India Income tax slabs 2012-2013 for General tax payersIncome tax slab (in Rs.

) Tax 0 to 2,00,000 No tax 10%

2,00,001 to 5,00,000

5,00,001 to 10,00,000 20% Above 10,00,000 30%

India Income tax slabs 2012-2013 for Female tax payersIncome tax slab (in Rs.) Tax 0 to 2,00,000 No tax 10%

2,00,001 to 5,00,000

5,00,001 to 10,00,000 20% Above 10,00,000 30%

India Income tax slabs 2012-2013 for Senior citizens (Aged 60 years but less than 80 years)Income tax slab (in Rs.) Tax 0 to 2,50,000 No tax 10%

2,50,001 to 5,00,000

5,00,001 to 10,00,000 20% Above 10,00,000 30%

India Income tax slabs 2012-2013 for very senior citizens (Aged 80 and above)Income tax slab (in Rs.) Tax 0 to 5,00,000 No tax

5,00,001 to 10,00,000 20% Above 10,00,000 30%

Section 80C The Basics The government encourages certain types of savings mostly, long term savings for your retirement and therefore, offers you tax breaks on such savings. Sec 80C of the Income Tax Act is the section that deals with these tax breaks. It states that qualifying investments, up to a maximum of Rs. 1 Lakh, are deductible from your income. This means that your

income gets reduced by this investment amount (up to Rs. 1 Lakh), and you end up paying no tax on it at all! (Section 80C investment is just one of the many avenues of saving income tax! Please read Reached Section 80C limit? You can still save more income tax! for more) This benefit is available to everyone, irrespective of their income levels. Thus, if you are in the highest tax bracket of 30%, and you invest the full Rs. 1 Lakh, you save tax of Rs. 30,000. Isnt this great? (Illustrative example and downloadable spreadsheet follow later in the article) So, lets understand the qualifying investments first. Qualifying Investments Provident Fund (PF) The payments that you make to your PF are counted towards Sec 80C investments. For most of you who are salaried, this amount gets automatically deducted from your salary every month.Thus, its not just compulsory savings for your future, but also immediate tax savings! Voluntary Provident Fund (VPF) If you increase your PF contribution over and above the statutory limit (as deducted compulsorily by your employer), even this amount qualifies for deduction under section 80C. Public Provident Fund (PPF) If you have a PPF account, and invest in it, that amount can be included in Sec 80C deduction. The minimum and maximum allowed investments in PPF are Rs. 500 and Rs. 70,000 per year respectively. To learn more about PPF, please read Public Provident Fund (PPF) Plan Your Retirement and Save Tax. Life Insurance Premiums Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. Please note that life insurance premium paid by you for your parents (father / mother / both) or your inlaws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) even insurance bought from private players can be considered here. Equity Linked Savings Scheme (ELSS)

There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C. Home Loan Principal Repayment The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components Principal and Interest. The principal component of the EMI qualifies for deduction under Sec 80C. Stamp Duty and Registration Charges for a home The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house. National Savings Certificate (NSC) The amount that you invest in National Savings Certificate (NSC) can be included in Sec 80C deductions. Infrastructure Bonds These are also popularly called Infra Bonds. These are issued by infrastructure companies, and not the government. The amount that you invest in these bonds can also be included in Sec 80C deductions. Pension Funds Section 80CCC This section Sec 80CCC stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C it maeans that the total deduction available for 80CCC and 80C is Rs. 1 Lakh. This also means that your investment in pension funds upto Rs. 1 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed Rs. 1 Lakh. Bank Fixed Deposits This is a newly introduced investment class under Section 80C. Bank fixed deposits (also called term deposits) having a maturity of 5 years or more can be included in your Sec 80C investment. Lock-in period These FDs have a lock-in period of 5 years. This means that once you invest, you can not withdraw the amount for 5 years. These FDs can not be pledged for any reason for these 5 years. Also, no overdraft facility is available for these tax saver fixed deposits.

The rate of interest offered on these FDs is in line with interest rate offered on similar FDs of 5 years maturity. Payment of Interest Like any other fixed deposit, you can choose to receive the interest periodically, or you can cumulate it and receive it at the time of maturity. Interest earned and income tax The interest earned on a tax saving FD is not tax free. It is fully taxable, just like the interest earned on a regular FD. Who can save tax using these FDs? Any individual or a Hindu Undivided Family (HUF) can invest in these FDs and save income tax. These FDs can be held jointly in two names. They can also be held with a minor being a joint holder. Note: When you go to a bank to open a tax saving FD, please mention it upfront that you want a tax saving FD and not a regular FD this is because banks offer these tax saver FDs as separate and distinct from regular FDs. Joint names and income tax If two people invest in the tax saving FD and become joint holders, the tax benefit as per section 80C would be available only to the first holder. How much tax can be saved? The investment made in a tax saving FD is considered for section 80C, and the upper limit of investment as per section 80C is Rs. 1 Lakh. Senior Citizen Savings Scheme (SCSS) SCSS is a deposit scheme specially meant for elderly citizens. Post Office Time Deposit Account This is the fixed / term deposits offered by the Department of Posts (Government of India) through the post offices in India. If the time deposit is opened for a duration of 5 years or more, the amount invested is qualified for deduction under section 80C. NABARD rural bonds:

