It’s been nearly 10 days since the Finance Minister Arun Jaitley, presented the Union Budget 2017 in Parliament. The Finance Minister cut income tax rates from 10% to 5%, for you and other citizens earning INR 2.5 – INR 5 Lakhs a year. The benefits of this move were felt even by citizens, falling in the higher tax brackets. This move will cut down the tax you pay, putting more money in your pocket.
The new income tax rates will be applicable from April 1st 2017. Yes, you can soon save a lot of money in taxes using the cut in income tax rates to your benefit. You must be curious to have a look at the income tax slabs, income tax rates and tax deductions, whose benefits you will soon enjoy. Let’s take a look at these income tax slabs and tax deductions.
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You get a tax deduction up to INR 1.5 lakhs a year, under Section 80C of the income tax act. You get this deduction if you invest in tax saving instruments like PPF (Public Provident Fund), NPS (National Pension Scheme), ELSS (Equity Linked Savings Scheme), NSC (National Savings Certificate), Sukanya Samriddhi Account, Premiums paid on life insurance plans, EMI Principal on the home loan, 5 year tax saver FD and certain other investments. You can read more on Section 80C here.
You get a tax deduction of a maximum of INR 25,000 a year, under Section 80D of the income tax act, on the premium paid for a health insurance plan, for self and family. If you are a senior citizen, you get a tax deduction of a maximum of INR 30,000 a year, under Section 80D, on the premium you pay for your health insurance plan.
If you have dependent parents, spouse, siblings, children who are differently abled, then you can claim a deduction up to a maximum of INR 75,000 a year, as expenses for their maintenance and medical treatment. You can avail a deduction up to INR 1,25,000 a year, in case of severe disability.
You can claim a deduction of up to INR 40,000 a year, for treatment of certain diseases for yourself and dependents. If you are above 60 years, this deduction can go up to INR 60,000 a year. If you are above 80 years, this deduction can go up to INR 80,000 a year.
You can claim a deduction on interest paid for an education loan with no upper limit, for yourself, spouse or children. You must avail this loan only from a bank, financial institution or an approved charitable institution for full-time higher education.
You get a tax deduction of INR 50,000, under Section 80CCD(1b) of the income tax act. This deduction is over and above the tax deduction of INR 1.5 Lakhs, you get under Section 80C.
You get a tax deduction of INR 50,000, under Section 80EE of the income tax act, on the interest you pay for your home loan. This is over and above, the tax benefit of INR 1,50,000 under Section 80C and INR 2,00,000 under Section 24.
Yes, April 1st is not far away. Take a look at these income tax slabs and tax deductions. They could prove very useful.
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