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INCOME TAX REBATE FOR AY 2020-21 ( FY 2019-20 )
& POPULAR TAX SAVING SCHEMES
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The Article on " TAX PLANNING FOR FY 2019-20 CONTAINS 5 PARTS
PART I: MAJOR CHANGES IN TAX RULES FOR FY 2019-20 CLICK HERE
PART 2: TAX RATES / SLABS FOR FY 2019-20 CLICK HERE
PART 3: INCOME TAX REBATES AND POPULAR TAX SAVING SCHEMES
READ THIS PART BELOW
PART 4: ESTIMATE YOUR INCOME TAX/ADVANCE TAX FOR FY 2019-20 CLICK HERE
:
PART 5: TAX ON RETIREMENT BENEFITS CLICK HERE
PART I: MAJOR CHANGES IN TAX RULES FOR FY 2019-20 CLICK HERE
PART 2: TAX RATES / SLABS FOR FY 2019-20 CLICK HERE
PART 3: INCOME TAX REBATES AND POPULAR TAX SAVING SCHEMES
READ THIS PART BELOW
PART 4: ESTIMATE YOUR INCOME TAX/ADVANCE TAX FOR FY 2019-20 CLICK HERE
:
PART 5: TAX ON RETIREMENT BENEFITS CLICK HERE
FOR INCOME TAX NEWS
CLICK HERE
ITR1 , ITR2 , ITR 3 & ITR 4 for FY 2019-20 ( AY 2020-21 ) can be filed on-line now For Details CLICK HERE
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Finance Minister Ms Nirmala Sitharaman will present her second budget for FY 2020-21 ON 01.01.2020 at 11.00 am.
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INCOME TAX REBATE FOR FY 2019-20
DO YOU KNOW ? : Senior citizens can claim Tax Rebate under section 80D even without having paid health insurance premium .
Under section 80D , senior citizens can claim tax rebate up to Rs 50,000 against payment of health insurance premium . But they also can claim up to Rs 50,000 , even when they don't have health insurance , against their medical bills , provide amount has been paid by cheques / on-line payment / cards etc . Cash payment only on the bills will not be accepted . However payment of Rs 5,000 for health check will be accepted , even if paid in cash .
Further sons / daughters also can claim tax rebates in their income tax returns for the medical bill payment of their senior citizen parents , provided parents do not have health insurance .
For the FY 2019-20 , all bills between 01.04. 2019 TO 31.07.2020 will be eligible for claim
Under section 80D , senior citizens can claim tax rebate up to Rs 50,000 against payment of health insurance premium . But they also can claim up to Rs 50,000 , even when they don't have health insurance , against their medical bills , provide amount has been paid by cheques / on-line payment / cards etc . Cash payment only on the bills will not be accepted . However payment of Rs 5,000 for health check will be accepted , even if paid in cash .
Further sons / daughters also can claim tax rebates in their income tax returns for the medical bill payment of their senior citizen parents , provided parents do not have health insurance .
For the FY 2019-20 , all bills between 01.04. 2019 TO 31.07.2020 will be eligible for claim
UTILISE TUITION FEE PAID FOR REBATE UNDER 80C
TAX REBATE UNDER 80C FOR TUITION FEE PAID

DO YOU KNOW ? : Parents can claim Tax Rebate under section 80c for the tuition fees paid for their wards to educational institutions
Total tuition fee paid by a parent for maximum of two children is eligible for tax exemption under 80C .
"Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children" is eligible to be deducted under 80C .
Tuition fees paid for self or spouse is NOT eligible under 80C .
Fees paid to educational institutions situated outside India are not eligible . Only
University, college, school or other educational institution must be situated in India though it can be affiliated to any foreign institutes.
Tuition fee Paid for children for full time courses only is eligible.Obviously fees paid for coaching classes will not be eligible .
Pre-nursery, play school and nursery class fees is also covered under section 80C (circular 9/2008 & 8/2007).
