EXEMPTIONS AND DEDUCTIONS FOR SALARIES FOR F.Y. 2015-16



EXEMPTIONS & DEDUCTION FOR SALARIES FOR F.Y.2015-16
House Rent Allowance (HRA):
  •          Actual HRA received.
  •          Rent paid less 10% of salary.
  •          40% of Salary (50% in case of Mumbai, Chennai, Kolkata, Delhi). In this case, salary is basic plus dearness allowance (basic+DA).

Leave Travel Allowance
LTC or LTA is exempted if the same is actually spent
Transport Allowance
 tax exemption is Rs 1600/month.
Children Education Allowance
 It is Rs. 100 per month per child up to a maximum of 2 children.
Hostel Subsidy
 It is Rs. 300 per month per child up to a maximum of two children.
Section 80CCC: Deduction For Annuity Plan
  •           There are some limitations on this deduction.
  •          You can’t contribute more than 10% of your salary or gross income.
  •          You can’t enjoy the deduction of more than Rs 1 lakh in a year.

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 applicable 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
  1.   maximum exemption of  Rs 2 lakh on  housing loan interest
  2.    The house should be self-occupied. You may get this exemption if your home is under  construction. however the  construction should complete within 3 years.


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.
  1.            The deduction is for the expense of illness of self or dependent.
  2.          The illness should be within the prescribed list.           There should be real expense. Any reimbursements of insurance claims should be subtracted.
  3.          You must give a certificate from the government doctor.
  4.            For senior citizens this deduction limit is Rs 80,000.





Section 80E: Deduction on Loan for Higher Studies
Like the home loan interest, one can also claim income tax deduction for education loan interest.
·         You must take education loan from a financial institution.
·         You can avail this tax deduction maximum of 7 years.
·         You can take the benefit of this deduction only for the higher education.
You can take this benefit only for the education of self, spouse or children. If you are the legal guardian of a student, you can also take this benefit.
Section 80G: Deduction for Donations
The donations specified in Section 80G are eligible for deduction. The deduction may of 100% of donation or 50%, It depends upon the type of receiver

Section 80GG: Deduction on House Rent Paid
This deduction is for those, who don’t get the house rent allowance from their employer. Such person can avail this deduction according the specified rules.
Deduction is the least of
1)      Rent paid less 10% of total income
2)      Rs. 2000/ month, i.e. Maximum Deduction available is 24,000.
3)      25% of total income
There are some conditions for this benefit.
·         Assesses or his spouse or minor child should not own residential accommodation at the place of employment.
·         He should not get a house rent allowance (HRA).
·         He should not have self occupied residential premises in any other place.
Section 80TTA: Saving Account Interest Deduction
Interest earned on a saving account is not added in taxable income, if it is less than Rs 10,000 in a financial year.
Section 80U: Deduction For Disabled
Under section 80U a person with disability gets extra deduction from his/her taxable income. Such person can deduct Rs 50,000 from the taxable income. In case the disability is severe, the deduction is up to Rs 1,00,000. To avail this deduction one should obtain a certificate from the government doctor.
.
For MEN & WOMEN Below 60 Years Of Age
Income Tax Slab
Income Tax Rate
Income upto Rs. 2,50,000
Nil
Income between Rs. 2,50,001 - Rs. 500,000
10% of Income exceeding Rs. 2,50,000
Income between Rs. 500,001 - Rs. 10,00,000
20% of Income exceeding Rs. 5,00,000
Income above Rs. 10,00,000
30% of Income exceeding Rs. 10,00,000
For Senior Citizens (Age 60 years or more but less than 80 years)
Income Tax Slab
Income Tax Rate
Income upto Rs. 3,00,000
Nil
Income between Rs. 3,00,001 - Rs. 500,000
10% of Income exceeding Rs. 3,00,000
Income between Rs. 500,001 - Rs. 10,00,000
20% of Income exceeding Rs. 5,00,000
Income above Rs. 10,00,000
30% of Income exceeding Rs. 10,00,000


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