ASSIGNMENT 3

INTRODUCTION OF TAX
SECTIONS UNDER IT ACT 1961
&
TAX SLABS

Submitted by:
SANDEEP SHEKHAR
AMITY BUSINESS SCHOOL
MBA (M&S)
 WHAT IS TAX ?
• A tax is a compulsory financial charge or some other type of
levy imposed upon a taxpayer by a governmental
organization in order to fund various public expenditures.
• Tax is defined as a compulsory contribution levied on
persons, property, or businesses for the support of
government for economic and social operations. In other
words, it is money paid to a government to fund its
programs and services.
 INCOME TAX SLABS
(GENERAL CATEGORY)
Individuals Below The Age Of
Income Tax Slab
60 Years
Up to 2,50,000 Nil
2,50,001 to 5,00,000 5%

5,00,001 to 10,00,000 12,500 + 20% of total income

exceeding 5,00,000

Above 10,00,000 1,12,500 + 30% of total income

exceeding 10,00,000

• 4% Health & Education Cess is applicable on the income tax

and applicable surcharge.

• Tax rates and slabs are same for Male and Female as per
above table
 INCOME TAX SLABS
(SENIOR CITIZENS AGED 60 BUT LESS
THAN 80 YEAR)

Senior Citizens (Aged 60 Years But

Income Tax
Less Than 80 Years)
Up to 3,00,000 Nil
3,00,001 to 5,00,000 5%

5,00,001 to 10,00,000 10,000 + 20% of total income

exceeding 5,00,000

Above 10,00,000 1,10,000 + 30% of total income

exceeding 10,00,000
 INCOME TAX SLABS
(SENIOR CITIZENS AGED 80 YEARS
AND ABOVE )

Very Senior Citizens (Aged 80

Income Tax Slab
Years And Above)

Up to 5,00,000 Nil

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

Above 10,00,000 1,00,000 + 30% of total income

exceeding 10,00,000
SECTION 80C OF INCOME TAX ACT
 Any individual or HUF can get a tax deduction
up to Rs. 150,000 per financial year under
Section 80C of the Income Tax Act and its allied
sections such as 80CCC and 80CCD. This
deduction is not available to partnerships,
companies and other corporate bodies. You have
to claim this deduction in your income tax return
(ITR)
SECTION 80C DEDUCTION TABLE
 Life Insurance : Premiums paid toward all life insurance policies are
eligible for tax benefits under Section 80C. This deduction can be claimed
for premiums paid towards insuring self, spouse, dependent children and
any member of Hindu Undivided Family. An important point to be noted
is that if the policy is issued on or prior to March 31, 2012, annual
premium up to a maximum of 20% of the sum assured becomes tax
deductible. For insurance policies issued on or after April 1, 2012, annual
premium up to a maximum of 10% of the sum assured is tax deductible.
 Sukanya Samriddhi Yojana : Investments made in Sukanya
Samriddhi Yojana, which is a saving scheme for the girl child, are
eligible for tax deduction under Section 80C of the Income Tax Act, 1961.
A parent or legal guardian of a girl child, who has not reached the age of
10 years, can open this account. Sukanya Samriddhi Yojana account can
be opened for two girl children (one account per girl child) and can be
extended to a third if twins are involved.
 Public Provident Fund : Public Provident Fund (PPF) contributions
are eligible for tax deductions under Section 80C. PPF accounts have a
maximum deposit limit of Rs.1,50,000 per year, therefore, all deposits
made to your PPF account can be claimed as deductions under Section
80C. The money that you put into a PPF account will be locked-in for a
period of 15 years. Partial withdrawals are permitted after 7 years.
 Equity Linked Saving Scheme : Investments in equity linked savings
scheme qualify for tax deduction under section 80C of the Income Tax
Act. Now, an essential point to be noted about equity linked savings
scheme is that they have a mandatory lock-in period of three years from
the date of investment. If you are considering investing in this scheme,
make sure to invest for longer periods like five to seven years as they are
equity schemes. Equity schemes are an ideal option for wealth creation
over a long period.
 Five Year Bank Deposit : Most banking institutions offer tax saving
fixed deposits where deductions can be claimed under Section 80C of the
Income Tax Act. The condition associated with tax saver fixed deposits is
that they come with a lock-in period of 5 years. Premature withdrawal is
not allowed under this investment. Interest earned on tax saver fixed
deposits, however, are taxable and will be deducted at source.
 Stamp Duty and Registration Charges : While buying a property,
one of the largest expenses you will have to bear is the stamp duty and
registration charges. To give taxpayers some relief, the government has
included these expenses under Section 80C of the Income Tax Act, 1961.
The deduction can only be claimed once the property construction is
complete and you have legal possession of the house.
 Senior Citizens Savings Scheme : Investments in Senior Citizens
Saving Scheme, which as the name would suggest is suitable for senior
citizens, qualify for deduction under Section 80C of the Income Tax Act.
This scheme has a tenure of 5 years. To participate in the Senior Citizens
Saving Scheme, an individual has to be at least 60 years of age. Those
who have taken VRS (voluntary retirement scheme) can opt for it after
the age of 55.
 National Savings Certificate : To encourage taxpayers to park their
money in National Savings Certificate scheme, the government has
allowed tax deductions to be claimed under Section 80C on the
investments made in it. Interest earned on National Savings Certificates
are liable to tax. However, if this interest is reinvested, it will be eligible
for deduction under Section 80C. The interest rate on this scheme is
similar to that of tax savings fixed deposits, PPF and other fixed income
earning instruments.
 Home Loan Principal Repayment : The amount that goes into
repaying the principal on a home loan is eligible for deduction under
Section 80C. To claim this tax benefit, construction of the property
should be complete. If you transfer the property before the end of 5 years
from the year you had taken its possession, no tax benefits will be
awarded. Additionally, the amount claimed as deduction in the earlier
years shall become taxable in the year that the property is transferred.
SECTION 80D OF INCOME TAX ACT
 Section 80D allows for the deduction for money
spent on maintaining your health
and health insurance.

