Tax Planning

For A.Y. 2014-15

- A LawCrew Presentation
What are the
deductions that I
can claim on my
income?
Everyone is talking
about 80C,
80DD###
deductions what are
they?
What is the
maximum amount
that I can save on
my tax?
What are the
best tax
planning's for
me this year?
PPF,
investments and
savings in banks
accounts?
In what slab
of income tax
do I come in?
How much tax
I have to pay
this year?
If you are seeking answers for all these questions then this presentation is for you.
INCOME TAX SLAB FOR ASSESSMENT YEAR 2014-15
Particulars Individuals

(<60 years)
Senior Citizens

(>60 years)
Super Senior Citizens
(>80 years)
Upton 2,00,000 Nil Nil Nil
2,00,000- 2,50,000 10% Nil Nil
2,50,000-5,00,000 10% 10% Nil
5,00,000-10,00,000 20% 20% 20%
Above 10,00,000 30% 30% 30%
There are no separate slabs for males and females.
The first step for tax planning is to know how much tax you need to pay?
Tax credit of Rs. 2,000 for the individuals whose income does not exceeds Rs. 5,00,000/-.
Surcharge of 10% on income more than Rs. 1 Crore.
http://law.incometaxindia.gov.in/DIT/Xtras/income_taxcalc.aspx
Calculate your tax here
How much Tax you need to Pay?
Salary includes many of the components that are chargeable to tax.
Some are fully taxable some partially and some are tax free.
The detailed list of the components is given below:-
Basic Salary
Dearness Allowance(DA)
Special Allowance
Bonus
Food Allowance
Furniture Allowance
Band Pay
Overtime
Arrears
Personal Pay
Shift Allowance


Leave Travel Allowance (LTA)
Vehicle maintenance
House Rent Allowance
Medical Reimbursement up to Rs. 15000 per
year.
Transport allowance up to Rs. 800 per month
and Rs. 1600 per month for orthopedic person.
Uniform Allowance- Amount up to Rs. 24,000
per annum is tax free.
Children education Allowance (Rs. 100 per
month per child and Rs. 300 for Hostel
Expenditure ) maximum for 2 children.
Telephone Allowance
Meal Coupons
Newspaper/ Journal Allowance up to Rs.
12,000 per annum is tax free.


100% taxable
Partially Taxable/ Tax
free
SALARY COMPONENTS ON WHICH TAX IS CHARGED


The deduction for HRA can be claimed for least of the following:-
Actual HRA received
40% (50% for metro cities) of Basic + Dearness Allowance
Excess of rent paid over 10 percent of salary.
You need to submit proof of rent paid through rent receipts, duly signed and stamped,
along with other details such as the rented residence address, name of the owner, period of
rent , PAN card number of landlord in case annual rent exceeds Rs. 1,80,000 etc..




If the company provides you the car for personal and official purposes and reimburses the
fuel, insurance, maintenance and drivers salary the taxable value will be:-
the car is between 0-1600 CC- Rs. 1,800 per month.
the car is above 1600CC Rs. 2,400 per month.
Also Rs. 900 in case the company provides driver.
In case the car is owned by you, the reimbursement of maintenance and running is up to-
for car less than 1600CC- Rs. 1,800 per month.
for car more than 1600CC Rs. 2,400 per month.

HOUSE RENT ALLOWANCE (HRA)
CAR MAINTENANCE ALLOWANCE
PARTIALLY TAXABLE SALARY COMPONENTS

LTA exemption can be claimed where the employer provides LTA to employee for leave to
any place in India taken by the employee and their family. Such exemption is limited to the
extent of actual travel costs incurred by the employee.
The meaning of family for the purposes of exemption includes spouse and children and
parents, brothers and sisters who are wholly or mainly dependent on you
The tax rules provide for an exemption only in respect of two journeys performed in a
block of four calendar years. The current block runs from 2010-2013
Travel cost means the cost of travel and does not include any other expenses such as
food, hotel stay etc.
There is no maximum limit for LTA and is decided by the employer.