There are two types of Bonds issued by NABARD (National Bank for Agriculture and Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB). Out of these two, only NABARD Rural Bonds qualify under section 80C. Unit linked Insurance Plan : ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments. They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term. Others Apart form the major avenues listed above, there are some other things, like childrens education expense (for which you need receipts), that can be claimed as deductions under Sec 80C. Example Lets say you are a male with an income of Rs. 2,50,000 for the year. Your employer has deducted Rs. 24,000 as PF. You have no housing loan, but have purchased NSC worth Rs. 10,000.Thus, your total qualifying investments under Sec 80C are Rs. 34,000. Since this is less than Rs. 1 Lakh, this is the amount that would get deducted from your income. Thus, you would have to pay tax on Rs. 2,16,000. The tax on Rs. 2,16,000 would be Rs. 17,200. If there were no investments made under section 80C, the tax on an income of Rs. 2,50,000 would have been Rs. 24,000. Thus, by making these investments, you end up saving Rs. 6,800! Also, if you would have made the full investment of Rs. 1,00,000, the tax would have further reduced to Rs. 4,000 a saving of Rs. 20,000! But the limit for section 80C deductions is Rs. 1 Lakh so the maximum income tax that you can save is Rs. 30,000 if you fall in the highest tax bracket of 30%. Are there any more deductions available apart from those under section 80C? Can you save more tax? Yes there are and there are lots of them! The deductions, including section 80C deductions, come under Chapter VIA (Chapter 6A). Lets have a look at some of the more generally applicable deductions, so that you can claim these deductions, and reduce your income tax liability further. Lets also have a look at some of the other (non-deduction) means of saving your income tax. All the deductions / methods would not be applicable to you but some definitely would be. If something is applicable to you, please click on the for more information link to read an article about

that specific deduction it would contain all the details about the limits, the restrictions, the procedure to be followed (if any) and all other relevant details. Section 80D: Deduction in respect of medical insurance premia paid Any amount that you pay as a premium for a medical insurance plan / policy (or Mediclaim, in common terms) is deductible from your income upto a certain limit. Section 80DD: Deduction in respect of maintenance including medical treatment of a dependent who is a person with disability If you have a disabled person as your dependent, and you spend for the medical treatment of that person, you can claim certain deduction. You can also claim deduction if you pay premiums towards buying certain insurance policies for them. Section 80DDB: Deduction in respect of medical treatment, etc. If you have spent on medical treatment of some specified diseases, either for yourself or some of your relatives, you can claim the amount as deductible from your income. Section 80E: Deduction in respect of interest on loan taken for higher education if you have taken an education loan for yourself or your relatives, and are repaying it, the interest that you pay can be claimed as deductible from your income. Section 80G: Deduction in respect of donations to certain funds, charitable institutions, etc. Are you philanthropic? Do you donate money to charitable institutions or certain government funds? The donations can be fully or partially deductible from your income. Section 80GG: Deductions in respect of rents paid Do you pay rent, but do not get a house rent allowance (HRA) as a part of your salary? Are you self employed or are a businessman, and pay rent? You can claim the amount as deduction, subject to certain conditions. Section 80U: Deduction in case of a person with disability Do you have a disability or are handicapped? You can claim deduction under section 80U. Other avenues of saving income tax Exemption of House Rent Allowance If you are salaried, get a house rent allowance as a part of your pay, and actually pay rent, you can claim the HRA as exempt from income tax under certain conditions and upto a certain limit.

