Tax Planning Measures for Government Employees for the Assessment Year

2020-2021 (Financial Year 2019-2020).

1. If your Gross Total Income is less than 5 lakhs, no special tax planning is
needed from yourself. You may claim Rebate under Section 87A which
amounts to a maximum of Rs.12500 in the Assessment Year 2020-
2021.Gross Total Income means total of the following Income
a. Income from Salaries
b. Income from House Property
c. Income from Business or Profession
d. Income from Capital Gains
e. Income from Other Sources
2. As far as Salaried persons are concerned , Standard Deduction of
Rs.50,000 is available in the Assessment Year 2020-2021.
3. You may claim Second House as Second Self –Occupied Property .But
Total Deduction under Interest on loan taken for the House Property will be
Rs.200,000. You may take Joint Housing loan with your Spouse. Then you
and your spouse can claim maximum deduction of Rs.200,000 each.
4. If your Gross Total Income (Including Interest) is less than Rs.500,000 ,You
may deposit in banks /Post-Offices (Term /Fixed/Recurring) as such:-
a. Total annual Interest on such accounts is less than Rs.40,000.
Banks and Post Offices did not deduct TDS upto Rs.40,000. Banks and Co-
operative Societies will deduct TDS when Interest more than 40,000.other
Cases 5000.
5. Closure or Opting out of the NPS did not attract tax up to 60% of the total
amount payable.
6. Please Contribute upto14% of your Salary to NPS(If you are Covered under
NPS scheme)
7.Use maximum Electronic mode of payments
8. Maximum compliance of newly introduced Sections in Chapter VIA of
Income Tax Act.
a. Sec 80EEA-Interest Up to 150,000 on loan taken for Residential House
Property (Loan should be taken from 01/4/2019 to 31/03/2020)
Subject to conditions
b. Section 80EEB –Tax Incentives for Electric Vehicles
Maximum deduction on Interest on loan taken for purchase of an electric
vehicle –Rs.150,000
(Loan Should be taken from 01/04/2019 to 31/03/2023 )
Subject to Conditions
9. Easy Application of Sec.89 is possible in the Assessment Year if you have
received arrears of Salary (Easy Procedure).
10. Use PAN Card. Avoidance of PAN CARD attract TDS@20%.
Aadhaar Card can be used as PAN CARD for certain transactions.
11. Link PAN with Aadhaar .It is most urgent
12. You cannot hide your transactions from 2020-2021 on words . CBDT will
introduce Pre-filled Tax Returns in the Assessment Year 2020-2021 on words.
13. Contribute to NPS even if you are not coming under NPS Scheme. You
may take NPS in Banks or Post offices. Besides, You may deduct the
following deductions from your Gross Total Income (Chapter VIA)
A.SEC 80 C
LIC premium paid by the You in respect of self ,spouse and son and daughter
can be deducted up to Rs. 150,000. In case of an individual, deduction is
available in respect of policy taken in the name of taxpayer or his/her spouse
or his/her children. No deduction is available in respect of premium paid in
respect of policy taken in the name of any person, other than given above.
Other deductions under Sec 80C are as follows
i. Tuition fees
ii.Contribution to SLI
iii.Contribution to GIS
iv. Contribution to Government Providenf Fund
B. An additional deduction of Rs. 50,000/- under Section 80CCD(1B) is
available to assesse 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
C. Sec 80 D
a.. Health Insurance Premium
Following are the important points
i. Self and family (Including Senior Citizen)-Maximum Rs.50,000
ii. Parents –Maximum Rs. 25,000
iii. Parents (Senior) –Maximum-50,000
iv.Self and Family including Parents –Maximum Rs. 50,000
v. Self and Family including Senior citizen Parents –Maximum Rs. 75,000
vi. Self (Senior Citizen ) and including Senior Citizen Parents –Maximum Rs.
100,000
b.. Medical Expenditure
Following are the important points
i. Self and family (Senior Citizen)-Maximum Rs.50,000
ii. Parents (Senior) –Maximum Rs.50,000
iii. Self and Family including Parents –Maximum Rs. 50,000
Payment through cash mode is not allowed for Sec 80 D Payments except the
following preventive medical checkup
c..Preventive Medical checkup
Maximum Rs. 50,00 deduction is allowed for Preventive Medical checkup
D. Sec 80DD Maintenance including medical treatment of a dependant No
Change
E. Sec 80DDB Medical treatment of Specified diseases-No Change
F. Sec 80E Interest on loan taken for Higher Education-No Change
G. Sec80 Donations to certain funds and charitable Institutions
Following points are important in this respect
a. Pay any mode other than cash
b. Visit Income Tax Department Website and check eligibility of
Institution Donations are as follows
a. Without qualifying Limit -100%
b. Without qualifying Limit- 50%
c. With qualifying Limit -100%
d. With qualifying Limit-50%
Donation to Kerala Chief Minister Draught Relief Fund can be included in
Donation as 100% without limit menu.
H.Deduction in respect of Contributions Given by any Person to Political
Parties or an Electoral Trust(Section 80GGC)
Any amount of contribution made by an assessee being any person to a a
political party or an electoral trust except local authority and every artificial
juridical person wholly or partly funded by the Government shall be allowed as
deduction while computing the total income of such person .
Note :Sum contributed by way of cash shall not be allowed as deduction
I SEC 80TTA Income from interest on Saving bank Accounts
Maximum amount of Rs. 10,000 can be deducted income from interest on
savings bank accounts of Banks and Post Offices included in the above
Income from other sources
J. SEC 80TTB Interest on deposit in case of senior citizens.
Maximum interest of Rs,50,000 can be deducted by a senior citizen from
interest on deposit income included in the above Income from other sources
L. SEC 80U In case of person with disability
Following are the important points
a. Self with disability –Maximum-Rs.75,000
b. Self with severe Disability –Maximum -125,000