How to save tax

Tax Planning – How to save income tax in FY 2016-17 (AY: 2017-18)

Posted on by Naimisha Parekh

This article will help you with your income tax planning by explaining each and every provision that you can use to save your tax.

How to save income tax in 2016-17

The question that I am asked most often is that my income is Rs. XXXXXXX, what tax planning can I do to save tax?

This article is dedicated to answering that question on income tax planning. I have created a comprehensive list of all the provisions that you can utilize to reduce your taxable income.

Income Tax Slabs

Income tax slabs have not been changed this year. The tax slabs are as follows:

1) In Case of General Assesses (Both Male & Female):

Income Bracket Rate
0 to Rs. 2,50,000 0   %
Rs. 2,50,001 to Rs. 5,00,000 10 %
Rs. 5,00,001 to Rs. 10,00,000 20 %
Above Rs. 10,00,000 30 %

2) In Case of Senior Citizens (Age above 60 years but below 80 years):

Income Bracket Rate
0 to Rs. 3,00,000 0   %
Rs. 3,00,001 to Rs. 5,00,000 10 %
Rs. 5,00,001 to Rs. 10,00,000 20 %
Above Rs. 10,00,000 30 %

3) In Case of Very Senior Citizens (Age 80 years and above):

Income Bracket Rate
0 to Rs. 5,00,000 0   %
Rs. 5,00,001 to Rs. 10,00,000 20 %
Above Rs. 10,00,000 30 %

* On final tax amount, a surcharge of 3 %
**No surcharge above 10 lacs.
***An additional surcharge of 15% will be applicable on persons whose annual income is above Rs. 1 crore.  (The surcharge was 10% last year)

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Income Tax Exemptions: 

1) Section 80 C Limit – Unchanged this year

  • Deduction on premium paid for a life insurance policy, taken after 1 April 2012, will be allowed only if yearly premium is less than 10% of sum assured.  If its more than 10% then it will be not eligible for deduction u/sec. 80C
  • ELSS (Mutual Fund)
  • PPF (upto Rs. 1,50,000)
  • EPF
  • FD for 5 years
  • Pension Plans
  • NSC
  • Post Office SB
  • Infrastructure Bonds
  • Expenditure on Children Education (For upto 2 children only for full time education)
  • Tuition fees (Only Tuition fees excluding Development Fees, Donations, etc. Maximum allowed is Rs. 24,000)
  • Housing loan principal (details here)
  • Deferred Annuity
  • Approved Super Annuation Fund
  • Investments under Sukanya Samriddhi Scheme. Even interest is exempt.

2) Section 80CCD – Unchanged this year

Deduction under this section can be claimed only if the contribution to your NPS account is made by your employer and the deduction is limited to a maximum of 10% of your basic salary. Returns on NPS are tax free, but withdrawal is still taxable. The deduction under sec 80CCD is over and above the deduction available under sec 80C. Max deduction allowed is Rs. 50,000.

3) Section 80 D – Unchanged this year

Deduction under section 80D

  • Deduction of Rs. 25000/- is allowed if the same is paid as premium for Medical Insurance taken for self / dependents or towards preventive health check-up (max Rs. 5000). In case any of self / dependents is a senior citizen, the deduction allowed is Rs. 20000/-
  • Additional Rs. 15000/- is allowed as deduction if the same is paid as premium for Medical Insurance taken for parents. In case the parent is a senior citizen, the deduction allowed is Rs. 30000/-
Age profiles Premium paid for medical insurance Total Deduction under Sec. 80D
Yourself, your spouse and kids, if any Parents
Every one is under 60 years 25,000 25,000 50,000
You and your family are less than 60 years & parents are above 60 years 25,000 30,000 55,000
You and your parents are of 60 years and above 30,000 30,000 60,000

4) Section 80DD – Unchanged this year

Deduction under section 80DD

  • Exemption given for expenditure made for a disabled dependant towards Medical Treatment/Training/Rehabilitation. It also includes the LIC/Insurance premium paid towards maintenance of such dependant.
  • Maximum deduction allowed is Rs. 75,000/- in case of normal disability and Rs. 1.25 Lakh in case of severe disability.

5) Section 80DDB – Unchanged this year

Deduction under section 80DDB

  • Exemption given for expenditure incurred on specified disease or ailments such as cancer/aids.
  • Maximum deduction allowed is Rs. 80,000/-. 

List of ailments covered:

(i) Neurological Diseases where the disability level has been certified to be of 40% and above,

  1. Dementia ;
  2. Dystonia Musculorum Deformans ;
  3. Motor Neuron Disease ;
  4. Ataxia ;
  5. Chorea ;
  6. Hemiballismus ;
  7. Aphasia ;
  8. Parkinsons Disease ;
(ii) Malignant Cancers ;
(iii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;
(iv) Chronic Renal failure ;
(v) Hematological disorders :
  1. Hemophilia ;
  2. Thalassaemia.

6) Section 80E – Unchanged this year

Deduction under section 80E
Deduction is allowed for repayment of interest component of Higher Education loan. All education after Class 12 is allowed, either vocational or Fulltime. But should be from a school/institute/university recognized by the government.

7) Section 80G – Unchanged this year

  • Contribution to exempt charities – 25/50/75/100% depending on the charity and as per approval
  • 100% exemption on donation to political parties 😉

8) Section 80U – Unchanged this year

  • Deduction upto Rs. 75,000/- is allowed in case of Permanent Disability.
  • In case of Permanent Disability exceeding 80%, maximum deduction allowed is Rs. 1,25,000/-.

9) Section 24(1)(vi) & Section 80EE – Unchanged this year

  • Housing loan interest. Maximum allowed limit raised to – Rs. 2,00,000 (for loans taken after 1 April 1999. For loans before that Maximum Investment Limit was 30,000).
  • Additional deduction of Rs. 1 lac will be applicable to persons taking first home loan of up to Rs. 25 lacs for property worth upto Rs. 40 lac. For such persons, the total deduction will be Rs. 2.5 lacs (Rs. 1.5 lac available under section 24(1)(vi) and Rs. 1 lac available under this new section 80EE).
    More details here.

10) Superannuation – Unchanged this year

Any contribution made by a company to superannuation fund upto Rs. 1,00,000 tax free in the hands of the employee.

11) Conveyance/Transport Allowance – Unchanged this year

Any Conveyance / Transport Allowance given to an employee is tax free upto Rs. 19,200 /- (No Supporting Bills required).

12) Medical Allowance – Unchanged this year

Any Medical Allowance given to an employee is tax free upto Rs. 15,000 /- (Supporting Bills required).

13) HRA – Unchanged this year

Any House Rent Allowance given to an employee is tax free upto the minimum value of the following conditions (subject to – when an employee can produce rent paid receipts from landlord for the period and if the employee has not availed of tax exemptions for home loan interest / principal repayment):

  1. 50% of Annual Basic (40% of Annual Basic in case of non-metros)
  2. Actual HRA received
  3. Rent Paid – (10% of Annual Basic)
    More details about HRA here.

14) Professional Tax – Unchanged this year

Any Professional Tax deducted from an employee’s salary can be reduced from the annual salary income to arrive at taxable salary.

15) Provident Fund – Unchanged this year

Provident Fund contributions (under section 80 C and subject to an overall investment limit of Rs. 1,50,000 ) deducted from an employee’s salary are tax exempt.

16)80CCG – Direct Equity Investment – Unchanged this year

Under ‘Rajiv Gandhi Equity Savings Scheme‘ – a new equity investor will be able to claim 50% of his investment in direct equity as deduction subject to maximum investment of Rs. 50,000 and provided his taxable income is below Rs. 10 lacs. The investment will be subject to 3 years lock-in.  The benefit will be available for 3 consecutive years.

Government has notified this scheme (RGESS). Mutual funds and ETFs that invest in BSE100 or CNX 100 stocks or PSUs which are Navratna, Maharatna and Miniratna will qualify under this scheme. These investments can be traded over stock exchange after 1 year of investment. New equity investor has been defined as someone who has opened a Demat account but has not bought any securities till date of notification of this scheme (22 Sep 2012). More information here.

17) Section 80TTA – Savings Bank Interest – Unchanged this year

No tax will be charged on interest earned on balance in savings bank account subject to a maximum of Rs. 10,000 per year.

18) Section 87A – Tax Rebate – Changed this year

Tax rebate of Rs. 5000/- (as against Rs. 2000/- last year) will be given to all those whose total annual income is up to Rs. 5,00,000.

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605 thoughts on “Tax Planning – How to save income tax in FY 2016-17 (AY: 2017-18)”

  1. Will the interest earned on FDs, less than 5 years come under, interest earned in SB A/c not more than 10K clause?

    Reply

    1. Prateek,

      This Savings Bank Interest Clause is only meant for those who have only Salaried Income and Savings Bank Interest. Tax on their Salary is Deducted at source by their employer and so to give them relief of not filing IT Returns this clause was introduced to make their taxable income nil. FD Interest is not eligible for deduction under this section and is fully taxable.

      Reply

        1. Hi Naimisha, Thanks for this wonderful post. I want know, as a salaried employee(income tax payable) and having a savings bank account, is the interest taxable? thanks.

          Reply

      2. but i read that
        this sec. is not for salaried persone, as per book of vinod gupta and bare Act,
        this is for Individual and Huf (Karta Accounts) (whatever source of income), whos gross total income is less then 10 lakh …. if they are recive interest on saving a/c then they are eligible for ded. up to rs10000

        Reply

        1. sorry,, in the above repply…
          i write a condition of rs 10 lakh,,,,,this is not for above Exemption
          this is wrongly quoted

          Reply

        1. I wish to know about 80D. Whether the amount of health insurance premium taken for dependent qualified under 80D is over and above 80C limit of rs 100000/- and whether any insurance taken overseas qualifies? or only the Indian company is needed.

          Reply

            1. The insurance in question was Travel health insurance taken here with the premium paid through credit card which was paid in rupees. Only the company was not Indian. Still it doesn’t qualify?

              Reply

              1. Sorry…
                Travel Insurance and Medical Insurance are quite different. The Tax claim can be done only in case of genuine Medical Insurance.

                The issue with Travel insurance is it also takes care of Medical issues during your Travel, however it takes care of Loss during travel.. and it covers your TRIPS.. for a limited or a unlimited number of trips for that FINITE time!.

                These Medical Insurance that can be claimed at 80D, has to be taken within the Taxable year, and are Available for that Complete year!. Hence can be claimed as Tax-free!

                Reply

  2. Prateek, the Rs. 10000 SB interest clause has not yet been defined clearly. However, in all probability, interest earned on FD will not qualify for deduction under this clause.

    By the way, interest earned on 5 year tax saving FD is also taxable 🙁

    Reply

    1. iF THE SBA/C interest exxceeds 10K, willthe excess over 10K only will be taxable OR the entire amount. . Though you have stated that the position is not fully spelt out,do you have anyfurther views

      Reply

      2. Sir, as per the provisions of TDS defined us/ 194A , if the amount of tax during the previous year over saving bank account exceeds Rs 10,000/- , TDS shall be deducted over the whole amount and not the amount exceeding over and above Rs 10,000/-.

        Reply

      3. the interest above the 10000 amount is taxable. To tell bank not to deduct, this submit form 15g if you are not senior citizen otherwise form 15h

        Reply

      4. Interest earned over 10000 on SB is taxable not the entire amount.For example if 25000 is total interest earned then 15000 would be taxable.

        Reply

  4. this is best article i searched for Tax Planning and also up to date but Ami..

    Do you Sure such a limit of 24000/- on tution fee as shown in your article.
    Please Make me sure.
    Please give any reference if Possible for you

    Reply

    1. The deduction of Rs. 24000 towards tuition fee is allowed to the best of my knowledge. You can cross check the facts on Income Tax India website (http://incometaxindia.gov.in).

