How can one pay zero taxes on a salary of Rs. 50 lakhs?
So, here on Rs. 50,00,000 income you can claim the following deductions to save your tax :-
- Under section 80C, a deduction of Rs 1,50,000 can be claimed from your total income. In simple terms, you can reduce up to Rs 1,50,000 from your total taxable income through section 80C. This deduction is allowed to an Individual or an HUF.
- A maximum of Rs 1, 50,000 can be claimed for the financial year 2016-17. The limit for the financial year 2017-18 is also Rs 1, 50,000.
Section 80CCC: Deduction for Premium Paid for Annuity Plan of LIC or Other Insurer
- This section provides a deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving a pension from a fund referred to in Section 10(23AAB).
Section 80CCD: Deduction for Contribution to Pension Account
- Employee’s contribution – Section 80CCD (1) Allowed to an individual who makes deposits to his/her pension account. Maximum deduction allowed is 10% of salary (in case the taxpayer is an employee) or 10% of gross total income (in case the taxpayer being self-employed) or Rs 1, 50,000,whichever is less.
- From FY 2017-18 – In the case of a self-employed individual, maximum deduction allowed is 20% of gross salary instead of 10% (earlier subject to a maximum of Rs1, 50,000).
- However, the combined maximum limit for section 80C, 80CCC and sec 80CCD (1) deduction is Rs 1, 50,000, which can be availed.
Additional benefit from F.Y. 2016–17 introduced :-
Deduction for self-contribution to NPS – section 80CCD (1B)
- A new section 80CCD (1B) has been introduced for an additional deductionof up to Rs 50,000 for the amount deposited by a taxpayer to their NPS account. Contributions to Atal Pension Yojana are also eligible.
Section 80D: Deduction for premium paid for Medical Insurance
- Deduction is available up to Rs. 25,000/- to a taxpayer for insurance of self, spouse and dependent children. If individual or spouse is more than 60 years old the deduction available is Rs 30,000. An additional deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 25,000/– if less than 60 years old and Rs 30,000 if parents are more than 60 years old. For uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000 shall be allowed as a deduction under section 80D. Therefore, the maximum deduction available under this section is to the extent of Rs. 60,000/-. (From AY 2016-17, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available).
Section 80G: Deduction for donations towards Social Causes
- The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in Sec. 80G. 80G deduction not applicable in case donation is done in form of cash for amount over Rs 10,000.
- From Financial Year 2017-18 onwards – Any donations made in cash exceeding Rs 2000 will not be allowed as deduction. The donations above Rs 2000 should be made in any mode other than cash to qualify as deduction u/s 80G.
Visit HireCA.com Now