Exemption of Leave Travel Allowance (LTA) or Leave Travel Concession (LTC) If you are salaried, get LTA / LTC, and actually avail of leave in order to travel, you can claim the LTA / LTC as exempt from income tax under certain conditions and upto a certain limit. Interest repayment of housing loan If you have taken a home loan and are repaying the EMIs, you can get income tax benefit from the interest you pay on the borrowed amount. You can also get tax benefit from any pre-EMI paid. Conclusion There are many avenues of saving income tax Section 80C is just one of them

Section 80C Deductions Deduction under this section is available only to an individual or an HUF. Section 80C of the Income Tax Act allows certain investments and expenditure to be deducted from total income up to the maximum of 1 lac.[6] The total limit under this section is 100,000 ) which can be any combination of the below: Contribution to approved superannuation fund/public provident fund/recognized provident fund/statutory provident fund. Provident fund contribution should not exceed 1/5th of salary & public provident fund. Payment of life insurance premium. It is allowed on premium paid on self, spouse and children even if they are not dependent on father or mother (subject to a maximum of 20% of sum assured). Payment in respect of non-commutable deferred annuity. Unit linked Insurance policy of UTI/LIC Mutual fund Dhanraksha. Subscriptions to National Savings Certificates VIII issues. Deposits with National Housing Bank. Principal part of loan taken for acquiring Residential House Property; provided that the house should not be transferred within 5 years. Loan for land cost for residential house is also qualified. Subscriptions to schemes of PSU's providing long term finance for housing, or of housing boards constituted in India for infrastructural development of cities/towns. Notified annuity plan of LIC or of any other approved insurer. Units of Mutual Fund or UTI. Notified pension fund by UTI or approved mutual fund. Tuition fees (not including donation or development fees) towards full-time education including playschool activities, pre-nursery & nursery classes, of any 2 children of an individual, paid to University, College or School in India. Investments in shares or debentures with a lock-in-period of 3 years, of approved public company exclusively engaged in infrastructure facility or power sector. Subscription to the bonds issued by NABARD as specified by Central Government. Any sum deposited as 5 years time deposit under Post Office Term Deposit. Any sum deposited in Senior Citizen Savings Scheme.

Any sum deducted from salary of Government employee (subject to maximum 20% of salary) towards deferred annuity plan for benefit of self, spouse or any children. Term deposit with scheduled bank for a period of not less than 5 years as per scheme notified by Central Government. Investing in units of notified mutual fund investing in approved public companies engaged in infrastructure facility or power sector. Section 80CCC Payments made to LIC or to any other approved insurer under an approved pension plan is admissible for deduction under this section. Then pension plan policy should be for individual himself out of his taxable income. The deduction is least of the amount paid or Rs. 100000. Section 80CCD Contribution made by the assessee and by employer to a Notified Pension Scheme is admissible for deduction under this section. The assesse should be an individual who is employed on or after January 1, 2004. The deduction shall be equal to the amount contributed by the assessee and/or by the employer, not exceeding 10% of his salary (basic+dearness allowance). Even a self-employed person can claim this deduction which will be restricted to 10% of gross total income. The total deduction available to an assessee under sections 80C, 80CCC & 80CCD is restricted to Rs. 100000 per annum. However, employer's contribution to Notified Pension Scheme under section 80CCD is not a part of the limit of Rs. 100000. Section 80CCF: Investment in Infrastructure Bonds From April, 1 2011, a maximum of 20,000 is deductible under section 80CCF provided that amount is invested in infrastructure bonds. However, this deduction has not been extended to Financial year 201213.[7] Omitted with effect from F. Y. 2012-13. Section 80D: Medical Insurance Premiums Health insurance, popularly known as Mediclaim Policies, provides a deduction of up to 35,000.00 (15,000.00 for premium payments towards policies on self, spouse and children and 15,000.00 for premium payment towards non-senior citizen dependent parents or 20,000.00 for premium payment towards senior citizen dependent). This deduction is in addition to 1,00,000 savings under IT deductions clause 80C. For consideration under a senior citizen category, the incumbent's age should be 60 years during any part of the current fiscal, e.g. for the fiscal year 2010-11, the incumbent should already be 60 as on March 31, 2011), This deduction is also applicable to the cheques paid by proprietor firm. Interest on Housing Loans Section

For self occupied properties, interest paid on a housing loan up to Rs 150,000 per year is exempt from tax. This deduction is in addition to the deductions under sections 80C, 80CCF and 80D. However, this is only applicable for a residence constructed within three financial years after the loan is taken and also the loan if taken after April 1, 1999. If the house is not occupied due to employment, the house will be considered self occupied. For let out properties, the entire interest paid is deductible under section 24 of the Income Tax act. However, the rent is to be shown as income from such properties. 30% of rent received and municipal taxes paid are available for deduction of tax. The losses from all properties shall be allowed to be adjusted against salary income at the source itself. Therefore, refund claims of T.D.S. deducted in excess, on this count, will no more be necessary.[8] Section 80DDB : Deduction in respect of Medical Treatment, etc Deduction is allowed to resident individual or HUF in respect of expenditure actually during the PY incurred for the medical treatment of specified disease or ailment as specified in the rules 11DD for himself or a dependent relative or a member of a HUF[9]