Income Tax Rates In India - Nothing As Certain As Death And Taxes

Education Cess

Here Education Cess on Income tax and Secondary and Higher Education Cess on income tax shall be levied at the rate of 2% and 1% respectively.

Small Relief For Tax Payers

In a small relief to taxpayers a tax credit of INR 2000 for persons with an income of up to INR 5 Lakhs has been granted.

Tax Deductions Under Section 80C

Certain investments are deductible up to a maximum of INR 1 Lakh per annum from gross total income. This tax exemption is available across Individual Tax Slabs.

Tax Deductions Under Section 80CCC

Here under this section an individual pays or deposits an amount out of his income chargeable towards tax for the premium of an annuity insurance policy such as an LIC policy for receiving pension from the fund. He shall be allowed a deduction of an amount equivalent to the premium paid or INR 1 Lakh whichever is less.

Tax Deductions Under Section 80CCD

Here under this scheme the deductions for contributions to the pension scheme of the Central government is available to those individuals who have been employed by the Central government or any other employer on or after January 1ST 2004 .Here a deduction of more than 10% of the employee’s salary will not be allowed.

Tax Deductions Under Section 80CCE

As per this section the maximum amount of deduction that the tax payer can claim under sections 80C, 80CCC and 80CCD is INR 1 Lakh.

Tax Deductions Under Section 80D

Here the maximum amounts available for self, spouse and dependents for mediclaim policies is INR 15000.In case of a senior citizen it is INR 20000.In case the parents of the taxpayer are senior citizens the deductions towards their medical policies is INR 20000.

Tax Deductions Under Section 80DD

Here we have the Expenditure incurred for the medical treatment and rehabilitation of a handicapped dependent relative. If the dependent relative is severely handicapped then a deduction of INR 1 Lakh is available under this scheme.

Tax Deductions Under Section 80DDB

Here we have deductions of INR 40000 or the amount actually paid , whichever is lesser for the treatment of a disease or an ailment of the tax payer or a dependent relative .Here the deductions will be reduced by an amount received under insurance of an insurer or if he is reimbursed by the employer. If he is a senior citizen then INR 60000 or the actual expenditure whichever is less.

Tax Deductions Under Section 80E

Here we have deductions for the interest on a loan taken for pursuing higher education. The deduction is also available for the purpose of higher education of a relative.

Tax Deductions Under Section 80GG

Here consider that you do not receive HRA from your company. Then you can get a tax rebate for the rent paid under Section 80GG. Here the amount available should be the lowest of the following

• An amount of INR 2000 per month.

• An amount of rent paid in excess of 10% of total income

• An amount equal to 25% of total income of the tax payer.

Tax Deductions Under Section 10(5)

Leave travel Allowance is received from the employer to proceed on leave to any place in India for himself and family is tax exempt under this section.

Medical Reimbursement

Reimbursement of medical expenses actually incurred by an employee or any member of his family up to INR 15000 per year is completely tax exempt .Member of the family includes spouse, children, dependent brother or sister.

Tax Deductions Under Section 80G

Here this section offers a tax deduction for donations to certain prescribed funds and charitable institutions.Here the extent of deductions is either 50% or 100% of the contribution depending on the charitable institution donated to. For certain funds the aggregate deductions are limited to 10% of the adjusted gross total income.

Donations with 100% Deductions

Donations with 50% Deductions

Tax Deductions Under Section 80U

Deductions of INR 50000 to an individual who suffers from a physical disability including blindness or mental retardation. If an individual has severe disability deductions of INR 1 Lakh are available

Tax Deductions Under Section 24

Section 24 deals with the tax aspects of the interests on home loan repayment. The maximum limit under this section is INR 150000 and you don’t have to actually live in the house to claim the benefits. Under Section 24 interest portion is tax deductible up to an amount of 1.5 Lakhs and an extra 1 Lakh deduction under section 80EE.Here the value of the property purchased should not exceed INR 40 Lakhs. Only those individuals who obtain a loan between April 1st 2013 and March 31st 2014 are eligible for this.

Tax Deductions Under Section 80CCG

Rajiv Gandhi Equity Savings Scheme is a new Equity tax saving scheme for equity investors in India exclusively for first time retail investors in the Indian market. Here Investors who have a gross total income of 12 Lakhs (Effective 1st April 2013) can invest INR 50000 with Tax benefit deductions under u/s 80 CCG It has a 3 year lock-in period with a fixed lock-in in the first year and a flexible lock-in for subsequent years. Here the maximum amount eligible for claiming benefit under RGESS is INR 50000.

Superannuation

It is a contribution made by the employer on behalf of the employees towards a group superannuation policy held by the employer. The company pays 15% of basic wages as superannuation contribution. There is no contribution from the employee. The contribution is invested by the fund in various securities as per investment pattern prescribed .Interest on contributions are credited to members accounts with a rate about that of a PPF.

I would like to end this article hoping that it is highly informative to all my readers .Here on a lighter note " A Middle Income Person Earns Too Much To Avoid Paying Tax And Makes Too Little To Afford Paying Them ". If you have any queries or doubts regarding income tax you can look up the website IndianMoney.com.