A complete guide to Tax deductions on Salary.

1. TAXATION FOR
SALARIED
EMPLOYEES
AND
ITS
IMPORTANCE
By Yash Dani & Co
Chartered Accountants
C/o Hotel Payal Agra Gate circle

2. INCOME TAX PROVISIONS FOR SALARIED
EMPLOYEES
 As per Taxation Rules, it is mandatory for
an earning individual/entity to file a return
irrespective of the fact that tax has been
deducted at source by his/her employer or
not, and whether he/she is eligible for a
refund or not.

3. TAX SLABS FOR FILING INCOME TAX
RETURNS

4. CESS AND WHY IT IS LEVIED
Cess
It is a Tax which is levied by government for some specific
purpose .
Currently Education & higher education cess is 2% and 1 %
respectively
Cess is levied on Total tax
calculated on Net Income

5. DUE DATES FOR FILING RETURNS
SALARIED
EMPLOYEES = 31St JULY OF
EVERY YEAR

6. TAX PLANNING
 Conceptually tax planning for salaried employees
can be divided into two broad categories.
1. Salary Restructuring
2. Investing in Tax Saving Devices

7. SALARY RESTRUCTURING
 An employee can restructure his salary to reduce
the Tax outgo by availing exempt allowances,
benefits and perquisites.

8. ALLOWANCES
AND
RESPECTIVE
EXEMPTIONS

9. M
Allowances and Respective exemptions
Type of Allowance Allowance exempt u/s 10
Conveyance Allowance Exempt up to Rs 1600 p.m (Earlier 800 pm)
Children Education Allowance Rs 100 p.m Per Child. Max for 2 children
Hostel Expenditure Allowance Up to Rs. 300 per month per child up to a
maximum of 2 children is exempt
Uniform Allowance Exempt to the extent of expenditure incurred
Family Pension received by the family
members of Armed Forces
Fully Exempt
House Rent Allowance (Sec. 10(13A) &
Rule 2A)
Least of the following is exempt:
a) Actual HRA Received
b) 40% of Salary
c) Rent paid minus 10% of salary
Entertainment Allowance received by
the Government employees (Fully
taxable in case of other employees)
Least is deductible :
a) Rs 5,000
b) 1/5th of salary
c) Actual allowance received

10. TAX SAVING
TECHNIQUES
AND
DEDUCTIONS

11. TAX SAVING TECHNIQUE
 Tution Fees
 Medical Insurance
 Life Insurance
 Donations
 Education Loans
 Housing Loans
 PPF
 5 Years FDR
 ELSS
 NSC
 New Pension Scheme
 Sukanya Samriddhi
Yojna
BY SPENDING BY INVESTING

14. LIFE INSURANCE PREMIUM
 Premium paid falls in the ambit of sec 80C.
 Max Deduction = 20% of Sum Assured
or Premium Paid W.E.L.
 Policies issued on or after April 01 2012,
Max Deduction = 10% of Sum Assured
or Premium Paid W.E.L.
 Policy Terminated / Ceased = Benefits
Reversed
Traditional Products 2 Years
ULIP 5 Years

15. Tuition fees
Tuition Fees paid on
your Child’s
Education can be
claimed as
deduction u/s 80C .
Maximum
allowable
deduction is
Rs 1,50,000.
Deduction can
only be claimed
on the Tuition
fees of Two
Children.

16. PUBLIC PROVIDENT FUND
TENURE
INITIAL DEPOSIT
TAX BENEFIT
INTEREST Rate of Interest 8.1% (From FY 2016-17)
Min 15 Years of Holding
Min Rs.100 to Max Rs. 1,50,000
Interest are Tax Free
Deposit claimed as deduction
u/s.80C

17. ELSS-Equity Linked Saving Scheme
Tax savings Mutual Funds
Amount invested
in ELSS qualifies
for tax
exemptions
under section
(u/s) 80C of the
Indian Income
Tax ACT
Long-term capital
gains from these
funds are tax free
in your hands.
Lock-in period is
only 3 years
You can also
choose to invest
through a
Systematic
Investment Plan