If both husband and wife are tax payers ,both can utilise the deduction separately for the individual payments made by them .
Not allowable Expenses:-
1. Development fees or donation not eligible.
2. Transport charges, hostel charges, Mess charges, library fees, scooter/cycle/car stand charges incurred for education are not allowed.
3. Late fees is not eligible for deduction.
4. Term Fees is not eligible for deduction.
Total tuition fee paid by a parent for maximum of two children is eligible for tax exemption under 80C .
"Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children" is eligible to be deducted under 80C .
Tuition fees paid for self or spouse is NOT eligible under 80C .
Fees paid to educational institutions situated outside India are not eligible . Only
University, college, school or other educational institution must be situated in India though it can be affiliated to any foreign institutes.
Tuition fee Paid for children for full time courses only is eligible.Obviously fees paid for coaching classes will not be eligible .
Pre-nursery, play school and nursery class fees is also covered under section 80C (circular 9/2008 & 8/2007).
If both husband and wife are tax payers ,both can utilise the deduction separately for the individual payments made by them .
Not allowable Expenses:-
1. Development fees or donation not eligible.
2. Transport charges, hostel charges, Mess charges, library fees, scooter/cycle/car stand charges incurred for education are not allowed.
3. Late fees is not eligible for deduction.
4. Term Fees is not eligible for deduction.

TAX SAVING INSTRUMENTS CAN BE BOUGHT NOW UP TO 31.07.2020
25.06.2020 : Ministry of Finance , by way of an ordinance , notified extension of various deadlines with regard to transactions relating to the Income Tax .
Normally Depositing money in Public Provident Funds ( PPF ) , Sukanya Samriddhi Account ( SSA ) , insurance premium and purchasing tax saving instruments like
National savings certificates should be done in the same year in which Rebates are claimed . However due to national lockdown , time to avail rebates under section 80C , 80D , 80G etc were given by the finance ministry up to 30.06.2020 earlier . Now the same has been extended up to 31.07.2020 . Hence you have time till 31.07.2020 to deposit / purchase such instruments and claim tax rebate for FY 2019-20 .
To read original ordinance / notification . CLICK HERE
25.06.2020 : Ministry of Finance , by way of an ordinance , notified extension of various deadlines with regard to transactions relating to the Income Tax .
Normally Depositing money in Public Provident Funds ( PPF ) , Sukanya Samriddhi Account ( SSA ) , insurance premium and purchasing tax saving instruments like
National savings certificates should be done in the same year in which Rebates are claimed . However due to national lockdown , time to avail rebates under section 80C , 80D , 80G etc were given by the finance ministry up to 30.06.2020 earlier . Now the same has been extended up to 31.07.2020 . Hence you have time till 31.07.2020 to deposit / purchase such instruments and claim tax rebate for FY 2019-20 .
To read original ordinance / notification . CLICK HERE
TAX REBATES YOU GET WITH NO FRESH INVESTMENTS
TAX REBATES THAT DO NOT INVOLVE ANY FRESH INVESTMENTS
Without investing your money in any scheme ,you can claim Tax Deduction /rebate in FY 2019-20 by utilizing the following Tax provisions:
1. Rebate under section 87 A for the Resident Indians with below taxable income of
Rs 5.00 lakhs
2. Standard Deduction of Rs 50,000 for Salaried persons / pensioners
3. Health Insurance premium paid between Rs 25,000 to Rs 1.00 lakh under section 80D
4. Interest on Education Loan paid under section 80E
5. Deductions allowed Rs 50,000/1,50,000 under Section 80EE/80 EEA for the Interest on Housing loans with certain conditions .
6. Deductions allowed Rs 2.00 lakhs under Section 24 for the Interest on Housing loans .
7. Deductions allowed Rs 1,50,000 under Section 80 EEB for the Interest on loans taken for purchase of electric vehicles .
8. Interest on savings bank accounts are exempted by tax up to an amount of Rs 10,000 under Section 80TTA and for senior citizens only if they have not claimed under section 80TTB .
