Financial Year 2015-16 [1 April 2015 to 31 March 2016]

Deductions

The Govt has given some incentive (deduction) to reduce TAXABLE income. They are

Section

Max Limit Instruments

80C

1,50,000

PPF/EPF/VPF

Senior Citizen Saving Scheme

NSC – 10/5 year + Interest of previous NSC

Bank Tax Saving FD / NHB / Post Office – 5 year

ELSS – Mutual Fund

Tuition Fee

Principal Amount – Home Loan

LIC / Life Insurance Premium [10% of Insurance Amount is Eligible]

Mutual Fund: UTI / Reliance / Franklin Pension Plan

10%( Salary / Gross Total Income) contribution to NPS under 80CCD (1)

 Premium Paid – Pension Plan from LIC/Other Insurer under 80CCC

For remaining options go to Income Tax Act

80TTA

10,000 Interest on Savings (Bank/Post Office) Account

80CCD(1B)

50,000 New Pension System – NPS and this is over and above 80C

80CCD (2)

10% Salary (basic+DA) Only for Salaried Person provided Contribution made by Employer. This is over and above 80C

80CCG 

25,000 [50% of Max 50,000] Rajiv Gandhi Equity Scheme [extended and up to 3 years]New investor having 12,00,000 GROSS INCOME

80D

25,000 + 25000/30000 Mediclaim Insurance [self, spouse,  children],Max 5000 for Health Check Up but within LimitFor parents 15,000 extra limit, if they are senior citizen then 20,000Max 5000 for Health Check Up but within Limit

80D

30,000 Senior Citizen PeopleMax 5000 for Health Check Up but within Limit

If age 80/+ and don’t have Insurance then Medical Expenditure up to this limit provided as Deduction

80E

No Limit, Only Interest paid allow Education Loan

10(13A)

Least (HRA; Rent- 10% salary; 50/40% Salary) Lived in Rented House – Salaried Person
80GG Least (Rent – 10% total income; 25% total income; 2000 per month) Rent Paid (Other than Salary)

24(B)

2,00,000 Interest on Home Loan

80G

10% gross total Income 50%/100% of donation

80EE

1,00,000 deduction for INTEREST can be utilized in Next FY also First time Home Buyer purchases 40 lacs or less Amount residential property and avail 25 lacs or less HOME LOAN

Some allowances are also eligible for deduction. Better to check with HR/salary dept of the Company. For example Medicines Bills, LTA, Transport Allowance (1600 per month), Education allowance (100 per month per children – Max 2 children) etc…

There are other Sections (80DD / 80DDB/ 80U) pertaining to Disabled person/parents; medical treatment etc.

Tax Rate – FY16 – April 2015 – Mar 2016 (Assessment Year 2016-17)

Income up-to …

Male / Female

Senior Citizen

Age >=60

Super Senior Citizen

Age >=80

Basic Exemption

2,50,000

3,00,000

5,00,000

10%+3% cess

10.3%

2.5 –  5 lacs

3 –  5 lacs

20% + 3% cess

20.6%

5 – 10 lacs

5 – 10 lacs

5 – 10 lacs

30% + 3% cess

30.9%

Above 10,00,000

Above 10,00,000

Above 10,00,000

– Individual having Gross Total Income 5,00,000 or less will get 2,000 TAX relief.

– Individual having 1 crore or more income will pay 12% surcharge.

Dividend Distribution TAX

  Individual/HUF
Mutual Fund (Borne by Unit Holder)
    Equity Oriented NIL
    Debt Oriented (Gross Value) 25% + 12% Surcharge + 3% cess = 28.84%
Company/Stock (Borne by Company) 15% + 12% Surcharge + 3% cess = 17.304%

Capital Gain Tax

  Short Term Long Term
Mutual Fund (1 yr or less) (more than 1 yr)
    Equity Oriented

    Arbitrage Fund

    Equity Saving Fund

15% + 3% = 15.45% 0%
Mutual Fund (3 yr or less) (more than 3 yr)
    Gold ETF / Fund Added to Total Income 20% with indexation
    Debt Oriented Added to Total Income 20% with indexation
    Money Market/Liquid Added to Total Income 20% with indexation
    International Fund Added to Total Income 20% with indexation
 
Direct Equity 15% + 3% = 15.45% 0%
F&O 15% + 3% = 15.45% 0%
 
Physical Assets (3 yr or less) (more than 3 yr)
    Gold Added to Total Income 20% with indexation
    Real Estate Added to Total Income 20% with indexation

Surcharge of 12% is levied in case of Individual/HUF having more than 1 Cr income

TDS Rate

  Individual/HUF
Bank FD + RD – (10,000 bank level)

Co-Operative Bank  and RD included from this year

10% – (15H/G to avoid the same)
Company FD – (5,000) 10% -(15H/G to avoid the same)
Physical Infrastructure Bond – (2,500) 10% – (15H/G to avoid the same)
Bonds/debenture – Demat Holding No
Mutual Fund
     Equity Oriented No
     Other Scheme No
SCSS 10% – (15H to avoid the same)
Real Estate [more than 50 lacs] 1%
EPF (Service Term less than 5 yrs and Amount more than 30,000 10%
LIC Policies (more than 1 lacs payment and 10(10D) not applicable)  2%

Note: If PAN number is not furnished then 20% TDS will be deducted.

From this year Bank/Other Companies have started reporting Interest Income (even if they don’t deduct TDS). The same can be viewed in 26AS.

Service Tax [Not part of income Tax]

An investor has to bear the service tax when s/he buys Insurance Plan or pay renewal premium

1st Year Onwards
Mutual Fund – FMC 14% Check each year
 

NPS

14% – All charges Check each year
Term Plan 14% Check each year
Endowment Plans, Money-Back; Single Premium; Child Plan; Immediate Annuity Plan etc, 3.5% 1.75%

(Check Every Year)

Unit Linked Plan 14% = Pay service tax on “various Charges” Check Each year