18. SUKANYA SAMRIDDHI ACCOUNT SCHEME
 Eligibility : Only for girl child
 Age limit Minimum – from the birth
 Maximum – 10 years
 No of accounts Minimum – 1
 Maximum – 2
 Minimum deposit (multiples of 100)Rs.1000 per year
 Maximum deposit Rs.1,50,000 per year
 No. of deposits No limit (either in month or financial year)
 Mode of deposit Cash or Cheque or Demand Draft
 Interest rate 9.1% for financial year 2014-15.
 Partial withdrawals Maximum up to 50%
 Maturity age 21 years
 Term period Minimum term of is 14 years from date of opening
a account.
 . Grace Period One year grace period is allowed to open account.
 Girl child who is born between 2.12.2003 & 1.12.2004 can open account up to 1.12.2015

19. NATIONAL PENSION PLAN
Additional
TAX DEDUCTION
Of Rs. 50000/-
is allowed u/s. 80CCD

20. TAX BENEFIT ON HOME LOAN-
SEC 80C ,24B
TAX DEDUCTION
U/s. 80C
Max upto
Rs. 1,50,000/-
Principal Amount of
Home Loan
Interest Paid on Home Loan
availed before FY 2016-17
TAX
EXEMPTION
U/s. 24B, Max
Upto Rs.
2,00,000/- for
Self Occupied
Property
Entire Interest
paid will be
TAX
EXEMPTED
U/s. 24B, for
Let Out
Property

21. ADDITIONAL TAX DEDUCTION U/ SEC. 80EE from FY
2016-17
Additional Tax Deduction of Rs.50,000/-* on Home Loan Interest
subject to following conditions:-
• HOME LOAN SANCTIONED IN FY 2016-17
• LOAN AMOUNT SHOULD BE LESS THAN 35 LACS.
• VALUE OF HOUSE SHOULD NOT BE MORE THAN Rs. 50 LACS
• HOME BUYER SHOULD NOT HAVE ANY EXISTING RESIDENTIAL HOUSE IN HIS NAME
CONDITIONS:

22. 80D-MEDICLAIM
DEDUCTION
U/S 80D
Rs 25000 in case of
family
Rs 30000 in case of
Senior Citizens
Additional deduction for health Check-ups
=
Rs 5000 included in above limit.
Note: Payment should be made through Cheque Only

23. 80E-DEDUCTION FOR INTEREST ON
EDUCATION LOAN

24. 80U-DEDUCTION IN CASE OF PERSON WITH
DISABILITY
Deduction u/s
80U
Disability less then
80% deduction is
Rs 50000
Disability more then
80% deduction is Rs
100000

25. 80G-DEDUCTION IN RESPECT OF DONATIONS PAID
Contributions made to certain Relief
funds or charitable trust can be claimed
as deduction.
Donations greater then Rs 10000 should
be made through cheque.

26. Rebate u/s. 87 A
Resident individuals.
Rebate in Tax is of Rs 2000 & Rs 5000 from AY 2017-18
Rebate is allowed before levy of Education Cess, SHE Cess
& Surcharge.
To claim rebate income should not exceed 5 Lacks.
CONDITIONS:

27. A
Interest Earned on Saving Bank Accounts
=
Max Deduction Upto Rs.10000/- U/s.80TTA .

28. WHY YOU SHOULD FILE INCOME TAX
RETURN????
All Salaried Employers are under Certain
Impressions:
 That Employer already deducted Income Tax and I am not
required to file Income Tax Return.
 My Total Income is below taxable limit, so I m not required to
file Income Tax Return.
 Income Tax department has come with a notification that if
income is below Rs.500000/-*(subject to certain conditions)
than no return is required to be filed.

30. SOME OF THE MAJOR BENEFITS :-
 STANDARD INCOME PROOF FOR VARIOUS PURPOSES
 FOR AVAILING ANY LOAN FACILITY
• HOME LOAN
• PERSONAL LOAN
• VEHICLE LOAN
• EDUCATION LOAN
 REFUND IN CASE OF EXCESS TAXES PAID CAN BE
CLAIMED
 FOR VISA AND EMMIGRATION PROCESSING

31. YASH DANI & CO.
CHARTERED ACCOUNTANTS
C/o Hotel Payal, Agra Gate Circle, P.R. Marg
AJMER
Cont: 9509583991
9549583991