 The Section 80D grants a tax deduction on

medical insurance premiums and medical
expenditure. It is granted on the premiums paid
for a medical insurance policy for the taxpayer
himself and/or a close family member.
DEDUCTION UNDER SECTION 80D
For Individuals
 The maximum permissible deduction is INR 25,000 every
financial year on the premium for health insurancefor self &
family.
 For senior citizens, the maximum permissible deduction is INR
50,000 per financial year.

Medical Insurance for Parents

 The maximum permissible deduction is INR 25,000 per financial
year on the premium paid for health insurance for parents.
 In the case of senior citizen parents, the maximum permissible
deduction is INR 50,000 per fiscal year on the premium paid.
 Apart from the premium paid, an additional exemption of INR
5,000 can be availed every financial year on the expenses incurred
towards health check-ups. This limit covers check-up costs for all
family members including kids spouse & parents. The Rs 5,000 is
included within the overall deduction limit of Rs 25,000.
For Hindu Undivided Family (HUF)
 For an HUF, the maximum permissible amount of
deduction is INR 25,000 as the premium paid on
the health insurance scheme of any family
member.
 The allowed limit of INR 25,000 is further added
to INR 50,000 in following cases –
 Premium paid for senior citizen member (i.e., any
resident individual aged 60 years or above).
 When medical expenditure is incurred on the
health of a very senior citizen person, if no amount
is paid in respect of health insurance of such
person.
 SECTION 80D EXEMPTION LIMIT

Medical Insurance Exemption Health Check-

Sl no Total
Cover Limit Up Exemption

1 For Self and family INR 25,000 INR 5,000 INR 25,000

INR (25,000 +
For Self and family
2 25,000) = INR INR 5,000 INR 50,000
including parents
50,000

For Self and family INR (25,000 +

3 including senior citizen 50,000) = INR INR 5,000 INR 75,000
parents 75,000

For Self (senior citizen) INR (50,000 +

4 and family including 50,000) = INR INR 5,000 INR 100,000
senior citizen parents 100,000
SECTION 10(10D) OF INCOME TAX ACT
 As per Section 10(10D) of the Income Tax Act,
1961 the amount of sum assured plus any bonus
(i.e. the policy proceeds) paid on maturity or
surrender of policy or on death of the insured are
completely tax free for the receiver subject to
certain conditions.

 Any income received from your life insurance

policy is exempted from income tax under this
section. This exemption is available for all types
of life insurance policy payouts, without any
upper limit and including bonuses and surrender
value too.
TERMS OF SECTION 10(10D) OF THE INCOME TAX
ACT, 1961

 Tax benefits under Section 10(10D) of the Income Tax

Act, 1961 can be claimed only on the following terms
and conditions:
 Tax deductions under Section 10(10D) of the Income
Tax Act, 1961, is applicable on any sum received under
a life insurance plan i.e. Death Benefit or maturity
Benefit or Bonus received from life insurance policies
 Payout that is not eligible for tax deductions under
Keyman Insurance Policy are eligible for deductions
under this section
 Premium paid during any particular year during the
policy term cannot be more than 20% of the sum
assured for life insurance policies bought between 1st
April 2003 and 31st March, 2012
 For policies purchased after 1st April 2012, the
premium payment cannot be more than 10% of the
sum assured.
 The insurance premium for any year during the
policy tenure should not exceed 15% of the sum
assured. Besides, it also should not have been
purchased on or after 1st April 2013. Also, the
insurance policy must be for the life of any
individual who meets the following criteria:
 Disabled or severely disability individual, as
specified under Section 80U of the Income Tax
Act, 1961
 Suffering from a disease as specified under
Section 80DDB of the Income Tax Act, 1961
DEDUCTION LIMIT UNDER SECTION 10(10D) OF THE
INCOME TAX ACT, 1961

Tax deductions are applicable on claims against life

insurance policies across categories. The claim payout
includes accrued bonuses. There is no upper limit
applicable for tax deductions under Section 10(10D) of
the Income Tax Act, 1961.
THANK YOU