The following INCOME TAX RATES ARE applicable for the Financial Year

ending March 31, 2015 (i.e. Financial Year 2014-15) - Assessment Year 2015-16).
Every year the income tax rates are changed and it is important to get the latest income tax
rates. We give below the Income Tax Rates and Slabs applicable for the FY 2014-15 or AY
2015-16. :- [As per Budget 2015, there is no change in Income Tax Slabs for FY

2015-16 (i.e. AY 2016-17). Therefore following rates are also applicable for FY
2015-16 ]

Income Range

General
(nonsenior
citizens)
Category

Women (Below 60 years of Senior Citizens Very Senior

age)
(Men and
Citizens
(This category is abolished Women above (Men and
from this year and is thus 60 years of age), Women
is same as that of General but below 80
above 80
Category
years
years of age)

Upto Rs. 2,50,000

Nil

Nil

Nil

Nil

10% *

10% *

Nil

Nil

10% *

10% *

10% *

Nil

20%

20%

20%

20%

30% **

30% **

30% **

30%**

Rs. 2,50,001 to Rs.

3,00,000

Rs. 3,00,001 to Rs.

5,00,000

Rs. 5,00,001 to Rs.

10,00,000

Above Rs. 10,00,000

* A tax rebate of Rs 2,000 from tax calculated will be available for people having an annual
income upto Rs 5 lakh. However, this benefit of Rs2,000 tax credit will not be available if
you cross the income range of Rs 5 lakh. Thus we can say that tax payable in 10% slab will
be maximum Rs23,000 (taking into account Rs 2000 tax credit), but for people who fall in
income range of Rs5 lakh and above, the tax will be Rs25,000 + 20% tax on income above
Rs 5 lakh;

The education cess to continue at 3 percent.

** Surcharge of 10% will be payable, if income is above Rs 1 crore for the FY 2014-15 or
AS 2015-16 (The Surcharge has been increased to 12% for the FY 2015-16 or AS

2016-17)

Proposed Changes in Budget for FY 2015-16

Existing
Provisions
for FY 201415
Particulars

Proposed Changes in Budget for FY

2015-16
OR

OR
AY 2016-17
AY 2015-16
Surcharge on taxable income exceeding Rs. 1 Crore
for Individuals, Senior Citizens, Very Senior Citizens,
HUFs, AOPs, BOIs, artificial juridical persons, firms,
cooperative societies and local authorities

10% of
Income Tax

12% of Income Tax

Exempted amount of transport allowance

Rs. 800/- per

month

Rs. 1,600/- per month

Section 80D - Deduction for Health Insurance premium

Rs. 15,000/-

Rs. 25,000/-

Section 80D - Deduction for Health Insurance premium

for Senior Citizens

Rs. 20,000/-

Rs. 30,000/-

Investment in Sukanya Samriddhi Scheme

Eligible for deduction u/s 80C and

any payment from the scheme shall
not be liable to tax.

Comparison of Benefits under various IT Sections

Section 80DDB - Deduction in case of very senior

citizens on expenditure on account of specified
diseases

Rs. 60,000/-

Rs. 80,000/-

Section 80DD - Maintenance, including medical

treatment of a dependent who is a person with disability

Rs. 50,000/-

Rs. 75,000/-

Section 80DD - Maintenance, including medical

treatment of a dependent who is a person
with severe disability

Rs. 1,00,000/-

Rs. 1,25,000/-

Section 80U - Person with disability

Rs. 50,000/-

Rs. 75,000/-

Section 80U - Person with severe disability

Rs. 1,00,000/-

Rs. 1,25,000/-

Section 80CCC - Contribution to provident fund of LIC

or IRDA approved insurer

Rs. 1,00,000/-

Rs. 1,50,000/-

Section 80CCD - Contribution by the employee to

National Pension Scheme (NPS)

Rs. 1,00,000/-

Rs. 1,50,000/The budget also proposes to provide a

deduction of upto Rs. 50,000 over and above
the limit of Rs. 1.50 lakh in respect of
contributions made to NPS.