      And thank you for your appreciation. Certainly boosts my motivation to write more helpful articles 🙂

      Reply

          1. 80C limit is restricted to rs 100000/-.
            This includes Tution fees also…and entirely Tution fees can be Rs 100000/- and it is not restricted to Rs 24000/-

            Reply

      2. Dear Ami, stating the fact of Rs 24,000/- is not correct , tuition fees covered u/s 80C is bounded by the limit prescribed for 80C, 80CCC & 80 CCD which is combinedly Rs 1,00,000/-. Thus tution fees can be claimed for exemption paid for the children (upto two children only) of assessee can be allowed as deduction upto Rs. 1,00,000/-. You can cross verify by searching for details u/s 80 C over google or income tax site.

        There might be some confusion regarding the limits of tution allowance in case of salary head in your mind. Kindly check the same.

        Reply

    1. Prem, the objective behind this article is to help readers save money on their taxable income. Agriculture income, as you rightly said, is tax free and hence is outside the purview of this write-up.

      But thanks for pointing it out.

      Reply

  6. Thank You Ami, This is best article Published on Tax planning till date. Can you tell me more about Medical Checkup and Interest on Bank SB account.

    Reply

    1. Hon. Finance Minister, Pranabda, in his budget speech, announced exemption of additional Rs. 10,000/- under section 80D for preventive health checkup. Before this announcement, any check-ups were not covered. Only premium towards health insurance policies was exempted subject to limits. But with this provision, we can now go ahead and get our health check up done and claim exemption on the expense, again subject to Rs. 5000 limit.

      Another announcement made by Pranabda was about interest earned on savings bank account. Till last year, any interest you earn from your savings bank account was added to your total income and taxed accordingly. However, from this year on ward, interest earned up to a max limit of Rs. 10000 will not be added to your taxable income. With interest rates on savings account increasing in the last few months (Kotak & Yes bank are giving 6%-7% per annum vs others at 4%) this is a welcome exemption.

      I hope to have answered your queries. Do write back if I can help you further.

      And thanks for your kind words 🙂

      Reply

      1. Hi Ami,

        Wanted to know how do I claim deduction under sec80D for preventive healthcare. Do I have to specifically go for such packages or can I claim for individual check-ups? eg:- say I spend Rs 200/- for blood sugar test for my mom. Can I claim deduction for that under preventive health care? Also which are the various tests that are allowed under preventive health care?

        Reply

        1. Vishal, you can claim expenses for preventive health checkup for your own self. All you need to do is preserve the bills. However, I am not sure if you can claim expenses for check-up of your mom.

          Can any of our readers help?

          Reply

          1. Most of the websites say that preventive health check-up expenses can be claimed for self,spouse,children and parents,max upto Rs 5,000/- but there is no info as to what kind/nature of tests are allowed. Also do we have to do the tests only at govt. authorised labs or could be at any lab. I see many labs offering preventive heath check-up packages. Is it mandatory that we have to opt only for such packages or can we get the individual tests done at any lab and preserve the bills? Can any one pls help with the some info. on this.

            Reply

      2. Hi Ami,

        Can you please tell, that if I have earned an interest of say 12000 Rs on my savings bank account, then while filing my IT do I need to show the interest as Rs 12000 or Rs 2000 (since interest above Rs 10000 is taxable, so should i deduct 10000 from my total interest earned) ?

        Reply

  7. Please eloborate on “Direct Equity Investment ” – Procedure how to invest in this
    Is there any scheme so that we can start investing
    Is the old ELSS on tax saving mutual funds applicable.

    Reply

    1. Hi Jayanta,

      There isn’t much information available on Direct Equity Investment as of now. Awaiting more details from the Finance Ministry. Will keep this post updated.

      Exemption on ELSS under 80C is applicable for this year (at least).

      Reply

        1. Ami,

          Do you have any updates on “Direct Equity Investment ” already a month has passed and delay in this can affect our tax planning

          Reply

          1. Jayanta,

            Still no information on Rajiv Gandhi Equity Scheme. The last that I heard was AMFI pitching to manage this scheme. No other details yet.

            Reply

  8. Dear Ami,

    I have a home loan of 4 lakh taken 2007 and I am claiming the tax benefit. Naturally I don’t claim tax benifit fromHRA. Now if I prepay the balance house loan principal and take another house loan to buy another flat at same city. Can u suggest some idea how to save tax in this situation.
    Regards,
    Tarak

    Reply

    1. Hi Tarak,

      There are exemptions available under two different sections for Housing loan. Sec 80C allows deduction of upto Rs. 1 lac for payment of PRINCIPAL part of your EMI whereas Sec 24 allows a deduction of upto Rs. 150000 for INTEREST part of your EMI.

      You cannot claim deduction under sec 80C for your second house if you are not staying in it. This deduction can be claimed only if you are living in a city, different from where your house is located, for occupation/job purpose. In all other circumstances, no deduction is allowed.

      However, you can claim deduction under sec 24 for the interest part even if you are not staying in that house. However, the maximum exemption stays at 1.5 lac. So even if you are paying EMI on 3-4 different properties, you will be allowed exemption only up to Rs. 1.5 lac combined.

      Reply

      2. i have an annual income from business rs 200000 plus interest income of 200000 and my spouse (housewife),s interest income of 200000.how can we save tax by financial planning?

        Reply

  9. Hey Ami,

    Please elaborate more on NSC and FD for 5 Years, my question is “Will the NSC/FD amount forms part of deduction or it is only Interest amount that forms part of deduction”?

    Thanks!!

    Reply

  10. Namiksha thanks for your valuable inputs. Its very importance information and i found it very handy.

    Reply

  11. Can u give a best tax planning to save tax, my salary take home is taxable 8L, i am 25. i am having lic 40K… no housing lone…. give me you valuable suggestion to me So I can follow

    Reply

    1. Hey Venu, you have shared very little information to do detailed tax planning. However, with whatever you’ve shared, the following can help you save tax:

        Since you are salaried, your employer must be deducting PF. That will add up as a deduction under 80C. 1,00,000 – 40k(lic) – PF = what you need to invest in ELSS or any other scheme mentioned under 80C.

        Get a health insurance for yourself (not just for tax saving purpose off course)

        Deduct conveyance allowance part of your salary up to 9,600 (Bills reqd)

        Deduct medical allowance part of your salary up to 15,000 (Bills reqd)

        If you are staying in rented premises, check point 14 above.

        Point 17 above will also help but the process is not yet clear.

      Reply

  12. Ami,
    I think new national savings Certificates (N S C) are issued by post offices for 10 years, but i think they are not allowed as deduction u/s 80 C.
    Please clarify so that readers get a clear idea.

    Reply

    1. Akshay, we are reasaonably sure that the investment in NSC is allowed as deduction, under sec 80C, up to a max limit of Rs. 1 lac. You may still want to clarify with your CA.

      The interest is taxable.

      Reply

      1. Hi Ami,

        It was amazing to read all your replies, need a help from you in one of your thread about petrol exemption.

        My father in law is a taxi driver but can we claim his petrol bill for exemption.

        Reply

  15. Hi Ami,

    I have taken a home on my name but if the loan(45lacs) is on the name of me and my wife, will it be possible to save tax’s for both of us.

    Reply

    1. Yes, both of you can claim deduction provided both of you contribute towards the EMI. The deduction will be to the extent of individual contribution and subject to caps mentioned above.

      Reply

  16. this year i got rs 9500 /- different saving banks accounts. Whether i need to pay tax on this?

    Reply

    1. This exemption is applicable starting from FY 2012-13. Assuming, you’ve received Rs. 9500/- in this financial year across your savings accounts, the amount will be exempt from tax. However, interest above Rs. 10,000/- will be taxable.

      Reply

    1. LTA is Leave Travel Allowance. This exemption can be claimed for expenses made on your travel in India (only). The travel should be made using the shortest route or cheapest mode. You need to maintain all bills and tickets.

      LTA can be claimed only twice in 4 years.

      Reply

  18. Hi Ami,

    The blog is too nice. You are doing a very good job and thank you.

    Could you pls let me know the saving in other than 80C section.

    Reply

    1. Hello Sriram, there is savings possible under each of the sections mentioned above. Depends on what all is applicable to you. Do read each one of them in detail and see if you can take advantage of it.

      And thanks a lot for your sweet words 🙂

      Reply

      1. hi naimisha ,
        thanks for enlighting me and adding to my knowledge of income tax
        my ques. is tat i do make many FD online for different time interval with cumulative intrest option , so i made many FD inthis year too , and many fd in previous years which are getting mature in this financial year , kindly tell me how to calculate intrest for it

        Reply

  20. I am a Permanant Physical Handicapped person with 55% disability & Certificate issued by Civil Hospital,Ahmedabad . I want to know how much Rs. I get deduction under Clause 80 U of Income tax Act.

    Reply

  21. hello ami,
    ur blog is very simple and easy to understand. keep up the good work !!
    i have a doubt about medical health insurance. i had purchased a two year policy and paid consolidated premium. how would the premium be taken in to account for exemption in 80D ?

    Reply

    1. Its a tricky call. You should ideally consult your CA on this. If you’ve paid a consolidated premium and claimed a deduction on the whole amount last year, you will not be able to claim it this year is what I think. But not very sure. Do re-check.

      And thanks for your kind words 🙂

      Reply

  22. If in Payment Slip not mentioned traveling Allowance then is it possible to deduct 9600/- from income

    Reply

  23. Thanks for such nice article Naimisha, it is very helpful.

    BTW, if possible could you please write an article where how much one has to pay tax? I have categorized it in the following:

    1. Those who have home-loan
    2. Those who don’t have home-loan

    Also, please give us more idea on how to save tax give us all possible ways or areas where we can save tax. I know more people will be happier to know this and I am sure it would help a lot of people.

    For instance, I get benefit only for home-loan, medical, & 80C – nothing else, I am just trying to see are there any other area where I could have saved my tax.

    Thanks.

    Reply

    1. Rakesh,

      This article is meant to help in exactly what you are asking for. There are many permutations and combinations of sources of income, expenses and investments. Hence, it is difficult to give exact tax liability and savings.

      Reply

  24. I just want to know that to which extent fuel reimbursement is tax free. (A person have company provided Car & maintenance charges also beared by company. He is getting Rs. 7000/- as Fuel Reimbursement in such case perrks amount is Rs. 1800/month. I just want to that is this right way or not.

    Reply

    1. Abhay,

      Fuel expense reimbursement (full amount) is tax free (provided it is supported by bills) as far as I know.

      I am not too sure about its treatment as perquisite

      Reply

  25. Thanks for your blog. It makes the process very simple.
    I need guidance on Section 80 D. Under that section you specified two points, i didn’t get the difference b/w both. Both sounded same to me. Apart from that, i would like to know whether i am eligible to take this benefit for my parents, considering i am married now. However, since my parents have two daughters and i am owning full medical expenses for my parents. My parents are retired now starting from july.

    Reply

    1. Shruti,

      The first point is for self and dependents. The second point if for parents.

      Since you claim deduction on payment of up to Rs. 15000 for health insurance premium for your parents. In case they are senior citizens, you can claim up to Rs. 20000

      Reply

  26. Good Article. I have a question. For loan taken over under construction property we can’t claim interest and principal deduction. Any other way where we can save tax.
    Also if we sell property withing 5 years of purchase then it comes under perview of tax and we have to reverse the deduction claims in previous years. Is this correct?
    Please clarify.

    Reply

  28. please confirm w/c is correct of the below.

    1. Preventive Health Check Up (Parents) and Preventive Health Chec
    k
    Up (Self) with limit up to 5000 each. Total for 2 items 10000.

    2. Preventive Health Check Up (Parents) and Preventive Health Chec
    k
    Up (Self) with limit up to 5000 combined, therefore total is 5000.

