Recently 31st July, 2014 ended, it is deadline to submit Income Tax Return for Salaried Employee and non-audit-able accounts. Near about 90% Taxpayee (Salaried Employee) submit their Income Tax Return by 31st July and now they are in planing to save income Tax for Asstt. Year 2015-16. The following information is most useful and important for salaried Taxpayee for Asstt. Year 2015-16 regarding Income Tax Exemptions and Deductions:
Exemptions under the head of Salary Income :
Section - 10 (5)
Details of Exemptions :
Exemption for Leave Travel Concession
Descriptions :
The amount actually incurred on performance of travel on leave to any place in India by the shortest route to that place is exempt. This is subject to a maximum of the air economy fare or AC 1st Class fare (if journey is performed by mode other than air) by such route.
Note - Provided that the exemption shall be available only in respect of two journeys performed in a block of 4 calendar years.
Section - 10(10)
Details of Exemptions :
Gratuity
Descriptions :
Least of the following will be exempt
1. Amount received
2. Rs. 10,00,000
3. 15*/26 x LS x (CYS + Fraction 6 months)
LS : Last Month Salary Drawn (Salary means Basic + DA (both))
Section - 10(10A)
Details of Exemptions :
Commuted Pension
Section - 10(10AA)
Details of Exemptions :
Leave Encashment upon Retirement
Descriptions :
Other Employee Least of the following will be exempted
1.Amount Received
2.Rs. 3, 00,000
3.10 x AS
(LE or 30 days) Received by Employee During the Employment (Fully TAXABLE)
Note - Govt. Employee {Fully Exempt} Received by Legal Heir (Fully exempt)
Section - 10(10B)
Details of Exemptions :
Retrenchment Compensation
Descriptions :
Least of the followings will be Exempt
1.Amount Received
2.Amount Calculated under “Industrial Dispute Act”
3.Rs.5,00,000
Note - Ref. Sec. 10(10B) of IT
Section - 10(10C)
Details of Exemptions :
VRS
Descriptions :
Least of the followings will be Exempt
1.Amount Received
2.Rs.5,00,000
Note - Ref. Sec. 10(10C) of IT
Section - 10(13A)
Details of Exemptions :
HRA
Descriptions :
The least of the following will be exempted
1.Amount received
2.50% or 40% of Salary
3.Rent paid less 10% of Salary
4.Salary means; Basic Salary+D.A
Section - 10(14)
Details of Exemptions :
Children Education Allowance.
Descriptions :
Rs.100 per month per child upto a maximum 2 children.
Details of Exemptions :
Hostel expenditure Allowance on employee’s child
Descriptions :
Rs.300 per month per child upto a maximum two children.
Note: Allowance granted to meet Hostel expenditure Allowance on employee’s child.
Details of Exemptions :
Uniform allowance
Descriptions :
It is exempted upto actual expenditure incurred for maintaining of the official uniform.
Note: Excess, if any, will be taxable.
Details of Exemptions :
Conveyance/Transport allowance
Descriptions :
upto Rs.800 per month
Note: Handicapped with the disability of lower extremities or a blind employee it shall be exempted upto Rs.1600 p.m.
Deductions under section 80 of Income Tax Act:
Section - 80C
Details of Deductions :
General deduction for investment in PPF, PF, Life Insurance, ULIP, Stamp duty on house, Fixed deposits for 5 years , bonds etc.
Descriptions :
Maximum Rs. 1,50,000 is allowed. Investment need not be from taxable income.
Note: Limit of eligible premium in case of insurance policy on life of disable person has been increased to 15 % instead of 10 % from FY 13-14.
Section - 80CCC
Details of Deductions :
Deduction in case of contribution to pension fund. However, it should be noted that surrender value or employer contribution is considered income.
Descriptions :
Maximum is Rs 1,50,000
Note: Aggregate of 80C & 80CCC & 80CCD is Rs 1,50,000.
Section - 80CCD
Details of Deductions :
Deduction in respect to contribution to new pension scheme. Employees of central and others are eligible.
Descriptions :
Maximum is sum of employer’s and employee’s contribution to the maximum: 10 % of salary.
