TAX PLANNING GUIDE 2008-09 Plan your investments and complete it before Jan 09.

. Go for Systematic Plan so that you get advantage of market conditions. What falls under Section 80C? There are certain investments and expenditure which are allowed as deduction under income tax act with overall limit of Rs.1 Lakh. Type of investments and expenditure covered are as under:a) The investments 1. 2. 3. 4. 5. Contribution to Provident Fund (PF) or Voluntary Provident Fund (VPF) Contribution to Public Provident Fund (PPF) Payment of life insurance premium Investment in pension plans Investment in Equity Linked Saving Schemes of mutual funds. SIP (Systematic Investment Plan) is the best to take care of market fluctuations. Eg. You can go in for a contribution of Rs.2000/p.m. and it will take care of your Rs.24,000/- investment at the year-end. There are two options available Divident and Growth. Recommend Growth option. Ensure to go for Taxgain else you will not get benefit. Investment in Infrastructure bonds Investment in National Savings Certificate Amount put in Fixed Deposit for 5 years or more with scheduled banks are also allowed u/s 80C. Post office term deposit

6. 7. 8. 9.

b) Expenditure 1. 2. 3. 4. 5. The limit Overall, the limit under Section 80C is Rs 1,00,000. However, there is maximum for PPF which is Rs 70,000 per annum. Barring this exception, you can choose to invest the entire amount in ELSS or infrastructure bonds. The choice is entirely up to you as to how you want to reach this limit. Or, if you are repaying a home loan and the principal repayment amounts to Rs 1,00,000, you can claim the entire amount as a deduction. Similarly, the deduction for tuition fees under Section 80C is available towards payment of education fees for children upto a ceiling of Rs 1,00,000. However, in order to avail of this deduction, you will have to produce the fee receipt. TAX SLAB 2008-09 Net taxable income Male - Upto Rs 1,50,000 Female - Upto Rs.1,80,000 Senior Citizen (>65 years) - Upto Rs.2,25,000 Male Rs 1,50,001 3,00,000 For Female - Rs 1,80,001 3,00,000 Rs.3,00,000 - Rs.5,00,000 Rs 5,00,000 onwards lakhs Surcharge of 10% if income exceeds 10 Tax rate Nil Nil Nil 10% 10% 20% 30% Payments towards Home loan (Interest 1.5 Lakh u/s 24 and principal 1 Lakh u/s/80c) - conditions apply Stamp Duty and Registration charges u/s 80C Payments towards Tuition fees for children u/s 80C Mediclaim Premium: For Self : Rs.15000/-, For Parents : Rs.15000/- u/s 80D Interest paid on Education Loan for self or children for a full time course no limit u/s 80E

 Surcharge

3% Education Cess charged on Tax and

FLEXI PAY: will open after 8 th April. Make maximum use of it. Increase HRA to limit, if you are in a rented flat and get maximum exemption. Keep Medical as it is to get tax benefit. Suggest keep LTA as it is. B form - Last years C form will be treated as B form of this year. You can modify it if required. Ensure that there is no difference between your B form and C form so that appropriate tax will be deducted. Excess tax deducted will not be refunded as per rule. PAN CARD: Compulsory. Apply immediately, if you do not have one. VPF is opened now. You can modify /add it now. If you miss now, it will be available only in October. Accumulate medical and telephone bills to submit in Jan 09