Wealth Tax Has been Abolished in the Budget for 2015-16

Changes that were effected last year i.e. from the FY 2014-15 (AY 2015-16)

Investment limit under section 80C of the Income-Tax Act raised from
Rs.1 lakh to Rs. 1.5 lakh.

Deduction limit on account of interest on loan in respect of self occupied

house property raised from Rs.1.5 lakh to Rs. 2 lakh.

Personal Income-tax exemption limit raised by Rs 50,000/- that is, from

Rs. 2 lakh to Rs. 2.5 lakh in the case of individual taxpayers, below the age
of 60 years.

[Click Here to see the Income Tax Slab Rates for FY 2013-14 or AY 2014-15]
[Click Here to see the Income Tax Slab Rates for FY 2012-13 or AY 2013-14]

Important Rules for filing of Tax Return

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1. Filing of income tax is compulsory for all individuals whose gross annual income
exceeds the maximum amount which is not charageble to income tax (e.g.
Rs.3,00,000 for Senior citizens, Rs.2,50,000/- for resident individuals
2. The last date for filing of income tax return is usually July 31 for individuals
(sometimes the same is extended).
3. The penalty for non filing of income tax return is Rs.5,000/-

(1) Deductions from Taxable Income (Section 80C) :VARIOUS INVESTMENTS OPTIONS AVAILABLE TO INDIVIDUALS AND
TAX BENEFITS AVAILABLE UNDER EACH OF THEM - Financial Year 201314
A new section 80C was introduced (replacing section 88) from the financial year
2005-06. Under this Section, a deduction of upto Rs.1,50,000/- (wef FY 2014-15) is
allowed from Taxable Income in respect of the investments made in some specified
schemes. The schemes are similar as were available in Section 88 earlier. Now there
are no sectoral caps and individuals can save in any of the schemes upto Rs.1,50,000/(now even in PPF it is allowed upto Rs. 150 lac as against only Rs.1 lakh upto March
2014).. The tax payers can plan their investments / savings so as to achieve their
financial goals. The details of such schemes alongwith some major features of each
of these are given below : (last reviewed in August , 2014)
Saving
Scheme

Sec. Return Tax

Lock in
under
benefits Period and
which
for
other

earnings
(i.e.
Tax
interest
Benefit
received
Remarks
availabl
/
e
dividend
received
)
5
years
(reduced
8.50%
wef
Dec
for VIII
2011 from 6
Series
years to 5
5 Year
years for new
National
NSCs;
investments).
Saving
and
The yield on
Section
Certificate
8.80% Taxable these NSCs
80C
s - ( NSC
for 10
will now be
scheme )
year
revised every
NSCs
year and will
for FY
be 25 bps
2014above the 5
15
year
government
bond yields
Varies
Equity
from
Linked
year to Dividend
Section
Savings
year
is
tax 3 years
80C
Schemes
(Marke free
(ELSS)
t
linked)
Varies
Varies
from
Life Insurance Sectio
from year scheme
Policies
n 80C
to year
to
scheme
Unit Linked Sectio Varies
Varies
Insurance
n 80C from year from
Plan (ULIP)
to year
scheme

Varies
from
scheme to
scheme
Varies
from
scheme to

scheme
to
(15 to 20
scheme
years)
Varies
from issue
to
issue. The
se
were
around
8%+ in
Dec
Infrastructure
2011.
Bonds
(NO
These
LONGER
Sectio have lost
3 to 5
AVAILABLE
Taxable
n 80C their
years
FOR FRESH
charm as
INVESTMEN
Additiona
T)
l
Tax
rebate of
Rs 20,000
is
NOT
given now
from FY
2012-13
onwards.
8.75% on
Till
EPF for
retirement
Contribution
2013-14 Interest
Sectio
(loans are
to EPF / GPF /
(announce earned is
n 80C
permitted
Voluntary PF
d
in tax free
only after
August
5 years)
201)
Earnings
are tax
Insurance
Sectio 6 to 7%
Locked till
free in
Policies
n 80C only
maturity
most of
the cases
Earnngs Partiail
Sectio Market
ULIPS
are tax withdrawa
n 80C linked
free
l allowed

