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BASICS ON TAXATION

 Basic

 HRA

 Conveyance

 Children Education Allowance

 Allowances in any other name


 Basic : Taxable
 HRA : Taxable. Exemption can be claimed
 Required Document – Rent receipt
 Computation of exemption - Least of the following :
1) Actual amount of HRA received
2) 50% (Metro) / 40% (Non Metro) of Salary (Basic + DA)
3) Actual Rent paid Less 10% of
Salary ( Basic + DA)
[The exemption will not be available, if the employee lives in his
own house, or in a house for which he does not pay any rent or
pays rent which does not exceed 10% of annual basic salary]


Conveyance : Taxable. Exempted upto Rs.800 per month &
Upto Rs.1600 per month if the employee is
handicapped
 Children Education Allowance : Taxable. Exempted upto
Rs.100 per month per child restricted to 2 children
 Other Allowances : All other allowances (except LTA) are
Taxable
 Medical Reimbursement is exempted upto
 Rs.15,000/- per annum on submissions of medical
bills

 Telephone Reimbursement
MALE FEMALE

 Upto Rs.160000 – NIL  Upto Rs.190000 – NIL


 Rs.160001-300000 – 10%  Rs.190001-300000 – 10%
 Rs.300001-500000 – 20%  Rs.300001-500000 – 20%
 Rs.500000 and above –  Rs.500000 and above –
30% 30%

+3% Educational Cess on total +3% Educational Cess on total


tax tax
 Investments under Sec 80C
 Mediclaim Insurance Policy – Sec 80D
 Personal Disability under Sec 80U
 Dependent Disability ie. Handicapped dependent under Sec
80DD
 Interest on Educational Loan under Sec 80E
 Donations under Sec 80G

ALL THE ABOVE INVESTMENTS / EXEMPTIONS ARE CLASSIFIED


AS

DEDUCTION UNDER CHAPTER VI-A


 What is the Limit ?
 Rs. 1 Lac is the limit. The Overall Rebate shall not exceed Rs. 1 Lac
even if the Investments are more than Rs.1 Lac.

 The investments allowed for exemption are


◦ In the name of Self or Spouse or Children or joint names
 Life Insurance Premium
 Public Provident Fund (Max Rs.70 K per Account as per PPF
Rules)
 ULIP – Unit Linked Insurance Plan
 Mutual Funds
◦ In the name of Self or Joint names
 PF, Voluntary PF (deducted in Salary – Self)
 Pension Plan (Self only)
 National Savings Certificate – NSC
 Housing Loan principal
 Term Deposit for a fixed period not less than 5 years
 Children Tuition Fee (Maximum 2 Children)
 Mediclaim policy taken in the name of employee or his
spouse and dependent children:
 Rs. 15 K or actual premium paid whichever is less.

 Mediclaim policy covering his parents alongwith his spouse


and children:
 Additional exemption of Rs.15 K. ie. Rs.30K or actual premium paid
whichever is less.
 Where the parent is Senior Citizen and additional exemption of Rs.5
K. ie. Rs.35 K or actual premium paid whichever is less.
 A fixed deduction of Rs.50 K is allowed from his total income,
if the person is suffering from permanent physical disability
and a higher deduction of Rs. 1 Lac is allowed if the person is
suffering from severe physical disability (ie. disability over
80%).
 Person with disability means a person having a disability of not less than 40%.

 Who will certify 40% or 80% physical disability ?


 Government physician for permanent physical disability (40% claim)

 Neurologist or Civil Surgeon or Chief Medical Officer in a Government


Hospital for severe physical disability ( 80% claim )
 A fixed deduction of Rs.50 K is allowed irrespective of amount paid
for :

 Any expenditure incurred for the medical treatment, training and rehabilitation
of a handicapped dependent, or

 Any amount paid or deposited under a scheme framed in this behalf by the LIC
or any other insurer or UTI, approved by the Board in this behalf for
maintenance of handicapped dependent.

 If the dependant is a person with severe disability (ie. disability over


80%), deduction is Rs. 1 Lac.

 Dependent means the parents, spouse, children, brother or sister of the


individual.

 Such dependent should not have claimed any deduction U/s 80U in
computing his total income.
 Amount of interest paid on a loan taken from any financial
institution for pursuing any higher education after senior secondary
examination for himself or for his spouse or children

 This deduction would be allowed subject to a maximum of 8 years or


till the full payment of interest is made, whichever is earlier. 

 There is no limit for claiming rebate. Any amount of Interest but not
the principal amount would be allowed as a deduction out of total
taxable income.
 Individuals are entitled for deductions under Sec 80G if they have donated to
Approved Funds and Charitable Institutions .
 Donations to the following funds will qualify for 100% of the amount donated:
◦ National Defence Fund
◦ Prime Minister’s National Relief Fund
◦ National Illness Assistance Fund
◦ National Sports fund
◦ Maharashtra Chief Minister’s Earthquake Relief Fund
◦ Andhra Pradesh Chief Minister’s Cyclone Relief Fund
◦ Gujarat Relief Fund etc
◦ Any Fund set up by a State Government to provide medical relief to the poor
 Donations to the following funds will qualify for 50% of the amount donated:
◦ Jawaharlal Nehru Memorial Fund
◦ Indira Gandhi Memorial Trust
◦ Rajiv Gandhi Foundation
◦ PM Drought Relief Fund
◦ National Children’s Fund
 A maximum of Rs. 1,50,000/- can be claimed as an exemption, if
the property is self occupied.

 There is no limit for claiming the Interest paid on Housing Loan, if


the property is let out for rent. For this purpose, the employee has
to provide Form 12C, which contains the detailed calculation of Loss
on House Property taking the Rent Income, expenses incurred
towards maintenance of the property (max of 30%) & Property tax
paid to the local authorities.
 Income Tax slab rates

 Surcharge has been removed

 Sec 80U and 80DD limit has been increased from


Rs.75 K to Rs. 1 Lac.

 Sec 80E from specific full time course to any course.

 Removal of FBT ( applicable to Employer)


EXISTING REVISED

MALE MALE

 Upto Rs.150000 – NIL  Upto Rs.160000 – NIL

 Rs.150001-300000 – 10%  Rs.160001-300000 – 10%

 Rs.300001-500000 – 20%  Rs.300001-500000 – 20%

 Rs.500000 and above – 30%  Rs.500000 and above – 30%

FEMALE FEMALE

 Upto Rs.180000 – NIL  Upto Rs.190000 – NIL

 Rs.180001-300000 – 10%  Rs.190001-300000 – 10%

 Rs.300001-500000 – 20%  Rs.300001-500000 – 20%

 Rs.500000 and above – 30%  Rs.500000 and above – 30%

SURCHARGE 10% IF TOTAL INCOME IS >10 LAC  NO SURCHARGE

+3% Educational Cess on total tax  +3% Educational Cess on total tax
 The Maximum limit for severe personal disability and severe dependent
disability (ie. Disability over 80%) has been increased

 from

 Rs. 75 K

 to

 Rs. 1 Lac.
 Interest on loan taken from any financial institution
for
 graduation or post graduation course in engineering,
medicine, management or for post graduate course in
applied sciences or pure science including
mathematics and statistics.
 has been amended as

 any higher education after senior secondary


examination for himself or for his spouse or children

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