Save Income Tax by Tax planning

By | December 20, 2015

Save Income Tax by Tax Planning

  1. Save Income Tax by Tax planning if you have Girl Child

Save Income Tax by Tax planning

  1. Save Income Tax by Tax planning by using  Sukanya Samriddhi Account Scheme for girl child of parent /legal guardian under section 80C :-

Pursuant to the Budget announcement in July 2014, a special small savings instrument for the welfare of the girl child has been introduced under the Sukanya Samriddhi Account Rules, 2014. The following tax benefits have been envisaged in the Sukanya Samriddhi Account scheme:-

(i) The investments made in the Scheme will be eligible for deduction under section 80C of the Income-tax Act.
(ii) The interest accruing on deposits in such account will be exempt from income tax. (Section 10(11A)
(iii) The withdrawal from the said scheme in accordance with the rules of the said scheme will be exempt from tax.

The Scheme has been notified under clause (viii) of sub-section (2) of section 80C of the Income-tax Act vide Notification number 9/2015 S.O.210 (E), F.No. 178/3/2015-ITA-I dated 21.01.20l5.

Deduction under section 80C may be availed by the parent or legal guardian of the girl child

Amendments take effect retrospectively from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent assessment year

2. Save Income Tax by Tax planning if you have Senior Citizen Parents and you are incurring medical expenditure

Save Income Tax by Tax planning

Section 80D has been amended to provide that any payment upto Rs.30,000/- made on account of medical expenditure shall be allowed as a deduction under section 80D, in respect of a very senior citizen, if no payment has been made to keep in force an insurance on the health of such person. The aggregate deduction available to any individual who is a very senior citizen in respect of health insurance premia and the medical expenditure incurred for his family would, however, be limited to thirty thousand rupees.

Example:

(i) For Individual and his family Rs.
Health insurance premia 21,000
(ii) For parents
Health insurance of Mother: 18,000
Medical expenditure on father (very senior citizen) 25,000
Deduction eligible u/s 80D Rs. 21000 + Rs. 30000 = Rs. 51,000

A ‘very senior citizen’ has been defined to mean an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.

Applicability:- These amendments take effect from the 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years.

3. Save Income Tax by Tax planning in case you are incurring medical expeneses for Dependant who is a person with disability

Save Income Tax by Tax planning

Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability

As per of section 80DD (1) Of the Income Tax Act as amended by Finance Act, 2015, w.e.f. 1-4-2016 :

(1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,—

(a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or
(b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability,

the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of seventy-five thousand rupees from his gross total income in respect of the previous year:

Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “seventy-five thousand rupees”, the words “one hundred and twenty-five thousand rupees” had been substituted.

4. Save Income Tax by Tax planning in case of person with disability 

Save Income Tax by Tax planning

As per section 80U as amended by Finance Act, 2015, w.e.f. 1-4-2016 :

(1) In computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of seventy-five thousand rupees:

Provided that where such individual is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “seventy-five thousand rupees”, the words “one hundred and twenty-five thousand rupees” had been substituted.

Disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons withDisabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) and includes “autism”, “cerebral palsy” and “multiple disabilities” referred to in clauses (a), (c) and (h) of section 2  of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

5. Save Income Tax by Tax planning in case you have taken loan for higher education

Save Income Tax by Tax planning

Deduction in respect of interest on loan taken for higher education.

For an assessee, being an individual, there shall be deducted  any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education [or for the purpose of higher education of his relative].

The deduction  shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest  is paid by the assessee in full, whichever is earlier.

 

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  1. Pingback: Tax benefit of expenses on medical treatment of specified diseases | Tax Heal

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