Ranjeet on August 8th, 2010

Deduction u/s 80D is available to the following:
1.An Individual;
2.A hindu undivided family(HUF)

Deduction u/s 80D is available to an individual for his own health , spouse and dependent children. An individual can also claim deduction u/s 80D for his parents (whether dependent or not). deduction in respect of parents health of an individual is in addition to the above deduction.

PERMISSIBLE DEDUCTION U/S80D:

1. Amount paid for medical insurance or Rs. 15,000/- for his own health or his family(spouse & dependent children)
2.Amount paid for the health of his parents whether dependent or not OR Rs. 15,000(Maximum). but if the parents are senior citizens, the above amount of deduction increased to Rs. 20,000(maximum).

therefore , an individual can get maximum deduction u/s 80D either Rs. 30,000(Rs.15,000 for himself & family & Rs. 15,000 for parents) OR Rs. 35,000( if the parents are senior citizens)

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Ranjeet on August 2nd, 2010

Deduction under Section 80C is allowed only to the following assessee from their gross total income:-

1. an individual, or
2. a Hindu undivided family

Maximum deduction u/s 80C is Rs. 1,00,000

Many types of investments are covered under section 80C but here I am discussing only those in which the assessee generally make investments.

  1. Life insurance premium (for himself, spouse & any child of such individual whether married/unmarried, dependent/non dependent)
  2. Provident Fund account (for individual only)
  3. Public provident fund (PPF) – maximum Rs. 1,00,000
  4. Unit linked insurance plan (ULIP)
  5. National saving certificates (NSC) & national saving schemes.
  6. Tution fees paid to any university, college, school or other educational institution situated in India for the purpose of full time education (dedution is available only for 2 childrens)
  7. Term deposit for a fixed period not less than 5 years with a scheduled bank as notified
  8. Five years term deposit with post office

Deduction u/s 80C is allowed upto Rs. 1,00,000. Hence a individual should invest in such a way to get maximum deduction u/s 80C. A person wanting to get deduction u/s 80C should plan early keeping in mind his/her PF deduction for the year & other regular investments. Invest more in those funds which gives benefit in present as well as future like provident fund , public provident fund etc.

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Ranjeet on August 2nd, 2010

WHAT IS PROVIDENT FUND?

Provident fund is a fund which is composed of contributions made by the employee during the time he/she worked along with an equal contribution by his employer

RATE : Provident fund is calculated as 12% of his/her basic salary & the same amount is contributed by the employer.however employee have a option to contribution more than 12%

DEPOSIT OF CONTRIBUTIONS:

Employers contribution of 12% of basic salary is totally deposited in provident fund account whereas out of employees contribution of 12% , 3.67% is contributed to provident fund & 8.33% is deposited in Pension scheme.

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Ranjeet on July 7th, 2010

The Income Tax department has issued new Saral-II(ITR 1) form to be used for assessment year 2010-2011.

You can use the new Saral-II(ITR 1) form if :-

  • You have salary income
  • You have pension income
  • You have income from one house property excluding losses brought forward from previous year
  • You have income from other sources

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Ranjeet on June 19th, 2010

One tax exemption almost everybody can avail is on House Rent Allowance (HRA)

To calculate HRA exemption, use the least of the following amounts:

  • Actual house Rent allowance received
  • Rent paid in excess of 10% of salary
  • 50% or 40% of salary (50% in case of Delhi, Mumbai, Kolkata & Chennai, 40% for other cities)

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Ranjeet on May 22nd, 2010

Generally, In India income tax is calculated on 5 type of incomes –

  1. Income from Salary
  2. Income from house property
  3. Income from business & profession
  4. Income from capital gains
  5. Income from other sources

In this article, we will talk about how to calculate income tax on salary, and what tax exemptions you can avail to minimize the tax paid.

By taking full advantage of exemptions & deductions available under the income tax act, 1961, a person can reduce their tax liability upto the certain limits.
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Ranjeet on May 22nd, 2010

Income Tax rates for the assessment year 2010-2011

For Individuals & HUF Other than women & senior citizens

Taxable Income Tax rate
Up to 1,60,000 NIL
1,60,010 to 3,00,000 10%
3,00,010 to 5,00,000 20%
Above 5,00,000 30%
Education cess 2%
SHEC 1%
Surcharge N/A

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