Have you done your Tax Planning?

Many salaried individuals are in the process of finalizing their investments for tax saving so that they can submit the proof by January’2014. If you fail to submit the details along with the proof, be prepared for huge cuts from the monthly salary. The company will deduct applicable tax (TDS) from your salary in the remaining three months of the financial year, although you have the option of claiming a refund later from the Income Tax department. We provide you the investment options and the additional new tax rules introduced this year. 

 

Exemptions for investments in Section 80C (Max Rs 1, 00,000/-)

  • Employee Provident Fund(EPF)
  • Public Provident Fund(PPF)
  • Bank Fixed Deposits(FD:5 years or more)
  • National Savings Certificate(NSC)
  • Senior Citizen’s Saving Scheme
  • Insurance, ULIP Policies(Sum assured more than 10 times the annual premium)
  • National Pension Scheme(NPS)
  • Home Loan Principal repayment
  • School Fees
  • Stamp duty and Registration Fees
  • Re-imbursement of Medical Expenses and Health Insurance premium

Medical expenses up to Rs.15, 000 for self and family is allowed as exemption from income tax. The original bills/receipts need to be submitted for reimbursement. Further under section 80(D),an amount of Rs 15,000/- is allowed as deduction towards health insurance premium for self and family and an additional amount of Rs 20,000/- is allowed as deduction for health insurance premium for parents who are senior citizens.

  • Home Loan Interest payment

Interest on Home loan up to Rs.1.5 lacs is deductible under sec.24 (b) for self occupied houses and actual interest paid for rented-out houses are allowed in full as deduction.

  • Education Loan 80 (E)

The interest paid on an education loan from a bank for a full-time course in a recognized institution in India or abroad is fully deductible.

  • Leave Travel Allowance  ( LTA)

The actual amount of expenses on the Leave Travel Tour is allowed as a deductible expenditure form the Income Tax. It can be availed once in Two year            block period.

  • Tax benefit on donations under 80(G

The can claim deduction for donations to approved institutions under the income tax act.You will not be able to claim this deduction if your donation is made in cash.

New changes for the year 2013-14 

  • Additional tax relief for lower income categories 
    If your annual taxable income is under Rs. 5 lakh, you will be entitled to a tax rebate of Rs. 2,000 this year. The lower of Rs. 2,000 or the entire tax liability (tax payable) will be allowed as a rebate under section 87A of the Income tax Act.
  • House rent Exemption ( HRA)

As per I-T department’s circular, you have to mention the PAN of your landlord, if you are paying an annual rent of more than Rs. 1 lakh.  The new rule could be bothersome for many individuals paying rent, as landlords may refuse to part with their PAN.

  • Additional benefit on Home Loan Interest (Section 80EEE)

First-time home buyers can look forward to some additional tax savings this year. If you have obtained a home loan(less than Rs. 25 lakh) this year (Financial year 2013-14), you can claim an additional tax deduction of Rs. 1 lakh on the interest paid on that loan.

 

Last modified on Wednesday, 10 February 2016 06:59

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.

4 comments

  • Sujata Aniruddha Sapkal

    posted by Sujata Aniruddha Sapkal

    Wednesday, 26 August 2015 11:55

    This information is very essential to avoid last minutes panic purchases of not so effective tax saving products.

    Report
  • Roshan

    posted by Roshan

    Monday, 13 January 2014 06:30

    Helpful to manage tax effectively

    Report
  • Dinesh

    posted by Dinesh

    Wednesday, 08 January 2014 12:40

    Helpful information

    Report
  • Aatish

    posted by Aatish

    Thursday, 26 December 2013 05:53

    Good, helpful information

    Report

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