    Reply

  29. Those who are drawing double Transport Allow (disabled persons) are eligible for double deduction of Transport Allow i.e. 9600+9600=19200 or only Rs.9600/-. Please clarify

    Reply

  30. Hi Ami,

    Its nice and handy article for the current year, but I still have a few questions as follows….
    1- Maximum limit of interest paid on education loan, nowhere defined on web :). Does it have any maximum limit for interest paid on education loan or it is on actuals ?
    2- Section 80CCF is completely withdrawn or we have something new this year in this section?
    3- Is it correct that the maximum tax can be saved by a normal salaried person this year is 1,35,000 as =>
    1,00,000(80C) +
    15,000 (80D) +
    15,000 OR 20,000 (80DD, 80DDB)
    ———————————————-
    1,35,000/-
    (Note: Not considering any donation and interest paid on education loan as dont know the maximum limit)

    Regards

    Reply

    1. Hey Priyesh,

      My answers are as follows:
      1. I assume it is on actuals but not sure.
      2. 80CCF is completely withdrawn
      3. Donation to political parties is 100% exempt. Hence, you can save 100% of your tax if you plan to donate it to our politicians 😀

      Reply

  31. Hi,
    Thanks for easy, helpful & good blog. Keep it up!
    I would like to know the new updates for home loan tax exemption.

    Regards,

    Reply

  32. Deduction under section 80DDB
    Exemption given for expenditure incurred on specified disease or ailments such as cancer/aids.
    What are the documents required to claim deduction under 80DDB?

    Reply

  33. I have a question regarding the savings bank interest for tax computation.

    It is clear that if the interest is upto 10000 there is no tax. However if the interest is lets say 15000 then does that mean the first 10000 is not taxed and tax should be paid only for the remaining 5000 ?

    Reply

  34. what about intrest from NSC ? is it tax free under sec 80(c)?
    i invested purchased NSC of rs 1 lakh .
    my intrest from NSC i purchaesd is rs 21787.this intrest will be calculated under ”income from other sourse”?
    my salary income is 450000.
    how much i will pay tax?
    can you pls COMPUTE for me?

    Reply

    1. Hi Yusuf,

      The interest on NSC is taxable.

      It is not possible to compute tax on basis of information you’ve provided. Besides, I am not authorised to calculate tax.

      Reply

  36. you mentioned that only the amount invested in FD for 5 years is eligible for deduction under 80C.
    What about the interest deemed to be accrued to the investor is o be treated in the next year?this situation occurs in a cumulative tax saving deposit for 5 years. i had a feeling this accrued interst amount could be claimed for deduction under 80C. please clarify. BTW your blog is well written. By googling only i discovered you. keep up the good work.
    you may reply to me by email if time permits.
    A senior citizen 70+ from Bangalore.

    Reply

  38. Hi Ami,
    Nice & useful post.
    I want to ask u about whether we can claim tax-rebate for home loan principal amount and interest amount even if house is under-construction. or we can claim only principal amount under 80C.
    Plz explain.

    Reply

  41. thanks Ami…it has been a very useful artical @ computing the tax of FY 2012-13.
    I have just few query on subject to said artical. could you plz clarify for mine knowledge-*
    1) can we consider the deduction u/s 80ccd at salary tax computation from employer, if yes then what is the actual limt over & above u/s 80c (i.e. 1 lac)
    2) At same time we can include the 80g exemption on salary tax computation from employer

    please be clarify my above query….
    thanks in advance
    Regards,
    RK

    Reply

  42. Dear Ami,

    V good informative article, easy to understand,really nice ,,,,,,one of the best on this topic,,,,,
    Keep the good work on………

    Nitin

    Reply

  43. Dear Ami,
    Please elaborate on a point relating to second housing loan taken jointly with father and son the interest applied on this loan account can be shared by both 50% each and what procedure is to be followed for the same
    Please advise

    Reply

    1. Dear Ganeshji,

      I am not sure with respect to tax treatment of second housing loan. Besides, it is also jointly help. You should consult an expert.

      Reply

  44. Would like to know, what includes the definition of preventive health check up. What test are included in such health check up. Can we go for any test and claim a sum of 5000 per assese

    Reply

  45. Hi Ami,

    Your blog is the best !

    I have home loan and I am claiming the tax exemption for that,
    but now I am trasferred to a different city and I am staying in a rented house.
    I can not claim for the principal part as I am not staying there.
    But can I claim the interest part and HRA part both ?

    Reply

  46. Dear Ami,

    IN ITR 1 Sahaj under which head I will have fill up the amount of Interest on housing loan for gettin g rebate. Is it in the column of 80 C.

    Reply

  47. Hi,
    Great work. I am contract employee working as a consultant. So, 10% of salary will be deducted at source. I do not know where to fill in my conveyance/telephone/medical expenses in ITR4 – Right now it is carry forward loss(CFL). How can I include this to claim refund?

    Thanks,
    Unmai.

    Reply

    1. As far as I understand, a consultant earning consultation fee under contract is not considered salaried and hence those provisions do not apply. However, you can claim all expenses under business expenses.

      Reply

  48. I think in case of senior citizens between 60-80 years the tax rates above Rs. 5 Lacs are as under:
    Rs. 5,00,001 to Rs.10,00,000 20 %
    Above Rs.10,00,000 30 %

    Reply

  51. I am a tax assesse havinc paid excess taxes and need to get a refund of about Rs. 30,000. for the AY – 2012-2013. pertaining to FY 2011-2012
    what happens if I file the returns, [a]. after the deadline of July 31st 2012, [b]. between 31st July 2012 and 31st March 2013, [c]. after 31st March 2013 ?

    Please do clarify my querry

    Regads & thanks

    Vincent

    Reply

    1. You will get the excess tax paid as refund. Returns should be filed before 31st July. Don’t know what is the penalty for delay.

      Reply

  52. Hi Ami Thank u vey much for the blog as it is help full to many guys who are afraid from tax planning, Its a great work done by you Excellent informative article Keep it up.
    I am a tax assesse and want to know whether i can claim the excess tax deducted in the financial year 2008-2009 & AY 2009-2010 as i got arrears for previous 3 years and despite of filling the IT return and form 10E within the stipulated time I could not get the refund of excess Tax Deducted at Source.

    Reply

    1. Hi Vijay,

      Excess tax paid by you will be refunded separately. It generally takes some time (which runs in years) for the refund to arrive.

      Reply

      1. The refund process has been quite faster now, I generally get my refunds in around 6 months time, all you need to ensure is complete documents are submitted.

        Reply

  54. This is a practical problem but still no one is raising this issue-Why? People don’t have faith that nothing will happen in this country?Only people in power will do things as they like?This is only a Pseudo democracy ?I am placing this before you so that you can take this forward.

    I am aged above 50 years.I am finding it difficult to reach my office using either thru public transport(due to poor transport system and infrastructure not in tune with the the demand) or two wheeler( due to neck pain and diabetes and poor road conditions).So I started using my own car and incurring fuel costs alone Rs. 5000/- per month aproximately for a distance of 30 km a day for 20 days in a month.This is no way near the statutory exempted amount of Rs. 800/- per month without any proof.

    Under the circumstances can I calim this actuals (Petrol/diesel bills) to office commutation showing my credit card debits thru my employer or at the time of filing return attaching the credit card statements highlighting the fuel bill debits each month .What is the solution for this?Company HR department is not entertaining any restructure of other allowances and permitting fule Bills reimbursements only for senior management staff.Why not Income Tax act/rules or Finance Act is amended to accept this as uniform polcy for all the employees with respect to office commutation.To force the Income tax department to accept this view with immediate effect what are the options availble to us.Can the ruling party memebers opposition parties , press and media play meaningful role in this regard.

    Pranab Mukhejee without looking into these kind of peoples /employees problems has become president of this country.It is really a shame such an experienced person never acquainted himself with these kind of peoples problems and drive the officials in Finance and Taxation departments to find an amicable and logical solutions for this .

    He is a waste to the country.At least let us see whether this message goes into the head of the next finance minister and whther he can come out with a good statutory solution directing the employers to check the credentials of individual employees claims and allow necessary tax exemption as they are doing for certain senior cadres.Can’t they do this simple job for the benefit of the tax abiding citizens of their company and this country.
    The corporate HR departments are simply turning a deaf ear to our requests to represent to the government and get the necessary justice.

    Even though so many cars are plying on the roads no one is raising this issue in a big way and no article by the news paper editors or media persons in this regard.May be most of the people are enjoying a free ride in this country like Ministers,MP’s MLA’s and top level management excutives in the Industries and we are a minority in this regard?

    Best regards
    Baacha

    Reply

    1. Dear Sir,

      I agree with you whole heartedly. Basically this country is going towards no-where, media & we are talking everyday of “India Shinning”- but if you see the gloomy face of common man, you will find “India Crying”.

      Nothing in this country is mend for common man; if you are good, honest, hard working then you either cheated or if not yet get ready for the day.

      A common mans routine begins from the first light of the day and ends at late night, this hard earned money is taxed by Government of India/ Ministers as per their budget of expenses!! See all the sections the limits are not feasible at all as per todays scenario and you are bound to pay tax (Eg: Education Limit: Rs. 200 pm * 2 child?? Transport Allowance/ Conveyance: Rs. 800 pm?? even our savings are taxable beyond Rs. 10000/-), but see the Section 80G
      Contribution to exempt charities – 25/50/75/100% depending on the charity and as per approval
      100% exemption on donation to political parties????????????

      Really very hard to cope up with the increasing prices.

      Thanks
      Prabal

      Reply

    1. If you have already invested 100000 under sec 80C, investment of additional 20000 in infra bonds will not be deductible.

      Reply

  56. Add-on:

    Rajiv Gandhi Equity Savings Scheme is under 80CCG. I guess, it will be helpful. Max we can save is 25000/-

    Reply

  57. political party ko income tax ke rebete kish dhara me milti hai. plese poora tareka batayin.

    Reply

  58. Thanks Ami for these useful tips

    Has any clarity been announced by the Govt on ‘Rajiv Gandhi Equity Savings Scheme’ regarding the amount of investment to be made and the lock in period ?

    Reply

  59. dear Ami,
    I have jus got a job n need to start investion to save tax….my doubt is that is the maximum limit under 80c applicable individually to each item or all items combined??

    this doubt arises as my employer pays epf…so dat itself comes to 1lac a yr…can i opt for other item under 80c or no??
    pls reply urgently on my mail id..as i am totally confused what to do….

    thanks a ton !!!

    Reply

    1. Hello Nida,

      Congratulations on your first job 🙂

      maximum limit of 1 lac is applicable to all items under 80C COMBINED. If the EPF contribution by your employer is already 1 lac, you cannot claim further exemption under sec 80C.

      Reply

  63. Hi Ami, I am a Govt. salaried employee, I got spine surgery during this FY. total expenditure about Rs.70000/- can I claim Income tax rebate and upto what amount, under medical allowance or some other or not at all. please guide me as soon as posible, as last date of return filing is ahead. thanx

    Reply

    1. Hello Mr. Singh,

      You need to claim medical expenses of 70k from your medical insurance provider (I hope, you were insured). You cannot claim it as a deduction from your income.

      Reply

  64. ami plz forgive me if my hurt u – but i wanna speak truth – that i fell in love with ur beautiful face — srry if it hurt u

    ADS

    Reply

      1. Hello Ami

        You look beautiful, but I like your answer that you are married and have a cute daughter.

        Your post is even better ;), simple to understand and easy to comprehend.

        Here is my question:Whats the allowable deduction under 80D: is it 40K or 30K? assuming parents are senior citizens. 20K for parents and 20K for self, spouse, dependents.

        What is covered under: 80D Parental Insurance Premium Salary Deduction?

        Thanks for your answers
        Vatz

        Reply

      1. AMi,
        I am planning to buy Medical Insurance for my MOM (15k) and for me as well(15K).
        ne advice on the best medical insurers.Basically to avoid tax.. kindly advice if u knw.

        Reply

        1. My personal health insurance is from Royal Sundaram. I like their service. There are other good options as well. But none which I have experienced personally.

          Reply

  66. Dear Ami!

    Great job of compiling the deduction list. 🙂
    Please check the deduction u/s 80U. I think it has been increased to 100000/- for people with with severe disability. This is just a suggestion to what is other wise a neat compilation.