LEAVE TRAVEL ALLOWANCE (LTA)
Here is the list of the sections for Tax Savings available for Individuals in India
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Maximum deduction
of 1 Lakh on taxable
salary combining
these 3 sections
80C
(Details
Discussed later)
80CC
(Pension Items )
80CCD
(Central Govt.
Employees
pension schemes)
Section 80D Section 80DD

Section 80DDB

Section 80U

Medical Insurance
for family & Parents
Maintenance &
medical treatment of
disabled dependent
Treatment of certain
diseases/Ailment
Physically Disabled
Assessee
Deductions up to
Rs. 40,000
Deductions up to
Rs. 1,00,000

Deductions up to
Rs. 60,000

Deductions up to
Rs. 1,00,000

Continued.
TAX SAVING SECTIONS
Continued
SECTION 80G SECTION 80GGA SECTION 80GGC
Donation to certain charitable
funds, charitable trusts, etc,
Donation to scientific research
institutions or rural development.
Donation to political parties
Deduction subject to 10% of the
adjusted gross total income.
Deduction up to Rs. 1,00,000 Deduction up to 100% of the
donation made to the parties
SECTION 24 SECTION 80 EE SECTION 80 E
Interest payable on Housing Loan
or Home Improvement Loan
Interest payable on housing Loan
(for first time home buyers)
Interest payable on Educational
Loan
Deduction up to Rs. 1.5 Lakh for
Housing loan & Rs. 30,000 for
Home Improvement Loan
Additional Deduction up to Rs. 1
Lakh.
No limit for deduction.
SECTION 80GG SECTION 80CCG SECTION 80TTA
For paying Rent in case of no HRA Rajiv Gandhi Equity Savings
Scheme (RGESS)
Interest received in Saving Bank
Accounts
Deduction subject to certain limits Deduction up to Rs. 25,000 (50%
of amount invested)
Deduction up to Rs. 10,000
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Details of the above mentioned sections are provided later in the presentation
Following are the deductions available under section 80C/80CC/80CCD.
The maximum deduction combining all these investments/ expenditures is Rs. 1 Lakh.
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Provident
Fund
EPF/VPF
Public
Provident
Fund (PPF)
National
Saving
Certificate
(NSC)
Senior Citizen
Savings Scheme
(SCSS)
Tax savings
Fixed
Deposits (for
5 years)
Life
Insurance
Premium
New Pension
Schemes
(NPS)
Pension Plans
from
Insurance
Companies
Tax Savings
Mutual Funds
(ELSS)
Tuition fees
of 2 children
Stamp duty and
registration cost
of the house

Principal
payment on
Home Loan
Central Govt.
Employees
Pension Schemes
All these options have been further
discussed In the subsequent slides.
SECTION 80C /80CC /80CCD

EPF is mandatory for salaried employees working in the companies having more than 20
employees.
Under EPF rules, you need to contribute 12% of your Basic Pay + DA to EPF.
The employer matches with this EPF contribution.
Also you have the option to put up 100% of Basic + DA to provident fund, this is called VPF
(Voluntary Provident Fund).
The employer generally does not matches with this contribution.


Money is locked till your retirement.
The EPF interest rates are market linked
an set by EPFO every year.
The withdrawal of EPF takes time.
The option is only available to salaried
employees only.


The interest on EPF/VPF is tax free.
Can take loan against EPF and also do
partial withdrawal under certain conditions.
convenient to invest as the amount is
directly deducted from salary.

You can opt for VPF by giving request to your company at the start of
every financial year.
Only YOUR contribution in EPF & VPF is considered for Tax Deduction.
If you withdraw your EPF before 5 years the amount is taxable and the
earlier tax deduction claimed is nulled.

EPF/VPF (EMPLOYEE PROVIDENT FUND)
PPF can be opened at any Post Offices, 24 Nationalized Banks and ICICI Bank.
PPF has a mandatory locking period of 15 years an can be extended for further 5 years at a time.
Maximum Investment allowed : 1 Lakh in year.
Minimum investment of Rs. 500 is required every year to keep the account active.
Interest rates on PPF are market linked hence would vary every year. The current interest rate is
8.7% since April 1, 2013.

