Tax Planning is not meant to be a year-end affair and investing your hard earned money in any tax saving product that come on your way.

What is Tax Planning?

Tax Planning can be defined as an arrangement of one’s financial and business affairs by legitimately taking in full benefit of deductions, exemptions, allowances and rebates so that tax liability reduces to minimum.

Our tax experts at Hirannya will help you minimizing your tax liability while aligning your tax saving investments with your long term financial goals. We also help you in filing your return.

Below is a checklist of available exemptions (as on date) :

Income Tax Slabs

Income tax slabs have been changed this year. Standard deduction limit has been raised to Rs. 2,50,000 for both Male and Female assesses.

*In case of Senior Citizens (age above 60 years but below 80 years) standard deduction limit is upto Rs. 3,00,000.

**In case of Very Senior Citizens (age 80 years and above) standard deduction limit is upto Rs. 5,00,000.

Income Tax Exemptions :

1) Section 80C :

Limit raised this year upto Rs. 1,50,000. Tax exemption on the amount invested can be claimed if investment is done in any of the following – Life insurance premium paid (only if yearly premium is less than 10% of sum assured), ELSS Mutual Fund, Public Provident Fund, Employee Provident Fund, Tax Saving FD of 5 years tenure, NSC, ‘Tuition Fee’ part of the total school fees paid on children’s education (for upto 2 children only for full time education), Housing Loan principal paid.

2) Section 80CCD :

Deduction under this section can be claimed only if the contribution to your NPS account is made by your employer and the deduction is limited to a maximum of 10% of your basic salary. The deduction under Sec 80CCD is over and above the deduction available under Sec 80C.

3) Section 80D :

Deduction under Sec 80D is as follows:

4) Section 80DD :

Exemption given here for expenditure made for a disabled dependent towards medical treatment / training / rehabilitation. Maximum deduction allowed is Rs. 50,000 in case of normal disability and Rs. 1 lakh in case of severe disability.

5) Section 80DDB:

Exemption given here for expenditure incurred on specified diseases or ailments such as cancer/AIDS. Maximum deduction allowed is Rs. 40,000/-. In case of Senior Citizens, maximum deduction allowed is Rs. 60,000/-

6) Section 80E:

Deduction is allowed for repayment of interest component of Higher Education loan. All education after Class 12 is allowed, either vocational or fulltime, but should be from a school/institute/university recognized by the government.

7) Section 80G:

Contribution to exempt charities – 25/50/75/100% depending on the charity and as per approval.

8) Section 80U :

Deduction upto Rs. 50,000/- is allowed in case of Permanent Disability. In case of Permanent Disability exceeding 80%, maximum deduction allowed is Rs. 1,00,000/-.

9) Section 24(1) (VI) & Section 80EE :

Housing loan interest – maximum allowed limit raised to – Rs. 2,00,000 (for loans taken after 1st April 1999). Additional deduction of Rs. 1 lac will be applicable to persons taking first home loan of up to Rs. 25 lacs for property worth upto Rs. 40 lac. For such persons, the total deduction will be Rs. 3 lacs (Rs. 2 lac available under section 24(1)(VI) and Rs. 1 lac available under this new section 80EE).

10) Section 80CCG :

Under ‘Rajiv Gandhi Equity Savings Scheme‘ – a first time equity investor will be able to claim 50% of his investment in direct equity as deduction subject to maximum investment of Rs. 50,000 and provided his taxable income is below Rs. 10 lacs. The investment will be subject to 3 years lock-in.

11) Section 80TTA :

No tax will be charged on interest earned on balance in savings bank account subject to a maximum of Rs. 10,000 per year.

For a salaried individual tax can also be saved under Housing Rent Allowance (HRA), Leave Travel Allowance (LTA), Medical Allowance, Conveyance / Transport Allowance.