Tax Facts – Deductions
Financial year 2017-18 and are subject to enactment of the Finance Bill, 2017
Income Tax Rates
For Individuals, Hindu Undivided Family, Association of Persons, Body of Individuals and Artificial juridical persons
| Income Tax | Tax Rate |
| Up to 250000 (a)(b) | Nil |
| Rs. 250,001 to Rs. 500,000(d)(e) | 5% |
| Rs. 500,001 to Rs. 1,000,000(d) | 20% |
| Rs. 1,000,001 and above(c)(d) | 30% |
- In the case of a resident individual of the age of 60 years or above but below 80 years, the basic exemption limit is Rs 300,000.
- In case of a resident individual of age of 80 years or above, the basic exemption limit is Rs 500,000.
- Surcharge @ 12% is applicable on income exceeding Rs 1 crore; Marginal relief for such person is available
- Education cess is applicable @ 3% on aggregate of tax plus surcharge
- Finance Bill, 2017 provides a rebate of lower of actual tax liability or Rs. 2,500 (against earlier rebate of Rs. 5,000) in case of individuals having total income of less than Rs. 350,000.
Tax Deductions (Section 80C)
If it’s a long-term investment (typically with a lock-in of 5 years), chances are high that it would qualify for the Section 80C deduction. Tax deductions are used by the government as tools to encourage you to:
- Save for your retirement
- Buy insurance and thus protect your loved ones.
- Invest in Indian economy for longer periods
- Buy a home
Why you should care?
- Because it is the closest thing to free money you will ever get. Depending on your income tax slab, you might be saving up to about Rs. 80,340.
A few investment avenues for 80C are:
| Deductions under 80C (Max Rs 1.5 lakh) | |
| 1 | Life insurance premium |
| 2 | PF |
| 3 | PPF |
| 4 | ULIP |
| 5 | NSC |
| 6 | ELSS (u/s 10(23D)) – Mutual Fund |
| 7 | Pension Fund (MF) (u/s 10(23D)) |
| 8 | Annuity Plan by insurer (u/s 80CCC) |
| 9 | Repayment towards Principal amount of Housing Loan |
| 10 | Bank Term Deposit |
| 11 | Senior Citizen Saving Scheme 2004 (Postal Scheme) |
| 12 | Sukanya Samriddhi Scheme |
| 13 | Tuition Fees (Excluding Development fee and Donation, Etc) |
Other than 80C
- Deductions u/s 80 CCG – Investments in RGESS (50% of First time Invest) – Max Rs.50000
- Deductions u/s 80 CCD – Investments in NPS (50000 Maximum)
- Deductions u/s 80 D – Medical Insurance Premium (Self, Parents) – Rs.25000 for self and for senior citizens Rs.30000.
- Tax Benefit u/s 24 – Interest Paid On Home Loan (Max 2 Lakh)
Deductions From Gross Total Income
Gross total Income is the total of income under all heads for a particular previous year. Out of the said Gross total Income, deductions are allowed under various sections comprised in chapter VI-A. To claim the said deductions, certain conditions have to be fulfilled.
80CCC – Contribution to Pension Fund of LIC
80D – Medical Insurance premia
80DD – Maintenance including medical treatment of handicapped dependent
80DDB – Medical treatment, etc.
80-E – Repayment of loan taken for higher education
80G – Certain Donations to Charitable trusts of institutions for charitable purpose.
80GG – Rent Paid by an Assessee
80GGA – Donations for scientific research or rural or urban development
80-HH – Deduction in respect of profits and gains from newly established industrial undertakings or hotel in backward areas.
80-HHA – Deduction in respect of profits and gains from newly established small scale industrial undertakings in certain areas.
80-HHB – Deduction in respect of profits and gains from projects outside India.
80-HHBA – Deduction in respect of profits and gains from housing projects in certain areas.
80-HHC – Deduction in respect of profits and gains from export of goods outside India.
80-HHD – Deduction in respect of earning in foreign exchange
80-HHE – Deduction in respect of profit from export of computer software, etc.
80-HHF – Deduction in respect of profit from export or transfer of film software, etc.
80-IA – Deduction in respect of profit and gains of certain industrial undertakings or enterprises, etc.
80-IB – Deduction in respect of profit and gains of certain industrial undertakings other than infrastructure development undertakings, etc.
80-JJA – Profits and gains from business of collecting and processing biodegradable waste.
80-JJAA – Deduction in respect of employment of new workmen.
80-L – Interest on securities, dividends, etc.
80 O – Royalties, commissions, fees for professional services etc, earned in convertible foreign exchange
80-P – Certain income of Co-operative Societies
80-R, 80-RR and 80-RRA – Income from foreign sources.
80-U – Income of handicapped Assessee.
Click here to down load the Tax Reckoner from TATA Mutual fund.
Disclaimer: The information set out above is included for general information purposes only and does not constitute legal or tax advice. In view of the individual nature of the tax consequences, each investor is advised to consult his or her own tax consultant with respect to specific tax implications arising out of their participation in the Scheme or investment. Any action taken by you on the basis of the information contained herein is your responsibility alone.
