“The art is not making money , but in keeping it”

MONEY

Rule No 1: Never Loose Your Money on Rule No 1: Never Loose Your Money on Tax.Tax.

Rule No 2: Don’t invest just for saving Rule No 2: Don’t invest just for saving tax look for returns.tax look for returns.

Save YOUR tax

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New Income tax slab for a.y 2012-13 (financial year 2011-12) New Income tax slab for a.y 2012-13 (financial year 2011-12)

Men (Below 60)

Men (Below 60)

Women (Below 60)

Women (Below 60)

TAX CALCULATION TAX CALCULATION

Annual Package = 10,00,000

Monthly = 83,334

Working:-

Upto 1,80,000 = No tax (+)1,80,000 to 5,00,000 (10%) = 32,000 (+)5,00,000 to 8,00,000 (20%) = 60,000 (+)More then 8,00,000 (30%) = 60,000 1,52,000

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TAX SAVING investment sectionsTAX SAVING investment sections

80C80C 80C80C

80E80E 80E80E

80D80D 80D80D

80U80U 80U80U

SECTION 80C

Inserted from 2006-07 onwards.

The maximum amount deductible under section 80C,80CCC and 80CCD cannot exceed rs 1,00,000.

Deduction only to an individual or a Hindu undivided family.

There are many schemes that are listed by the Income Tax department.

80c (life insurance) 80c (life insurance)

Your Life cover Premium is eligible for a tax deduction up to 1 Lakh.

The Premium paid should be 20% or less of the sum insured.

Premium towards your self, spouse or your children gets included.

Returns on life insurance %%%%%%%%%%%%%

Tax benefit under section 80C and 10(10D)

80c (unit linked insurance plan) 80c (unit linked insurance plan)

ULIP’s Premium is eligible for a tax deduction up to 1 Lakh.

The Premium paid should be 20% or less of the sum insured.

Premium towards your self, spouse or your children gets included.

Returns on Ulips %%%%%%%%%%%%%

Tax benefit under section 80C and 10(10D)

80C (life insurance and ulip) 80C (life insurance and ulip)

80c (public provident fund ) 80c (public provident fund )

It is the Long term debt scheme of the Government of India.

Scheme is for 15 Years and interest rate is 8.6% (w.e.f 1/12/2011)

Annual investments limit has been increased from 70,000 to 1,00,000.

If a loan taken from PPF account ,interest rate is 2% against 1% at present.

80c (EMPLOYEE PROVIDENT FUND) 80c (EMPLOYEE PROVIDENT FUND)

EPF is compulsory deduction from salary by employer for there employee.

Every month12% Deducted from your Basic salary.

Interest rate of 9.5% monthly cumulative best avenue in low risk category.

Eligible only if salary is above 6500 per month.

Interest income is not taxable.

If you withdraw EPF before 5 years the amount is taxable.

80c (5 years tax savings deposit) 80c (5 years tax savings deposit)

Deposits booked by an individual or HUF for 5 yrs up to rs 1,00,000

Interest on a Quarterly basis is 8.25% p.a and for senior citizen 8.75%.

Multiples of rs.100/-

Monthly or Quarterly interest payout option is available.

No partial / premature withdrawal allowed.

Sweep in not allowed.

In the case of joint holder deposit ,deduction only to 1st holder.

80c (tuition fees) 80c (tuition fees)

A Parents can claim a deduction on payment made for tuition fees to any Universities, College, School or educational institutional. Deduction on payment towards tuition fees claimed up to Rs1,00,000.

Payment of fees to play schools or creches will be allowed.

Fees for admission are excluded from amounts eligible for deduction.

The deduction is allowed only for two children.

Deduction is available of paid basis.

Adopted Child’s tuition fees is also eligible for deduction

80c (National savings certificate) 80c (National savings certificate)

This Government-backed security is available at post offices and gives an interest rate of 8% , compounded half-yearly (till Nov 2011).

The interest income is entirely taxable but no TDS.

NSC is the only small saving scheme wherein interest for the first five years is eligible for a deduction under section 80C.

NSCs are good for those in lower tax slabs with an investment horizon of six years.

The 5-year NSC will carry a rate of interest of 8.4 per cent against 8 per cent at present. The 10-year NSC will offer 8.7 per cent.

Illustration:

Example: You invest Rs 1,00,000 in an NSC on April 1, 2010. Interest on this investment for each year is shown in the following table:

April 1, 2010 Initial investment 100,000 Mar 31, 2011 interest for Yr 1:   8,160 Mar 31, 2012 interest for Yr 2:   8,830 Mar 31, 2013 interest for Yr 3:   9,550 Mar 31, 2014 interest for Yr 4:  10,330 Mar 31, 2015 interest for Yr 5:  11,170 Mar 31, 2016 interest for Yr 6:  12,070

Total interest 60,110 Total value of investment:   1,60,110

80c (National savings certificate) 80c (National savings certificate)

80c (National savings certificate) 80c (National savings certificate)

10-Year National Savings Certificate (IX-Issue), 2011 is being launched from Dec 1, 2011.

