MONEY

The art is not making money , but in keeping it

Save YOUR tax

Rule No 1: Never Loose Your Money on Tax.

Rule No 2: Dont invest just for saving tax

look for returns.

New Income tax slab for a.y 2012-13

(financial year 2011-12)
Men (Below 60) Women (Below 60)

0%

Up to 1,80,000

0%

Up to 1,90,000

10%
20% 30%

1,80,000 to 5,00,000

10%
20% 30%

1,90,000 to 5,00,000

5,00,000 to 8,00,000

5,00,000 to 8,00,000

Above 8,00,000

Above 8,00,000

TAX CALCULATION
Working:-

Annual Package = 10,00,000 Upto 1,80,000 = No tax (+) Monthly = 83,334 1,80,000 to 5,00,000 (10%) = 32,000
(+) 5,00,000 to 8,00,000 (20%) = 60,000 (+) More then 8,00,000 (30%) = 60,000 1,52,000

TAX SAVING investment sections

80D
80C

80G

80E

80U

SECTION 80C
Inserted from 2006-07 onwards.
The maximum amount deductible under section 80C,80CCC and 80CCD cannot exceed rs 1,00,000. 80CCC 80C Deduction only to an individual or a Hindu undivided family. There are many schemes that are 80CCD listed by the Income Tax department.

80c (life insurance)

Your Life cover Premium is eligible for a tax deduction up to 1 Lakh.
The Premium paid should be 20% or less of the sum insured.

Premium towards your self, spouse or your children gets included.

Returns on life insurance %%%%%%%%%%%%%

Tax benefit under section 80C and 10(10D)

80c (unit linked insurance plan)

ULIPs Premium is eligible for a tax deduction up to 1 Lakh.

The Premium paid should be 20% or less of the sum insured.

Premium towards your self, spouse or your children gets included.

Returns on Ulips %%%%%%%%%%%%%

Tax benefit under section 80C and 10(10D)

80C (life insurance and ulip)

80c (public provident fund )

It is the Long term debt scheme of the Government of India.
Scheme is for 15 Years and interest rate is 8.6% (w.e.f 1/12/2011) Annual investments limit has been increased from 70,000 to 1,00,000. If a loan taken from PPF account ,interest rate is 2% against 1% at present.

80c (EMPLOYEE PROVIDENT FUND)

EPF is compulsory deduction from salary by employer for there
employee. Every month12% Deducted from your Basic salary. Interest rate of 9.5% monthly cumulative best avenue in low risk category. Eligible only if salary is above 6500 per month. Interest income is not taxable. If you withdraw EPF before 5 years the amount is taxable.

80c (5 years tax savings deposit)

Deposits booked by an individual or HUF for 5 yrs up to rs 1,00,000

Interest on a Quarterly basis is 8.25% p.a and for senior citizen 8.75%. Multiples of rs.100/ Monthly or Quarterly interest payout option is available. No partial / premature withdrawal allowed. Sweep in not allowed. In the case of joint holder deposit ,deduction only to 1st holder.

80c (tuition fees)

A Parents can claim a deduction on payment made for tuition
fees to any Universities, College, School or educational institutional. Deduction on payment towards tuition fees claimed up to Rs1,00,000. Payment of fees to play schools or creches will be allowed. Fees for admission are excluded from amounts eligible for deduction. The deduction is allowed only for two children. Deduction is available of paid basis.

Adopted Childs tuition fees is also eligible for deduction

80c (National savings certificate)

This

Government-backed security is available at post offices and gives an interest rate of 8% , compounded half-yearly (till Nov 2011). The interest income is entirely taxable but no TDS. NSC is the only small saving scheme wherein interest for the first five years is eligible for a deduction under section 80C.

NSCs are good for those in lower tax slabs with an investment horizon of six years.
The 5-year NSC will carry a rate of interest of 8.4 per cent against 8 per cent at present. The 10-year NSC will offer 8.7 per cent.

80c (National savings certificate)

Illustration:

Example: You invest Rs 1,00,000 in an NSC on April 1, 2010. Interest on this investment for each year is shown in the following table:
April 1, 2010 Initial investment 100,000 Mar 31, 2011 interest for Yr 1: 8,160 Mar 31, 2012 interest for Yr 2: 8,830 Mar 31, 2013 interest for Yr 3: 9,550 Mar 31, 2014 interest for Yr 4: 10,330 Mar 31, 2015 interest for Yr 5: 11,170 Mar 31, 2016 interest for Yr 6: 12,070 Total interest 60,110 Total value of investment: 1,60,110

80c (National savings certificate)

10-Year National Savings Certificate (IX-Issue), 2011 is being launched from

Dec 1, 2011.
The major highlights of this scheme are as follows:i) Investments in Certificate will earn Interest at the rate of 8.7% p.a. compounded semi-annually. ii) On investment of Rs.100,the depositor will get Rs. 234.35 on maturity of Certificate. iii) This Certificate will be available in the denominations of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000 and Rs. 10,000. iv) There is no upper limit for investment in the Certificate. v) This Certificate can be transferred from a post office where it is registered to any other post office and it can be pledged as a security.

