Oh, March is ahead. It is time to have a look at the Income Tax component

Srinivasa Murthy By Srinivasa Murthy, 25th Jan 2014 | Follow this author | RSS Feed | Short URL http://nut.bz/nbwl6xr-/
Posted in Wikinut>Money>Tax

Government of India - Income Tax saving schemes for the benefit of all categories of employees.

Sharing information on Current Income tax saving schemes in India under various sections.

When March is ahead, every employee irrespective whether from the public sector or private sector, either small or big whoever comes under income tax bracket is busy calculating the income tax impact on their earnings in the particular financial year and brainstorm to arrive at taxable income and sketch an investment plan.

Income tax is the main source of income to the Government. The amount accumulated is used for various development activities and implementation of welfare schemes. Based on the annual income, the tax slabs have been fixed by the government. As a part of women’s empowerment program, a bit more relaxation has been provided to the working women.

For the benefit of employees, the government of India has come out with various tax saving schemes which will eventually benefit the employees as well as the government to raise the funds for various development activities.

Under Section 80C, employees can get tax exemption on….

a) Housing loan Principal repayment.
b) Tuition fee paid to the children (only 2 children)
c) Investment made on National Saving Certificates.
d) Investment made on Infrastructure Bonds
e) Investment made upto Rs.1 Lakh on National Bank for Agriculture and Rural Development.
f) Investment made on Unit Linked Insurance Plan.
g) Premium paid on Life Insurance policies.
h) Premium paid towards pension fund (Rs.1 Lakh limit)
i) 5 years Tax saving Bonds / Fixed deposits.
j) 5 Years Post office term deposits.
k) 5 years National Housing Bank (Tax Saving) Term deposits (maximum investment upto Rs.1 Lakh is exempted.)
l) Equity linked saving scheme (under 3 year lock-in)
m) Stamp duty and registration charges paid towards the purchase of a house.

Apart from the above under different sections certain exemptions have been provided which are….
1) Under Section 80D, Premium upto Rs.15000/- payable on Mediclaim policy is exempted from tax. In case of Senior Citizens, it is Rs.20000/-.
2) Under Section 80DDB, expenses incurred upto Rs.40000/-in a year towards medical treatment for self and dependents are exempted from tax.
3) Under section 80E, interest paid on loan obtained for higher education is exempted.
4) Under Section 80G, donations paid to charitable institutions are exempted.
5) Under Section 80GG, exemption can be availed on House rent paid.
6) Under Section 80GGC, contribution made to political parties and trusts are exempted.

These are few channels /sections under which employees / individuals can avail tax exemption, which will mitigate the tax burden on small salaried category of people.

Tags

Income Tax, Income Tax Extension, Tax Saving Strategies, Tax Savings, Tax Strategies

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author avatar Srinivasa Murthy
Having more than 10 years of experience in the financial sector and passionate of writing. Interested to write all sorts of articles

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