9. Interest received by a senior citizen on deposits with banks / co-operative societies / post office is exempted up to Rs 50,000 under section 80 TTB .
10. Rent paid in excess of 10% of total income for furnished/unfurnished residential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less) subject to certain conditions under section 80GG
11. Donations made to certain organizations under sections 80G & 80 GGA,80 GGB
You may check details of the above rebates below and can utilize while submitting IT Returns
1. Rebate under section 87 A for the Resident Indians with below taxable income of
Rs 5.00 lakhs
2. Standard Deduction of Rs 50,000 for Salaried persons / pensioners
3. Health Insurance premium paid between Rs 25,000 to Rs 1.00 lakh under section 80D
4. Interest on Education Loan paid under section 80E
5. Deductions allowed Rs 50,000/1,50,000 under Section 80EE/80 EEA for the Interest on Housing loans with certain conditions .
6. Deductions allowed Rs 2.00 lakhs under Section 24 for the Interest on Housing loans .
7. Deductions allowed Rs 1,50,000 under Section 80 EEB for the Interest on loans taken for purchase of electric vehicles .
8. Interest on savings bank accounts are exempted by tax up to an amount of Rs 10,000 under Section 80TTA and for senior citizens only if they have not claimed under section 80TTB .
9. Interest received by a senior citizen on deposits with banks / co-operative societies / post office is exempted up to Rs 50,000 under section 80 TTB .
10. Rent paid in excess of 10% of total income for furnished/unfurnished residential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less) subject to certain conditions under section 80GG
11. Donations made to certain organizations under sections 80G & 80 GGA,80 GGB
You may check details of the above rebates below and can utilize while submitting IT Returns
REBATE UNDER SECTION 87A
SECTION 87A - An assessee, being an individual resident in India, whose total income does not exceed Five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax on his total income with which he is chargeable for assessment year 2020-21 of an amount equal to hundred per cent of such income-tax or an amount of Twelve thousand and five hundred rupees, whichever is less.
The above section is applicable only for residents whose total taxable income for the year is less or equal to Rs 5,00,000.Hence to obtain the above rebate ,you may use other tax rebates under various sections like 80C , 80D , 80E etc to see that your taxable income becomes less than Rs 5,00,000
To estimate your current taxable income , CLICK HERE
The above section is applicable only for residents whose total taxable income for the year is less or equal to Rs 5,00,000.Hence to obtain the above rebate ,you may use other tax rebates under various sections like 80C , 80D , 80E etc to see that your taxable income becomes less than Rs 5,00,000
To estimate your current taxable income , CLICK HERE
DEDUCTION UNDER SECTION 80D OF INCOME TAX ACT
Deduction allowed on Health insurance Policies under 80 D is Rs. 50,000/- for senior citizens and up to Rs. 25,000/- for others .For senior citizens,if no insurance amount is paid ,hospital expenditure up to Rs 50,000 is allowed .An assessee can claim additional Rs 50,000 for his/her parents if they are senior citizens and Rs 25,000 in other cases .Overall claim cannot exceed Rs 1,00,000 . All payments should have been made in any mode other than cash .Cost of preventive health check up up to Rs 5,000 can be claimed within the overall limit and it could have been made in cash also .
To know about Health insurance Policies , CLICK HERE and
For List of Health Insurance Companies in India , CLICK HERE
To know about Health insurance Policies , CLICK HERE and
For List of Health Insurance Companies in India , CLICK HERE
OTHER TAX REBATES / DEDUCTIONS
1. Standard Deduction of Rs 50,000 allowed for salaried persons / pensioners.
2. Cumulative deduction allowed under Section 80C, 80CCC, and Section 80 CCD for savings/investments, premium for annuity / pension fund is Rs. 1.5 lakh.Now under Section 80CCD, a deduction of upto Rs. 50,000 is allowed over and above the limit of Rs. 1.50 lakh under Section 80C in respect of contributions made to NPS
3. Deductions allowed Rs 50,000 / 1,50,000 under Section 80 EE / 80 EEA for the Interest on Housing loans with certain conditions
4. Deduction allowed under 80 E for interest on education loan taken for pursuing Higher Education .
'higher education' means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, Board or university recognised by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so.