80c (REPAYMENT OF HOUSING LOAN)

The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components Principal and Interest. Principal component Sec 80C. Stamp Duty and Registration Charges for a home

80c (equity linked savings scheme)

ELSS is mutual fund products and carry market risk.
ELSS comes with a 3 year locking period.

Choice between dividend option, growth option and Dividend re-investment option.
Investments up to Rs 1,00,000 qualify under section 80C. The dividends earned and returns at maturity are also tax-free under section 10(10D).

Sec 80CCC
(Contribution to Pension Funds)
Section 80CCC provides deductions from gross (total) income for amounts paid or deposited by the assessee to any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the fund referred to in clause (23AAB). The deduction is available to an individual who is resident or nonresident, Indian citizen or foreign citizen. The maximum amount deductible under section 80C is Rs. 1,00,000. Also the total amount of deductions under sections 80C, 80CCC and 80CCD is Rs. 1,00,000. If deduction is claimed under 80CCC, pension received will be taxable in the hands of assessee or the nominee in the year of receipt.

Sec 80CCd
(Contribution to Pension scheme of central govt)
Deduction is allowed to an individual employed by the Central Government or any other employer on or after the 1st day of January, 2004, has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government.
However, the deduction is limited to 10 per cent of his salary in the previous year. The maximum amount deductible under section 80C is Rs. 1,00,000. Also the total amount of deductions under sections 80C, 80CCC and 80CCD is Rs. 1,00,000.

Section 80CCE

As per this section, the maximum amount of deduction that an assessee can claim under Sections 80C, 80CCC and 80CCD will be limited to Rs 100,000.
In other words, Section 80CCE is not the separate deduction. It says that the Maximum limit for deduction under all the 3 laws means, - Section 80C - Section 80CCC & - Section 80CCD is combinely Rs.1,00,000

SECTION 80Ccf
Section 80 CCF has been introduced for the assessment year 2011-12

and 2012-13. Under this section and individual or a Hindu undivided family can claim a deduction for the investments done in notified long-term infrastructure bond.

The Quantum of deduction cannot exceed rs.20,000 which is over and above the existing overall limit of deduction on savings of upto rs 1 lakh under section 80C,80CCC and 80CCD.
Deduction under this section will be available only for assesment year 2011-12 and 2012-13. Returns offer are 9% in IDFC and L&T for 10 years bond.

SECTION 80d

80D

80DD

80DDB

Section 80D
Payment of Mediclaim Insurance Premium Eligible to Individual or HUF. Amount of deduction
Basic deduction ( Max 15k ). Additional 5K for senior citizen.

By Assesse

For whom Individuals own health, spouse, Parents & dependent Children. HUF Any Member To Whom GIC or other Approved Insurance CO By Cheque

Section 80DD
Eligible to Individual or HUF. Treatment & Maintainance of HDR Amount of deduction
Disablity < 40% 40 to 80% > 80%- Severe Disability Deduction No Deduction Rs 50K Rs 100K

Should spend on treatment or should deposit some amount with LIC or other insurer. Furnish a certificate of disability.

Section 80DDB
Eligible to Individual or HUF. Treatment of specified diseases Amount of deduction
Disablity < 40% 40 to 80% > 80%- Severe Disability Deduction No Deduction Rs 50K Rs 100K

Should spend on treatment of specified disease.( Rule 11DD) Furnish a certificate of disability.

SECTION 80E

80E

SECTION 80E
Deduction in respect of interest on loan taken for higher education

Conditions: The assessee should be an individual.

Any amt paid by an assessee in the previous year for interest of loan taken from any bank OR FIs for pursuing higher education. It includes only interest paid and not repayment of loan. While computing, the total income of such assessee will be allowed @ 100% of interest paid on loan and not repayment of loan. Such deduction is allowable from GTI of initial assessment year and for 7 successive years or until the interest is paid in full whichever is earlier

Section 80u
Assesses is himself handicapped. Eligible for Resident Individual Amount of Deduction Normally Rs 50k flat deduction. Severe Disability Rs 100K flat deduction Amount of deduction Disablity < 40% 40 to 80% > 80%- Severe Disability Furnish a certificate of disability.

Deduction No Deduction Rs 50K Rs 100k

3 type of people

Declaration

1.YES 2.YES 3.YES

1.YES 2.NO 3.NO

1.NO 2.NO 3.NO

Proof

Tax savings

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