EXEMPTIONS AND DEDUCTIONS FOR SALARIES FOR F.Y. 2015-16
EXEMPTIONS & DEDUCTION FOR SALARIES FOR F.Y.2015-16
House Rent Allowance (HRA):
Leave Travel Allowance
LTC or LTA is exempted if the same is actually spent
Children Education Allowance
It is Rs. 100 per month per child up to a maximum of 2 children.
It is Rs. 300 per month per child up to a maximum of two children.
Section 80CCC: Deduction For Annuity Plan
Section 80CCD(1) : Contribution For Pension Plan
Similar to annuities, contribution in pension plans is also eligible for tax deduction. For example contribution to National Pension Scheme (NPS) will get deduction benefit under this rule.
It is also limited to 10% of salary or 10% gross income (if not salaried)
Section 80CCD(2): Contribution To Pension Plan By employer
This section gives you extra tax saving opportunity. If your employer contributes into your pension plan, it would be also tax-free. This contribution does not come under the overall limit of 1.5 lakh.
Other Allowance Eligible For Income Tax exemptions
Uniform Allowance, Special Compensatory, Allowance, High Altitude Allowance, allowances to North East, Compensatory Field Area Allowance, Counter Insurgency Allowance, High Active Field Area Allowance, island duty allowance, tribal allowance etc. These allowances are tax-free, but you need to produce the proof of the actual expense in some cases.
Deductions Under Chapter VIA of Income Tax Act
Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)
Your annual income should not be more than Rs 10 lakh. You can invest up to Rs 50,000 under this scheme, However, the tax deduction would beavailable for the 50% of your investment
Section 80D: Medical Insurance Deduction
You can get a tax deduction of maximum Rs 25,000,Senior citizen max.Rs.30,000/-b) Preventive Health Check Up Tax Deduction
The maximum deduction allowed under this provision is 5,000. Health check up can be of yourself, your family or parents.
Income Tax Exemption on Interest Paid on Housing Loan
Section 80DD: Deduction For Maintenance of Disable Dependent
Under this section, one can get extra tax deduction of Rs 50,000. To avail this deduction, you must fulfill some conditions.
1. A person with a disability must be dependent upon you. The disability may be physical or mental.
2. You must produce a certificate from the doctor.
3. You must incur the expense of treatment, rehabilitation, nursing and training.
If dependent person is with severe disability, you can claim deduction up to Rs 1,00,000.
Tax Deduction Under Section 80C
There are many investments and expenses under section 80C, 80CCC and 80CCD. However, the total deductions under this section are limited to Rs 1.5 lakh.
Section 80DDB: Serious Illness Deduction
This deduction is for the treatment of serious illness. An assessee can get an income tax deduction of Rs 40,000 under this section.