Axe your Tax – Options to save tax for FY 2019-20

Axe your Tax – Options to save tax for FY 2019-20

This article is a quick & simple knowhow for all tax saving instruments available in India for Individual tax payers.  Our focus is to enable even a layman understand these options and plan their tax accordingly.  We trust this will be helpful.

So unless one has tracked the Indian tax systems regularly, you might have been haunted by questions every year such as these:

How much taxes will I pay this year! Or What is the maximum I can save on taxes! Or How do I get on top of my Investments & taxes! Or Can I use both HRA & Home loans to save on taxes! Or What do I choose - PPF, FDs or Insurance for tax saving! Or Everyone talking about 80C/CCC/D/E!!! – What’s the mystery behind the 80s! Or Why am I paying more tax than my friend with a higher income!

If yes, this article is certainly going to clear a lot in your head!  Let’s start by visiting the new income tax rules as introduced by budget 2019 for us:

• ·      Increased Tax Rebate u/s 87A: For individuals with net taxable income of Rs 5 lakh or less the tax rebate would be lesser of tax liability or Rs 12,500 whichever is lower
• ·         Increased Tax for Super-rich: Surcharge increased to 25% for income between 2 to 5 crore & to 37% for income beyond Rs 5 crores
• ·         Additional Tax Deduction of Rs 1.5 lakhs u/s 80EEA on home loans on purchase of affordable home
• ·         Additional Tax Deduction of Rs 1.5 lakhs u/s 80EEB on Auto loans on purchase of Electric vehicles
• ·         Standard deduction for Salaried and Pensioners increased from Rs 40,000 to Rs 50,000
• ·         No Tax on Notional Rental Income from Second House
• ·         Capital gains exemption on reinvestment in two house properties: Tax payers can now buy two houses on sale of 1 house if the capital gains are less than Rs 2 crore. This benefit can be availed only once in lifetime.
• ·         TDS threshold raised from Rs 10,000 to Rs 40,000 on Bank Interest Income
• ·         NPS withdrawal up to 60% tax free & NPS Tier II now eligible for tax saving u/s 80C (only for Central Govt employees)

Now let’s understand the Individual Income tax slabs rates for FY 2019-20:

General Public (Age below 60)		Senior Citizens (Age 60 to 80)		Very Sr. Citizens (Age above 80)
Income Slabs	Tax Rate %	Income Slabs	Tax Rate %	Income Slabs	Tax Rate %
Up to Rs 2.5 Lakhs	Nil	Up to Rs 3 Lakhs	Nil	Up to Rs 5 Lakhs	Nil
Rs 2.5 to Rs 5 Lakhs	5%	Rs 3 to Rs 5 Lakhs	5%	Rs 5 to 10 Lakhs	20%
Rs 5 to 10 Lakhs	20%	Rs 5 to 10 Lakhs	20%	About Rs 10 Lakhs	30%
About Rs 10 Lakhs	30%	About Rs 10 Lakhs	30%

Income Band	<50 Lakhs	50 to 1 Crore	1 to 2 Crore	2 to 5 Crore	> 5 Crore
Surcharge on Tax	0%	10%	15%	25%	37%

On top of the above there is, Health & Education cess @4%

Also there is, a full tax rebate up to Rs 12,500/- for income up to Rs 5 Lakhs u/s 87A

There are no separate slab rates for men and women

We have also summarised the Tax Saving sections for Indian individuals:

Investments & Expenditures	Max Rs 1.5 Lakhs Deductions combining these
	Sec 80C	Sec 80 CCC	Sec 80 CCD
	PPFs/ELSS/FDs etc.	Pension products	Centra govt. Employees’ Pension
Investment in National Pension Scheme	Additional Rs 50,000 Deductions under this
	Sec 80 CCD (1B)

