2016-17 has been presented in Parliament. The Finance Minister has kept
the Personal Income
Tax slab rates unchanged
for the Financial Year 2016-17 (Assessment
Tax Deductions FY 2016-17 As per Budget 2016
maximum tax exemption limit under Section 80C has been retained as Rs 1.5 Lakh
only. The various investment avenues or expenses that can be claimed as tax
deductions under section 80c are as below;
- PPF (Public
- EPF (Employees’
- Five year Bank or Post office Tax saving Deposits
- NSC (National
- ELSS Mutual Funds (Equity Linked Saving Schemes)
- Kid’s Tuition Fees
- SCSS (Post
office Senior Citizen Savings Scheme)
- Principal repayment of Home Loan
- NPS (National
- Life Insurance Premium
- Sukanya Samriddhi Account Deposit Scheme
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to annuity plan of LIC (Life
Insurance Corporation of India) or any other Life Insurance Company
for receiving pension from the fund is considered for tax benefit. The maximum
allowable Tax deduction under this section is Rs 1.5 Lakh.
contribute to Government notified Pension Schemes (like National Pension Scheme – NPS).
The contributions can be upto 10% of the salary (or) Gross Income and Rs 50,000
additional tax benefit u/s 80CCD (1b) was proposed in Budget 2015.
To claim this
deduction, the employee has to contribute to Govt recognized Pension schemes
like NPS. The 10% of salary limit is applicable for salaried individuals and
Gross income is applicable for non-salaried. The definition of Salary is only
‘Dearness Allowance.’ If your employer also contributes to Pension Scheme, the
whole contribution amount (10% of salary)can
be claimed as tax deduction under Section 80CCD (2).
note that the Total
Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2016-17.
The additional tax deduction of Rs 50,000 u/s 80CCD (1b) is over and above this
Rs 1.5 Lakh limit.
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80D on health insurance premium is Rs 25,000. For Senior Citizens it is Rs
30,000. For very senior citizen above the age of 80 years who are not eligible
to take health insurance, deduction is allowed for Rs 30,000 toward medical
reventive health checkup (Medical checkups) expenses to the extent of Rs 5,000/-
per family can be claimed as tax deductions. Remember, this is not over and
above the individual limits as explained above. (Family includes: Self, spouse, dependent
children and parents).
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You can claim
up to Rs 75,000 for spending on medical treatments of your dependents(spouse,
parents, kids or siblings) who
have 40% disability. The tax deduction limit of upto Rs 1.25 lakh in case of
severe disability can be availed.
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An individual (less
than 60 years of age) can
claim upto Rs 40,000 for the treatment of specified critical ailments. This can
also be claimed on behalf of the dependents. The tax deduction limit under this
section for Senior Citizens is Rs 60,000 and for very Senior Citizens(above 80
years) the limit is
claim Tax deductions under Section 80DDB, it is mandatory for an individual to
obtain ‘Doctor Certificate’ or ‘Prescription’ from a specialist working in a
Govt or Private hospital.
the purposes of section 80DDB, the following shall be the eligible diseases or
- Neurological Diseases where the disability level has
been certified to be of 40% and above;
(b) Dystonia Musculorum Deformans
(c) Motor Neuron Disease
(h) Parkinson’s Disease
- Malignant Cancers
- Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;
- Chronic Renal failure
- Hematological disorders
Section 24 (B)
interest component of home loans is allowed as deduction under Section
24B for up to Rs 2 lakh in case of a self-occupied house. If your property is a
let-out one then the entire interest amount can be claimed as tax deduction.
is a new proposal which has been made in Budget 2016-17. First time Home
Buyers can claim an additional Tax deduction of up to Rs 50,000 on home
loan interest payments u/s 80EE. The below criteria has to be met for claiming
tax deduction under section 80EE.
- The home loan should have been sanctioned in FY 2016-17.
- Loan amount should be less than Rs 35 Lakh.
- The value of the house should not be more than Rs 50
- The home buyer should not have any other existing
residential house in his name.
is similar to Section 80DD. Tax deduction is allowed for the tax assessee who
is physically and mentally challenged.
As per the
budget 2016 proposal, the Tax Deduction amount under 80GG has
been increased from Rs 24,000 per annum to Rs 60,000 per annum. Section
80GG is applicable for all those individuals who do not own a residential house
& do not receive HRA (House Rent Allowance).
extent of tax deduction will be limited to the least amount of the following;
- Rent paid minus 10 percent the adjusted total income.
- Rs 5,000 per month.
- 25 % of the total income.
made to certain relief funds and charitable institutions can be claimed as a
deduction under Section 80G of the Income Tax Act. This deduction can only be
claimed when the contribution has been made via cheque or draft or in cash. But
deduction is not allowed for donations made in cash exceeding Rs 10,000.
In-kind contributions such as food material, clothes, medicines etc do not
qualify for deduction under section 80G.
If you take
any loan for higher studies (after
completing Senior Secondary Exam), tax deduction can be claimed
under Section 80E for interest that you pay towards your Education Loan. This
loan should have been taken for higher education for you, your spouse or your
children or for a student for whom you are a legal guardian. Principal
Repayment on educational loan cannot be claimed as tax deduction.
is no limit on the amount of interest you can claim as deduction under section
80E. The deduction is available for a maximum of 8 years or till the interest
is paid, whichever is earlier.
Section 87A Rebate
are earning below Rs 5 lakh, you can save an additional Rs 3,000 in taxes.
Tax rebate under Section 87A has been raised from Rs 2,000 to Rs 5,000 for FY
case if your tax liability is less than Rs 5,000 for FY 2016-17, the rebate u/s
87A will be restricted up to income tax liability only.
Section 80 TTA
Deduction from gross total income of an
individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on
deposits in savings account with a bank, co-operative society or post office
can be claimed under this section. Section 80TTA deduction is not available on
interest income from fixed