    Thanks

    Reply

  67. Hi Namisha,
    I would like to know wether we can avail Tax benefit for insurance paid for vehicle??

    Regards,
    Vishal

    Reply

      1. Thanks for the quick response. Can you help me with my tax planning. I am about to change job and according my CTC will be 11,70,000/- What savings should I do to save my earnings..

        Reply

  68. THANKS FOR SHARING VALUABLE INFO. I wanted to know sec. Wise deduction benifit and i got it thank u very much

    Reply

  69. Hi Ami,
    This is an amazing work! Thanks for your time & efforts.

    I require some suggestions for tax planning for FY 2012-13; my total income (before tax) is around 18L and I have already fulfilled the requirements of 1Lakh (PF & LIC), 1.8L (HRA), 15K (medical Bills), 9.6K (TA) & 5K (health insurance) deductions.

    I don’t have a Home Loan now, but i am planning for purchasing a flat. But is that really beneficial (since am already saving 1L (th’ 80C) & 1.8L (th’ HRA), as i assume i can’t claim HRA if i am claiming for Home Loan Interest?

    Is there any other ways of doing it? Can you suggest me more on the possibilities of saving tax?

    Many Thanks,
    Roby

    Reply

    1. Roby, you are right. You can’t claim both HRA and Housing loan deduction together.. unless you have your own house (on which you’ve taken the loan) in one city and you work in another city and stay on rent there..

      Reply

  70. Hey Ami.

    I happened to stumble upon this blog of yours and I have to really say, its a marvellous job you are doing. This information on tax exemptions is priceless and all under one roof. Really helpful for the first timers too. Keep up the good work.

    Reply

  71. 1.Slab for senior citizons also changed as 2.5 Lac tax nil,2.5lac to 5.00 lac 10%tax ,5.00 lac to 10.00 lac 20% tax.
    2.No cap for tution fee like Rs.24000.00. It can be claimed upto Rs.1.00 lac for two children.
    3. good effort, good help.

    Reply

  73. Sure I have seen many blogs with orphaned questions & requests. One of the rare who answered politely to even appreciations and tease. Glad some body like me still out there,, lol. Good job, Keep it up.

    It appears deductions for individual I think. There are more good options available for HUF & others. I can’t recall but sure 1 eg; Husband, wife together making a trust and contributing something like that is also exempted (2004-05 memory). Hope u can dig out.

    Reply

    1. Hey Ramesh, sincere thanks for your appreciation of my work. There are plenty of ways to make money and I am surely using some of them to make enough myself. But this blog allows me to give back. I like to share my knowledge and help others through this blog.

      Tax rules for individuals and huf are similar if not same as far as I know. I have heard about tax benefits of making a trust. But for some reason, have not been able to dig out credible info which I can share. If you can help, I will certainly add it to this post.

      Reply

  74. I am a salaried employed staying in company,s acommodation at construction sites. My wife stays at other city in a rental acommodation. I am not availing any home loan. Should I claim HRA tax exemtion by producing rent receipts to my present employer? If yes – then Last year (FY2011-12) I did not claim any HRA tax exemtion so it does not reflect in my Form 16. Now I am yet to file my return for the FY 2011-12. Should I claim my HRA tax benefit while efiling my return? please suggest.

    Reply

    1. No. Since, the company is providing you accommodation, your salary will not have HRA component. You will not be able to claim deduction.

      Reply

  75. Thanks for all the details on various queries of readers. I am a retired person with income from pension, house rent and interest from various instruments. Please clarify on the following :
    1) Can I can claim exemption under Sec 80D for Medical Insurance premium paid for my son who is 26 years old ?
    2) Are there any limits for investments in NPS and RGESS and exemptions thereof ?
    Thanks
    Sathish

    Reply

  76. Thank you very much for making an excellent publication. As I am working in the area of Personal Investment and Tax Planning, it is very much helpful for me. Please write whether gains from the balanced mutual funds are taxable or tax free in the hands of the recipients. As per my knowledge in concerned, gains from equity mutual funds are tax free, if the same is held for more than one year. While any gains from debt mutual funds are taxable.

    Reply

    1. Hello Prakash,

      Yes, gains from equity mutual funds are tax free. The definition of equity fund is a fund which invest 65% or more of its corpus in equity instruments.

      To take advantage of tax free status of equity funds, fund houses have redesigned balanced funds to have 65% equity and rest 35% in debt and liquid instruments. Hence, you need to get into details of each fund to understand its asset allocation which will determine its tax status.

      Reply

  79. Ami,
    if i am getting HRA Rs.10221/- per month & 122652 per yr. whole amount is exempted from Tax under 80E? Pease clarify. TQ.

    Reply

  81. A very good article and a lot of healthy discussion taking forward the subject and exploring the niche areas. Please keep up the good work.

    Reply

  84. Thanks for your valuable efforts …

    I want to know tax slab define by total anual income or on taxable income.

    Reply

      1. Thanks..
        Two more ques; If am declaring tax exemption under 80DD ,is any proof or certificate required for dependent declaration. If yes please assist how can i get.

        Can i declare my uncle as a dependent. he is physically 100% handicapped as per CMO certificate.

        Thanks for your valuable time and suggestion.

        Regards
        Jitendra Sharma

        Reply

  85. The life insurance premium should not be more than 10% or the sum assured… add that this is a new change from c.y. earlier it was 20%… if its more than 10% then not eligible for deduction u/sec. 80C

    Reply

  86. Sir… want to knw abt 80TTA…
    MAM normally interest earn on saving bank a/c is taaxble under the head IFOS..
    how saving bank interest exemption???
    confuse???
    jst clear mam

    Reply

  87. dear amisha
    kudos to for bringing out such valuale info on your blog
    i shared your blog with a lot of my colleagues and yes
    shared it on the facebook as well…keep up the good work
    ihave a query . iam already booked to the hilt for the 80c
    section and yes 80ccf has been abolished and i have reas-
    nably claimed 80g exemtion .IS IT TRUE THAT contribution
    to the NPS is exempt over and above Rs 1lac
    iam working for last 23 yrs in a psubank.What is the criteria for claiming
    additional 10%of basic exemption.How can my organisation
    join the NPS bandwagon..

    Reply

    1. Hi Amisha,

      Contribution to NPS is exempt over and above 1 lac 80C limit. However, the gains are taxable when you withdraw them.

      All government organisations are bound to contribute to NPS. Your bank would already be doing it. Do check.

      And thanks a lot for sharing this post with your friends and on Facebook. 🙂

      Reply

  88. Hi Ami,
    This is best article i searched for Tax Planning and also up to date.

    I want information that can i get TAX saving benefit from my current Education SAP Delphi computech having fees 1.68 Lakh

    Reply

    1. Shekhar, the exemption can be claimed only on interest component of the loan taken for education and only if the institute is recognized by government.

      If you’ve not taken a loan to fund your education, then you will not be be able to claim exemption 🙁

      Reply

  91. more on Infrastructure Bonds please.. is it available in 2012-13 fin year? if yes how to buy these bonds..kindly guide

    Reply

      1. 🙁
        OK.. i have invested 1 lac in PPF / 25k+22k in LIC/HRA around 10k monthly for 2012-13..
        wher else do u think i should invest. I fall in category below 10 lacs /annum..

        Reply

        1. Oh.. you are earning less than 10 lacs?? poor you..

          Just joking.. Please don’t mind.

          You should definitely buy yourself some medical insurance. You may also consider donating some money to our political parties 😉

          Reply

          1. ya.. pooor me indeed..:(
            hey ami.. i already have insurance which my company provides for me and my dependent (mom).
            should i still go for private self medical insurance for 15k? (for tax benefit)
            if yes..I am 26 years old.. how much should i invest in this insurance /annum at this age?
            help me wid ur advice.. 🙂

            Reply

            1. You should never rely on company provided insurance. What will you do when you change the company? Medical insurance does not cover all diseases for the first few years after you take it. Hence, the more you delay taking the policy in your name, the higher is the possibility that you will be denied claim for some illness as you grow older.

              I suggest take a policy in your own name. You can take a cover of 2 lacs to start with.

              PS: I like helping poor people. It gives me tremendous sense of satisfaction 😉

              Reply

  92. well thnx on pooor thing note.. 😛
    if i get my private medical insurance done , what would happen in case of claims? i meant
    ideally i would be covered by 2 insurance companies ryte?
    n tell me more about ur royal sundaram coverage pleeeej …. 🙂

    Reply

    1. Depends on which company you claim your bills from. You can claim from either. I have taken medical insurance for my family from Royal Sundaram. I have a good experience with them in terms of claim settlement and service.

      Reply

  93. Under section 80G political party payment is 100 % exempted, but what is definition of political party under income tax act

    Reply

  94. http:// taxbymanish.blogspot.in/2012/08/tax-planning-how-to-save-tax-in-fy-2012.html – Your article plagiarized here

    Reply

    1. Hey Sindhuja, so nice of you to have pointed this out. Unfortunately, with the Indian law system, you can’t do much about such copy-cats.

      By the way, imitation (or copying in this case) is the biggest form of flattery.. and I am flattered 😀

      Reply

  95. madarchodas want to eat in crores and for cmon man they have limits – sale chutiye do baap ke harami pile – FMs

    Reply

  96. Hi Ami,

    I want to know about Section 80TTA. Is this applicable for FY 2011-12 and Assessment year 2012-13 as i m going to file return for Assessment year 2012-13 and i m deducting Rs 10000 from my whole interest earned during FY 2011-12 while calculating Taxable income.

    I m also confused about Rs 10000 limit. Is it only Saving bank balance interest or Saving bank balance interest + FD interest. Pls help me out.

    Thanks

    Vinod

    Reply

    1. 80TTA is applicable for FY 2012-13 and not 2011-12.

      10000 limit is applicable for only savings bank balance interest and not FD interest.

      Reply

  97. Very Good Article

    Slab for Senior Citizen above 60 shown in this article is
    Tax Free 2.50L,
    2.50L to 5L @ 10%.
    5.00L to 8L @20% (general people slab is 5L to 10L @ 20%)
    and above 8L @ 30% . (general people slab is above 10L @ 30%)

    I have one query, when general people’s slab for 20% is upto 10L why senior citizen higher slab starts at 8 lacs instead of 10L?

    Reply

  98. I was surching for a complete list of Tax Exemptions Items(Saving Item). Lot of people posted IT slabs an calculatior but without showing a list of IT Exemption Details. Thanks.

    Reply

      1. Thank you very much. All information, at a glance and in detail.

        wishing you have a bright future.

        raghavendra.

        Reply

  99. I am a retired senior citizen(67) and approximted TDS for 2012-13 is Rs.5000,
    How much amount should I save and under which scheme so that the TDS is not deducted or, if deducted , I can get the refund ?

    Reply

    1. By default, TDS of Rs. 5000 would mean that you are taxed at 10% slab and an investment of Rs. 50000 would suffice to save the tax.

      However, in some cases, TDS is deducted as per law even though your income may not come under taxable bracket i.e. less than Rs. 250000. In such case, you just need to file your returns to claim the refund.

      Reply

  100. Hi Ami,
    Thanks for my earlier reply.
    But now i want to know about TDS deducted by banks on FD interest earned. Is it inclusive of education and Higher secondary education cess? What if it is not included? if i have to deposit it by my own during ITR filing after calculating my payable tax and cess on it or Is it bank interest TDS is exempted from education and HSE cess?

    As my employer has already deducted education cess in TDS certificate of my salary income.

    Thanks and regards,

    vinod

    Reply

  101. Hi Ami,

    I have heard from one of my friend that now we can invest more than 1L in fd’s and can get the full exemption, is it so?

    Reply

  102. Hi Ami,
    Thanks for earlier reply.
    But now i want to know about TDS deducted by banks on FD interest earned. Is it inclusive of education and Higher secondary education cess? What if it is not included? if i have to deposit it by my own during ITR filing after calculating my payable tax and cess on it or Is it bank interest TDS is exempted from education and HSE cess?