5. Deductions allowed Rs 2.00 lakhs under Section 24 for the Interest on Housing loans
6. Deductions allowed Rs 1,50,000 under Section 80 EEB for the Interest on loans taken for purchase of electric vehicles.
7. Interest on savings bank accounts are exempted by tax up to an amount of Rs 10,000 under Section 80TTA and for senior citizens only if they have not claimed under section 80TTB
8. Interest received by a senior citizen on deposits with banks / co-operative societies / post office is exempted up to Rs 50,000 under section 80 TTB .
If you need any clarifications or you want to know various rebates available under various sections of IT Act , CLICK HERE
2. Cumulative deduction allowed under Section 80C, 80CCC, and Section 80 CCD for savings/investments, premium for annuity / pension fund is Rs. 1.5 lakh.Now under Section 80CCD, a deduction of upto Rs. 50,000 is allowed over and above the limit of Rs. 1.50 lakh under Section 80C in respect of contributions made to NPS
3. Deductions allowed Rs 50,000 / 1,50,000 under Section 80 EE / 80 EEA for the Interest on Housing loans with certain conditions
4. Deduction allowed under 80 E for interest on education loan taken for pursuing Higher Education .
'higher education' means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, Board or university recognised by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so.
5. Deductions allowed Rs 2.00 lakhs under Section 24 for the Interest on Housing loans
6. Deductions allowed Rs 1,50,000 under Section 80 EEB for the Interest on loans taken for purchase of electric vehicles.
7. Interest on savings bank accounts are exempted by tax up to an amount of Rs 10,000 under Section 80TTA and for senior citizens only if they have not claimed under section 80TTB
8. Interest received by a senior citizen on deposits with banks / co-operative societies / post office is exempted up to Rs 50,000 under section 80 TTB .
If you need any clarifications or you want to know various rebates available under various sections of IT Act , CLICK HERE
New Updated Article
TAX PLANNING FOR FY 2020-21 ( AY 2021-22 )
Comprehensive Article on Income tax changes in Rules, Rates , Slabs , Rebates and Estimation
CLICK HERE TO READ
TAX PLANNING FOR FY 2020-21 ( AY 2021-22 )
Comprehensive Article on Income tax changes in Rules, Rates , Slabs , Rebates and Estimation
CLICK HERE TO READ
11 POPULAR INSTRUMENTS FOR REBATES UNDER SECTION 80C DEDUCTION LIST
1. Premium paid on a Life Insurance policy for self or spouse or child (Tax benefits come with riders .To see the riders ,go to section)
2. Contribution made under Employee’s Provident Fund Scheme Amount paid towards PPF for self/spouse, any child .
3. Contribution to a recognised Provident Fund
4. Sum deposited in Post Office Savings Bank Account(10 year/15 years)
5. Subscription to any notified securities/notified deposits schemes like ELSS ( For details , go to the end of the page )
6. Amount invested in any notified savings certificate, Unit Linked Savings certificates.
7. Investments in Unit Linked Insurance Plan of LIC Mutual Fund
8. Payments made in installments or part payment for purchasing or constructing a house property.(conditions Apply )
9.Tuition fees paid to any Indian school,college, university or other educational institutions ( Conditions Apply )
10. Contribution made to Sukanya samriddhi account
11. Tax saver Fixed Deposits issued by Commercial Banks
INSTRUMENTS QUALIFYING UNDER 80CCC, 80CCG AND 80D
Instruments qualifying under 80CCC
Payment of premium for annuity plan of LIC or any other insurer.
