1. The tax rate for income between Rs 2.5 lakh to Rs
5 lakhs has been reduced to 5% from 10%
2. 10% Surcharge introduced for Income between Rs 50
Lakhs to Rs 1 crore
3. Tax Rebate under Section 87A reduced to Rs 2,500
for income up to Rs 3.5 Lakhs
Download: Automated All in One for Non-Govt Employees for F.Y.2017-18 with Form 12 BA.
5. Loss from House/Property capped at Rs 2 Lakh
irrespective if the house is rented or self-occupied
6. NPS tax deduction for self-employed increased to
20% of gross income
Mentioning Some Points I am
frequently asked
1. There is NO tax benefit on Infrastructure Bonds
2. There is NO separate tax slab for Men & Women
We give a brief of all the tax saving sections below:
1.
Section 80C/80CCC/80CCD
These
3 are the most popular sections for tax saving and have lot of options to save
tax. The maximum exemption combining
all the above sections is Rs 1.5 lakhs. 80CCC deals with
the pension products while 80CCD includes Central Government Employee Pension
Scheme.
You can choose from the following for tax saving
investments:
1.
Employee/ Voluntary Provident
Fund (EPF/VPF)
2.
PPF (Public Provident fund)
3.
Sukanya Samriddhi Account
4.
National Saving Certificate
(NSC)
5.
Senior Citizen’s Saving Scheme
(SCSS)
6.
5 years Tax Saving Fixed Deposit in banks/post offices
7.
Life Insurance Premium
8.
Pension Plans
from Life Insurance or Mutual Funds
9.
NPS
10.
Equity Linked Saving Scheme (ELSS – popularly known as Tax Saving Mutual
Funds)
11.
Central
Government Employee Pension Scheme
12.
Principal
Payment on Home Loan
13.
Stamp Duty and
registration of the House
14.
Tuition Fee for
2 children
We have done a comprehensive analysis of all the
above available options and you can choose which is the best for you.
Download: Automated All in One TDS onSalary for Govt & Non-Govt employees For F.Y.2017-18 with Arrears ReliefCalculation U/s 891(1) & Form 10e
2.
Section 80CCD(1B) – Investment in NPS
Budget 2015 has allowed additional exemption of Rs
50,000 for investment in NPS. This is continued this year too. We have done a
complete analysis which you can read by clicking the link below.
Download: Automated Pan Application Form 49A( New Format)
3.
Payment of interest on Home Loan (Section 24/80EE)
The interest paid up to Rs 2 lakhs on home loan for
self-occupied or rented home is exempted u/s 24. Earlier there was NO limit on
interest deduction on rented property. Budget 2017 has changed this and now the
tax exemption limit for interest paid on home loan is Rs 2 lakhs, irrespective
of it being self-occupied or rented. However for rented homes any loss in
excess of Rs 2 lakhs can be carried forward for up to 7 years.
Budget 2016 had provided additional exemption up to
Rs 50,000 for payment of home loan interest for first time home buyers. To
avail this benefit the value of home should not exceed Rs 50 lakhs and loan
should not be more than Rs 35 lakhs.
4.
Payment of Interest on Education Loan (Section 80E)
The entire interest paid (without any upper limit) on
education loan in a financial year is eligible for deduction u/s 80E. However
there is no deduction on principal paid for the Education Loan.
The loan should be for education of self, spouse or
children only and should be taken for pursuing full time courses only. The loan
has to be taken necessarily from approved charitable trust or a financial
institution only.
The deduction is applicable for the year you start
paying your interest and seven more years immediately after the initial year.
So in all you can claim education loan deduction for maximum eight years.
Download:- All in One TDS on Salary for Govt and Non-Govt Employees for F.Y. 2017-18
5.
Medical insurance for Self and Parents (Section 80D)
Premium paid for Mediclaim/ Health Insurance for
Self, Spouse, Children and Parents qualify for deduction u/s 80D. You can
claim maximum deduction of Rs 25,000 in case you are below 60 years of age and
Rs 30,000 above 60 years of age.
An additional deduction of Rs 25,000 can be claimed
for buying health insurance for your parents (Rs 30,000 in case of either
parents being senior citizens). This deduction can be claimed irrespective of
parents being dependent on you or not. However this benefit is not available
for buying health insurance for in-laws.
HUFs can also claim this deduction for premium paid
for insuring the health of any member of the HUF.