Health & Well being	Sec 80 D	Sec 80 D	Sec 80 DDB	Sec 80 U
	Medical Insurance for Family and Parents	Medical treatment of disabled dependent	Treatment of certain Disease/ Ailment	Physically Disabled Assesse
	Deduction Up to Rs 1 Lakh	Deduction Up to Rs 1.25 Lakh	Deduction Up to Rs 1 Lakh	Deduction Up to Rs 1.25 Lakh

Loans	Sec 80 E	Sec 24	Sec 80 EEA	Sec 80 EEB
	Interest on Education Loan	Interest payable on Housing Loan & Home Improvement Loan	On Home loans on purchase of Affordable home	On Auto loans on purchase of Electric vehicles
	Deduction Up to Rs 1 Lakh	Deduction Up to Rs 1.25 Lakh	Additional Deduction Up to Rs 1.5 Lakh	Additional Deduction Up to Rs 1.5 Lakh

Donations	Sec 80 G	Sec 80 GGA	Sec 80 GGC
	Donation to certain Charitable funds, Charitable institutions, etc.	Donations for Scientific research or Rural development	Donation to Political parties
Others	Section 80GG	Section 80TTA	Section 80TTB
	For Paying Rent in case of no HRA	Interest received in Saving Account	Interest Income for Senior Citizens only
	Deduction Up to Rs 60,000	Deduction Up to Rs 10,000	Deduction Up to Rs 50,000

Now we shall take you through the aforesaid sections in detail as necessary and important for you to know:

Section 80C/80CCC/80CCD

The maximum deduction combining all these investments/ expenditures is Rs 1.5 lakh.  Following options are available for deduction under sec 80C/80CCC/80CCD:

Debt options: Provident Fund (EPF/ VPF), Public Provident Fund (PPF), Sukanya Samriddhi Account (SSA), National Saving Certificate (NSC), Senior Citizen’s Saving Scheme (SCSS), Tax Saving Fixed Deposits (for 5 Years)

Other Investment options: Life Insurance premium, Pension plans from Mutual funds, Pension Plans from Insurance companies, New Pension Scheme (NPS), Tax Saving Mutual Funds (ELSS), Centrol Govt. Employees’ Pension Scheme

Expenditure options: Principal payment on Home Loan, Stamp duty & registration cost of the house, Tuition fee for 2 children

Let’s learn in details about some of the above deductible options:

  Ø  EMPLOYEE PROVIDENT FUND/VOLUNTARY PROVIDENT FUND (EPF/VPF)

·      EPF is mandatory for salaried employees working for companies with more than 20 employees

·       Under EPF rules, you need to contribute 12% of your Basic pay + DA to EPF

·       The employer matches this EPF contribution

·     You have option to put up to 100% of Basic pay + DA to EPF. This is known as Voluntary Provident Fund (VPF)

·        The employer is NOT required to match your VPF contribution

The Good vs. The Bad

C  The interest earned on EPF/VPF is Tax Free

C  Loan against EPF & partial withdrawal possible under certain conditions

C  Convenient to invest as the amount is directly deducted from salary

D  Money is locked till your retirement

D  The EPF interest rates are market linked and set by EPFO every year

D  This option is only for salaried employees

D  The withdrawal of EPF takes time and paperwork

Quick Tips:

v  You can opt for VPF by giving a request to your company at the start of every financial year

v  Only your contribution in EPF and VPF is considered for Tax Deduction

v  If you withdraw your EPF before 5 years the amount is taxable and TDS would be deducted

v  In case you change your job, you should transfer the previous EPF to your current employer

  Ø  PUBLIC PROVIDENT FUND (PPF)

·        PPF can be opened at Post Offices and most Banks

·        Mandatory lock in of 15 Years & can be extended further 5 years at a time

·        Max. Investment Allowed: Rs 1.5 Lakh per Year (Budget 2014 increased this limit)

·        Min. Investment of Rs 500 required every year to keep the account active

·        Interest Rates paid on PPF are market linked, hence would vary quarterly

