):  PF is automatically deducted from your salary. your contribution [12% of Basic] (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF). Current rate of interest is 8.5% per annum (p.a.) and is tax-free.

Life Insurance Premiums: Any amount that you pay towards life insurance premium in Life Insurance Corporation (LIC) or any other Insurance CO.for yourself, your spouse or your children can also be included in Section 80C deduction. If you are paying premium for more than one insurance policy, all the premiums will be included. also premium paid for ULIP will also be treated as Premium paid for Life Insurance Policies.                                                                                                                                                         
Unit linked Insurance Plan : ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments.They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term.
IMP : Total Amount Received at Maturity, Survival Benefits, , Withdrawl in Insurance Policies is Tax Free and fully exempteed u/s 10(10D).

Public Provident Fund (PPF): Among all the assured returns small saving schemes, Public Provident Fund (PPF) is one of the best. Current rate of interest is 8% tax-free and the normal maturity period is 15 years. Minimum amount of contribution is Rs500 and maximum is Rs1,50,000.(New Change) from Budget 2014

National Savings Certificate (NSC)National Savings Certificate (NSC) is a 5-Yr small savings instrument eligible for section 80C tax benefit. Rate of interest is  8.58% compounded half-yearly, i.e. If you invest Rs.100, it becomes Rs.150.90 after five years. The interest accrued every year is liable to tax (i.e. to be included in your taxable income) but the interest is also deemed to be reinvested and thus eligible for section 80C deduction. Home Loan Principal Repayment & Stamp Duty and Registration Charges for a home Loan The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.The principal component of the EMI qualifies for deduction under Sec 80C. Even the interest component can save you significant income tax – but that would be under Section 24 of the Income Tax Act. The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.

Tuition Fees: Tuition  fees  for 2 children  Apart form the above major investments expenses for children’s education (Only Tution Fee (for which you need receipts)), can be claimed as deductions under Sec 80C.

Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C.

5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction. 5-Yr post office time deposit (POTD) scheme: POTDs are similar to bank fixed deposits. Although available for varying time duration like one year, two year, three year and five year, only 5-Yr post-office time deposit (POTD) – which currently offers 7.5 per cent rate of interest –qualifies for tax saving under section 80C. Effective rate works out to be 7.71% per annum (p.a.) as the rate of interest is compounded quarterly but paid annually. The Interest is entirely taxable.

Pension Funds or Pension Policies – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it means that the total deduction available for 80CCC and 80C is  Rs 1.5 Lakh.This also means that your investment in pension funds upto Rs.1.5 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed  Rs.1.5 Lakh.

Infrastructure Bonds: These are also popularly called Infra Bonds. These are issued by infrastructure companies, and not the government. The amount that you invest in these bonds can also be included in Sec 80C deductions.     

NABARD rural bonds: There are two types of Bonds issued by NABARD (National Bank for Agriculture and Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB). Out of these two, only NABARD Rural Bonds qualify under section 80C.

Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. Current rate of interest is 9% per annum payable quarterly. Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax.

u/s 80CCE- Maximum Exemption up to  Rs.150000/- 
Rajiv Gandhi Equity Savings Scheme (RGESS) (Se 80CCG): u/s 80CCG - Rajiv Gandhi Equity Savings Scheme is a new exemption available for investment in stock markets (direct equity). Avaialble only for those with gross income less than 12 lacs and only for first time investors in stock market. Exemption available at 50% of investment subject to maximum of Rs.50,000/- invested. Investments are locked-in for three years.

Medical Insurance Premium (sec 80D): u/s 80D Medical Insurance Premium (such as Mediclaim & Critical illness Cover)& Health Check up Upto Rs5000, premium is exempt up to Rs30,000/ per year (Rs.15,000/- for self,spouse and children ) (Rs15000/- for Parents. If the premium includes for a dependent who is (Senior Citizen) above 60 years of age, an extra Rs5,000//- can be claimed.

Medical treatment for specified diseases (Sec 80DDB): u/s 80DDB Deduction in respect of medical treatment for specified ailments or diseases for the assesse or dependent can be claimed up to Rs40,000/- per year. If the person being treated is a senior citizen, the exemption can go up toRs60,000/-. but any amount received under Medical Insurance Policy will be reduced from the amount of deduction allowed. 
 The Diseases and ailments specified under rule 11DD are.   (1)neurological diseases being demetia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and parkisons disease, (2) cancer, (3) AIDS, (4)Chronic renal failure, (5) hemophilia, and (6) thalassaemia. 

Interest on Higher Education Loan(Sec 80E):u/s 80E Interest repayment on education loan (taken for higher education from a university of self & dependents) is completely tax exempt    

Deduction for permanent disability (80U): u/s 80U who suffers from not less than 40 per cent of any disability is eligible for deduction to the extent of Rs. 50,000/- and in case of severe disability to the extent80 of Rs. 100,000/-     

Donations to charitable institutions and others (Sec 80G): u/s 80G Donations given for certain charities are tax exempt. Some(NGO,Trust etc.) are exempt to the tune of 50%, whereas Govt funds are 100%. 

Medical treatment for handicapped dependents (Sec 80DD): u/s 80DD Deduction in respect of medical treatment of handicapped dependents is limited to 50,000/- per year if the disability is less than 80% and Rs1,00,000/- per year if the disability is more than 80%
u/s 24: There is an Exemption for interest on housing loan.(for Self occupied Residence). If the loan was taken before Apr 1, 1999 exemption is limited to Rs30,000/- per year. If the loan was taken after Apr 1, 1999 exemption is limited toRs2,00,000/- per year if the house is self-occupied; There is no limit if the house is rented out This exemption is available on accrual basis, which means if interest has accrued, you can claim exemption, irrespective of whether you've paid it or not..          

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