Public
Provident
Fund (PPF)

NPS

15 years
and
extendable
.
Withdrawa
ls allowed
after
7
years.
8.70% for Interest
Sectio
Yield on
FY 2014- earned is
n 80C
PPF will
15
tax free
vary and
will
be
fixed at 25
basis point
above the
10
year
governme
nt bonds.
Withdrawa
Interest l
not
Sectio Market
earned is permitted
n 80C Linked
tax free before
maturity

Tuition Fees
including
admission
fees or college
Not
fees paid for Sectio Not
applicab
full
time n 80C applicable
le
education of
any
two
children of the
assessee.
Repayment of
Not
Sectio Not
Housing Loan
applicab
n 80C applicable
(Principal)
le
Bank
Fixed Sectio Varies
Taxable
Deposits - 5 n 80C from bank
Years
to
bank
(around

Not
applicable

Not
applicable
5 Years

8.00%
9.00%)

As per the
guidelines
issued in
December
2011, there
will
be
Senior Citizens
spread of
Savings Scheme Sectio 9.20% for
2004
(from
FY 2014- Taxable 100 basis
financial
year n 80C
15
points
2007-08)
above the
5
year
bonds
yields for
this
scheme.
Post Office Time
Deposit Account Sectio
(from financial n 80C
2007-08)

PS Note : Now some of the above investments (like PPF and 5 Year Senior
Citizens Saving Schemes etc.) are linked to the benchmark of 10 year / 5 Year
government bond yields, and thus the return on these investments will vary as
and when the yield on government bonds changes. Therefore, now remember
that you will not have fixed rate of return on these investments. On the other
hand, for other Small Saving schemes GoI will advise before 1st April every year,
the rates applicable for those schemes for the next FY. Such instruments will
continue to have same return for the whole tenure of the investment. [For
clarification see below the notification which is self explanatory]

HOW TO MAKE BEST USE OF SECTION 80C OR BACKGROUND AND

KNOW ALL ABOUT SECTION 80C
(1) Deductions Under Section 80CCC(1) :
Under this section, the contributions by individuals towards "Pension" schemes of
LIC or any other Insurance company, is allowed as deduction of Rs.10,000/-.

However, as provided under section 80CCE, the aggregate deduction u/s 80C, and u/s
80CCC and 80CCD can not exceed Rs.1,50,000/-. Thus effectively, now these are
covered under the maximum limit of Rs.1,50,000/- under section 80C.
(2) Deductions Under Section 80 D :
Basic Deduction under Section 80D, Mediclaim premium paid for Self,
Spouse or dependant children is allowed upto Rs 15,000. In case any of the
persons specified above is a senior citizen (i.e. 65 years or more as of end of
the year) and Mediclaim insurance premium is also paid for such senior
citizen, deduction amount is enhanced to Rs. 20,000.
Additional deduction: Mediclaim premium paid for parents. Maximum
deduction Rs 15,000. In case any of the parents covered by the Mediclaim
policy is a senior citizen, deduction amount is enhanced to Rs. 20,000.
Thus, in a net shell we can say that health insurance premium that you pay for
yourself, your dependents (spouse and children) and your parents, are all
considered for tax benefit under Section 80D of the Income Tax Act
1961. Therefore, you can claim a deduction up to Rs.30000 on your taxable
income, and if your parents are senior citizens, the deductible amount goes up to
Rs.35000.
However, there are a few conditions:
You can not claim tax benefit on health insurance premium paid for your
in-laws;
Proof of payment of premium has to be furnished, in order to avail the tax
benefit
The health insurance premium must be paid from taxable income of that
year only if you want to claim a deduction. Thus, if one has paid the
premium from ones savings or from gifts of money received, then one is
not eligible for tax benefits under this section.
However, you have to remember that the premium paid by any mode of other
than cash is eligible. Note prior to 1st April 2009, premium payment was
required to be paid only by cheque. However, now even the payments through
Credit card or other on line mechanism are allowed. Thus, now all payment
modes except cash payment are accepted

(3)

Deductions

Under

Section

80

Under this section, deduction is available for payment of interest on a loan taken for higher
education from any financial institution or an approved charitable institution. The loan should be
taken for either pursuing a full-time graduate or post-graduate course in engineering, medicine or
management, or a post-graduate course in applied science or pure science.
The deduction is available for the first year when the interest is paid and for the subsequent seven
years.