To avail deduction the premium should be paid in any
mode other than cash. Budget 2013 had introduced deduction of Rs 5,000
(with in the Rs 25,000/30,000 limit) is also allowed for preventive health
checkup for Self, Spouse, dependent Children and Parents. Its continued to this
year too.
6.
Treatment of Serious disease (Section 80DDB)
Cost incurred for treatment of certain disease for
self and dependents gets deduction for Income tax. For very senior citizens
(more than 80 years of age) the deduction amount is up to Rs 80,000;
while for senior citizens (between 60 to 80 years of age) it Rs 60,000
and for all others its Rs 40,000. Dependent can be parents, spouse,
children or siblings. They should be wholly dependent on you.
To claim the tax exemption you need a certificate
from specialist from Government
Hospital
Diseases Covered:
1.
Neurological
Diseases
2.
Parkinson’s
Disease
3.
Malignant
Cancers
4.
AIDS
5.
Chronic Renal
failure
6.
Hemophilia
7.
Thalassaemia
Download: Automated All in One TDS on Salary for West Bengal Govt employees for F.Y. 2017-18
8.
Physically Disabled Tax payer (Section 80U)
Tax
Payer can claim deduction u/s 80U in case he suffers from certain disabilities
or diseases. The deduction is Rs 75,000 in case of normal disability (40% or more disability) and
Rs 1.25 Lakh for severe disability (80% or more
disability)
A certificate from neurologist or Civil Surgeon or
Chief Medical Officer of Government
Hospital
Disabilities Covered
1.
Blindness and
Vision problems
2.
Leprosy-cured
3.
Hearing
impairment
4.
Locomotor
disability
5.
Mental
retardation or illness
6.
Autism
7.
Cerebral Palsy
Download: Automated Arrears Relief Calculator U/s 89(1)with Form 10 E From F.Y.2000-01 to F.Y. 2017-18
9. Physically Disabled
Dependent (Section 80DD)
In case you have dependent who is differently abled,
you can claim deduction for expenses on his maintenance and medical treatment
up to Rs 75,000 or actual expenditure incurred, whichever is lesser. The limit
is Rs 1.25 Lakh for severe disability conditions i.e. 80% or more of the
disabilities. Dependent can be parents, spouse, children or siblings. Also the
dependent should not have claimed any deduction for self disability u/s 80DDB.
To claim the tax benefit you would need disability
certificate issued by state or central government medical board.
You can also claim tax exemption on premiums paid for
life insurance policy (in tax payers’ name) where the disabled person is the
beneficiary. In case the disabled dependent expires before the tax payer, the
policy amount is returned back and treated as income for the year and is fully
taxable.
40% or more of following Disability is considered for purpose of
tax exemption
1.
Blindness and
Vision problems
2.
Leprosy-cured
3.
Hearing
impairment
4.
Locomotor
disability
5.
Mental
retardation or illness
Download:- Automated H.R.A. Calculator U/s 10(13A)
10. Donations to Charitable
Institutions (Section 80G)
The government encourages us to donate to Charitable
Organizations by providing tax deduction for the same u/s 80G. Some donations
are exempted for 100% of the amount donated while for others its 50% of the
donated amount. Also for most donations, the maximum exemption you can claim is
limited to 10% of your gross annual income. Please note that only donations
made in cash or cheque are eligible for deduction. Donations in kind like
giving clothes, food, etc is not covered for tax exemption.
How to Claim Sec 80G Deduction?
1.
A signed &
stamped receipt issued by the Charitable Institution for your donation is must
2.
The receipt
should have the registration number issued by Income Tax Dept printed on it
3.
Your name on the
receipt should match with that on PAN Number
4.
Also the amount
donated should be mentioned both in number and words
Download: Automated All in One TDS on Salary for Non-Govt Employees forF.Y.2017-18.
13. House
Rent in case HRA is not part of Salary (Section 80GG)
In case, you do not receive HRA (House Rent
Allowance) as a salary component, you can still claim house rent deduction u/s
80GG. Tax Payer may be either salaried/pensioner or self-employed.
To avail this you need to satisfy the following
conditions:
1.
The rent paid
should be more than10% of the income
2.
No one in the
family including spouse, minor children or self should own a house in the city
you are living. If you own a house in different city, you have to consider
rental income on the same
The House Rent deduction is lower of the 3 numbers:
1.
Rs. 5,000 per
month [changed from Rs 2,000 to Rs 5,000 in Budget 2016]
2.
25% of annual
income
3.
(Rent Paid
– 10% of Annual Income)
You need to fill form no 10BA along with
the tax return form
