Here is a simplified Tax Guide 2016-2017 to help you in your tax planning. Firstly, it is imperative to know what are the income tax slabs for financial year 2015-2016 and assessment year 2016-2017.
Income Slab for FY 2015-2016
Up to Rs. 2,50,000 – No Tax
Rs. 2,50,001- Rs. 5,00,000 – 10%
Rs. 5,00,0001- Rs. 1,000,000 -20%
Rs. 1,000,000 and above – 30%
The most crucial thing for every salaried class is to look at the tax guide 2016 for the benefits that he/she can avail under Section 80C. This is one of the most important parameters from a tax declaration perspective and the one that all of us are generally aware of.
But did you know that apart from 80C there are other sections under which you are eligible to claim for tax benefits. Let’s take a closer look at all the sections under which one is eligible to make their income declarations from tax saving purposes.
Income tax guide 2016 includes Section 80C, 80CCD, 80CCG, 80D, 80DDB,80TTA, Section 24b, Gift Tax, 80G, 80GGB, 80EE & 80U
Tax Guide 2016 in India for FY 2015-2016
- Provident Fund (PF) and Voluntary Provident Fund (VPF)
- Public Provident Fund (PPF)
- National Savings Certificate (NSC)
- Life Insurance Premium
- Pension Fund
- ELSS (Equity Linked Saving Schemes) Mutual Funds
- 5-Year Fixed Bank Deposits
- 5-Year Post Office Time Deposits
- Senior Citizens Savings Scheme (SCSS)
- Home Loan Principal Repayment
- Child Education Expenses(Tution Fee) upto 2 Children
80CCD – National Pension Scheme(NPS)
Additional deduction of Rs. 50,000/- is allowed under Section 80CCD by investing in National Pension Scheme(NPS)
So Section 80C+ Section 80CCD = Rs. 1,50,000+ Rs. 50,000= Rs. 2,00,000
80CCG – Rajiv Gandhi Equity Saving Scheme (RGESS)
You can save up to Rs. 25,000/- or 50% of your investment which ever is less if you are a first time equity investor.
If you already have a Demat account and have traded in equity or derivative segment, you are not eligible for this deduction.
This is over and above 80C Deductions
Section 80D – Health Insurance Premium
Rs. 25,000/- deduction ( Mediclaim Policy for self spouse, children).Rs. 30,000/- for dependent parents u/s-80D.
Medical reimbursement :- Rs. 15,000/- US 17(2)
Medical expense occurred on dependent for specified diseases. (Spouse, Children, Parents, Brother & Sister)
- Max Limit allowed is Rs. 40,000/- if dependent age is less than 60 Years
- Max Limit allowed is Rs. 60,000/- if dependent age is more than 60 Years and less than 80 Years
- Max Limit allowed is Rs. 80,000/- if dependent age is above 80 Years
Up to 10,000/- for Interest in saving bank account.
Not eligible for Fixed, time and Term Deposit.
Exemption up to Rs. 50,000/-(cumulative value).
Above Rs. 50,000 full amount taxable (FY) from other than Blood Relations(relatives clearly mentioned by Income Tax Act) .
Gift from blood relations is 100% exempted.
Transport allowance :-
Rs. 19,200/- for FY 2015-2016. Increased from Rs. 9,600/- to Rs. 19,200 in Budget 2015
Children Education Allowance
Rs. 2,400/- for FY 2015-2016
HRA as per Calculation
(a) Actual HRA received
(b) Rent Paid – 10% of Basic + DA
(c) 40% of your Basic + DA (50%, if you are staying in a metro city)
Section 24(b)- Home Loan Interest
Exemption up to Rs.2,00,000/- (Home Loan Interest Tax Deduction)
Section 80G – Tax Deduction for Donation
Full amount in few selected organisation. This exemption is 50%
Section 80GGB – Tax Deduction on Contribution to Political Parties
100% exemption for political parties
80E- Deduction on Repayment of Interest of Education Loan
Unlimited (interest on education loan).
Section 80U – Tax Deduction for Physical Disabled Person
Rs. 75000/- (in case of taking care of a Handicapped depends).
With this income tax guide 2016, I have tried to cover most of the areas under which a salaried employee can claim for tax benefits for Financial Year 2015-2016.
What are your views on income tax guide 2016? Please share it the comment box.
Have a Great Financial Year ahead……!