Income Tax Saving Schemes

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Exemptions:

Basic : No exemption (Full taxable)

Section 10 & 17

1. HRA : Exempted up to certain conduction (need to produce house rent slips) – Sec 10
2. Conveyance : Exempted up to 800 per month. – Sec 10
Professional Tax : Full exemption – Sec 16
Gratuity – Sec 10
LTA – Sec 10
Leave Encashment – Sec 10
Medical bills: Sec 17

80 C:

EPF & public and voluntary PF
Children education, Tuition fees
NSC (National Saving Certificate)
Insurance Premium (life insurance)
Saving in post office
Bank fixed deposits (not less than 5 years)
Insurance pension scheme
NSS (National Saving Scheme)

80 D: Medical insurance premium ((max Rs.10, 000/-))

80 D D: Medical for handicapped dependants (max Rs.50, 000/-)

80 D D B: Dependent's Medical treatment / Medical specified disease (max Rs.40, 000/-)

80 E: Higher education loan repayment including therom

80 G: Donation to certain relief fund, charitable institutions

80 GGA: Donation for scientific resear & rural der

80 U: Person with disability / Deduction for permanent disability ((max Rs.50, 000/-)


These are the income tax saving schemes,
1. National Savings Certificates (NSC)
2. Public Provident Fund (PPF)
3. Kisan Vikas Patra (KVP)
4. Post Office Scheme (POS)
5. Special Schemes For Retiring Person
6. Postal Life Insurance
7. Dividend

Forms:

Form 16: Full details of salary & Tax

Gross
Exemptions
Deductions
TDS
Balance tax payments

Form 12 B: Particulars regarding salaries received previous employers

Form 12 C: Details of any loss under the head com for m house property

Process to calculate TDS (Example & Form with example):

Consolidated Salary details (Basic, HRA, Medical, Incentives, Allowances, Conveyance…
===è Total amount

Less

Exemption on allowances (HRS, Medical, Conveyance…)
===è Total amount of exemption

Less

Standard deductions (P.T, PF, LTA, Gratuity, Leave encashment…)
===è Total amount of Standard deductions

Gross Total Income
(Consolidated Salary - Exemption on allowances - Standard deductions)

Less

Deduction (80 C, 80 CC)
===è Total amount of Deduction (80 C, 80 CC)

Grand Total Income
(Gross Total Income - Total amount of Deduction (80 C, 80 CC))


====è Taxable amount (based on tax slabs rates, gender & age)

Tax payable

Rebate

Balance Tax payable + Surcharge if any

Calculate for monthly tax amount

Finally deducting monthly tax amount, monthly wise