(4) Deductions Under Section 24(b) :

Under this section, interest on borrowed capital for the purpose of house purchase or
construction is deductible from taxable income upto Rs.2,00,000/- is deductible from
income. (certain conditions are to be fulfilled)
PS : 1A) Section 80CCF : Infrastructure Bonds : (NOT PERMITTED FROM
FY 2012-13) onwards) :
Section 80CCF allowed you to invest an additional Rs. 20,000 in infrastructure
bonds, and such an investment was reduced from your taxable income in
addition to the Rs.100,000 deduction you get from the other instruments listed
above. You were to get the tax benefit only in the year in which you have
invested in these instruments. NOW THIS IS NOT ALLOWED

TAX FREE INCOMES :

Some of the incomes are completely exempted from income tax and that too
without any upper limit. The following incomes which are tax free :(a) Interest on EPF / GPF / PPF
(b) Interest on GOI Tax Free Bonds / Tax Free Bonds issued with specific
stipulation to this effect
(c) Dividends on Shares and Mutual Funds. Dividend income from companies /
Equity Oriented Mutual funds is completely exempt in the hands of investors.
Dividend is also tax free in the hands of investors in case of debt-oriented Mutual
Fund schemes. (However, the Asset Management Company is liable to deduct
22.44% distribution tax in case of non individuals / non HUF investors and
14.025% in case of individuals or HUF investors.)

(d) Capital receipts from Life Insurance policies i.e. sums received either on
death of the insured or on maturity of Life insurance plans. However, in case of
life insurance policies issued after March 31, 2004, exemption on maturity
payment u/s 10(10D) is available only if premium paid in any year does not
exceed 20% of the sum asssured;
e) Interest on Saving Bank accounts in banks upto Rs10,000/- per year (from FY
2012-13)
(f) Long term capial gains on sale of shares and equity mutual funds after
01/10/2004, if security transaction is paid / imposed on such transactions.

GIFT TAX :
Gift tax was abolished with effect from October 1, 1998. The gifts are no longer
taxable in the hands of donor or donee. However, w.e.f. September 1, 2004, any
gift received by an individual or HUF will be included in taxable income, if the
amount of tax exceeds Rs.25,000/-. However, gifts received from any of the
following will continue to remain tax free :(i) Spouse;
(ii) Brother or sister;
(iii) Brother or sister of the spouse;
(iv) Brother or sister of either of the parents of the individual;
(v) Any lineal ascendant or descendant of the individual
(vi) Any lineal ascendant or descendant of the spouse of the individual
(vii) spouse of the person referred to in (2) or (6) or received on the occasion of
marriage or under a will by way of inheritance

Capital Gains :

Capital gains arise when an individual sells at a profit certain assets like property or shares or mutual funds or b

other sources. There are two types of capital gains, viz Short Term Capital Gains or Long Term Capital Gains.

(a) Short Term Capital Gains : Capital gain is considered as Short Term Capital Gain, if immovable property is s
shares or other financial securities such as mutual funds are sold within one year of purchase, the profit earned is

Short term capital gain is included in the gross taxable income and normal tax rates are applicable. However, w.
shares or units of equity oriented mutual fund schemes are taxed only at a flat rate of 10%, irrespective of the tax
paid on such sale.

(b) Long Term Capital Gains : Capital gain is considered as the Long Term, if the immovable property is sold aft
discount bonds, units of open ended or close ended schemes of mutaula funds are disposed (i.e. sold / redeemed
the gain is considered to be long term capital gain.