The Good vs. The Bad

C  The interest earned on PPF is Tax Free

C  Highest Safety – backed by Govt. of India

C  Investment can be done online (for most banks)

C  Can take loan against PPF and also do partial withdrawal

C  It cannot be attached by Court orders

D  Longer Lock in period

D  The PPF interest rates are market linked & change quarterly

D  HUFs and NRIs cannot open PPF Account

Quick Tips:

v  Investment done till 5th of the month earns interest for the month. So deposit your money before 5th of month

v  PPF can be opened on minors name with either parents as guardian

v The total investment in your PPF & the minor child PPF (for whom you are guardian) should not exceed Rs1.5 lakh in a financial year

  Ø  SUKANYA SAMRIDDHI ACCOUNT (SSA)

·       Sukanya Samriddhi is a new scheme to promote Girl child development

·       Can only be opened for Girl child below 10 years of age (max for 2 girls)

·       Deposit to the account to be made for 14 years & account matures at 21 years from date of opening

·        Max Investment Allowed: Rs 1.5 Lakh per Year per account

·        Min Investment of Rs 250 required every year to keep the account active

·        Interest Rates paid are market linked & is reset every quarter.

The Good vs. The Bad

C  The interest earned on SSA is Tax Free

C  Highest Safety – backed by Govt. of India

C  Investment can be done online

C  50% withdrawal allowed when girl turns 18 for marriage/higher education

D  Longer Lock in period

D  The SSA interest rates are market linked and hence would change every quarter

D  HUFs and NRIs cannot open SSA Account

Quick Tips:

v  Documents Needed – Date of Birth proof for Girl Child, Your Identity and Address Proof

v  Minimum deposit of Rs 1,000 needs to be made every year else penalty of Rs 50 is levied

v  Account can be closed before 21 years in case of marriage

v  Only resident Indians are eligible to open SSA account

  Ø  NATIONAL SAVINGS CERTIFICATE (NSC)

·      NSC is Tax saving Fixed Deposit Scheme from India Post

·      Available for 5 years (NSC VIII) – 10 Year NSC has been discontinued

·      The interest is market linked and changes every quarter.

·  There is no max limit for investment in NSC but the deduction is only till maximum of Rs 1.5 Lakh u/s 80C

·      You can buy NSC in denominations of Rs 100, 500, 1000, 5000 and 10000

The Good vs. The Bad

C  The interest accrued for NSC qualifies for Sec 80C deduction in subsequent years

C  Highest Safety – backed by Govt. of India

C  NSCs can be kept as collateral security to get loan from banks

C  No Tax deduction at source

D  The interest earned is taxable

D  You need to go to post office to invest and redeem. There is still no online investment/ redemption facility

D  Trust and HUF cannot invest

Quick Tips:

v  NSC is better tax saving option than banks Tax Saving FD (offering similar interest) as interest accrued for NSC qualifies for Sec 80C deduction in subsequent years

v  NSC would now be issued in form of Passbook rather than actual certificates

  Ø  TAX SAVING FIXED DEPOSITS BY BANK/POST OFFICES

·       These are like normal Fixed Deposit with banks but is labeled as “Tax Saving FD” while making the deposit

·   Has minimum tenure of 5 Years. Some banks offer special schemes for longer tenures with higher interest rates

·     Some banks offer 0.25% to 0.60% additional interest for Senior Citizens and their employees

·      As of today banks are offering 7% - 8% for general public and additional 0.25% - 0.6% for Senior Citizens

The Good vs. The Bad

C  Convenient to invest. Many banks offers online facility for Tax Saving FD

C  Redemption on maturity comes directly to your bank account

C  High Safety - FD up to Rs1 Lakh is insured by RBI

D  The interest earned is taxable

D  Cannot be withdrawn prematurely

D  Cannot be pledged to secure loan or as security

Quick Tips:

v  The Post Office Time Deposit Account (which is FD offered by Post Office) of 5 Years maturity also qualifies for 80C deduction.

