Insurance Planning

Investment Planning

Cash Flow Planning

Tax Planning

Retirement Planning

Children's Future Planning

Payment of taxes is our duty.

However, current tax laws allow us to take advantage of several benefits so that we can reduce our tax burden. Hence, Tax Planning plays an important role in our lives. The steps for tax planning, which you can do on your own, are given below:

Step 1 - Calculate the taxable income for the respective financial year such as income from salary, house rent, business & profession, capital gains and income from other sources.
Step 2 - Plan to minimize your tax liability through proper tax planning.
Step 3 – Calculate the tax payable.

How to plan your tax?
Find out your tax liability and then understand the available government incentives that are applicable to you. Prudent planning will not only help you to save on taxes but also provide an avenue for retirement savings.   

Deductions allowed from Taxable Income:

- Deductions u/s 80C

Deduction under this section, introduced from the financial year 2005-06, is available only to an individual and HUF up to an amount of Rs. 100,000 per annum from the taxable income in respect of investments made in the following specified schemes;

1. Investments in Equity Linked Savings Scheme (ELSS) of Mutual Funds.
2. Life Insurance Premiums.
3. Contributions to PPF/ EPF/GPF/NSC.
4. Investment in Unit Linked Insurance Plan (ULIP).
5. Repayment of Housing Loan (Principal).
6. Tuition Fees (excluding development fees/donations) paid for children (maximum 2 children) in India for full time education in
    school/college.
7. Amount deposited in a Fixed Deposit of 5 years or more with a scheduled bank / post office.
8. Accrued interest of NSC VIII issue.
9. Pension scheme of LIC of India or any other insurance company.

An addional amount of dediuction of Rs 20000/- is allowed over and above the existing limit of Rs 1 Lakh for investment in Long Term Infrastructure Bonds as notified by the Government.

- Deduction u/s 80D (Medical Insurance Premium)

1. Up to Rs. 15,000 for self and/or family (family means spouse and dependent children)
2. An additional amount of up to Rs. 15,000 for health insurance of parents. It is not necessary whether parents are dependent or not.     If the parents are senior citizens (65 years and above) then the deduction amount allowed would be up to Rs. 20,000.

 

- Deduction u/s 80DD (Maintenance incl. Medical treatment of handicapped dependent)

You can get the benefit of deduction by availing anyone of the two options given below:

1. You have incurred for medical treatment including nursing, training and rehabilitation of a dependent.
2. You have paid / deposited under any scheme of LIC or any other insurer for the maintenance of a disabled dependent.
    Dependent means spouse, children, parents, brother and sister of the individual. The limit of deduction will be Rs. 50,000 from the     gross total income of the individual. Moreover, in case of severe disability, the limit will be Rs. 75,000.

- Deduction u/s 80DDB (Medical Treatment)

If you have paid any amount for the medical treatment of a specified disease or ailment as prescribed by the board such as neurology, oncology, urology, hematology or immunology then, the amount of deduction allowed is Rs. 40,000 or Rs. 60,000 (if the dependent is 65 years and above)

- Deduction u/s 80E (Repayment of Loan taken for Higher Education)

Loan taken by an individual for self and/or spouse or any child from any bank, financial institution or approved charitable institution and such amount is payable out of income chargeable to tax, then the deduction allowed is Rs. 40,000 (repayment of loan with interest) and the deduction is allowed for a maximum period of 8 years or till fully paid whichever is earlier.

 

Following rates are applicable for computing tax liability for the Financial Year ending on March 31 2010, (Assessment Year 2010 -11)

For Resident MALE below 65 years of age, HUF, Association of Persons / Body of Individuals

For Resident FEMALE below 65 years of age

For Resident Senior Citizens both male and female (65 years and above)

 

Filing of Income Tax Returns

Filing of income tax return is compulsory for all individuals whose gross annual income exceeds the maximum amount which is not chargeable to income tax i.e. Rs. 160,000 for Resident Male individuals below 65 years and HUF, Rs. 190,000 for Resident Women and  Rs. 240,000 for Senior Citizens above 65 years.

The last date of filing income tax return is 31st July, in case of individuals and for business and professional income requiring tax audit, the last date is 30th September.

 

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