Instruments qualifying under 80 CCG
Listed Equity shares or listed units of a fund in accordance with Rajiv Gandhi Equity Savings Scheme Subject to following conditions :
Resident Individual being a new retail investor with not more than 10.00 lakhs income and investing with a lock in period of 3 years
Instruments qualifying under 80 D
Health Insurance policies
Payment of premium for annuity plan of LIC or any other insurer.
Instruments qualifying under 80 CCG
Listed Equity shares or listed units of a fund in accordance with Rajiv Gandhi Equity Savings Scheme Subject to following conditions :
Resident Individual being a new retail investor with not more than 10.00 lakhs income and investing with a lock in period of 3 years
Instruments qualifying under 80 D
Health Insurance policies
POPULAR TAX SAVING SCHEMES
For the current interest rate on various SMALL SAVINGS Instruments ,visit our page " NEWS ON INTEREST RATES "
Array of products from
1. Guaranteed return schemes like PPF AND NSC
2. Insurance schemes which cover life risks with units linked to market or otherwise
3. Equity linked mutual funds which have high risk and return probabilities like ELSS
are available for the investors to utilize the rebates on income tax offered by the government .
PPF is a fixed income long term investment while NSC is fixed return medium term investment . Insurance policies which cover life risk are available in unit linked market related schemes and otherwise also.On the other hand ELSS is totally market related mutual fund which carry all the risks of an equity market and have given good returns
Details of Each scheme is given below :
PUBLIC PROVIDENT FUNDS
SALIENT FEATURES :
NATIONAL SAVINGS CERTIFICATES
SOURCE OF INFORMATION INDIA POST
NSC VIII Issue
NSCS ARE AVAILABLE ONLY IN POST OFFICES ALL OVER INDIA
LIFE INSURANCE POLICIES
Life insurance policies are the financial instruments which cover Life Risks of the insured along with Tax relief . Various types of life insurance policies are available with wide ranging terms . Some are unit linked policies whose Net Asset value depends up on the equity market and hence carry market risks . For full details on Life Insurance and tips for purchasing such policies , please go the page LIFE INSURANCE
Under 80 C of Income tax Act , life insurance premium paid on life insurance policies is one of the eligible instruments for total tax exemption up to Rs 1,50,000 only . However be cautious and confirm with policy issuers whether the contribution made to the particular policy is eligible for such exemption . The reason is there are riders for contributions made to be eligible for exemption .
As per Income tax law ,
Quote ; "
Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80 C . Payment of premium which is in excess of 10 percent ( if policy is issued on or after 1-4-2013 , 15 % in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80 DDB/ rule 11DD ) of actual capital sum assured shall not be included in gross qualifying amount . The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise , over the sum actually assured , which is to be or may be received under the policy by any person , shall not be taken in to account for the purpose of calculating the actual capital sum assured .The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account--
(i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person. " unquote "
For full page of Income tax website relevant to the above rule , CLICK HERE
Hence premiere paid one time premium policies may not be eligible to qualify for exemption as the insured amount may not be ten times the premium . Further amount received under those policies may be treated as Taxable Income and tax calculated . Hence double check with insurance companies before purchasing as selling agents may not reveal you correctly .
EQUITY LINKED SAVING SCHEME ( ELSS )
Is another popular scheme under which investors can invest in stock market mutual fund while enjoying tax benefits under 80C of Income Tax act .
TAX SAVING FIXED DEPOSITS ISSUED BY COMMERCIAL BANKS :
Key highlights of Tax Saver FDs:
Array of products from
1. Guaranteed return schemes like PPF AND NSC
2. Insurance schemes which cover life risks with units linked to market or otherwise
3. Equity linked mutual funds which have high risk and return probabilities like ELSS
are available for the investors to utilize the rebates on income tax offered by the government .
PPF is a fixed income long term investment while NSC is fixed return medium term investment . Insurance policies which cover life risk are available in unit linked market related schemes and otherwise also.On the other hand ELSS is totally market related mutual fund which carry all the risks of an equity market and have given good returns
Details of Each scheme is given below :
PUBLIC PROVIDENT FUNDS
SALIENT FEATURES :
- Ideal investment option for both salaried as well as self employed classes.