v  Don’t be misled by banks advertisements about their yield on Tax Saving FDs. Those are manipulative calculations

v  Be cautious of small co-operative banks as they have higher risk than bigger private and public sector banks

  Ø  SENIOR CITIZENS’S SAVING SCHEME (SCSS)

·       As the name suggests, SCSS is for senior citizens who are 60 years or above on the date of opening of the account. Also people with 55 years of age who have retired by VRS can open SCSS after 3 months of retirement

·       Minimum Investment: Rs 1,000 while Maximum Investment: Rs 15 Lakhs

·   The joint account can be opened only with your spouse. There is no age limit applicable for the joint account holder

·       The interest is paid out quarterly

·      No partial withdrawal is permitted before 5 years. The account may be extended for a further period of 3 Years

The Good vs. The Bad

C  The interest is paid quarterly to the saving account, hence can serve as regular income for retired

C  Redemption on maturity comes directly to your bank account or through post dated cheques

C  Highest Safety – backed by Govt. of India

D  The interest from SCSS is taxable

D  Bank would deduct TDS if the total interest in a year is over Rs 10,000

D  NRIs and HUF are not eligible to open an account

Quick Tips:

v  Open SCSS with Post offices, 19 nationalized bank or ICICI bank

v  SCSS account can be closed after 1 Year (with penalty) but in case you have availed Sec 80C benefit, it would be reversed

v  If your income is not taxable, you can provide form 15H or 15G so that banks don't cut TDS

v  Any retired Defense Services personnel is eligible for SCSS irrespective of his age

  Ø  NATIONAL PENSION SCHEME (NPS)

·      NPS introduced in April 2009 and has two types of Accounts – Tier 1 and Tier 2

·   Tier 2 account is optional and contribution to Tier 1 account is eligible for Tax Deduction u/s 80CCD

·     Tier 1 account requires a minimum investment of Rs 1,000 annually and Rs 500 per transaction

·       Investment to Tier 2 account is now eligible for Tax deduction u/s 80C for Central Govt Employees only (Budget 2019)

·   Salaried employees can claim deduction up to 10% of your salary, which comprises basic + DA, while for self employed its capped at 20% of gross total income

The Good vs. The Bad

C  This is lowest cost Pension plan in the country

C  You can choose your investment profile based on your risk. NPS can invest maximum of 75% in equity.

C  On death the entire amount is paid to the nominee

D  NPS is partially taxable at withdrawal

D  The locking is till you are 60 years of age

D  You can withdraw max of 60% at maturity and have to compulsorily buy annuity for min 40% corpus

Quick Tips:

v  You should opt for 75% equity investment when young and slowly move to debt as you approach your retirement

v  60% lump-sum withdrawal in now tax free (Budget 2019)

v  Budget 2015 has announced additional tax exemption of Rs 50,000 for investment in NPS u/s 80CCD(1B)

v  NPS can be opened up to 65 years of age (changed in November 2017 from 60 years)

  Ø  EQUITY LINKED SAVING SCHEME (ELSS)

·         ELSS is popularly known as Tax Saving Mutual Fund

·         The minimum investment is Rs 500

·         There is no limit for maximum investment but the maximum deduction you get 1.5 Lakhs every year

The Good vs. The Bad

C  Only investment option which can beat inflation

C  Has the shortest locking period of 3 years

C  ELSS can be bought and redeemed online

D  The returns are dependent on stock market. So its high risk investment. You might lose money at the end of 3 years as well!

Quick Tips:

v  Budget 2018 has imposed Long Term Capital Gains/Dividend Distribution Tax of 10% on Equity Mutual Funds

v  Doing SIP (Systematic Investment Plan) in one or two ELSS Fund is the best way to invest

v  Dividend Reinvestment option in ELSS has been discontinued from February 2015

v  Do not over diversify by investing in multiple mutual funds

v  You should try to invest directly to fund as this would give you 0.5% to 1% higher returns as compared to when you invest through broker

  Ø  LIFE INSURANCE

·    The only product to consider from Life Insurance companies is – Term Plan

·       The sum assured on death should be at least 10 times the annual premium

·      This limit is altered only in special cases of disability (the premium should be 15% or less of sum assured)

·       Buy insurance only if you have dependents! Do not buy insurance to save tax!

