Income Tax Planning

Tax rates for AY 2012-13

A.    Individuals

Sl no

Income level/slabs

Income tax Rate

1

Total income up to Rs 1,80,000/-

NIL

2

Total income exceeds Rs 1,80,000/- but does not exceeds Rs 5,00,000/-

10% of amount 
by which the total income exceeds Rs. 1,80,000/-

3

Total income exceeds Rs. 5, 00,000/- 
but does not exceed Rs. 8, 00,000/-.

Rs. 32,000/- + 20% of the amount 
by which the total income exceeds Rs. 5, 00,000/-.

4

Total income exceeds Rs. 8, 00,000/-.

Rs. 92,000/- + 30% of the amount 
by which the total income exceeds Rs. 8, 00,000/-.

Education Cess: 3% of the Income-tax.

 B. Individual being a woman resident in India and below  60 years 

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Income level/slabs

Income tax Rate

1

Total income up to Rs 1,90,000/-

NIL

2

Total income exceeds Rs 1,90,000/- but does not exceeds Rs 5,00,000/-

10% of amount 
by which the total income exceeds Rs. 1,90,000/-

3

Total income exceeds Rs. 5, 00,000/- 
but does not exceed Rs. 8, 00,000/-

Rs. 31,000/- + 20% of the amount 
by which the total income exceeds Rs. 5, 00,000/-.

4

Total income exceeds Rs. 8, 00,000/-

Rs. 91,000/- + 30% of the amount 
by which the total income exceeds Rs. 8, 00,000/-.

Education Cess: 3% of the Income-tax.

 C. An individual resident who is the age of 60  or above  but below  80 years

Sl no

Income level/slabs

Income tax Rate

1

 Total income does not exceed Rs. 2,50,000/-.

NIL

2

Total income exceeds Rs. 2,50,000/- 
but does not exceed Rs. 5,00,000/-

10% of the amount 
by which the total income exceeds Rs. 2, 50,000/-.

3

  1. otal income exceeds Rs. 5,00,000/- 
    but does not exceed Rs. 8,00,000/-

Rs. 25,000/- + 20% of the amount 
by which the total income exceeds Rs. 5, 00,000/-.

4

Total income exceeds Rs. 8,00,000/-

Rs. 85,000/- + 30% of the amount by which the total income exceeds Rs. 8, 00,000/-.

Education Cess: 3% of the Income-tax.

D. An individual resident who is of the age of 80 years or more

Sl no

Income level/slabs

Income tax Rate

1

Total income does not exceed Rs. 5,00,000/-

NIL

2

Total income exceeds Rs. 5,00,000/- but does not exceed Rs. 8,00,000/-

20% of the amount by which the total income exceeds Rs. 5, 00,000/-.

3

Total income exceeds Rs. 8,00,000/-

Rs. 60,000/- + 30% of the amount by which the total income exceeds Rs. 8, 00,000/-.

Education Cess: 3% of the Income-tax.

Deduction u/s 80C (Max Rs1, 00,000)

 80C deduction is available for the followings.

a. Premium on life insurance policy on the life of self, spouse and any child.

b. Contribution to non-commutable deferred annuity.

c. Contribution towards statutory provident fund/ approved superannuation fund.

d. Contribution to PPF account (subject to maximum Rs. 1, 00,000/-).

e. Contribution to NSC, Interest deemed to be reinvested also qualifies for deduction.

f. Invest in Unit Linked Insurance Plan (ULIP) and equity linked saving scheme (ELSS).

g. Repayment of principal amount of housing loan.

h. Five year term deposit with a scheduled bank and post office.

i. Deposit under the senior citizens savings scheme. 

Under section 80CCC: Contribution to pension fund.

Under section 80CCD: Pension scheme of central government.

Under section 80CCD (2): Investment in new pension scheme.

Under section 80CCF: An individual can claim deduction up to Rs. 20,000/- under 80CCF, for in Infrastructure bonds.

Deduction u/s 80D

80D deduction is available for health insurance premium.

a. Amount of Rs. 15,000/- will be allowed for deduction, in case of premium paid on self and family.

b. An additional sum of Rs. 15000/-( Rs. 20,000/- in case of senior citizen) will be allowed for deduction for dependent parents

Deduction u/s 80DD

80DD deduction is available on the payment made for the disabled dependant in the event of death.

a. Rs. 50,000/- from gross total income, irrespective of expenditure (at least 40% disability) incurred

b. Rs. 1, 00,000/- where such dependant is a person with severe disability (more than 80% disability).

Deduction u/s 80DDB:

80DDB deduction is available for expenses on self or dependants actually incurred for specific disease.

a. Rs. 40,000/- or actual incurred whichever is lower

b. Rs. 60,000/- or actual incurred whichever is lower in case of senior citizen

Deduction u/s 80E

Any interest paid on loan taken by individual from any financial institution or approved charitable institution for purpose of pursuing his or spouse or children’s higher education.

Deduction u/s 80G

80G deduction is available, if an individual donates certain funds to approved charitable institutions.  It is depending on whom you donate to, half or the entire donation can become a deduction from your income.

Deduction U/s 80GG

80 GG deduction is available on the rent payment for furnished/ unfurnished accommodation subject to maximum of Rs 24,000/- pa. The individual should not have any house rent allowance and should not own any residential complex in India or abroad.  

Deduction U/s 80GGC

Any amount of contribution made to a political party or an electoral trust is deductible.

Deduction u/s 80U

80DD deduction is available on the payment made for the disabled assessee in the event of death.

a. Rs. 50,000/- from gross total income, irrespective of expenditure (at least 40% disability) incurred

b. Rs. 1, 00,000/- where such dependant is a person with severe disability (more than 80% disability).

Deduction U/s 24(B)

Interest amount up to Rs. 1, 50,000/- is allowed for deduction in case property is acquired after 1.4.1999.  However, if the house is rented out, then the entire interest due becomes deductible. 

 

Consult SEBI registered investment adviser for your tax obligation status. They will provide unbiased recommendations by keeping the clients interest uppermost in mind.

Also they will guide you with the help of chartered accountant and lawyer in tax related queries. 

Last modified on Friday, 16 August 2013 12:03

Prakash Praharaj

Shri Prakash Praharaj has a passion for excellence. He has been awarded two gold medals for securing top positions both in Graduation and Post Graduation in Commerce. He is an MBA with specialization in Finance and marketing. He has been awarded Diploma in Treasury, Investment and Risk Management besides CAIIB from the Indian Institute of Bankers. He is a Certified Financial PlannerCM from the Financial Planning standards Board, India (FPSB), affiliated to FPSB, Denver, USA and Certified Personal Financial Adviser from NISM. He is also a SEBI registered Investment Adviser vide Reg. no. INA 000000045 dated 2nd August 2013.His book "Your Every day guide to Personal Finance and Insurance" has been published by CNBC TV 18 in August 2015.

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