Note: Aggregate of 80C & 80CCC & 80CCD is Rs 1,50,000.
Section - 80CCE
Details of Deductions :
It should be noted that employer contribution is allowable as extra u/s 80CCD(2) of the Income Tax Act from Asst Yr 2012-13 and only employee's contribution is within limit of Rs 1 Lakh as stated in 80CCE
Descriptions :
It should be noted that as per section 80CCE, the maximum amount of deduction which can be claimed in aggregate of 80C ,80CCC & 80CCD(1) is Rs 1,50,0000.
Section - 80CCG
Details of Deductions :
Individual having gross total income up to Rs. 12 Lakh can claim this deduction for investing in IPOs of share or mutual fund units.
Descriptions :
50 % 0f the invested amount. Limit is Rs. 25,000 max.
Note: The deduction is allowed for three years only.
Section - 80D
Details of Deductions :
Medical insurance on self, spouse, children or parents. The deduction is also allowable for CGHS contribution to Central and State scheme. It is also for conducting health check up to Rs 6000.
Descriptions :
Rs 15,000 for self, spouse & children. Extra Rs. 15,000 for insurance on parents. IF parents are above 65 years, extra sum should be read as Rs 20,000. Thus maximum is RS 35,000 per annum to a person of age below 60 yrs.
Note: Cash payment not allowed. Watch the Video on Section D.
Section - 80DD
Details of Deductions :
For maintenance including treatment or insurance the lives of physical disable dependent relatives
Descriptions :
Rs 50,000. In case disability is severe, the amount is Rs 1,50,000. Watch video on 80DD Deduction
Section - 80DDB
Details of Deductions :
For medical treatment of self or relatives suffering from specified disease
Descriptions :
Actual amount paid to the extent of Rs 40,000. In case of patient being Sr Citizen, amount is Rs 60,000.
Section - 80E
Details of Deductions :
For interest payment on loan taken for higher studies for self or education of spouse or children.
Descriptions :
Actual amount paid as interest and start from the financial year in which he /she starts paying interest and runs till the interest is paid in full. Watch the video on 80E.
Note: Watch the video on 80E.
Section - 80EE
Details of Deductions :
Interest on home loan sanctioned during F. Y. 2013-14.
Descriptions :
Maximum Rs 1 lakh.
Note: Value of the property should be below Rs 50 Lakh and max loan sanctioned should be Rs 25 lakh. Further Assessee should not have any other residential house.
Section - 80G
Details of Deductions :
Donations to charitable institution.
Descriptions :
100% or 50% of amount of donation made to 19 entities (National defense fund, Prime minister relief fund etc). For Asst Yr 2014-15, National Children Fund will also get 100% deduction.
Section - 80GG
Details of Deductions :
For rent paid.
Descriptions :
This is only for people not getting any House Rent Allowance. Maximum is Rs 2000 per month.
Note: If you or your spouse or your HUF or minor son has any residential house, deduction is not available.
Section - 80GGA
Details of Deductions :
For donation to entities in scientific research or rural development Fund.
Descriptions :
Only those tax payers who have no business income can claim this deduction .Maximum is equivalent to 100 % of donation.
Note: Cash payment not allowed.
Section - 80GGB & 80GGC
Details of Deductions :
For contribution to political parties
Descriptions :
100 % of donations
Note: Cash payment not allowed.
Section - 80QQB
Details of Deductions :
Allowed only to resident authors for royalty income for books other than text book
Descriptions :
Royalty income or Rs 3,00,000 whichever is less.
Section - 80RRB
Details of Deductions :
For income receipt as royalty on patents of resident individuals
Descriptions :
Actual royalty or Rs 3,00,000 whichever is less.
Section - 80TTA
Details of Deductions :
Individual & HUF having interest in Savings Account
Descriptions :
Rs 10000 maximum
Note : Deduction not allowed if interest derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons or a body of individuals.
Section - 80U
Details of Deductions :
Deduction in respect of permanent physical disability including blindness to taxpayer
Descriptions :
RS 50,000 which goes to Rs 1,00,000 in case taxpayer is suffering from severe disability.