The major highlights of this scheme are as follows:- i) Investments in Certificate will earn Interest at the rate of 8.7% p.a. compounded semi-annually.

ii) On investment of Rs.100,the depositor will get Rs. 234.35 on maturity of Certificate.

iii) This Certificate will be available in the denominations of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000 and Rs. 10,000.

iv) There is no upper limit for investment in the Certificate.

v) This Certificate can be transferred from a post office where it is registered to any other post office and it can be pledged as a security.

80c (REPAYMENT OF HOUSING LOAN) 80c (REPAYMENT OF HOUSING LOAN)

The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.

Principal component – Sec 80C.

Stamp Duty and Registration Charges for a home

80c (equity linked savings scheme) 80c (equity linked savings scheme)

ELSS is mutual fund products and carry market risk.

ELSS comes with a 3 year locking period.

Choice between dividend option, growth option and Dividend re-investment option.

Investments up to Rs 1,00,000 qualify under section 80C.

The dividends earned and returns at maturity are also tax-free under section 10(10D).

Sec 80CCC (Contribution to Pension Funds) Sec 80CCC (Contribution to Pension Funds)

Section 80CCC provides deductions from gross (total) income for amounts paid or deposited by the assessee to any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the fund referred to in clause (23AAB).

The deduction is available to an individual who is resident or non-resident, Indian citizen or foreign citizen.

The maximum amount deductible under section 80C is Rs. 1,00,000. Also the total amount of deductions under sections 80C, 80CCC and 80CCD is Rs. 1,00,000.

If deduction is claimed under 80CCC, pension received will be taxable in the hands of assessee or the nominee in the year of receipt.

Sec 80CCd (Contribution to Pension scheme of central govt)

Sec 80CCd (Contribution to Pension scheme of central govt)

Deduction is allowed to an individual employed by the Central Government or any other employer on or after the 1st day of January, 2004, has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government.

However, the deduction is limited to 10 per cent of his salary in the previous year.

The maximum amount deductible under section 80C is Rs. 1,00,000. Also the total amount of deductions under sections 80C, 80CCC and 80CCD is Rs. 1,00,000.

Section 80CCESection 80CCE

As per this section, the maximum amount of deduction that an assessee can claim under Sections 80C, 80CCC and 80CCD will be limited to Rs 100,000.

In other words, Section 80CCE is not the separate deduction. It says that the Maximum limit for deduction under all the 3 laws means,

- Section 80C - Section 80CCC & - Section 80CCD is combinely Rs.1,00,000

SECTION 80CcfSECTION 80Ccf

Section 80 CCF has been introduced for the assessment year 2011-12 and 2012-13.

Under this section and individual or a Hindu undivided family can claim a deduction for the investments done in notified long-term infrastructure bond.

The Quantum of deduction cannot exceed rs.20,000 which is over and above the existing overall limit of deduction on savings of upto rs 1 lakh under section 80C,80CCC and 80CCD.

Deduction under this section will be available only for assesment year 2011-12 and 2012-13.

Returns offer are 9% in IDFC and L&T for 10 years bond.

SECTION 80d

Section 80DSection 80D

• Payment of Mediclaim Insurance Premium• Eligible to Individual or HUF. • Amount of deduction –

– Basic deduction ( Max 15k ).– Additional 5K for senior citizen.

By Assesse

By Cheque

For whom – Individuals own health, spouse, Parents & dependent

Children.HUF – Any Member

To Whom GIC or other Approved Insurance CO

Section 80DDSection 80DD

• Eligible to Individual or HUF. • Treatment & Maintainance of HDR• Amount of deduction –

– Disablity Deduction– < 40% No Deduction– 40 to 80% Rs 50K– > 80%- Severe Disability Rs 100K

• Should spend on treatment or should deposit some amount with LIC or other insurer.

• Furnish a certificate of disability.

Section 80DDBSection 80DDB

• Eligible to Individual or HUF. • Treatment of specified diseases• Amount of deduction –

– Disablity Deduction– < 40% No Deduction– 40 to 80% Rs 50K– > 80%- Severe Disability Rs 100K

• Should spend on treatment of specified disease.( Rule 11DD)

• Furnish a certificate of disability.

SECTION 80E

Deduction in respect of interest on loan taken for higher education Deduction in respect of interest on loan taken for higher education

Conditions:• The assessee should be an individual.

• Any amt paid by an assessee in the previous year for interest of loan taken from any bank OR FI’s for pursuing higher education.

• It includes only interest paid and not repayment of loan.

• While computing, the total income of such assessee will be allowed @ 100% of interest paid on loan and not repayment of loan.

• Such deduction is allowable from GTI of initial assessment year and for 7 successive years or until the interest is paid in full whichever is earlier

SECTION 80E

Section 80uSection 80u

Assesses is himself handicapped. Eligible for Resident Individual Amount of Deduction

Normally Rs 50k flat deduction.Severe Disability – Rs 100K flat deduction

Amount of deduction –Disablity Deduction< 40% No Deduction40 to 80% Rs 50K> 80%- Severe Disability Rs 100k

Furnish a certificate of disability.

3 type of people3 type of people

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