- Non-Resident Indians (NRIs) are not eligible.
- Investment up to INR. 1,50,000 per annum qualifies for IT Rebate under section 80 C of IT Act.
- The rate of interest varies quarter to quarter as per announcements made by Government .
- Loan facility available from 3rd financial year up to 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.
- Withdrawal permitted from 6th financial year.
- Free from court attachment.
- An individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of persons.
- Public Provident Fund(Individual account on his behalf or on behalf of minor of whom he is the guardian)INR. 500/- in a financial year INR. 1,50,000/- in a financial year
- The public provident fund is established by the central government.
- One can voluntarily open an account with any nationalized bank,selected authorized private bank or post office.
- SAFE , SECURE , TAX EFFICIENT AND LIMITED LIQUIDITY AVAILABLE FROM 3RD YEAR BY WAY OF LOAN FACILITY
NATIONAL SAVINGS CERTIFICATES
SOURCE OF INFORMATION INDIA POST
NSC VIII Issue
- Scheme specially designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses.
- No maximum limit for investment.
- No Tax deduction at source.
- Certificates can be kept as collateral security to get loan from banks.
- Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act.
- Trust and HUF cannot invest.
- No maximum limit for investment.
- Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.
- A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
- Buy National Savings Certificates (NSCs) every month for Five years – Re-invest on maturity and relax - On retirement it will fetch you monthly pension as the NSC matures.
NSCS ARE AVAILABLE ONLY IN POST OFFICES ALL OVER INDIA
LIFE INSURANCE POLICIES
Life insurance policies are the financial instruments which cover Life Risks of the insured along with Tax relief . Various types of life insurance policies are available with wide ranging terms . Some are unit linked policies whose Net Asset value depends up on the equity market and hence carry market risks . For full details on Life Insurance and tips for purchasing such policies , please go the page LIFE INSURANCE
Under 80 C of Income tax Act , life insurance premium paid on life insurance policies is one of the eligible instruments for total tax exemption up to Rs 1,50,000 only . However be cautious and confirm with policy issuers whether the contribution made to the particular policy is eligible for such exemption . The reason is there are riders for contributions made to be eligible for exemption .
As per Income tax law ,
Quote ; "
Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80 C . Payment of premium which is in excess of 10 percent ( if policy is issued on or after 1-4-2013 , 15 % in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80 DDB/ rule 11DD ) of actual capital sum assured shall not be included in gross qualifying amount . The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise , over the sum actually assured , which is to be or may be received under the policy by any person , shall not be taken in to account for the purpose of calculating the actual capital sum assured .The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account--
(i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person. " unquote "
For full page of Income tax website relevant to the above rule , CLICK HERE
Hence premiere paid one time premium policies may not be eligible to qualify for exemption as the insured amount may not be ten times the premium . Further amount received under those policies may be treated as Taxable Income and tax calculated . Hence double check with insurance companies before purchasing as selling agents may not reveal you correctly .
EQUITY LINKED SAVING SCHEME ( ELSS )
Is another popular scheme under which investors can invest in stock market mutual fund while enjoying tax benefits under 80C of Income Tax act .
TAX SAVING FIXED DEPOSITS ISSUED BY COMMERCIAL BANKS :
Key highlights of Tax Saver FDs:
- Deposits are opened for a period of 5 years.
- Maximum tax deduction up to Rs.1, 50,000.
- Deduction is available to individuals, members of Hindu undivided family (HUF), senior citizens and NRIs.
- The interest earned from tax saver fixed deposits is taxable. Tax will deducted at source.
- Premature withdrawal is not allowed .
- No loan against tax saver fixed deposits.
- Tax saver deposits can be opened both singly and jointly. In case of a joint account, tax benefit will be availed by first holder of the deposit as per the section 80C of the Income Tax Act, 1961.