How much Insurance?

ü  Your life insurance should be adequate to replace your income

ü  This roughly turns out to be at least 7 to 10 times your present annual income

ü  This might vary widely based on your assets, liabilities and situation

Quick Tips:

v  Online Term Plans are cheaper than products sold by agents. So if you are comfortable with online purchasing go for it

v  Never hide anything from insurance companies. A wrongly stated fact might deny insurance to your dependents when they need it most

v  PPF along with Term Plans are better products than Endowment Plans. Similarly Mutual Funds with Term plans turn out better option than ULIPs

v  The maturity proceeds of life insurance is tax free u/s 10(10)D, subject to certain conditions

  Ø  TUTION FEES OF CHILDREN

·         The expenses on tuition fees for maximum of two children is eligible for deduction u/s 80C

·         In case a couple has four children, both can claim tax benefit as both have a separate limit of two children each

·         The parent who makes the payment gets the tax advantage. If both parents are working and pay taxes, both can claim individually up to the amount of fees paid

·         The max deduction available is Rs 1.5 Lakh under overall limit of 80C.

·         The deduction is available for full time courses only

·         The deduction is not available for tuition fee to private coaching classes

·         The educational institute should be located in India, though it may be affiliated to any foreign university

Quick Tips:

v  The following expenses are not considered as tuition fees – Development Fee, Transport charges, hostel charges, Mess charges, library fees, late fines, etc.

v  This deduction is not available for tuition fees for self or spouse

  Ø  STAMP DUTY & REGISTRATION CHARGES

·         Stamp duty and registration charges up to Rs 1.5 Lakh can be claimed for deduction under overall limit of 80C

·         The payment should have been made in the same financial year for which the tax is being paid. i.e. deduction cannot be carried forward to next year

·         The house should be in the name of assessee claiming deduction

·         The payment for stamp duty should have been made from his own funds

·         This benefit is available on purchase on new residential unit only

  Ø  HOME LOAN: INTEREST & PRINCIPAL

·         Buying a house is one of the top most priority for most

·         The good news is you get tax deduction on both principal and interest payment on your Housing Loan

           Deduction on Principal Payment on Home Loan

·       Deduction up to Rs 1.5 Lakh is allowed on the principal repayment of the housing loan if the house is self-occupied or vacant

·      The house should be registered in the name of assessee. (He should be one of the owners, in case of joint ownership)

·    The loan should be taken from Banks, NBFCs or respective employers. Loans taken from friends/ relatives does not qualify for this deduction

·         This deduction is available also to people with multiple properties

Deduction on Principal: Under section 80C up to overall limit of Rs 1.5 Lakh

Deduction on Interest: Under section 24 up to Rs 2 Lakh

·         The deduction is only available from the year of possession/ completion of the house

·         All the benefit of tax u/s 80C will reversed if house property is sold with 5 year from purchase of house property

Deduction on Interest Payment on Home Loan

·         Budget 2017 has capped the maximum deduction on “Income/Loss from House” to Rs 2 lakh irrespective of the house being rented or self-occupied or number of houses

·         Section 24 covers “Loss/Gain from Housing Property”

·         For Sec 24, all the rent you receive from houses is your income while the interest paid on housing loan is considered as expense

·         So broadly speaking the (income – expense) subject to certain conditions is added to your income.

