As per circular issued by Income Tax Department for Salaried Employee to
calculate Income Tax for Asstt. Year 2016-17, the Tax Calculation Utility with all types of head of
income i.e. Income under head of Salary, House Property Income, Other
source of Income, Capital Gain Income and Income From others are here under.
Salaried Employee can't calculate actual Income Tax on their Income
because there is no any provision of monthly salary Statement and salary
deductions restated to income tax exemptions. This difficulty solved
this utility. This utility calculates Annual Income Tax Liability
including Month-wise Salary Statement and suggest to deduct as TDS from
salary.
Tax Calculation Method for Salaried Employee:
What are the Income Tax Exemption Limit for Asstt. Year 2016-17, Click Here.
HRA exemption = Least of (40% (50% for metros) of Basic+DA or HRA or rent paid - 10% of Basic+DA)
Transport allowance is
exempt up to Rs.800/- per month during the month. (Expenditure incurred
for covering journey between office and residence.) For people having
permanent physical disability, the exemption is 1,600/- per month.
Reimbursement of Medical bills
are exempt for self and dependent family, up to Rs.15,000/- per annum
u/s(5) LTA is exempt to the tune of economy class Train/ Air /Recognised
public Transport fare for the family to any destination in India, by
the shortest route.
LTA can
be claimed twice in a block of 4 calendar years. The current block is
from 01.01.2010 to 31.12.2013. For claim, it is must to provide
originals tickets etc.
U/s 24 There is an Exemption for interest on housing loan.
(for Self occupied Residence). If the loan was taken before Apr 1, 1999
exemption is limited to Rs. 30,000/- per year. If the loan was taken
after Apr 1, 1999 exemption is limited to Rs. 2,00,000/- per year if the
house is self-occupied; There is no limit if the house is rented out.
This
exemption is available on accrual basis, which means if interest has
accrued, you can claim exemption, irrespective of whether you've paid it
or not.. "
If
you have rented out your house, enter the total income / loss from the
house (after deducting property tax and standard maintenance expenses).
U/s 80CCE- Maximum
Exemption up to Rs. 150000/- Investments up to Rs. 1.5 lac in PF,
VPF, PPF, Employee contribution in NPS,Insurance Premium, Housing loan
principal repayment, NSC, ELSS, long term bank Fixed Deposit, Post
Office Term Deposit, etc. are deductible from the taxable income. There
is no limit on individual items, (for example) all 1 lac can be invested
in NSC or PPF etc.
U/s 80CCD -The
Finance Act, 2011 provides that contribution made by the Central
Government or any other employer to NPS (up to 10 per cent of the salary
of the employee in the previous year)shall be excluded while computing
the limit of Rs. 1,50,000.The contribution by the employee to the NPS
will be subject to the limit of Rs. 1,00,000.
U/s 80CCG - Rajiv
Gandhi Equity Savings Scheme is a new exemption available for
investment in stock markets (direct equity). Avaialble only for those
with gross income less than 12 lacs and only for first time investors in
stock market. Exemption available at 50% of investment subject to
maximum of Rs.50,000/- invested. Investments are locked-in for three
years
U/s 80D Medical
Insurance Premium (such as Mediclaim & Critical illness
Cover)& Health Check up Upto Rs. 5000, premium is exempt up to
Rs. 30,000/ per year (Rs.15,000/- for self,spouse and children ) (Rs.
15000/- for Parents. If the premium includes for a dependent who is
(Senior Citizen) above 60 years of age, an extra Rs. 5,000//- can be
claimed.
U/s 80DD Deduction
in respect of medical treatment of handicapped dependents is limited to
Rs. 50,000/- per year if the disability is less than 80% and Rs.
1,00,000/- per year if the disability is more than 80%
U/s 80DDB Deduction
in respect of medical treatment for specified ailments or diseases for
the assesse or dependent can be claimed up to Rs. 40,000/- per year. If
the person being treated is a senior citizen, the exemption can go up to
Rs. 60,000/-. but any amount received under Medical Insurance Policy
will be reduced from the amount of deduction allowed. The Diseases and
ailments specified under rule 11DD are.
- neurological diseases being demetia, dystonia musculorum deformans,
motor neuron disease, ataxia, chorea, hemiballismus, aphasia and
parkisons disease,
- cancer,
- AIDS,
- Chronic renal failure,
- hemophilia, and
- thalassaemia.
U/s 80E Interest repayment on education loan (taken
for higher education from a university of self & dependents) is
completely tax exempt
U/s 80G Donations
given for certain charities are tax exempt. Some(NGO,Trust etc.) are
exempt to the tune of 50%, whereas Govt funds are 100%.
U/s 80GG If
you are not getting HRA, but living in rented house, an exemption is
available. This will be calculated as minimum of (25% of total income or
rent paid - 10% of total income or Rs. 24,000/- per year)
U/s 80U who
suffers from not less than 40 per cent of any disability is eligible
for deduction to the extent of Rs. 50,000/- and in case of severe
disability to the extent of Rs. 100,000/-
U/s 80TTA introduced
through Finance Act, 2012. Section 80TTA provides a deduction of up to
Rs. 10,000 on your income from interest on saving bank accounts.