Long term capital gains on transfer of listed shares / units of equity oriented mutual funds schemes has been exem
tax has been paid on such sale. For assets other than the listed shares / units of mutual funds schemes, tax is pay
amount of gain has to be adjusted for inflation through indexation benefit.

Long term capital gains tax in respect of bonds and debt securities or debt oriented mutual fund schemes listed o
amount. In case an individual wishes to avail the benefits of indexation, then tax has to be paid at normal long te

ection 54EC of the I-T Act, 1961 : Relief from C

You can make good use of this Section to save Taxes specially when you sell some property. The I
per cent for individuals and foreign firms and 30 per cent for domestic companies. However, Section
Under this Section, gains on transfer of a long-term capital asset can be exempted from tax if the mo
the Rural Electrification Corporation (REC), SIDBI or the National Highway Authority of India. S
you have to invest in these bonds within six months from the date of transfer of the original asset. T
is locked in for three years. If you want to buy a new property one or two years after transferring th
funds. After the lock-in period or on the maturity of the bonds, the investor is free to put in his m
taxable.

On the other hand, State Bank of India, offers SBI Capgains Plus Scheme where lock-in period is a
saving bonds is offered. The proceeds of the sale of the capital asset can be parked in the fixed
marginally higher than what bonds under Section 54 EC would fetch. The interest earned will be tax
depositor cannot put the money in a different kind of asset. The plan stipulates that re-investment sho
a boon for people who have sold their property but haven't been able to purchase the property wi
property you want to reinvest in, you can opt for an exit from SBI Plan, but you will need to get a cer

Click Here to View Previous Years (Last 10 years) Income Tax Slab / Rates in
India
*******
Latest Circulars Regarding Rate of Interest on Small Savings etc.
RBI CIRCULAR FOR RATE OF INTEREST ON PPF and SCSS 2004
Schemes
RBI/2013-14/526
DGBA.CDD. No. 5342 /15.02.001/2013-14
March 21, 2014
Madam/Dear Sir,
Public Provident Fund Scheme, 1968 (PPF Scheme, 1968) and
Senior Citizens Savings Scheme, 2004 (SCSS, 2004) - Revision of interest rates
The Government of India has now vide their Office Memorandum (OM) No. 6-1/2011-NS.II dated 4th
March 2014, advised the rate of interest on various small savings schemes for the financial year 2014-15.
Accordingly, the rates of interest on PPF, 1968 and SCSS, 2004 for the financial year 2014-15, effective
from April 01, 2014, on the basis of the interest compounding/payment built-in in the schemes, will be as
under:

Scheme

Rate of Interest w.e.f.

01.04.2013

Rate of Interest w.e.f.

01.04.2014

5 Year SCSS, 2004

9.2% p.a.

9.20% p.a.

PPF, 1968

8.7% p.a.

8.70% p.a.

Revision of Interest Rates for Small Savings Schemes for the Financial Year
2014-15 Announced

Various decisions taken by the Government of India on the recommendations of the

Shyamala Gopinath Committee for Comprehensive Review of National Small Savings
Fund (NSSF), were communicated to all concerned by the Government through its Office
Memorandum dated 11th November, 2011.
One of the decisions of the Government based on the recommendations of the
Committee relates to revision of interest rates every financial year, to be notified before
1st April of that year. Accordingly with the approval of the Finance Minister, the rates of
interest on various small savings schemes for the Financial Year 2014-15 effective from
01.04.2014, on the basis of the interest compounding/payment built-in in the schemes, shall
be as under :
Scheme
1.
Savings Deposit
1 Year Time Deposit
2 Year Time Deposit
3 Year Time Deposit
5 Year Time Deposit
5 Year Recurring
Deposit
5 Year SCSS
5 Year MIS
5 Year NSC
10 Year NSC
PPF

Old Rate of interest Rate of Interest

w.e.f.01.04.2013
w.e.f. 01.04.2014
2.
3.
4.0
4.00
8.2
8.2
8.3
8.4
8.3

8.40
8.40
8.40
8.50
8.40

9.2
8.4
8.5
8.8
8.7

9.20
8.40
8.50
8.80
8.70