The interest on PPF is Tax free.
After opening PPF account investment
can be done online (only in some banks).
It cannot be attached with court
orders.
Highest Security- backed by Govt. of
India.

Money is locked for longer period.
Interest rates are market linked
hence would vary every year.
HUFs and NRIs cannot open a PPF
account.
Investment till 5th of the month earns interest for the month. So deposit
your interest before the date to entertain the interest benefit.
PPF can be opened in the name of the minor with either parents as
guardian.
The total investment in your PPF account and that of the minor child (for
whom you are guardian) should not exceed Rs. 1 Lakh in a financial year.

PPF (PUBLIC PROVIDENT FUND)
NSC is a Tax Saving Fixed Deposit Scheme directed by India Post.
It is available for 5 years and 10 years tenure, (NSC VIII) & (NSC IX) respectively.
The interest rate is market linked and hence changes every year. Its 8.5% for 5 years NSC and
8.8% for 10 years NSC.
There is no maximum investment limit in the NSC but the deduction allowable is only maximum
till Rs. 1 Lakh u/s 80C.
The denominations available for NSC are in 100, 500, 1,000 , 5,000 and 10,000.


Certificates from NSC can be kept as
collateral security to take loans from
banks.
No tax deduction at source.
The interest accrued for NSC qualifies
for deduction u/s 80C in the subsequent
years.
Highest Safety- backed by Govt. of
India.



Interest earned is taxable.
There is no online investment facility
for NSC. You need to go to post office for
any investment or redemption.
Trust and HUF cannot invest in NSC.
NSC is a better Tax saving option than FD from banks ( giving same
interest) as interest accrued for NSC qualifies for deduction in section
80c.
NSC (NATIONAL SAVING CERTIFICATE)
A person attaining an age of 60 years at the time of deposit can opt for the scheme or any person
of an age of 55 years but less than 60 years retired under VRS can open the account.
The amount can be deposited in any Post office, 24 Nationalized Banks and in any branch of SBI.
Interest rate applicable on these deposits is 9%.
Minimum limit for investment is Rs. 1,000 and maximum limit is Rs. 15,00,000.

Interest payable on Quarterly Basis.
Nomination facility available.
SAS agency facility can be availed.
It can be transferred from one post
office to another.

A commission of 0.5% is payable to SAS
agents.
There can be only one deposit in the
account.


Maturity of these schemes is 5 years but can be extended for another 3
years on the option of depositor.
The balance amount will be paid after deduction, if the account is
closed
after 1 year but before 2
nd
year deducting 1.5% of the balance
amount.
after 2
nd
year deducting 1% of the balance amount.
Payment will be made at POSB rate.


Senior Citizen Saving Scheme(SCSS)

These are same as Fixed Deposits In banks but are named as Tax Saving FD while making the
deposits.
Has minimum tenure of 5 years.
Some banks offer 0.25% to 0.75% additional interest for Senior Citizens and their employees.
The current interest rate for these deposits are 8.5%- 9.5% for general public and 8.75%-9.75%
for Senior Citizens.


Convenient to invest. ICICI banks provides
online facility for Tax saving FDs.
Redemption to maturity comes directly to
your bank account.
Highest safety- FD up to Rs. 1 Lakh is
insured by RBI.

Caution should be taken while making the deposits with Cooperative
banks as they are more risky than big banks.
The Post Office Time Deposits Plan of 5 years also qualifies for
deduction u/s 80c. The current rate for these deposits is 8.4%.

The interest earned is taxable.
Amount cannot be withdrawn before
maturity
Cannot be pledged to secure loan as
security.