    As my employer has already deducted education cess in TDS certificate of my salary income.

    Thanks and regards,

    vinod

    Reply

    1. Hello Vinod, 3 Very simple steps to solve your problem.

      1) Calculate your income tax including FD interest income with education cess and interests.
      2) Deduct from TDS (whether on FD or on any income).
      3) Pay remaining tax or refund (if excess deposit).

      It is not your duty to rectify bank’s mistakes. It is the duty of bank fixed by government. So don’t worry about that. Follow the above steps and file your return without any worry.
      thanks

      Reply

  103. Hi Naimisha,

    My CTC for 2011-12 was 12 lacs (basic is 40000 per month). No PF deduction. All take home. I live on rent (24000/month). I have no saving scheme but have paid 8000 for medical insurance policy. How can I save the tax and how much?

    Thanks
    Anupam

    Reply

    1. You can save tax on 1 lac of your income if you invest the same under sec 80C. Various options under sec 80C are listed above.

      Reply

    2. HI ANUPAM..
      U CAN ALSO SAVE TAX BY INVESTING UR MONEY UNDER SECTION 80CCG (RAJIV GANDHI EQUITY SAVING SCHEME)
      FURTHER U CAN PURCHASE MEDICLAIM POLICY FOR YOUR PARENTS BY PAYING PREMIUM FROM UR BANK( NOT CASH) AND U’LL GET A DEDUCTION UNDER SECTION 80D APART FROM UR OWN MEDICLAMI PREMIUM.

      Reply

    1. My company doesn’t offer NPS they offer EPF. So if I open a individual NPS account …. what is the maximum deduction that I can get over 80C. I was researching over net couldn’t able get anything on the tax benefit on the individual accounts.

      Reply

      1. For you to get deduction under sec 80CCD, your employer needs to make contribution to your NPS account. If your employer does not have this provision, then you by yourself cannot invest and claim. The maximum limit is 10% of your basic salary.

        Reply

    2. According to the latest information available, tax deduction under sec 80CCD is allowed if the contribution is made by the employer to your NPS account. The maximum limit is 10% of your basic salary. And yes, this deduction is over and above the deduction under sec 80C.

      Reply

  105. It’s known that one can claim combined 80 C deduction upto 1 lac , Can an individual deposit 1 lac in his own ppf a/c and 1 lac in his minor son ppf a/c.

    Reply

      1. Ami, it’s 1 lac only and one can claim 80 c deduction in the name of minor child ppf a/c. My ques was can one deposit 1 lac each in his and his minor son a/c.

        Reply

    1. If your company does not give you HRA, you cannot claim it. You need to approach your company and ask them why are they not giving it. It is a standard part of salary.

      Reply

  108. I have a home loan for own house where my parents are living and i am living at rented place.Company gives HRA…. Possible to claim both home loan and rent in TDS??

    Reply

  109. Hi Ami

    Please let me know if I can avail the benefit on Home Loan interest when Loan availed on my name but property bought in my spouse’s name.

    Please suggest

    Reply

  110. Ami ji, you said tds will be deducted from saving a/c interest from 12-13 year onwards..can u plz elaborate…????

    Reply

  112. Dear Ami,

    Last financial year I claimed about 75000 rupees as medical reimbursement. Is of it taxable???? Please advise.

    Reply

  116. Dear Ami,
    Great work u have done by posting all this.

    I have a question:-
    I am resinding in a rented house at 7000 PM till sept-12. After that I move in to my house purchaged on a loan. Can I claim HRA (for Apr-Sept) as well as Principle (Under 80C) & Interest for house property for remaining period of financial year?

    Thanks in anticipation

    Reply

  117. Is the exemption of Rs 10,000/- on S/Bank a/c interest in Banks apart from the exemption of Rs.3,500/- for intest in a Post Office Savings Bank a/c(single holder a/c)?

    Reply

  118. Hi Ami..Fantastic blog..thanks for putting this up..

    My question for your comments is that, I have two houses (in joint names ..me and my husband). One is let out fully and in second house I myself stay along with my son. My son pays me rent so that he can benefit from HRA policy. What is my tax implication, particularly for the second house (since I too reside). The house is in joint name (me and my spouse).

    Thanks in advance

    Reply

      1. Hi Ami,

        I am not claiming HRA as I am not in service. What I would like to know is that is there any kind of benefit I could get for the house where I personally reside but also am getting rent on from my son. Do I have to add both rents for income from house property or is their some rebare I can get since I too reside in the same house.

        Reply

        1. The planning you have done is good , but it share some consequences , only portion let out to your shall be treated as rented property and distinction has to be made(although segregation not done). Thus your second house has to be segregated into two portions , one is self occupied and another is let out.
          So benefit of SOP & let out both can be availed. Also you have the option to choose among the houses to treat as SOP, depending upon the facts of your case.

          Secondly the rent received will be added to your income from house property.

          Thirdly , although generally does not happen , but AO can upon the assessment of your son’s return may disallow the benefit of HRA treating it as a colorable device to avoid the tax implications.

          Reply

  119. I am working on contractual basis. Employer asks to raise invoice every month. 10% of my salary is deducted as TDS. In my salary, there is no clarification of Travel/HRA/Medical Allowance. Its like I am working as a consultant for my employer. How can I claim Travel/HRA/Medical Allowance deductions?

    Reply

    1. Ashish, since you are working and hence getting paid as a consultant, you will not be able to claim benefits like travel/HR/medical. However, you can show some of these expenses as business expenses and claim deduction

      Reply

  123. I recieved my pension backlog of five years from 2005-2010. From 2005 to 2008 I had no income as this money was held up. In 2008 I started to get rental income and my pension from 2010.
    Since the return is being filed for 2011 – 2012 I have tp pay tax on my total salary payment. For the year 2005-2008 when I had no income do I still pay slab of 30% or can it be staggered

    Reply

    2. Ashwini ji

      Income Tax which is the price to live in a civilized society we pay, is sometimes very harsh.

      As per the provisions given under sec 15 , Salary is charged to tax on due or receipt basis which ever is earlier , hence in your case arrears of salary has been received , which was not due earlier , thus it shall be taxable only in the year in which it is received ; although it can relate to any previous year.

      Also to part off the burden some tax portion , relief can be sought u/s 89 , by consulting to CA with full details of your returns and documents as called up.

      Reply

      2. Ashwini ji

        Income Tax which is the price to live in a civilized society we pay, is sometimes very harsh.

        I couldn’t agree with u more. Look at a Draconian law which the IT Deptt has created to enrich themselves. I have a friend who lives only of his investments and earns Rs 3,05,000/- as Interest annually. Before the start of each FY he puts Rs 1,00,000/- in PPF and during the FY he pays Rs 6000/- as Mediclaim premium for himself. He is single with no family no liability own house. His Income gets reduced to Rs 1,99,000/- for which no tax is payable. As per the law he cannot give Form 15-G to the bank to avoid TDS since his gross income exceeds Rs 2,00,000/-. Every year a huge portion of his income gets deducted as TDS which is refunded by the IT department next year with interest.

        When the govt is trying to make things simple for the tax payer why can’t they fix this bug in the law.

        Reply

  124. Nice article. i was searching for tips on tax planning. This came across and it helped me a lot. Keep up the good work. If you post any such useful article on personal finance, just mail it across.

    Reply

  125. HI ami,

    I am salaried employee and studied MBA in distance education. Is it possible to claim tax exemption for my college tution fee?

    Reply

  126. PL TELL ME IF IM PAYING MY HIGHER EDUCCATION FEES IN CASH TO UNIVERSITY BY MYSELF THEN SHOULD I GET TAX BENIFIT IF SO UNDER WHICH SECTION I CAN CLAIM IT

    Reply

  128. Hi Ami,

    i have two lic premiums, both are 5 lacs sum assured and premiums are 50 thousand and 18,500 each respectively. does it calculate like this 5 + 5 = 10 lacs and premium comes to 68,500 rupees and i will be benefited based on current year 80 c section ?

    Please clarify .

    regards,
    prasad ss

    Reply

  129. Hi Ami,
    Thank you for the info.
    I am working as a Consultant. Appreciate if you could help me with these queries

    1. Assuming that the yearly remuneration is 30 Lakhs. What will be the applicable TDS ?
    2. Is CESS and Education CESS applicable on top of the TDS?

    Thank you
    Deepu

    Reply

      1. Dear Ami

        There isn’t a straight forward rate for deducting TDS in case of salary u/s 192, it shall be computed on slab basis and average rate of tax for a every single previous year & for each assessee has to be determined for deducting TDS , average rate of tax includes Cess & H.Cess.

        Tax shall be levied over Net taxable Income with some filthy long procedural calculations, and need to done by a professional for accuracy and escape from default. 😀

        Reply

  130. Request you to help in getting the information on paper gold , and also need to knw that paper gold is exempted,if invested in that

    With Redgs
    Jalpa

    Reply

  131. Dear Ami
    Liked your efforts very much, would like to know how should we plan our Investments apart from Tax planing i.e. after the investment of 80C etc..which are the safe and best returns giving schemes ?

    Reply

    1. Safe and best returns don’t go together. Your investment can either be safe but give low returns (PPF, Tax saving 5 year FD) or riskier (ELSS) but (may) give better returns. You have to decide based on your risk appetite.

      Reply

  132. Hi Ami,

    I ahve a question abt PPF. Does it comes under tax saving?

    I know that yearly we can invest from 500 to 1Lakh.My question is , is there any restriction that we have to invest same amount for the next year as we paid in previous year?

    For ex: Assume that I have invested RS 10,000 this year. And next year can i invest more ot less than 10,000?

    Pls suggest me which is better If I choose FD or PPF to save tax.

    If I chhose FD, does it applicable to next year also?

    Very much appriciate that you are suggesting people to plan their savings.
    Thank you.

    Reply

    1. Prashanth, you’ve asked a lot of questions. Here are my answers:

      1. PPF comes under 80C for tax saving
      2. Under PPF you can claim a deduction of maximum Rs. 70000 per annum.
      3. There is no rule that you should invest the same amount next year
      4. PPF is a better option than FD as returns are not taxable. However, lock-in is longer.
      5. If you invest in FD, deduction will be applicable for the year of investment. No deduction for next year.

      🙂

      Reply

      1. Thank you Ami.

        Really I appreciate U and your patiancy that u r answering all questions from all coreners of people.

        Regards:
        Prashanth

        Reply

  133. Hi Ami,

    This is an excellent illustration of Tax Saving Schemes I have ever seen.
    Thanks a ton for sharing such a useful information !!

    Regards,
    Loknath

    Reply

  134. Hi Ami.

    Could you pls tell me which is the best option (FD or PPF) for showing tax saving?

    If we opt PPF,can we pay Rs 10,000 this year and 15000 next year in PPF account?

    Pls advise me.

    Thank you.

    Reply

    1. Prashanth, as I have replied earlier, I prefer PPF over FD as returns are not taxable though the lock-in is higher.

      There is no rule to keep investing the same amount every year in PPF. Hence, you can invest 15k next year.

      Reply

    2. hello

      From the amount shown in $ , we presume that you are paying the money abroad for your daughter’s education , thus from that presumption , deduction section 80C for tuition fees is not eligible as it allows for payment for education only in India that too from defined institutions.

      Secondly if you have taken loan to pay off for education , then the interest portion is eligible for deduction u/s 80E unlimited for next 8 year from the year in which the loan was taken.

      Thirdly if you have a business income , then after consulting your financial adviser and looking to the other facts , the whole amount can be claimed under business expenditure.

      Reply

  136. Good post…..i ask one question …can person avail benefit of parents LIC policy if he/she paid the premium instead parents?

    Reply

    2. Mr. Bansal

      LIP paid for parents is not eligible for deduction u/s 80C , however if ** you have a HUF formed with your father , then in that case LIP deduction can be availed.

