Tax Planning FY 2019-20

Tax Planning FY 2019-20

We are in 4th Quarter of FY 2019-20. Definitely you will also be getting notice from your accounts dept. to submit proof of tax savings investments.

Just for quick refresher let me briefly take you through various deductions available under chapter VI of Income Tax Act. As we are aware that for these deductions are available for various payments and receipts. Let’s me take you through various expenses/investments first then will take up receipt para later on.

1.50 Lacs
Available to Individual & HUF under combination of Section 80C, 80CCC, 80CCD(1).  Eligible schemes are-Employee
Provident Fund (EPF)
Voluntary Provident Fund (VPF)
Public Provident Fund (PPF)
National Savings Certificate (NSC)
5 Year Post Office Time Deposit
5 Year Tax Saving Bank Fix Deposit
Equity Linked Saving Schemes (ELSS)
Unit Linked Insurance Plans (ULIP)
Senior Citizens Saving Schemes
Sukanya Samridhhi Scheme
Within 80C
Applicable for individuals only under certain pension schemes
Within 80C
Investment in pension schemes notified by the Central Government.
Section 80CCD(1) applies to all the employees who voluntarily make contributions to NPS. The deduction is restricted to maximum 10% of the Salary (Basic + DA).
Section 80CCD(1B) Under this section all the employees who are voluntarily contributing to NPS can claim additional deduction up to Rs 50,000 subject to 10% of salary (Basic+DA). But if any deduction is allowed under section 80CCD(1), then no deduction will be allowable under this section for the same contribution.
1 Lac
Deduction for expenses incurred towards medical insurance, preventive health checkup, and other medical expenses. The deduction is available for the taxpayer, spouse, dependent children, parent (dependent or independent).
75K to 1.25 Lacs
Deduction for medical expenses to take care a differently abled family member dependent on the taxpayer. The deduction amount varies with the severity of the disabled member.
80K to 1 Lac
Deduction available for treatment of certain specified diseases. If treated person is <60 years then 40K else 1 Lacs.
No Limit
Deduction to individuals on the interest repayments of the loan taken from approved charitable organisations and financial institutions. The deduction can be claimed maxim for 8 years.
50 K
Deduction available to individuals for HBL taken for first time.
100% or 50%
Deduction on contributions made towards an approved charitable institution.
The adjusted gross total income is to be calculated on which the qualifying limit is calculated at 10%.
As per calculation
Deduction on the rent paid by an individual who is not receiving HRA from his employer. Least of following-
-Rs 5000 per month
-An amount equal to total rent paid less 10% of total income
-25% of the adjusted total income of the employee
Deduction of 100% on the contributions made to scientific research or rural development only when the contributor is an individual without any profits or gains from business and profession. Individuals with income from business and professions can claim the same under section 35.
No Limit
Here deductions are allowed to Indian companies on funds donated to political parties or an electoral trust qualifying for such deductions
No Limit
Deduction available for contributions made by individuals to political parties or electoral trust to the extent of 100% of the amount contributed.

  You may choose any of the options depending which suits your requirements. Happy Tax planning.

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