TAX SAVINGS FD FROM BANKS/POST OFFICES
NATIONALISED BANKS
Allahabad
Bank
IDBI Bank
State Bank Of
Bikaner & Jaipur
Canara Bank State Bank of
Patiala
Union Bank Of
India
Andhra Bank Indian Bank State Bank of
Hyderabad
Central Bank of
India
State Bank of
Travancore
United Bank of
India
Bank of India Indian Overseas
Bank
State Bank of
India
Corporation
Bank
Syndicate Bank Vijaya Bank
Bank of
Maharashtra
Punjab National
Bank
State Bank of
Mysore
Dena Bank UCO Bank Bank of Baroda


ICICI Bank Ltd.
PRIVATE SECTOR BANK
At present, Post Offices, 24 Nationalized Banks and a private sector bank are authorized
to deal with SCSS & PPF.
BANKS FOR OPENING SCSS & PPF
LIFE INSURANCE PREMIUM


Deduction for Life insurance is applicable only if the policy holder has paid or deposited the premium
during the previous year for which he is claiming the deduction.
Individuals and Hindu Undivided Family (HUF) are allowed to claim the deduction for life insurance.
The maximum amount of deduction allowable is Rs. 1,00,000 including the other investments and
expenditures u/s 80C.
The investment can be made on:-
* for Individuals - his/her own life, on the life of Spouse, on the life of any child.
* for HUF any of the member of the HUF.



How much Insurance?
Your life insurance should be adequate to replace your income.
This turns out to be 7 to 10 times of your present income.
This might vary widely base on your assets, liabilities and situation.

All the above benefits of getting deduction for life insurance premium paid
shall be reversed if the policy terminated or cease in force within 2 years after
the date of commencement of such insurance policy.
The only product you should consider with the Life Insurance Companies Is
Term Plan.
PPF along with Term Plans are better products than Endowment Plans. Also
Mutual Funds with term Plans are turn out to be better products than ULIPs.
Life Insurance Premium
Pension plans from Insurance Companies qualifies deduction u/s 80CCD.

They generally have assured return in the range of 1-2% per annum which is very low as compared
to the Saving Accounts pay which is at least 4%.


These plans give very low returns and does not invest in equities which are
very useful for creating long term wealth.
On surrendering, the tax benefit you claimed earlier gets reversed and you
would need to pay these taxes back.
PPF/ VPF & EPF turns out to be better plans in comparison of these pension
plans.
NPS is also a better alternative for pension plans.


Why you should never go for these Pension Plans??
PENSION PLANS FROM INSURANCE COMPANIES
NPS has two types of accounts- Tier 1 and Tier 2.
Tier 2 is optional and only Tier 1 contributes to deduction u/s 80CCD.
Tier -1 requires an annual investment of Rs. 6,000 and Rs. 500 per transaction.
Salaried employee can claim deduction up to 10% of your salary [ Basic+ DA], while for self
employed it is 10% of the gross total income.

This is the lowest cost Pension Plan.
NPS can invest maximum of 50% in
selected stocks.
on the death the entire amount is paid
to the nominee.
The gain on NPS is taxable on
withdrawal.
The locking period is till you are 60
years of age.



However the contribution made by the Central Government or any other
employee to a pension scheme u/s 80CCD(2) shall be excluded from the limit
of Rs.1,00,000/- provided under this Section.
You should opt for 50% of equity investment when you are young and then
slowly move to debt as you approach your retirement.


NATIONAL PENSION SCHEME (NPS)
Smallest locking period of 3 years as
compared to other tax saving options.
Online facility available for investment
and redemption options.
Tax free funds.

Comprises of 80- 100% investment in
equities, which are highly volatile in
short term and can cause capital loss
too.
Returns are dependent on stock market
which is highly risky. You can loose the
investment in 3 years.

You should choose maximum of two funds for investing.
Research well before you invest in ELSS funds.
Never choose Dividend Reinvestment option in ELSS funds as you will the
full amount ever.

