Income Tax

Tax benefits in india

Income Tax, among the biggest income generators for the Union Government, is a type of direct expense that is demanded by people and additionally firms and organizations, whereby a part of their wage and term plan comparison need to cover (or benefits in case of non-people) is chargeable as wage assessment.

While this expense gathered by the Government is utilized for improvement of the nation, there are different arrangements in the law that can be utilized to lessen our duty risk. With a specific end goal to limit our duty, we have to arrange well and use however many assessments sparing methods as could be expected under the circumstances.

An individual A, with a CTC of Rs 10 lacs pays an assessment of Rs 80,000 whileMr. B, who has a similar CTC pays a negligible Rs 40,000. This is on the grounds that Mr. B has arranged his expenses well, and thus winds up with a much lower taxation rate, in a lawful way.

The above circumstance represents the significance of tax reduction, charge making arrangements for people, and as a shrewd individual along with financial planning, you should take the assistance of experts to diminish your assessment obligation along with Tax benefits in India.

Segment 80C is the most prevalent under which people spare duty, however, it isn’t the just a single. To comprehend where else an individual can spare expenses please contact to our Tax master.

In a period of specialization, similar to every single other circle of life,not with standing for compelling expense arranging, we require the exhortation of specialists. For individual expense counsel, you may likewise counsel our master group.
To examine your duty arranging, essentially fill in the question shape above or keep in touch with us at info@mgracesolution.com

India Income tax slabs 2015 – 2016 for General tax payers

Overall

Income Tax Slab (In Rs) Tax
0 to 2,50,000 Nil
2,50,001 to 5,00,000 10%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

Senior citizens (Aged 60 years but less than 80 years)

Income Tax Slab (In Rs) Tax
0 to 3,00,000 Nil
3,00,001 to 5,00,000 10%

Very senior citizens (Aged 80 and above)

Income Tax Slab (In Rs) Tax
0 to 5,00,000 Nil

1. Under section 80 C – 1 / 2

  1. Provident Fund
  2. Public Provident Fund
  3. Life Insurance
  4. Pension Funds
  5. Infrastructure Bonds
  6. National Savings Certificate
  7. Equity Linked Savings Scheme
  8. Bank FDs ( 5 Yrs and above)
Overall limit of Rs. 150,000

2. Options beyond 80 C

If you have exhausted your limit of rs. 1,50,000 under section 80C, here are a few more options:

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    Sec 80CCG: RGESS is a tax saving scheme basically for 1st time investors (annual income not exceeding Rs. 10 lakhs). Lock in period is of three years and for tax exemption purpose only Rs. 50,000 is eligible. Tax deduction is 50% of invested amount.

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    Sec 80D: Deduction of Rs. 25,000 for medical insurance of self, spouse and dependent children and Rs. 30000 for medical insurance of parents above 65 years.

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    Sec 80E: Deduction in respect of interest on loan taken for higher education

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    Sec 24:Interest paid on the home loan: a deduction up to Rs. 2,00,000 towards the total interest payable on the home loan.

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    Sec 80G: Donations to specified funds or charitable institutions.

3. HRA

Are you paying rent, yet not receiving any HRA from your company? The least of the following could be claimed under Section 80GG:

  1. 25 percent of the total income or
  2. Rs. 2,000 per month or
  3. Excess of rent paid over 10 percent of total income
  4. This deduction will however not be allowed, if you, your spouse or minor child owns a residential accommodation in the location where you reside or perform offices duties.
  5. If HRA form part of ypur salary, then the minimum of the following three is available as exemption:
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      The actual HRA received from your company

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      The actual rent paid by you for the house, minus 10 percent of your salary (this includes basic dearness allowance, if any)

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      50 percent of your basic salary (for a metro) or 40 percent of your basic salary (for non-metro)

4. Tax Savings under Home Loans

  1. Use your home loan efficiently to save more tax. The principal component of your loan, is included under Section 80C, offering a deduction up to Rs. 1,50,000. The interest portion offers a deduction up to Rs. 2,00,000 separately under Section 24.
  2. The Govt. has been encouraging individuals to invest more on House Property.
  3. Greater benefits on Housing Loan by exempting payment of interest as well as principal part of the loan. Budget 2013 introduced a new section 80EE giving additional benefits of Rs. 1 Lakh on interest payment to Individuals who were taking housing loan for the first time.

Why need Tax Planning

  1. Increasing Net Income
  2. Adhering to statutory requirements
  3. Enhancing credit worthiness
  4. Improving post tax investment yields
  5. Managing your personal finance and cash flow better
  6. Balancing your short-term and long-term financial goals

Tax Saving Tips

The Department of Income Tax provides numerous provisions whereby an individual may save tax, in a perfectly legal manner. When employed, these techniques would lead to a lower tax payment, that means a higher net income. In this section we however look at income tax for an individual. Here are a few tips:

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    Ask your employer to create a tax friendly package. LTA, conveyance, Medical allowance help to cut down on income tax.

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    Ask your employers to replace part of your salary with food vouchers such as Sodexho

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    Save as much tax under section 80(c) as possible by selecting the instruments best suited to your risk appetite.

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    If you are salaried and living in a rented house, declare the same to your employer since it can help bring down your taxable income.

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    REMEMBER – HRA is exempt over and above the limit set by section 80C

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    Look out for investment plans that provide a tax exemption on returns which would mean that all growth/returns can be fully enjoyed by the you.

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    A mediclaim provides rebate over and above the 1Lac limit of Section 80C. Incase you do not have medical insurance buying a plan for yourself and your family can also provide you further tax relief.

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    Homeloans not only contribute to exemption under section 80(c), but can also reduce your taxable income through interest repayment under section 24.

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    Incase, interest outflow is high, it may be advisable to take a joint home loan so that the interest exemption can be shared between both the applicant and the co-applicant.

These tips are meant to help you reduce your tax outflow. However for the best individual advice please consult our team of experts.