      Reply

  137. Ami..thanks for the above.. they are very helpful to me…i need a help…Last Dec I took a NSC for 10,000, i understand that the interest earned is taxable (but can be declared under 80c) i would like to know what is the amount i need to declare every year..
    First year it will be around 816(assuming 8.16) , Year 2 is it 8.16 of 10,816 or 8.16 of 10,000 ?

    Reply

    2. Mr. Milton

      Interest accrued on NSC savings are reinvested and eligible for deduction u/s 80C , as the word reinvested is used , which signify the compound of interest yearly, thus interest shall be calculated over 10,816/- as in your given fig.

      Reply

    3. Yes you are correct……….
      Their is a Chart displayed on Income Tax website for calculation of Interest on NSC. You can use that chart for your reference for calculation

      Reply

  138. Dear Ami, 2012-09-27

    Thanks for rendering the service to the needy.

    My annual salary is Rs. 425700 and I contribute Rs. 39804 in NPS and my employer also contributes the same amount of Rs. 39804 annually.
    1. Will my contribution of Rs. 39804 be deducted from taxable income and,
    2. Will the employer’s contribution add to my income and if so is there any tax benefit for this amount?

    God bless you!

    Sincerely,
    Ummar Muhammad

    Reply

    1. 1. Your contribution will not qualify for deduction
      2. Employer contribution will be added to your income and you can claim deduction on it.

      Reply

  140. In general, the more number of PAN’s one can legally utilise, the better can the tax planning. Let me explain. There are legal ways in which one can utilise more than one(his own) PAN for tax planning. They are HUF, adult children, wife etc.

    1. HUF

    For Hindu married males, HUF is an option for tax planning.

    One can divert familt gifts etc to HUF(which is a seperate tax entity under IT act) and Karta of HUF can invest the funds on its behalf.

    2. Adult children(between 18- job)

    Investments by adult children can save tax as he/she will be a new tax entity and pay tax at lowest level. Thus one can say adult unemployed children also can contribute to family income.

    3. Wife

    Same as above.

    Reply

    1. Hey Srinivas, this is awesome info. I should have shared this, but it completely skipped my mind.

      Thanks a lot for sharing it with everyone 🙂

      Reply

  141. For saving capital gains :

    u/s 54B , capital gains arising from the sale of agricultural land is exempt ; if the amount of gain is reinvested in any other agricultural land.

    Now agricultural land can be classified under two : Rural & Urban , so if the new agricultural land purchased is rural agricultural land and afterwards its sold , although it attracts violation of sec 54B which instates not to transfer such land for 3 years after the purchase otherwise the exemption previously allowed shall be deducted from the cost of acquisition of newly owned land , but also u/s 54 sale of agricultural land is not treated as transfer , thus impacting the over all tax zero , this could be planned in big linkups and a large scale tax planning can be done.

    Its one of the ways by which builder lobby is saving their taxes… there are many more.

    Reply

  142. Dear Ami
    I want to file income tax first time. kindly help me

    My Basic Pay Rs 82240/- yearly, Received HRA Rs 12336 yearly, Education Allowance Rs 6168 Yearly, Telephone Allowance Rs 6168/- yearly. Received PF Rs 9867/- yearly and equal amt PF paid by employer. I invested in Post office FD Rs 48000/-

    Reply

  143. Does the limit of 1.0 lac under 80C is split in pension schemes and general insurance products; eg; like only 50,000 could be invested in gen. insurance products or likewise.

    Reply

  144. Conveyance/Transport Allowance – Any Conveyance / Transport Allowance given to an employee is tax free upto Rs. 9,600 /- (No Supporting Bills required).

    is this amount Rs.9600/- for a month or for a year

    Reply

  145. Hi Naimisha,

    till now i had a doubt, whether HRA exemption will come under 80C or not. Now i got a more clear picture that it wont come under 80C, Thanks for your article.

    Reply

  147. Ami……
    I am confused regarding surcharge
    So pls. Clear it
    You have mention that surcharge is 3%
    And above1000000/- no surcharge
    So i want i want to know that 3% is e.cess or surcharge
    And also u give the details of surcharge….
    Becoz i have find that who’s income crossea 1 crore,surcharge will be charged 2 and 5% respectively.

    Reply

  148. i have 1 simple question..
    can i take tax exemption by following ways,,
    1-ppf=700000 investment
    2-five year fd=100000
    total tax saving money=170000
    pls reply,,,i am so confused about what is maximum amount for tax exemption?

    Reply

  149. Please clarify, if a person is 60 Year in Dec 2012. When he file the tax return for F.Y. 2012-13, can he calculate the tax as a Senior Citizens (Age above 60 years but below 80 years) or not.

    Reply

  150. Hi…

    I have already have Demat account since last three years…… If now I am trade in any notified investment for the purpose of claiming dedcution u/s (80CCG – Direct Equity Investment) , Is that was available to me……

    Regards
    Dinesh

    Reply

  151. Sir,
    For saving Income tax How much amount to be invest in Fix Deposite for 5 years. How much deduction are allowable. Please clearify the point with the examples.. i am little bit confuse on that point…

    Reply

  152. Hi,
    I need clarifictaions for:

    1. I have a NPS Tier1 Account and I pay towards it annually to accumulate pension. Under which section can I claim exeptiom for this payment made?

    2. Did the Fin Min introduce any new plans to save tax as Infra bonds under sec 80CCF is withdrawn?

    Regards,
    Kunal

    Reply

  153. Hello,

    As i got a new job and my ctc is 3 laks PA so could you pease tell ow can i save my tax on 300000-200000=100000

    on 100000 lak the tax is 10000 ,i want to save that tax so please guid me ?

    Reply

    2. @Ani,

      You said your CTC is 3 l/a. Based on your calculation you say 1,00,000 is taxable. You still not included HRA, PF, health insurance (If your company provides). After considering these facts you can plan your saving to avoid tax. Of course saving money is not bad at all.

      Reply

  154. sir, my wife and myself are in the 30% tax bracket. we have a joint home loan on a property jointly owned by us.can we both avail tax benefit on interest payment of upto 150000 each.
    thanks

    Reply

  156. hi
    Thx for giving the details,

    i wanna ask two things.
    1.PF contribute by me is 4100 and by company is 4100 i.e. 4100+4100.
    Now in PF how much amount i can invest more. ie 100000 – (8200*12) or 100000 – (4100*12)
    if second is the case then, will company reduce the amount deposited by them to my pf or not?
    2. what ever the PF amount i will get at retirement will be tax free or not.?
    what ever the PPF amount i will get after maturity will be tax free or not ?

    Pls reply me. and once again thx a lot to shear that with us 🙂

    Reply

  158. Thanx for updating Naimisha.Its great that u r spending ur valuable time in giving inputs.
    Regarding house loan…

    if i pay principal of 100000 and interest of 150000
    will i get a Tax Exemption of Rs 250000???
    or the Tax exemption will be 150000??.

    I purchased that flat in Vizag,currently i am staying in Bangalore.
    Can i show the House Rent for Tax exemption as the house rents are very high in Bangalore.

    once i wil travel to vizag in flight ,can i show this flight expenses as a tax exemption for my LTA??

    Waiting for ur reply.

    Thankks very much

    Reply

    1. Answers:

      1. If you pay principal of 1 lac and interest of 1.5 lacs, you can claim deduction for both. Principal under sec 80C up to 1 lac and interest under sec 24 up to 1.5 lac

      2. You can claim both HRA and Housing loan deduction if you live in a different city to where your purchased property is which in your case is true.

      3. Not sure.

      Reply

  159. I have 2 things to clarify/ ask here-

    1) Tution fees – Does it also include fees paid by husband for wife’s education?
    2) Section 80DDB – what all special diseases are covered under this exemption?

    Thanks in advance!
    Sam

    Reply

  160. one more thing i want to ask,

    can i avail all without limit , like: ppf (1,00,000) + pf (4100*12) + HRA (pls tell the limit of that also), + Home loan principle amount (1,00,000) + Home loan interest (1,50,000) + conveyance exempt (9600).

    and at what limit there is no need to show/submit the rent slips.

    thanks a lot to provide us the valuable feedback.

    Reply

    1. You cannot claim deduction on each of them individually. Most of the ones you’ve discussed come under 80C where the combined limit is 1 lac. Do read through the article again to understand in detail.

      Reply

  161. hi Naimisha,

    this is Ram. your article is surely very good.i would request you to suggest me to save the income tax. firstly, i will brief you about the situation.

    i am a captain in Army.My total taxable pay as being reflected is Rs 648296. i am currently paying tax to the tune of Rs 39659 i am investing
    Rs 5000 pm in hdfc top 200 and Rs 2000 in hdfc equity. i am also investing Rs 6000 quaterly in aegon religare pension plan and these are not reflected in payslip. however, monthly PLI worth Rs 5350, monthly contribution to Army group insurance fund worth Rs 4000 and monthly contribution to Provident fund is Rs 5000 are reflected in montly payslip.

    i have taken a home loan of Rs 23,80000 from the Army Group of insurance fund at 9% fixed interest rate. the emi of Rs 21414 pm is to start from 01 may 2013. the building will be possessed by me on 14 Feb 2013.

    how can i go about saving the tax now, with the above things in view please elaborate in detail under with IT section can i save . hoping for early response from your side.

    Reply

  162. WHETHER INVESTMENT THROUGH SIP IN HDFC TOP 200(G) AND HDFC EQUITY FUND(G) ARE ELIGIBLE FOR TAX EXEMPTION UNDER ANY SECTIONS OF INCOME TAX.

    Reply

  163. Hi Naimisha

    A very informative blog, answering nearly all the quetions.

    Like to ask that, during retirement I had contributed to ECHS sum of 15000/-, is it exempt under section 80D.

    Secondly, my employer pays me HRA and I live in a house owned by my Mom & Dad who do not earn and are dependant on me. The monthly maintenance charges are paid my me and it contains a Municipal Tax element. Can I take exemption on the HRA??

    Reply

    1. 1. What is ECHS?
      2. You can give rent to your Dad for staying in his house. Do remember to collect rent receipts. You can show rent paid for claiming HRA.

      Reply

      1. Hi Naimisha

        ECHS means (Exservicemen Contributory Health Scheme). Like to ask that, during retirement I had contributed to ECHS sum of 15000/-, is it exempt under section 80D.

        Believe rent receipts are not required below Rs. 3000 for claiming HRA, so can I claim HRA< 3000, while staying in my Dads house without rent receipts.

        Reply

  166. Hi Naimisha,

    I have paid my LIC premium of 10454/- on 29/02/2012 and the due date for the same was 05/03/2012. Can I claim rebate under section 80C for FY 2012-13. The premium was not claimed in FY 2011-12 and this is the last premium of the policy.

    Reply

  167. Dear Sir,
    My contribution towards New Pension Scheme for the FY2012-13 will Rs.78398/-, which is more than 10% of Basic Salary, as some arrears NPS contribution has deducted. So, will the total amount stated above tax free ???

    Reply

  168. i am paying tution fee rs 50000/-in the the current year of daughter who is studying in m.tech. how much amount will be treated as investment for the
    rebate to save my income tax

    Reply

  169. Hi Naimisha,
    First would like to appreciate your work.
    I have confusion on my investments to save tax.
    NSC & 5 yr FD – Interests are taxable (Good,safe one)
    PPF – Interests on maturity is nontaxable, period is for 15yrs (still a very good one).
    Pls correct me if I am wrong.
    1. Which one do you suggest. I agree it depends upon the commitment if someone can wait for 15yrs, but would like to know your suggestion.

    2. I have invested 30000 in NSC last year, can I show the interest amount gained in the 1 yr in this year 80C investment. How do I calculate this, please help
    Thanks,
    Lakshmi

    Reply

  170. Hi Naimisha,

    This blog is very informative and simply written.
    I had a query. I have an housing loan for which have taken insurance coverage too. I am paying the EMI for the insurance now. Can this be claimed for tax deducton? If so under which section?
    The house is still under construction and so think can’t claim the House Loan interest being paid now.

