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What is Income Tax ?
Read about 80C, 80CCC and 80CCD Tax Saving Options Beyond 80C 80D, 80DD, 80DDB, 80E, 80G, 80GG, 80GGC, 80U, 80CCG, 80GGA, 80TTA
A tax imposed by the government on the financial income by all entities is called ‘Income Tax’. Every year all individuals and business must submit tax returns. Getting income from Income Tax is key source of funds to the government for funding its public related activities.
Income Tax Slabs Assessment Year 2015-16 FY 2016-17
Income Tax Rates/Slabs Rate (%) (applicable for assessment year 2015-16)
| Individual resident (Age below 60 Yrs.) | For resident senior citizen (60 Years and Above) | For super senior citizen (80 years and Above) | For any other person excluding companies and co-operative societies | Income Tax rates |
|---|---|---|---|---|
| Up to Rs 2,50,000/- | Up to Rs 3,00,000/- | Up to Rs 5,00,000/- | Up to Rs 2,50,000/- | NIL |
| Rs 2,50,001–5,00,000/- | Rs 3,00,001–5,00,000/- | - | Rs 2,50,001–5,00,000/- | 10% |
| Rs 5,00,001–10,00,000/- | Rs 5,00,001–10,00,000/- | Rs 5,00,001–10,00,000/- | Rs 5,00,001–10,00,000/- | 20% |
| Above Rs 10,00,000/- | Above Rs 10,00,000/- | Above Rs 10,00,000/- | Above Rs 10,00,000/- | 30% |
Taxable Income
As per the Finance Act , the income exceeds the ‘Maximum Amount’ shall be chargeable to income tax at the rates prescribed for the relevant assessment year. The charge is depending on nature of the income source.
The government of India has announced Income Tax rules for the current financial year. The very few amendments, which could provide relief to salaried employees. The first useful amend is the income tax slab rates. The government has increased the minimum tax ememption limit from Rs. 2,00,000/- to Rs. 2,50,000/- . The second one is enhancing 80C and 80CCC deductions raised from 1,00,000/- to 1,50,000/-
Head of Income Segregation
The income of an individual is divided into five heads
- Income from salaries
- Income from house property
- Profits and gains of business or profession
- Capital gains
- Income from other sources
Income from other sources
1. Income from Dividends.
2. Income by way of lotteries or horse races.
3. Employees contribution towards staff welfare scheme/ provident fund/ superannuation fund or any fund set up under the provisions
of ESIC Act, received from the employees by the employer.
4. Interest on securities like debentures, Government securities and bonds .
5. Any amount received from insurance policy including the sum allocated by way of bonus on such policy.
6. Income from renting of other than house property.
7. Interest on compensation/enhanced compensation.
8. Gifts subject to certain conditions and exemptions.
9. Family pension received by family members after the death of the pensioner.
10. Income by way of interest on other than securities
Section 80C
Section 80C , entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,50,000/-Read more
In section 80C of the Income-tax Act, in sub-section (1), for the words one lakh rupees, the Amendment of words one hundred and fifty thousand rupees shall be substituted with effect from the 1st day of section 80C. April, 2015
Section 80CCC
Life Insurance Corporation of India or any other approved insurer for receiving pension from the Fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject to the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or as does not exceed the amount of 1 lakh rupees in the previous year. Read more about EPF/VPF, PPF, NSC POTD, SCSS, 80CCD, ELSS, ULIP
Education Cess on Income tax (2%)
The amount of income tax including the surcharge if any, shall be increased by Education Cess on Income Tax at the rate of 2% of the income tax.
Secondary and Higher Education Cess on Income Tax(1%)
An additional education cess is chargeable at the rate of 1% percent of income tax including the surcharge if any, but not including the education cess on income tax
80C Tax Exemption Provisions Income Tax Act
- Tuition Fee- Two Children Max Rs150,000
- National Savings Certificates (NSC) Max Rs150,000 -
- Repayment of Home Loan Principle Max Rs 150,000
- LIC Insurance Premium- Annual Max Rs 150,000
- Unit linked Insurance Plan Max Rs 150,000
- Public Provident Fund Max Rs 150,000 80C
- ULIP Max Rs 150,000
- PLI 150,000 Max Rs 150,000
- Equity linked Savings Schemes (ELSS) Max Rs 150,000
- 5-Years fixed deposits with bank/post office Max Rs 150,000
IT Act Section 80C
Section 80C , entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,50,000/-Read more
In section 80C of the Income-tax Act, in sub-section (1), for the words one lakh rupees, the Amendment of words one hundred and fifty thousand rupees shall be substituted with effect from the 1st day of section 80C. April, 2015
IT Act Section 80CCC
Life Insurance Corporation of India or any other approved insurer for receiving pension from the Fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject to the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or as does not exceed the amount of 1 lakh rupees in the previous year. Read more about EPF/VPF, PPF, NSC POTD, SCSS, 80CCD, ELSS, ULIP