Also used as a synonym for Tax Saving Mutual Funds.
Minimum Investment in these plans is Rs. 500.
Maximum deduction for these funds is Rs. 1,00,000 every year under section 80C.
Investments can be done in lump sum or through Systematic Investment Plan (SIP).
EQUITY LINKED SAVING SCHEME (ELSS)
HOME
LOAN

PRINCIPAL
Deduction u/s 80C up to Rs. 1
Lakh


INTEREST
Deduction u/s 24 up to Rs. 1.5
Lakh
Additional deduction u/s 80EE
up to Rs. 1 Lakh



Deduction on Principal Amount of Home Loan

Deduction allowable on the repayment of principal of the housing is loan
is Rs. 1 Lakh u/s 80C.
The house should be registered on the name of the assessee or should
be one of them if it is jointly owned.
This deduction is available to also with the people having multiple properties.
The deduction is only available from the year of possession/ completion of
the house.
The deduction will be reversed if the said house is sold within 5 years from
the year of purchase of the house property.


SECTION 80C: TAX BENEFIT ON HOME LOAN (PRINCIPAL AMOUNT)

HOME LOAN : INTEREST & PRINCIPAL
















Deduction on Interest Amount on Home Loan
As per Section 24, the income from house property shall be reduced by the amount of interest
paid on home loan (taken for the purpose of purchase/ construction/ repair/ renewal/
reconstruction of a residential property).
The maximum deduction allowable in this respect is Rs. 1,50,000 on a self- occupied property.
The deduction is allowable on accrual basis and hence should be claimed on yearly basis even if
no payment has been made during the year.
This tax deduction shall be available only if the construction has completed within 3 years from
the end of the financial year in which the amount is borrowed.
























In case the house for which the loan has been taken is not self occupied then no
maximum limit has been specified for the interest deduction.
If the property is not acquired/ constructed within 3 years from the end of
financial year in which the loan has been taken then the interest benefit will reduce
from Rs. 1,50,000 to Rs. 30,000 only.
The Pre-EMI interest that you pay before the completion of the house can be claimed
as deduction in 5 equal annual installments starting from the year of completion.
No deduction for commission paid on arranging the loan.
Interest paid for outstanding amount is not allowed as deduction.




Please Remember
SECTION 24: INTEREST BENEFIT ON HOME LOAN





In the budget 2013, Section 80EE was inserted as new section which provides additional
deduction of Rs. 1,00,000 for the first time home buyers.
Following conditions need to be fulfilled :-

The loan is sanctioned between 01.04.2013 to 31.03.2014.
The amount of loan sanctioned should not exceed Rs. 25 Lakh.
The value of the residential property should not exceed Rs. 40lakh.
The Assessee should not own any other property on the date of
sanction of the loan.

The interest deduction on the home loan can be claimed for F.Y. 2013-14, in case you are not
able to exhaust the deduction F.Y. 2013-14, you can claim it in F.Y. 2014-15.




Please Remember

The tax deduction above (Sec. 80C, Sec 24, sec. 80EE) is per person and not per property.
So in case you have purchased a property jointly and have taken a joint home loan each
person repaying the amount would be eligible to claim whole deduction separately.

If you are living in a rented premise and are taking Tax benefit of HRA allowance, even
then you can claim the Tax benefit on home loan under Section 80C, Section 24, and
Section 80EE .

SECTION 80EE: INTEREST BENEFIT ON HOME LOAN
(FOR FIRST TIME HOME BUYERS)

Home improvement loan can be taken for furnishing of new home or repairing, painting or
refurnishing the existing home.
Deduction is Rs. 30,000 on the interest paid for loan for house improvement.
The deduction is only allowable for self occupied house.
No deduction is allowable for the principal payment of the loan.
No deduction is allowed for rented or vacant house.
This exemption is over and above the limit of Rs. 1,50,000 that you can claim for interest on
loan for house .

If the loan for acquisition/construction is taken before 01 April 1999- then
combined limit for interest deduction will be Rs. 30,000. (interest paid on
loan for acquisition/construction and interest paid on loan taken for
repair/ renewal ).
The loan can be taken up to 80% of the valuation of home improvement
work.