    Thanks
    Vijay

    Reply

  171. Hi,

    I have purchase house on Sep 2010 and its under construction and possession is on June 2013, EMI is starting from this month itself (Nov)
    & in the past only interest part is paid. The best thing is that i have taken only 5 Lacks of Loan (approval is for 30 L) , right now I am claming HRA ~14,000 PM , the home is on the name of me & my wife (she is also working) so i want to know what is the best possible calculation so that i can save my tax for next year .

    In addition my father is suffering from Kidney disease which is under 80ddb (CKD) how can i take tax benefit from that as per year the cost of medicines > 1 Lakh. Please suggest !

    Thanks for the nice blog !!

    Reply
  173. Pingback: Save 25k using Rajiv Gandhi Equity Savings Scheme (RGESS) - Sec 80CCG

  174. Thanks 4 ur co-operation. Ur Article has been no doubt very clear to understand I have just started my Tax Consultancy but was in service for last 12 yrs. in the same work. Pls do let us gain more knowledge on tax Planning bi-fuc’tg on business basis & salaried person. Thanks once again .

    Reply

  175. Hi Naimisha

    Like to ask that, during retirement I had contributed to ECHS (Exservicemen Contributory Health Scheme), sum of 15000/-, is it exempt under section 80D.

    Believe rent receipts are not required below Rs. 3000 for claiming HRA, so can I claim HRA< 3000, while staying in my Dads house without rent receipts.

    Read more: http://howtobuybest.in/tax-planning-how-to-save-tax-in-fy-2012-13-ay-2013-14/#ixzz2CUXNZmBi
    Follow us: @howtobuybest on Twitter | howtobuybest on Facebook

    Reply

  176. Hi Ami, Hi All,

    Last weekend my friend ask me a question on 80G and as i do not have much data..pls are you able to advise ?

    Q- Currently my friend pays a income tax which comes upto 10,000 for the year (FY 12-13)..He now wants to donate 10,000 to a NGO(they have 50% exemption). So when he gets a refund from the dept does he get 5,000 back ??

    Reply

  177. Hi Ami,

    I have taxable income around 1 lacs (after deducting all the tax exempted allowances, and tax free slab). I read your article and could find only that almost all the tax saving investments are long terms (like 5-years lock-in). I had some plans in next 1-2 years, so i dont want to lock my money for 3 or 5 years. Can i do some short term investments which can save my tax and keep my money available for next 1 or 1.5 years as well. Even I wont mind if it doesnt give much returns because saving 10000 bucks as tax itself would be a good return 😛
    Please sugeest me if any such thing is possible. I can at maximum lock in money for next 1.5 years..:(

    Reply

      2. As per my knowledge, if I am not wrong, trading in the stock market doesnot help. Right?

        And some of my friends said showing savings in your Saving Account saves tax. I know it sounds silly. But can you confirm it 😛

        Reply

            1. That list is a top secret list only shared with my internal club members 😉

              On a serious note, you should be looking at large companies with minimum debt and a good business model to invest in. You will not get multi-bagger returns but your money will remain safe and also grow.

              Reply

  178. Nimisha I think you are not very clear about the provisions. I guess tax planning is possible only when the provisions are clear. So if you are not sure regarding the provisions then at least stop confusing the people.

    Rahul K

    Reply

    1. Hey Rahul,

      There are plenty of hardcore finance blogs around explaining the provisions of tax planning in jargon-laden detail. The agenda of this blog is to keep it as simple as possible for the ‘non-finance’ people to understand.

      Your comment proves that I have achieved my objective. Thank you for the compliment 🙂

      Reply

  179. Hi Naimisha,

    My intention was not to hurt you. If I have done so, I truly apologies but when I was reading various discussions, I found there are many suggestions which are incorrect and if somebody invests his/her money relying on these suggestions may not really be benefited.

    But I appreciate some of your comments. Actually I was searching for some amendments on google n I got the link of your article on amendments. But still I think one should b specific while giving any financial advice. Wish you all the very best……!!!!!!! 🙂

    Reply

    1. Chill Rahul. I take feedback constructively. I appreciate you taking the effort to write back.

      If you find any information incorrect, please do point out. The whole community will benefit.

      Reply
  180. Pingback: Save 5k using Rajiv Gandhi Equity Savings Scheme (RGESS) - Sec 80CCG

  181. I am a KVS Employee joined after 2004 , We have NPS managerial share of Rs. 42000 annually ( i.e 10 % of Basic Salary). Whether this amount is excluded from the Rs. 100000 limit of 80CCE ? or it has to be included within Rs. 100000 ?

    Reply

  182. hiii
    i want to deposit 1cr in FD’s and i have housing loan of 60 lac’s can u please tell me how can i save tax on my FD’s.and how should i make FDs to save tax..without investing in securities n insurancez…i am business man and i want recuring monthly income generated from FD intrest…

    Reply

    1. Max you can claim deduction on is Rs. 1 lac when you invest in 5yr tax saving FD. The remaining 99 lacs cannot be claimed as deduction and you will need to pay tax on interest income as well.

      Reply

      1. Thanks naimisha…
        what if i will deposite this amount by different names of my siblings…and tell me the procedure how can i save the tax….

        Reply

  184. Hi Naimisha,
    First of all appreciate your efforts for this blog… 🙂

    Any updates on Tax Saver Funds (Under 80C) for FY 2012-13.

    Reply

  185. Hi Naimisha,

    Is it safe to have fixed deposits in Jaiprakash Associates Limited or DHFL Ltd. Because I came to know these offer better interest rates even on short term deposits like 1 year.

    I know this is bit out of context, but if you can just put some light on their credentials. 🙂

    Reply

    1. Company deposits are never as safe as bank deposits where there is an insurance. Therefore, the interest rate offered by them is always higher. Higher risk, higher gain.

      Both the companies you have listed are decent companies. You may invest in them for 1 year.

      Reply

  189. We can do saving up to 1 lac for tax saving. Is there any other way so that we can have some more tax saving benefit (means to say apart from PPF,LIC,Medical claim)

    Reply

  191. Hi, I am working in software company and getting dearness allowances(DA). is have to pay tax for DA. Please send me if you get any related link.

    Regards
    Santhosh

    Reply

  192. Dear Madam ,

    I am repaying two home loans one is 39000 interest +20000 principal which is self occupied . second one rs:3900000/- interest and 150000/- principal , same was rented the rent was Rs 50000/- per Annam.

    Shall i claim rebate on both interest components ? If yes how much and how to claim ?

    Reply

    1. You will be able to claim deduction for your own home only. Besides, 20000×12=240000 is greater than 150000 deduction available under sec 24.
      (I am assuming that the figures mentioned by you are monthly figures)

      Reply

  193. Dear,

    really nice blog, Helped me a lot… Have few questions will be great if you can help.

    1. Can you suggest any saving scheme which would get my money back i in another 2 years

    2. I have purchased a flat which is under construction and I am paying 30k EMI every month, The possession is still 2 years. Can I show this as investment ?

    3. I has tds deducted form my bank for 2k, Can I show it as a investment ?

    really appreciate your work 🙂

    Reply

    1. 1. You should look at investing in FDs or debt Mutual Funds if you want your money back in 2 years.
      2. No
      3. You can adjust the TDS when you file your returns and if it is excess, you’ll get a refund. But you cannot show it as investment.

      Thank you for your kind words 🙂

      Reply

  194. Hello,

    Under Section 80 C Limit the maximum limit is 1 lakhs. Is that included LIC,PPF,ULIP etc or each one has a limit of 1 lakh?

    Reply

  195. Can I claim Tax benefits for LIC policy taken after April/2012.
    The premium amount I pay is Rs 1,11,000.00 and sum assured is Rs 15 lakhs.
    Thanks

    Reply

  197. Hello Madam,

    Need clarification regarding the HRA and home loan interest for the below scenario

    +++
    1) I own only one house and it is in city A, I stay in rented Accommodation in city A (because my own house is far from workplace)
    I can claim HRA for my stay in city B.
    I can claim Principal and Interest of home loan.

    Case A) if it is rented out:
    I need to consider the rental income and compute Annual value while deciding the income from house property

    I have to consider the Annual Value of my rented house in city A
    Annual value= Rental income- Municipal Taxes
    Income from house property= Annual value- 30% annual value- Housing Loan interest.

    Case B) if it is lying vacant/my parents stay:
    I need to consider the Notional Rental Income and consider the property deemed to be let out (Even if I don’t receive income from it as rent) while deciding the income from house property.

    This house is considered as self occupied property and i can claim max. 1.5 lakh interest on housing loan.
    If so, how can I declare a property as self occupied and still show notional rental income. It isn’t logical right?
    The basic underlying fact is if a house is said to be self occupied, There is a cap imposed on Interest on housing loan-1.5 lakh.
    if it is rented out/ deemed to be let out(If the 2nd property is in same city as of the 1st property), there is no cap on interest on housing loan.
    Please

    +++
    In case A –> is the calculation is correct .. and what you mean by standard rent ?
    and is there any limitation on the home loan interest (like 1.5 Lakhs cap) ?

    In case B –> what do mean by notational rent and how to calculate with example may be useful ?

    Thanks and Regards,
    Muru

    Reply

  199. Hi Naimisha,

    Regarding income tax exemption for preventive health checkup, could u please clarify would sonography tests during pregnancy come under the purview of preventive health checkup?

    Reply

  200. hi Namisha,

    Can we claim membership fee of any professional society (related to working field of assesses) for tax deduction like Donation given to these societies ..?

    Reply

  201. Hi

    Pls help me out,

    if i purchase a plot and its financed by LIC housing finance and i am paying EMI (Actual mount + Interest).
    under Section 24(1)(vi), can i clam that interest for tax relief.

    Thanks With Regards,
    amit rathi

    Reply

  202. Dear Ami I appreciate the way u replied back all the quires.
    I am working in Merchant Navy, & my salary is exempted but under which section or article i don’t know.. Can u help me ?
    At same time don’t know what to fill up in ITR… DO u ve some idea ?

    Reply

  204. If Tds deducted on winning from game shows then again this income will be taxable under individual hands according slab rate applicable

    Reply

  205. It is missing a main component.
    If you declare the house bought as Let out, then there is no limit on the interest paid.

    Reply

  206. tell me the transport allowance calculated rs800 p.m. or rs 9600.00 yearly. if the amount of t/a is receive rs 1600.00p.m.for 11months in f/y2012-13.

    Reply

  207. Hi Naimisha, I want to know the tax implications for equity holdings(short term), around 2 Lakhs as it swings between profit and loss. Another thing is the divedends, though small gets credited directly to my savings bank ac-are the subject to tax? BTW, I am a salaried person in the i-tax bracket of 10%.

    Reply

    1. You need to worry about tax implication only when you sell your equity holdings. Till then chill 😉

      Dividends are taxed at source and are free in the hand of investor. Hence, no tax implication on dividends that are getting credited in your account.

      Reply

      1. Thanks for your reply. Actually I trade in short terms even intraday, so quite a few buying and selling done in last 1 year, some at profit and some at loss. In that case how will i-tax be applied?

        Reply

  208. hi ami

    very good work you’ve done.

    Till I confused regarding 80DD. Six months back I took treatment for pulmonary embolism. Many medical checkups have done including angiogram. I’ve spent about Rs. 1,00,000/- for my treatment and medical tests. Also, I have not taken any health insurance so far. Is it possible to claim as refund from paid tax.

    Reply

      1. thnx for your reply. what r the diseases covers under 80DDB. Shall I get the deduction up to Rs. 40000/- for my PE.

        Reply

  209. Hi Naimisha,
    I am contributing for NPS (section 80CCD). As per your article, this deduction is over and above the deduction under section 80C(Rs 100000).Does it mean that NPS contribution can be directly deducted from taxable income?