DEDUCTION u/s. 80C and chapter VIA
U/s. 80C of
the Income Tax Act allows certain investments and expenditure to be
deduct from total income. One must plan investments well and spread it
out across the various instruments specified under this section to avail
maximum tax benefit. There are no sub-limits and is irrespective of how
much you earn and under which tax bracket you fall. Most of the Income
Tax payee try to save tax by saving under Section 80C of the Income Tax
Act. However, it is important to know the Section in total. so that one
can make best use of the options available for deduction under income
tax Act. One important point to note that one can not only save tax by
undertaking the specified investments, but some expenditure which you
normally incur can also give you the tax exemptions.
Qualifying Investments u/s 80CCE
- Provident Fund (PF) & Voluntary Provident Fund (VPF) PF
is automatically deducted from your salary. your contribution [12% of
Basic] (i.e., employee’s contribution) is counted towards section 80C
investments. You also have the option to contribute additional amounts
through voluntary contributions (VPF). Current rate of interest is 8.5%
per annum (p.a.) and is tax-free.
- Life Insurance Premiums: Any amount that you pay towards life
insurance premium in Life Insurance Corporation (LIC) or any other
Insurance CO.for yourself, your spouse or your children can also be
included in Section 80C deduction. If you are paying premium for more
than one insurance policy, all the premiums will be included. also
premium paid for ULIP will also be treated as Premium paid for Life
Insurance Policies.
- Unit linked Insurance Plan : ULIP stands for Unit linked
Saving Schemes. ULIPs cover Life insurance with benefits of equity
investments.They have attracted the attention of investors and
tax-savers not only because they help us save tax but they also perform
well to give decent returns in the long-term.
IMP : Total Amount Received at Maturity,
Survival Benefits, Withdrawal in Insurance Policies is Tax Free and
fully exempted u/s 10(10D).
- Public Provident Fund (PPF): Among all the assured returns small saving schemes,
- Public Provident Fund (PPF) is
one of the best. Current rate of interest is 8% tax-free and the normal
maturity period is 15 years. Minimum amount of contribution is Rs. 500
and maximum is Rs. 1,50,000.(New Change) from Budget 2014
- National Savings Certificate (NSC): National
Savings Certificate (NSC) is a 5-Yr small savings instrument eligible
for section 80C tax benefit. Rate of interest is 8.58% compounded
half-yearly, i.e. If you invest Rs.100, it becomes Rs.150.90 after five
years. The interest accrued every year is liable to tax (i.e. to be
included in your taxable income) but the interest is also deemed to be
reinvested and thus eligible for section 80C deduction.
- Home Loan Principal Repayment
& Stamp Duty and Registration Charges for a home Loan The
Equated Monthly Installment (EMI) that you pay every month to repay your
home loan consists of two components – Principal and Interest.The
principal component of the EMI qualifies for deduction under Sec 80C.
Even the interest component can save you significant income tax – but
that would be under Section 24 of the Income Tax Act. The amount you pay
as stamp duty when you buy a house, and the amount you pay for the
registration of the documents of the house can be claimed as deduction
under section 80C in the year of purchase of the house.
- Tuition fees for 2 children
Apart form the above major investments expenses for children’s education
(Only Tution Fee (for which you need receipts)), can be claimed as
deductions under Sec 80C.
- Equity Linked Savings Scheme (ELSS):
There are some mutual fund (MF) schemes specially created for offering
you tax savings, and these are called Equity Linked Savings Scheme, or
ELSS. The investments that you make in ELSS are eligible for deduction
under Sec 80C.
- 5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.
- 5-Yr post office time deposit (POTD) scheme: POTDs
are similar to bank fixed deposits. Although available for varying time
duration like one year, two year, three year and five year, only 5-Yr
post-office time deposit (POTD) – which currently offers 7.5 per cent
rate of interest –qualifies for tax saving under section 80C. Effective
rate works out to be 7.71% per annum (p.a.) as the rate of interest is
compounded quarterly but paid annually. The Interest is entirely
taxable.
- Pension Funds or Pension Policies –
Section 80CCC: This section – Sec 80CCC – stipulates that an investment
in pension funds is eligible for deduction from your income. Section
80CCC investment limit is clubbed with the limit of Section 80C – it
means that the total deduction available for 80CCC and 80C is Rs 1.5
Lakh.This also means that your investment in pension funds upto Rs.1.5
Lakh can be claimed as deduction u/s 80CCC. However, as mentioned
earlier, the total deduction u/s 80C and 80CCC can not exceed Rs.1.5
Lakh.
- Infrastructure Bonds: These are
also popularly called Infra Bonds. These are issued by infrastructure
companies, and not the government. The amount that you invest in these
bonds can also be included in Sec 80C deductions.
- NABARD rural bonds: There are
two types of Bonds issued by NABARD (National Bank for Agriculture and
Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB).
Out of these two, only NABARD Rural Bonds qualify under section 80C.
- Senior Citizen Savings Scheme 2004 (SCSS): A
recent addition to section 80C list, Senior Citizen Savings Scheme
(SCSS) is the most lucrative scheme among all the small savings schemes
but is meant only for senior citizens. Current rate of interest is 9%
per annum payable quarterly. Please note that the interest is payable
quarterly instead of compounded quarterly. Thus, unclaimed interest on
these deposits won’t earn any further interest. Interest income is
chargeable to tax.
Know, How to calculate Income Tax for Asstt. Year
2016-17 with all exemption limits i.e. 80C, Deduction under Chapter -VIA
and many more, Click Here.
Latest TDS amendments effected from 01.10.2015 & TDS Rate for Asstt. Year 2016-17.