Contd..
Stamp duty charges and registration charges paid while purchasing a new house are eligible for
tax deduction under Section 80C.
Amount should have been paid by the assessee only. Deductions shall not be available to any
other member within in the same family making the payment on behalf of the assessee.
The deduction can be claimed in the only year in which the payment is made.
The deduction available is up to the limit of Rs. 1,00,000.
The claim is available only on the purchase of new residential property and for the commercial
property.


The meaning of new house is; you are purchasing for the first time
and
no one stayed in that house previously. That means it is not a resold
property.
Also the assessee himself must pay such amount to claim deduction
under
section 80C and the house property should be in his/her name.
The claim is entitled only after the possession of the property.

STAMP DUTY AND REGISTRATION CHARGES
Deduction available to only Individuals and not to HUFs.
Deduction is available for only 2 children. Both husband and wife have individual exemption of 2
children each.
Deduction for tuition fees is Rs. 1,00,000 u/s 80c.
Deduction only available for Full Time courses only.
Deduction available for payment basis only and the fees can be of any period.

Following expenses are not considered under tuition
fees-
-Development fees, Transport charges, Hostel
charges, Mess charges,
Library fees, late fines, Term fees etc.

No deduction is allowable for the tuition fees of self
and spouse.
TUTION FEES



This deduction is available for both Individual and HUF :-
For individual:- premium paid for medical insurance of self or the spouse, parents or
dependent children*.
For HUF:- premium paid for any of the family member of the HUF.
for individuals below 60 years of age maximum deduction is Rs. 15,000 an for individuals above 60
years of age deduction is Rs. 20,000.
An additional deduction of Rs. 15,000 can be claimed for buying health insurance for your parents (if
either of the parent is senior citizen then deduction is Rs. 20,000) irrespective of whether your
parents are dependent on you or not.




Please remember

*Dependent children means : Children above 18 years, if employed, can not be
covered.
Male children, if not employed, but a bonafide student can be covered up to
age of 25 years. Female children, if not employed, can be covered until the time
she is married.
To claim the deduction the payment of premium should be made in any form
other than cash.
You cannot claim deduction under section 80D in respect of mediclaim
paid for your in-laws.
Also Budget 2013 provides deduction of Rs. 5000 (this is within limit of Rs. 15,000
for Health Insurance) for preventive health checkup of self, spouse, dependent
children and parents.

Section 80D: medical insurance

This deduction is available to Individual and HUF who are resident of India.
Disabled Dependent for individual includes -spouse, children, parents, brothers and sisters. And for
HUF, any members of its family.
The deduction allowed is Rs. 50,000. Deduction allowed goes up to Rs. 1,00,000 if disabled
dependant is a person with severe disability.*
Expenditure for the medical treatment (including nursing), training and rehabilitation of a
disabled dependent and money paid to Life Insurance Corporation (LIC), Unit Trust of India or any
other insurer are eligible for deductions.

Blindness &
Low vision
Leprosy-
cured
Hearing
Impairment
Loco-motor
Disability
Mental
retardation
and illness
Autism Cerebral palsy
Multiple
disability
40% or more of these disabilities are considered for deduction
* 80% or more of the above disabilities are considered as severe disability


For claiming the deduction in respect of the above, you have to furnish a medical
certificate of disability from a Government Hospital certifying the disability of the
dependant. The certificate needs to be renewed periodically.
In case your disabled dependant dies before you the amount in the policy is returned
back and treated as your income for the year and is fully taxable.
The life insurance policy should on the name of the assessee and the disabled
person as beneficiary.

