Tax Sevings and Tax Deductions

In the month of March every tax payer starts looking for the deductions. As the closing is approaching every tax payer wants to plan their taxes in such a way so they need to pay less taxes. This requirements of tax payer will efficiently managed by the chapter of deduction of the income tax act.

The income tax has sec 80 a complete solution to tax payer. This sec 80 contains number of deductions benefit of which are available to individuals and other assesses as well.

We all know that Sec.80 contains various deductions but I am quoting some of here which can be used by an individuals while calculating their total income.

11.)    Sec.80 C

22.)     Sec. 80 CCF

33.)   Sec. 80 CCG

44.)       Sec 80 D

55.)       Sec 80 DD

66.)       Sec 80 DDB

77.)       Sec  80 E

88.)       Sec 80 G

99.)       Sec 80 GG

110.)   Sec 80 GGC

111.)   Sec 80 U

Out of above listed 11 deductions Section 80C, 80CCF and 80 CCG are investment based deductions while others are expense based deductions. I am going to elaborate all the above mentioned deductions.

There are some other expense based deductions also available like we can claim interest on housing loan up Rs. 1, 50,000/ P.A

In F.Bill 2013-14 the finance minister also announces that the buyer of first hose will get additional benefit of Rs. 1,00,000/-  As well as the person with the annual income will get additional tax benefit of Rs. 2,000/-

There are not much in this finance bill 2013-14 for common man.

Section 80C

a)      Life insurance premium or deferred annuity paln or any unit linked insurance plan or

b)      PPF or PF or any  recognized provident fund or any approved superannuation fund or

c)       Saving certificate like NSC, KVP, IVP or

d)       Any ULIP of LIC mutual fund or

e)      Tax saving mutual funds or Equity linked mutual funds

f)       Deposit made to NHB or

g)      Bonds of Infrastructure companies or

h)      Tuition fee up to  two children or

i)        Principal payments of Housing loan including  expenses related to transfer of property or

j)        Bonds from NABARD or

k)      Deposit under senior citizen saving account or

l)        Five year FD

m)    Deduction in respect to certain pension fund or pension scheme of central govt.

A person can obtain maximum of Rs. 1,00,000/-  benefit by investing in above listed items

Section 80CCF

 Investment in long term infrastructure bonds. This section provides additional benefit of Maximum Rs. 20,000/-

Section 80CCG

Deduction made in equity shares maximum of Rs 25000 or ½ of the amount invested in equity shares. This benefit is also known as Rajive Gandhi Equity Linked Scheme.

Section 80 D

Medical insurance premium also called as mediclaim  for the individual assess maximum allowed to Rs. 15,000/ and for senior citizen Rs. 20,000/

Section 80 DD

If an assessee has dependent with medical disability he can claim  Rs. 50,000 and if the medical disability of dependent are of severe in nature can claim Rs. 1,00,000/ as deduction U/S 80 DD

Section 80 DDB

If an assessee pays for the medical treatment for himself or for his dependent then he can avail benefit of Rs. 40,000/ or the actual amount spent whichever is less  on the treatment of such ailment .

   Section 80E

Interest on educational loan taken for self or relative higher education.

Section 80G

 Donations paid to national funds are 100 % and  other funds are 50% eligible for deductions.

Section 80 GG

Deduction in respect of rent paid 10 % of total income but does not exceed Rs. 2,000/- P.M

Section 80 GGC

Any amount of contribution made to political party.

Section 80 U

This deduction is allowed to individual person  who have medical disability  will get deduction  of Rs. 50.000/ -and or with sever disability can claim deduction up to Rs. 75,000/-