·         In case the interest paid is more than your rental income, the above calculation is negative and hence a deduction to your total income

·         The deduction is only available from the year of possession/ completion of the house

·         The Pre-EMI interest you pay before the completion of the house can be claimed as deduction in 5 equal installments starting from year the construction of the house completes

·         You can claim benefit of both HRA and Home Loan together

·         In case the Home Loan is taken before April 1, 1999 the deduction on interest is only Rs 30,000

·         In case the house is not completed within 5 years (enhanced from 3 yeas in Budget 2016) of start of loan, the interest exemption for self-occupied home is capped at Rs 30,000 only

Section 80EEA – Home loan for Affordable homes

Budget 2019 as introduced additional tax deduction for payment of interest on loan taken for purchase of Affordable home

Following are the eligibility conditions:

·         The home loan is taken from approved financial institutions between April 1, 2019 to March 31, 2020

·         The stamp value of house is less than Rs 45 Lakhs

·         The buyer should not have any other house in his name at the time of loan sanction

Total deduction on interest on housing loan would be Rs 3.5 lakh (2 lakh u/s 24 & 1.5 lakh u/s 80EEA)

Section 80EEA – Auto loan for electric vehicles

Budget 2019 as introduced additional tax deduction for payment of interest on auto loan taken for purchase of electric vehicles

Following are the eligibility conditions:

·         The loan should be sanctioned by the financial institution (banks, NBFCs, etc) between April 1, 2019 to March 31, 2023

·         Only the interest part of the loan is eligible for deduction u/s 80EEB

The maximum amount of deduction under this section 80EEB in a financial year is Rs 1.5 lakhs

Section 80D - Mediclaim

·         Premium paid for Mediclaim/ Health Insurance for Self, Spouse, Children and Parents qualify for deduction u/s 80D

·         You can claim maximum deduction of Rs 25,000 in case you are below 60 years of age and Rs 50,000 above 60 years of age.

·         An additional deduction of Rs 25,000 can be claimed for buying health insurance for your parents (Rs 50,000 in case of either parents being senior citizens)

·         This deduction can be claimed even if parents are dependent on you or not

·         This is not available for buying health insurance for in-laws.

·         HUFs can also claim this deduction for premium paid for insuring the health of any member of the HUF

·         To avail deduction the premium should be paid in any mode other than cash

·         Budget 2013 introduced deduction of Rs 5,000 is also allowed for preventive health checkup for Self, Spouse, dependent Children and Parents.

·         This Rs 5,000 is within Rs 25,000 limit for Health Insurance

Section 80E – Education loan

·        The entire interest paid on education loan in a financial year is eligible for deduction

·         There is no deduction on principal paid for the Education Loan

·         The loan should be for education of self, spouse or children only

·         The loan should be taken for pursuing full time courses only

·   The loan has to be taken necessarily from approved charitable trust or a financial institution only

·      The deduction is applicable for the year you start paying your interest and seven more years immediately after the initial year.

·         So in all you can claim education loan deduction for maximum eight years.

Section 80DDB – Treatment of certain diseases

·      Cost incurred for treatment of certain disease for self and dependents gets deduction for Income tax.

·    For senior citizens the deduction amount is up to Rs 1,00,000 and for all others its Rs 40,000

·    Dependent can be parents, spouse, children or siblings. They should be wholly dependent on you.

·         A certificate from specialist from Government Hospital would be required as proof for the ailment and the treatment

·    In case the expenses have been reimbursed by the insurance companies or your employer, this deduction cannot be claimed.

·         In case of partial reimbursement, the balance amount can be claimed as deduction

·       Diseases covered include: Neurological diseases, Parkinson’s disease, Malignant cancers, AIDS, Chronic Renal failure, Hemophilia, Thalassaemia.

Section 80U – For physically disabled assessee

·         Tax Payer can claim deduction u/s 80U in case he suffers from certain disabilities or diseases.

·         The deduction is Rs 75,000 in case of normal disability (40% or more disability) and Rs 1.25 Lakh for severe disability (80% or more disability)

·         Disabilities include: Blindness & vision problem, leprosy, hearing impaired, locomotor disability, mental retardation or illness, autism, cerebral palsy

·         A certificate from neurologist or Civil Surgeon or Chief Medical Officer of Government Hospital would be required as proof for the ailment.