    Reply

  210. Hi Naimisha, i need ur guidance:
    I purchased a house of 10 lac in year 2002 and now i am selling it in 60 lac, The circle rate has appriciated from 8 lac to 45 lac. Means the purchaser will pay stamp duty on 45 lac. But my questions are :-

    a. How much i need to pay tax on 15+45 (B & W) ?
    b. Is there any formula or law to calculate tax on property selling ?
    c. How much should i pay tax ? and what to show in filing ITR ???

    Thanks in advance for ur help…

    Reply

  211. Hi,
    I would like to what is the house rent amount we can claim under HRA upto which we don’t need to submit the PAN card of the owner. Is it 15000 per month or 16500 per month?

    Reply

  212. Dear Sir,

    I invested a sum of Rs 40,000/- on Post Office one year Term Deposit Scheme on 10 January 2013. Can I get a tax exemption for the yr 2012-2013 on this purchase.

    regards,

    pradip

    Reply

  213. Do investments in ULIP qualify for 80 C tax exemption?
    It is not listed under the “Tax Exemptions” section in article.

    Reply

  215. A lot of thanks for such a nice post … I need a valuable suggestion.
    i have already deposited 60k to PPF and 40k to NPS (my contribution) (and the same amount by govt.). Now looking for additional saving as i have reached the limit for 80C.
    Is CHSS contribution can be used to take rebate under ‘HEALTH CARE’ clause..
    Please suggest and do provide if any other solution can be explored …
    Thanks and well appreciate ur efforts 🙂

    Reply

  216. Very good post to improve knowledge and save tax.It is not clear that the remuneration received by the retired pensioners appointed as consultants in the different departements for a fixed period of six months or one year will be treated as salaried income or income from profession?Although the designation for these Rtired people is consultant but many of them are not professionally qualified like doctor engineer advocate etc.These so called consultants are also bound to follow all the rules for attendance time punctuality etc except leave and liable for proportionate deduction in contracted remuneration for their absence from office in which they are appointed consultants.Thish need to be clarified as now a days it has been almost essential to run the day to day show with the consultants aken from the retired personnel due to ban on fresh recruitemens.Non availability of sanction for new posts and man power escarcity.

    Reply

      1. Hi naimisha

        Thanks for you post as this helped me a lot but i have a concern
        if the annual income is above 30L what would be the ideal things i can save my tax to ..as i have to do my declaration next week could you help me on this

        Reply

  217. I am permanent physically handicaped with one hand and one leg(both right side). I have also been issued 50% disability certificate from Ahmedabad Civil Sergon. Pl specify what amount I can claim as deduction?

    Reply

  219. Hi Ami,

    My whole hearten appreciation for the work you are doing months for the readers.
    Here my question is – I am a salaried employee having taxable income and also a short term share trader. If I have loss in the share trading, can I adjust the same with the salary income ? if the loss is more than that of the taxable income, can I carry forward the loss to next year ?

    For example I have a taxable salary income after all deductions will be 2,00,000 and TDS has deducted by the employer. At the same time I have a loss of Rs. 3,00,000 from the share trading business. Can I adjust the same loss in the ITR and claim for the refund ?

    I request you to kindly spend your valuable time to reply my query, thanks.

    Reply

  221. Hi Naimisha

    Thnks for your wonderful writeup. As per IT rules, any interest earned by minor or non earning wife is added to donor’s income. Recently i read in TOI dt 25.2.13 that it is possible to save tax by investing in minor child’s name (16-17 years old) through 500-700 day FMP. could you please give some details of what is FMP and how it works. Is it like FD or equity linked where risk are more?. Is FMP operated by banks?

    Reply

    1. FMP (Fixed Maturity Products) are not the same as FDs. They are products that have a fixed maturity date and they invest in company deposits and not bank depostis. You can invest in 1 yr, 2yrs, 3yrs, etc FMPs and these FMPs have risk grade based on type of company deposits they are investing in.

      Reply

  222. Thanks Naimisha,
    Could you pls inform from where to buy these FMP. Is there any other better option available to save tax on interest of FDs without holding money for long term like PPF or tax saving bonds etc.

    Reply

    1. hii, im gurpreet singh employed in private sector and my gross annual salary 3lakh, i have no LIC or nor any saving details, then how can i save myself from Income tax.

      Reply

  223. Helo
    M working with defence and my motnhly salary is 29535 . Including Basipc pay 9900 rs, x group pay 1400 rs , class pay 120, DA 11880 , Hygien allownce 75 rs , LRA 422 RS , military service pay(2000 RS) , TPTL(800 RS) , Grade pay 2400 . I wana to knw frm all above pay and allownce which r nt come under taxble income ? And i got ration allownce(rs 2000 pm) and house rent(rs 3000 pm ) in every six month .is it also comes under taxable income. Plz help me hope u r nt irritiating by my way of asking ! 🙂

    Reply

  225. My mom is a Sr. citizen and she underwent an operation of the heart where in we had to pay 1 lac.
    My question is that can she claim that 1 lac in her income tax returns?
    if yes under what head.

    Reply

    1. IF she has a medical insiurance, she can claim this amount from the company she has taken medical insurance from. Otherwise, she cannot claim it.

      Reply

  226. Hi,

    i already have one home which is rented out & am showing its income. and for second home i have taken a loan. so can i get max benefit ?

    Reply

  228. Hi Naimisha,

    Great blog.Keep up the great work!!
    I have couple of question regarding 15000 deduction under Medical Expenses
    1.Can any one claim this 15000 under Medical Expenses? What if my company gives me a medical allowance of Rs.1000 per month? Can I still claim 15000?
    2.What is procedure to claim? I have to submit the bills to my company and get taxable Income reduced or have to mention at the time of filing returns?
    Thanks

    Reply

    1. Thanks for the complement Harshal. The answer to your queries is as follows:

      1. In your case, you can claim a max of Rs. 12000/- as that is what you get as Medical Allowance

      2. Your company needs the bills as proof to reduce your TDS. However, the same needs to be mentioned even when you file your returns though you don’t need to submit any proof there.

      Reply

  229. Thanks a lot for the reply.

    The issue is I have changed my job this January.Now my new company says “Since your income for Jan-March does not exceed 2Lakh we will not cut any TDS from your salary”. I am not sure whether they will accept my medical bills and approve them.What should I do?

    My total income from current and past employer exceeds taxable income hence I will have to show the total income from both the employers,Right?

    Reply

    1. Simple. No need to submit the bills to your new employer. Just file your returns as per your actual income in the whole year and declare the medical expenses you’ve made. Don’t need to submit bills anywhere. Preserve them with you so that you can show them in case there is an enquiry from IT department.

      Reply

  230. i would like to know rgess is over and above 80c and is it applicable to the old mutual fund investors or share holders

    Reply

  231. Hi,

    Is the intrest earned on FD’s and RD’s Taxable?
    Is there any cap on the intrest to be tax free.

    Regards,
    Shalini

    Reply

      1. HI,

        Thank you for such a collabrated information. I seek your advice on TAX excemption for my housing loan and my HRA if live in a different city from the place where I own a house through housing loan. Am I exempted for HRA and also for my housing loan principle and interest. Please clarify

        Reply

  233. As far as I know, no deduction of Rs. 15000/-against Medical Allowance is allowed. However, this deduction of Rs. 15000/- is allowed against Medical Facility (being a perquisite and not allowance) upto maximum of proof of amount of medical bills.

    Also, It would be noticeable that deduction u/s 80DDB can be claimed by the taxpayer. An employer cannot claim this deduction for his employee.

    Pls make me clarify if I am wrong.

    Reply

    1. Deduction of max. 15k is allowed as Medical Allowance subject to proof of expense (medical bills).

      Yes, the employer cannot claim deduction under 80DDB.

      Reply

  234. Hi Ami,

    May I know what are the Mutual Funds are eligible for deduction U/s 80C ?

    Section 10(23D) specifies 2 types of mutual funds.

    1. Mutual Funds registered under SEBI Act
    2. Such other mutual fund as may be notified

    Any notification/ circular in this regard

    Thanks in advance,
    Anu

    Reply

    1. Mutual funds that are eligible for deduction are called Equity Linked Saving Schemes (ELSS). They have more than 65% allocation in stocks and a lock-in of 3 years.

      Some ELSS examples are as follows:
      HDFC Tax Saver Fund
      Reliance Tax Saver Fund
      Franklin Templeton Tax Plan

      Reply

  236. Hi Naimisha,

    Great sharing. Thanks for it.
    could you please provide some light on online tax filing or if you have any link.
    currently I’m filing online for my family and no idea where the bill and receipt should be provided?

    Thanks, Shiv

    Reply

    2. Shiv,
      I am no tax consultant but for last two years i have e-filed my own income tax returns. I am providing the links where you can e-file your income tax returns https://incometaxindiaefiling.gov.in/, http://www.taxspanner.com/, http://cleartax.in/, http://easyitfiling.com/. The first link is of Income tax department where you can file tax returns for free. you can register using your PAN number. The last link is also free. I think other two sites charge you something for e-filing.
      I hope it helps you.

      Reply

      1. It is just so awesome when you know that you have a community of readers who are all willing to help each other!! I am so happy 😀

        Snehal, can you also tell us the procedure to be followed after you have filed your return online in terms of if and where we need to submit challans/reciepts etc?

        Thank you Snehal!!

        Reply

  237. hi Naimisha,

    I need your help.
    I had made one FD of 55,000/- for 5 years with tax saver scheme. The total interest i will get is 30,540/-. I had filled 15G form in bank so that there is no TDS deduction.

    Now if i enter this 55,000/- under 80c investments still income tax will be deducted for this from my salary? if yes then what about will be deducted?

    Please reply to this as i need to make the declaration in this month only.

    Reply

    1. Priyanka, whether income tax gets deducted from you salary depends on a lot of other factors as listed above in the article. But since you have made an investment of 55k in 5 yr FD, you will definitely get appropriate deduction for the same.

      55k will be deducted from your annual salary under 80C.

      Reply

      1. i had made the FD to save tax. i have FD of 55000 and 45000 is covered in my PF. so total 100000 investment is there. And my salary is 300000. so now is there any income tax or TDS will be deducted from my salary monthly?
        I am fresher so know very little about income Tax.

        Reply

  238. Hi Namisha,

    For tax exception If i have shown FD amount of 40,000 for 5 years, Its valid for that first year or for total 5 years.

    Thanks in advance…

    Reply

  239. Can u please tell me about the benefit of Rs. 5000 in case of general checkups which is being allowed from A/y 3013-14 under sec 80D

    Reply

  240. Hi Naimisha,
    Very helpful info. and simply put, for all to understand !!!!! Keep up the good work !!!!
    I have a few doubts which are:
    1. I have taken a home loan jointly, with my wife, can we claim the Home loan interest & principle exemption, 50 % of the amount, each ?
    2. Can we claim tuition fees exemption, 50% each similarly ?
    3. Can my wife & I, under Business profession, claim an exemption upto Rs. 1 lac under sec. 80C (Home Loan Principal, 50% of total in our case), Rs. 15,000 under Sec. 80D(Mediclaim) & Rs. 1.5 lac under Sec. 24(1)(vi) (Home Loan Interest, 50% of total, in our case),, i.e. a total of Rs. 1,65,000.
    Thanking in anticipation,
    Nilesh.

    Reply

    1. Answers as follows:
      1. Yes, provided each partner pays 50% of EMI
      2. Yes, provided each partner pays 50% of tuition fee
      3. Though I am not 100% sure, I think its allowed.

      Reply

  241. I have income from comission up to Rs 400000 lace. So how I can save maximum income tax on above mentioned income. Kindly arrange to provide exect detail regarding aforesaid matter.

    Regards
    Amit Thakur

    Reply

  242. I have received TDS certificate after 31st july-2013 after that there is any provision to file income tax return or not

    Reply

  244. A quick question …

    Deduction under section 80D.

    If I have a Medical Insurance premium for myself 6,000, my mum 9,000 and my dad( senior citizen )-10, 000..

    is the deduction going to be 6,000+9,000 +10,000

    ??

    Reply