Salary tax exemption

Dear Sudha,

Hope you are doing well !!

Apart from 80C deduction for principal repayment, you can also take the benefit of following sections:

80CCD (1b): Section 80CCD (1b) specifically deals with contributions made by an individual (employee or self employed) to pension schemes as notified by the central government. This section provides additional deduction of Rs 50,000 over and above 80C limit of Rs 1.5 Lakh. Which mean an individual can claim total deduction of Rs 2 lakh by making investments in 80C and contribution for national pension scheme u/s 80CCD (1b).

Section 80D: Medical Expenditure and Insurance Premium:

Section 80D is a deduction you can claim on medical expenses. One could save tax on medical insurance premiums paid for the health of self, family and dependent parents.
The limit for Section 80D deduction is :

• Rs 25,000 for premiums paid for self/family.
• Rs. 50,000 for premiums paid for senior citizen parents.
• Additionally, health checkups to the extent of Rs 5,000 are also allowed and covered within the overall limit.

-You can claim a tax deduction under section 80G for a general donation made during a financial year. 

The various donations specified in u/s 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in section 80G.

-Interest on home loan can be claimed under section 24 and 80EEA. Interest paid on home loan is eligible for deduction of Rs.2 lakh u/s 24 if the house property is self occupied. In case of rented property, full amount of interest paid is allowed as deduction. Also section 80C allows to claim Rs.1.5 Lakh of principal amount of the home loan.

-Salaried individuals receive house rent allowance (HRA) from their employer. An exemption against HRA under Chapter 10 of Income Tax Act is possible if the employee is living in a rented accommodation and pays rent to the owner. HRA exemption limit is the lower of:

• HRA received from employer
• Actual rent paid less 10% of basic monthly salary
• 40% of basic salary for those staying in any place except the metros cities of Delhi, Mumbai, Kolkata and Chennai. In case of people staying in these four cities, exemption can be upto 50% of basic salary

Broadly/Practically, there are lots of Income tax sections under which we can claim the tax exemptions.

We may assist for the same.

It is advisable to take a phone consultation for detailed discussion.

Hello, 

Going by the facts of your query, I understand that presently you are fully utilising exemption provided under section 80C along with home loan interest deduction under section 24.

You can further reduce your tax outgo by investing in specified pension fund and claiming deduction for any premium paid for health insurance taken for self or family. 

There are few more exemptions available to an individual but I need to determine your eligibility for the same before advising. 

Therefore, I would suggest you to take a telephonic consultation for detailed discussion on your tax planning. 

Best Regards,

- Limit of Rs.1.50 lacs u/s 80C is already exhausted with principal component. Further you can invest Rs.50k in NPS u/s 80CCD (1B). Also you can claim deduction upto Rs.75k for medical insurance premium u/s 80D, out of which 50k is for senior citizen parents and Rs.25k for you, spouse and dependent children.

- Please avail old tax rate regime structure instead of alternative tax regime.

You can buy mediclaim insurance which will allow a deduction upto 25K under 80D. If you have dependent parent the amount can go upto 50K. Heal

Also, you may invest in NPS scheme which will allow a deduction upto 50K under 80CCC. You can also relook your salary structure. You can add LTA, reimbursements for phone,internet if your Company policy allows.

Hi

you may have deduction under section 

80CCD (1b) & 80D

Section 80CCD of the income tax act deals with deductions offered to individuals contributing to the NPS. As per Section 80CCD, until the year 2015, an individual was eligible to claim an income tax deduction of up to Rs. 1 lakh against contributions made to the NPS. In the budget for the year 2015, the government enhanced the maximum amount payable to the NPS to Rs. 1.50 lakh per annum. Additionally, a new sub-section 1B was also introduced, which offered an additional deduction of up to Rs. 50,000/-for contributions made by individual taxpayers towards the NPS. The additional deduction of Rs. 50,000/- under Section 80CCD(1B) is available to assess over and above the benefit of Rs. 1.50 Lakhs available as a deduction under Sec 80CCD(1). Thereby, raising the maximum limit of exemption to Rs. 2.00 Lakhs with Section 80CCD(1) + Section 80CCD(1B)

80D you  can avail tax deduction on premium paid towards medical insurance for self, spouse, dependent parents and dependent children. ... Additional deduction of Rs 25000 is available for insurance paid for parents aged less than 60 years and Rs 50,000 if parents are above 60 years of age.

We may assist you in tax planning

Please have a phone consultation for details discussion.

Hi,

Are you working as a freelancer or full time employee. If you are a freelancer, you can opt for presumptive scheme under section 44ADA and sace taxes upto 50%.

If you are a full time employees, there are inly limited avenues such as investing in NPS (50k), mediclaim (25+25k), leave travel allowance etc.

Hi Sudha

Thanks for the question.. I will try to cover maximum benefits available to a salaried individual.

Currently, you are rightfully claiming the house property exemption. But are you investing as well? FYI, there are various schemes where you can invest to claim deduction u/s 80C, even though you have already exhausted the limit with repayment of housing loan principal.

Various deductions / exemptions available to a salaried individual include Standard deduction, LFA exemption, transport allowance exemption, HRA exemption, any expenditure incurred toward official duty, entertainment allowance (government employee), motor car tax perquisite exemption, etc.

Further, other check deductions under Chapter VI such as 80C family, 80D, etc.

Thanks.