Section 80DD – For handicapped dependents

·         In case you have dependent who is differently abled, you can claim deduction for expenses on his maintenance and medical treatment

·         You can claim up to Rs 75,000 or actual expenditure incurred, which ever is lesser. (The limit is Rs 1.25 Lakh for severe conditions)

·         Dependent can be parents, spouse, children or siblings. The dependent should not have claimed any deduction for self

·         40% or more of following Disability is considered for purpose of tax exemption: Blindness and Vision problems, Leprosy-cured, Hearing impairment, Locomotor disability, Mental retardation or illness

Deductions are permissible in either of the following cases:

·         Costs incurred for medical treatment, training or rehabilitation of a disabled dependent, including amount spent for nursing

·         Amount paid towards an insurance scheme for the maintenance of your disabled dependent in case of your untimely death

·         A severe disability condition is 80% or more of the disabilities

·         Individuals would need disability certificate issued by state or central government medical board to claim deduction

·         The life insurance policy should be on the tax payer name, with the disabled person as the beneficiary.

·         In case the disabled dependent expires before you, the policy amount is returned back and treated as income for the year and is fully taxable.

Section 80G – Donations to Approved charitable organizations

·         The government encourages us to donate to Charitable Organizations by providing tax deduction for the same u/s 80G

·         Some donations are exempted for 100% of the amount donated while for others its 50% of the donated amount

·         Also for most donations, the maximum exemption you can claim is limited to 10% of your gross annual income.

How to Claim Sec 80G Deduction?

·         A signed & stamped receipt issued by the Charitable Institution for your donation is must

·         The receipt should have the registration number issued by Income Tax Dept printed on it

·         Your name on the receipt should match with that on PAN Number

·         Also the amount donated should be mentioned both in number and words

·         Only donations made to approved organizations and institutions qualify for deduction

·         Only donations made in cash or cheque are eligible for deduction. Donations in kind like giving clothes, food, etc. is not covered for tax exemption.

Section 80GGA & 80GGC – Donations to Political parties/Scientific Research

Section 80GGA – Donation for Scientific Research

·    100% tax deduction is allowed for donation to the following for scientific research u/s 80GGA

·  To a scientific research association or University, college or other institution for undertaking of scientific research

·     To a University, college or other institution to be used for research in social science or statistical research

·         To association or institution, undertaking of any program of rural development

·   To a public sector company or a local authority or to an association or institution approved by National Committee, for carrying out any eligible project or scheme

·         To the National Urban Poverty Eradication Fund set up

Section 80GGC – Donation to Political Parties

·       100% tax deduction is allowed for donation to a political party registered under section 29A of the Representation of the People Act, 1951 u/s 80GGC

·         Donations made in cash or kind is not for tax exempt.

Section 80TTA & 80TTB – Interest on Savings bank account

·     Budget 2012 introduced a new Section 80TTA, which allows deduction of Rs 10,000 on interest earned on saving bank account

·         This benefit is continued for FY 2019-20

·       Budget 2018 introduced a new Section 80TTB, which allows deduction of up to Rs 50,000 on interest income for Senior Citizens only

·    TDS limit on interest income has been increased from Rs 10,000 to Rs 50,000 in case of Senior Citizens

·       Taxpayers who take benefit of Section 80TTB cannot get benefit of 80TTA

We sincerely hope you liked this article and that it would be helpful for planning your taxes for FY 2019-20.  We would appreciate your feedback on this blog under comments section if you liked it.  Also, if you liked this article, feel free to share the same further with your friends and acquaintances.

Feel free to write to us at gaurav@gjmco.in for any queries in relation to the above provisions of the income tax laws.

Thanks & Best regards,

Knowledge Base team

GJM & Co.

Chartered Accountants

www.gjmco.in