Section - 87A
Details of Deductions :
Rebate to individual having low taxable income
Descriptions :
Amount of tax or Rs 2,000 which ever is less
Note : Only resident individual gets this rebate
Exemptions under the head of Salary Income :
Section - 10 (5)
Details of Exemptions :
Exemption for Leave Travel Concession
Descriptions :
The amount actually incurred on performance of travel on leave to any place in India by the shortest route to that place is exempt. This is subject to a maximum of the air economy fare or AC 1st Class fare (if journey is performed by mode other than air) by such route.
Note - Provided that the exemption shall be available only in respect of two journeys performed in a block of 4 calendar years.
Section - 10(10)
Details of Exemptions :
Gratuity
Descriptions :
Least of the following will be exempt
1. Amount received
2. Rs. 10,00,000
3. 15*/26 x LS x (CYS + Fraction 6 months)
LS : Last Month Salary Drawn (Salary means Basic + DA (both))
Section - 10(10A)
Details of Exemptions :
Commuted Pension
Section - 10(10AA)
Details of Exemptions :
Leave Encashment upon Retirement
Descriptions :
Other Employee Least of the following will be exempted
1.Amount Received
2.Rs. 3, 00,000
3.10 x AS
(LE or 30 days) Received by Employee During the Employment (Fully TAXABLE)
Note - Govt. Employee {Fully Exempt} Received by Legal Heir (Fully exempt)
Section - 10(10B)
Details of Exemptions :
Retrenchment Compensation
Descriptions :
Least of the followings will be Exempt
1.Amount Received
2.Amount Calculated under “Industrial Dispute Act”
3.Rs.5,00,000
Note - Ref. Sec. 10(10B) of IT
Section - 10(10C)
Details of Exemptions :
VRS
Descriptions :
Least of the followings will be Exempt
1.Amount Received
2.Rs.5,00,000
Note - Ref. Sec. 10(10C) of IT
Section - 10(13A)
Details of Exemptions :
HRA
Descriptions :
The least of the following will be exempted
1.Amount received
2.50% or 40% of Salary
3.Rent paid less 10% of Salary
4.Salary means; Basic Salary+D.A
Section - 10(14)
Details of Exemptions :
Children Education Allowance.
Descriptions :
Rs.100 per month per child upto a maximum 2 children.
Details of Exemptions :
Hostel expenditure Allowance on employee’s child
Descriptions :
Rs.300 per month per child upto a maximum two children.
Note: Allowance granted to meet Hostel expenditure Allowance on employee’s child.
Details of Exemptions :
Uniform allowance
Descriptions :
It is exempted upto actual expenditure incurred for maintaining of the official uniform.
Note: Excess, if any, will be taxable.
Details of Exemptions :
Conveyance/Transport allowance
Descriptions :
upto Rs.800 per month
Note: Handicapped with the disability of lower extremities or a blind employee it shall be exempted upto Rs.1600 p.m.
Deductions under section 80 of Income Tax Act:
Section - 80C
Details of Deductions :
General deduction for investment in PPF, PF, Life Insurance, ULIP, Stamp duty on house, Fixed deposits for 5 years , bonds etc.
Descriptions :
Maximum Rs. 1,50,000 is allowed. Investment need not be from taxable income.
Note: Limit of eligible premium in case of insurance policy on life of disable person has been increased to 15 % instead of 10 % from FY 13-14.
Section - 80CCC
Details of Deductions :
Deduction in case of contribution to pension fund. However, it should be noted that surrender value or employer contribution is considered income.
Descriptions :
Maximum is Rs 1,50,000
Note: Aggregate of 80C & 80CCC & 80CCD is Rs 1,50,000.
Section - 80CCD
Details of Deductions :
Deduction in respect to contribution to new pension scheme. Employees of central and others are eligible.
Descriptions :
Maximum is sum of employer’s and employee’s contribution to the maximum: 10 % of salary.
Note: Aggregate of 80C & 80CCC & 80CCD is Rs 1,50,000.