WHAT IS AN ELSS SCHEME ?
Subscription to certain notified securities/notified deposits schemes are eligible instruments under section 80C for claiming deductions from taxable income . One such popular investment is tax saving mutual funds or Equity Linked Savings Scheme (ELSS). In this equity diversified fund , investors enjoy the benefits of capital appreciation as well as tax benefits. With recent positive movements in equity market , more interest is being generated in the public on the scheme .
ELSS is basically an equity based diversified Mutual Fund with a lock in period of 3 years .It has got same risk and reward function of any other equity based mutual fund .While under national saving certificate , funds are locked in a period of 6 years , ELSS has lock in period of 3 years only .One who is willing to take market risk , ELSS is a good option as investment is tax free under 80C as also all the returns . Some ELSS funds have been reported giving good tax free returns over a long period of time . One has to carefully study the past performance of the fund as well as fund manager's performance before investing.As returns or principal is not guaranteed and classified as high risk investment,Risk averse persons may avoid such investment .
Persons interested in investing in ELSS may understand Mutual Funds and go to the websites of Mutual fund Issuers
ELSS is basically an equity based diversified Mutual Fund with a lock in period of 3 years .It has got same risk and reward function of any other equity based mutual fund .While under national saving certificate , funds are locked in a period of 6 years , ELSS has lock in period of 3 years only .One who is willing to take market risk , ELSS is a good option as investment is tax free under 80C as also all the returns . Some ELSS funds have been reported giving good tax free returns over a long period of time . One has to carefully study the past performance of the fund as well as fund manager's performance before investing.As returns or principal is not guaranteed and classified as high risk investment,Risk averse persons may avoid such investment .
Persons interested in investing in ELSS may understand Mutual Funds and go to the websites of Mutual fund Issuers
For Tax on Retirement Benefits CLICK HERE
The Article on " TAX PLANNING FOR FY 2019-20 CONTAINS 5 PARTS
PART I : MAJOR CHANGES IN TAX RULES FOR FY 2019-20 CLICK HERE
PART 2 : TAX RATES / SLABS FOR FY 2019-20 CLICK HERE
PART 3 : TAX REBATES FOR FY 2019-20 READ THE ABOVE PART
PART 4 : ESTIMATE YOUR INCOME TAX / ADVANCE TAX FOR FY 2019-20 CLICK HERE
:
PART 5 : TAX ON RETIREMENT BENEFITS CLICK HERE
PART I : MAJOR CHANGES IN TAX RULES FOR FY 2019-20 CLICK HERE
PART 2 : TAX RATES / SLABS FOR FY 2019-20 CLICK HERE
PART 3 : TAX REBATES FOR FY 2019-20 READ THE ABOVE PART
PART 4 : ESTIMATE YOUR INCOME TAX / ADVANCE TAX FOR FY 2019-20 CLICK HERE
:
PART 5 : TAX ON RETIREMENT BENEFITS CLICK HERE
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UNIFIED PAYMENT INTERFACE BHARAT BILL PAYMENT SYSTEM
BHIM APP AADHAR
e-INSURANCE Account ( eIA )
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BHIM APP AADHAR
e-INSURANCE Account ( eIA )
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FOR AUTHENTIC INFORMATION AND TIPS ON INCOME TAX MATTERS
Income tax dept of Govt of India has a very useful portal which churns out valuable guidance for tax payers . One can go through and understand the basics .
Link to the portal is http://india.gov.in/spotlight/filing-income-tax-returns#itr2
Further there are practical tips for computing tax which can be read and used . For example , the link how to compute other income. One can make use of the portal in understanding law, making payment and also to file returns .
Link to the portal is http://india.gov.in/spotlight/filing-income-tax-returns#itr2
Further there are practical tips for computing tax which can be read and used . For example , the link how to compute other income. One can make use of the portal in understanding law, making payment and also to file returns .