HOW SALARIED PERSON CAN REDUCE HIS TAX LIABILITY
HOW SALARIED PERSON CAN REDUCE HIS TAX LIABILITY?
Income tax act,1961 has provided deduction in Chapter 80 of the act, through which Individual and Hindu undivided families can get exemption or deduction by investing in certain schemes.
As per Section 80c of the Income Tax act, 1961 following investments are eligible for the deduction up to Rs.1,50,000 under the act, which results in the reduction of tax liability.
1. Tax-Saver FDs
You can get an expense reasoning of up to Rs 1.5 lakh under multi-year charge saver FDs. They provide a fixed rate of interest at present between 7-8%.
2. PPF (Public Provident Fund)
Public Provident Fund is an administration set up reserve funds conspire with a residency of 15 years accessible at most banks and post workplaces in India. Its rate changes each quarter yet is at present 8%. The contribution to PPF is tax-exempt.
3. NSC (National Saving Certificate)
A National Savings Certificate has a tenure of 5 years and a fixed rate of interest. The rate is as of now 8%. The investment in NSC is eligible for a deduction of Rs 1.5 lakh under 80C.
4. Disaster protection Premiums
Premiums for various sorts of protection approaches including ULIPs, term protection, and gift strategies are charge deductible up to Rs 1.5 lakh. Anyway, the protection spread must be in any event multiple times the yearly premium.
5. Home Loan Repayment
Repayment of the installment on a home loan is deductible up to Rs 1.5 lakh per annum from the Income of the assessee.
8. Installment of education costs
Payment of education costs for your youngsters is charge deductible up to Rs 1.5 lakh per annum.
9. EPF
Under the EPF Act. 12% of the compensation of representatives in the sorted out segment is deducted towards Employees Provident Fund. This derivation checks towards the Rs 1.5 lakh limit under Section 80C.
10. Senior Citizens Savings Scheme
Contribution to the SCSS is charge deductible up to Rs 1.5 lakh. SCSS has a residency of 5 years and is accessible to those over 60. The rate for SCSS is higher than winning FD rates and is as of now 8.7% (it is assessable).
INCOME TAX SLAB FOR FINANCIAL YEAR 2019-20 the ASSESSMENT YEAR 2020-21 FOR INDIVIDUAL
|
BELOW THE AGE OF 60 YEARS |
SENIOR CITIZEN(60 TO 80 YEARS) |
SUPER SENIOR (ABOVE 80 YEARS) |
|||
|
SLAB(in lakhs) |
TAX RATE |
SLAB(in lakhs) |
TAX RATE |
SLAB(in lakhs) |
TAX RATE |
|
UP TO 2.5 LAKHS |
NIL |
Up to 3.00 Lakhs |
NIL |
Up to 5.00 lakhs |
NIL |
|
Rs.2.5 - 5.00 LAKHS |
5% |
Rs. 3-5 lakhs |
5% |
Rs. 5-10 lakhs |
20% |
|
Rs. 5-10 lakhs |
20% |
Rs. 5-10lakhs |
20% |
Above Rs. 10 lakhs |
30% |
|
Above Rs. 10 lakhs |
30% |
Above Rs. 10 lakhs |
30% |
||
1. Education + Health Cess of 4%
2. Tax Rebate: Tax rebate maximum up to Rs. 12500 for Total income up to Rs. 5,00,000
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