Section - 80CCE
Details of Deductions :
It should be noted that employer contribution is allowable as extra u/s 80CCD(2) of the Income Tax Act from Asst Yr 2012-13 and only employee's contribution is within limit of Rs 1 Lakh as stated in 80CCE
Descriptions :
It should be noted that as per section 80CCE, the maximum amount of deduction which can be claimed in aggregate of 80C ,80CCC & 80CCD(1) is Rs 1,50,0000.
Section - 80CCG
Details of Deductions :
Individual having gross total income up to Rs. 12 Lakh can claim this deduction for investing in IPOs of share or mutual fund units.
Descriptions :
50 % 0f the invested amount. Limit is Rs. 25,000 max.
Note: The deduction is allowed for three years only.
Section - 80D
Details of Deductions :
Medical insurance on self, spouse, children or parents. The deduction is also allowable for CGHS contribution to Central and State scheme. It is also for conducting health check up to Rs 6000.
Descriptions :
Rs 15,000 for self, spouse & children. Extra Rs. 15,000 for insurance on parents. IF parents are above 65 years, extra sum should be read as Rs 20,000. Thus maximum is RS 35,000 per annum to a person of age below 60 yrs.
Note: Cash payment not allowed. Watch the Video on Section D.
Section - 80DD
Details of Deductions :
For maintenance including treatment or insurance the lives of physical disable dependent relatives
Descriptions :
Rs 50,000. In case disability is severe, the amount is Rs 1,50,000. Watch video on 80DD Deduction
Section - 80DDB
Details of Deductions :
For medical treatment of self or relatives suffering from specified disease
Descriptions :
Actual amount paid to the extent of Rs 40,000. In case of patient being Sr Citizen, amount is Rs 60,000.
Section - 80E
Details of Deductions :
For interest payment on loan taken for higher studies for self or education of spouse or children.
Descriptions :
Actual amount paid as interest and start from the financial year in which he /she starts paying interest and runs till the interest is paid in full. Watch the video on 80E.
Note: Watch the video on 80E.
Section - 80EE
Details of Deductions :
Interest on home loan sanctioned during F. Y. 2013-14.
Descriptions :
Maximum Rs 1 lakh.
Note: Value of the property should be below Rs 50 Lakh and max loan sanctioned should be Rs 25 lakh. Further Assessee should not have any other residential house.
Section - 80G
Details of Deductions :
Donations to charitable institution.
Descriptions :
100% or 50% of amount of donation made to 19 entities (National defense fund, Prime minister relief fund etc). For Asst Yr 2014-15, National Children Fund will also get 100% deduction.
Section - 80GG
Details of Deductions :
For rent paid.
Descriptions :
This is only for people not getting any House Rent Allowance. Maximum is Rs 2000 per month.
Note: If you or your spouse or your HUF or minor son has any residential house, deduction is not available.
Section - 80GGA
Details of Deductions :
For donation to entities in scientific research or rural development Fund.
Descriptions :
Only those tax payers who have no business income can claim this deduction .Maximum is equivalent to 100 % of donation.
Note: Cash payment not allowed.
Section - 80GGB & 80GGC
Details of Deductions :
For contribution to political parties
Descriptions :
100 % of donations
Note: Cash payment not allowed.
Section - 80QQB
Details of Deductions :
Allowed only to resident authors for royalty income for books other than text book
Descriptions :
Royalty income or Rs 3,00,000 whichever is less.
Section - 80RRB
Details of Deductions :
For income receipt as royalty on patents of resident individuals
Descriptions :
Actual royalty or Rs 3,00,000 whichever is less.
Section - 80TTA
Details of Deductions :
Individual & HUF having interest in Savings Account
Descriptions :
Rs 10000 maximum
Note : Deduction not allowed if interest derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons or a body of individuals.
Section - 80U
Details of Deductions :
Deduction in respect of permanent physical disability including blindness to taxpayer
Descriptions :
RS 50,000 which goes to Rs 1,00,000 in case taxpayer is suffering from severe disability.
Section - 87A
Details of Deductions :
Rebate to individual having low taxable income
Descriptions :
Amount of tax or Rs 2,000 which ever is less
Note : Only resident individual gets this rebate
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