Please Remember
Section 80DD: maintenance & medical treatment of dependent disabled
This section provides deduction for expenses made on medical treatment of specified ailments (like
AIDS, Cancer and Neurological diseases) for self and dependents.
The maximum deduction allowable under this section is Rs. 40,000 and Rs. 60,000 if case of senior
citizens.
The dependents (should be wholly dependent on you) are considered to be self, spouse, children,
parents, brothers and sisters.
Specified diseases for this section are described below:-

Neurological
Diseases
Parkinson's
Diseases
Malignant
Cancer
AIDS
Chronic
Renal failure
Hemophilia Thalassaemia
In order to claim this deduction, however, you will have to submit Form 10-1 from a
specialist doctor working in a government hospital in India, confirming the treatment
of the disease.
This deduction is allowed on a condition that no medical reimbursement is received
from any insurance company or employer for this amount. In case of reimbursement
the amount paid should be reduced by the amount received if any under insurance
from an insurer or reimbursed by an employer.
40% or above of disability of these diseases are considered for deduction
Please Remember.
Section 80DDB: Treatment of certain diseases/ ailment
This section provides deduction for a person who suffers from physically disability or any
diseases.

An individual who suffers from not less than 40 per cent of any below mentioned disability
is eligible for deduction to the extent of Rs. 50,000/- and in case of severe disability (80
percent of the disability) to the extent of Rs. 100,000.



To avail the above deduction the individual needs to obtain a certificate from medical
authority constituted by either the Central or the State Government, along with the
Return of Income for the year for which the deduction is claimed.
The medical authorities who are deemed to certify are:
-A Neurologist with an MD in Neurology.
-For children, a Pediatric Neurologist having an equivalent degree.
-A Civil Surgeon or Chief Medical Officer (CMO) of a government hospital.

Blindness &
Low vision
Leprosy-
cured
Hearing
Impairment
Loco-motor
Disability
Mental
retardation
and illness
Autism Cerebral palsy
Multiple
disability
Diseases to be considered for deduction-
Please Remember
Section 80U: Physically disabled assessee
The amount of interest paid on educational loan* is fully qualified for deduction under section
80E.
The deduction under this section is only available to individuals and not to HUF or any other
assessee.
The deduction is only available on the interest paid and not the payment of the principal
amount of the loan.
Loan should have been taken for the purpose of pursuing higher studies of Individual ,
Spouse, Children of Individual or of the student of whom individual is legal Guardian.
The loan should be taken from any financial institution or any approved charitable institution
for the purpose of pursuing higher education.


Deduction shall be allowed in computing the total income in respect of the
initial assessment year and seven assessment years immediately succeeding
the initial assessment year or until the interest is paid by the assessee in full,
whichever is earlier.
The loan includes not only tuition or college fees but also other incidental expenses
for pursuing such studies like hostel charges, transport charges etc.
There is no condition that the course should be in India.

Please Remember
Section 80E : Educational loan
Newly inserted Section 80CCG provides deduction w.e.f. assessment year 2013-14 in respect of
investment made under notified equity saving scheme.
The scheme has a lock-in period of 3 years.
The amount of deduction is at 50% of amount invested in equity shares. However, the amount of
deduction under this provision cannot exceed Rs. 25,000.
You can take advantages of RGESS for three consecutive years.


The assessee is a resident individual (may be ordinarily resident or not ordinarily resident)
His gross total income does not exceed Rs. 10 Lakh;
He has acquired listed shares in accordance with a notified scheme;
The assessee is a new retail investor as specified in the above notified scheme;.
The investor is locked-in for a period of 3 years from the date of acquisition in accordance
with the above scheme;
The assessee satisfies any other condition as may be prescribed.
WHO ARE ELIGIBLE TO CLAIM DEDUCTION ?
Section 80ccg: Rajiv Gandhi Equity Saving Scheme (RGESS)
If the assessee, after claiming the aforesaid deduction, fails to satisfy the
above conditions, the deduction originally allowed shall be deemed to be the
income of the assessee of the year in which default is committed.

There is a concept of flexible and fixed lock in, which makes the scheme
complex. For simplicity you should assume that your investment in RGESS is
locked-in for 3 years.


Open a
Demat
account
Designate the a/c
by RGESS a/c by
filing up relevant
forms
Buy eligible
stocks or ETFs
Submit Demat
statement as
proof to claim
tax benefit


It is very convenient because
everything is one through Demat a/c.
The gain on RGESS is tax free.
It has a short locking period of3 years.



It is tough to deal for a new investor.
The returns are dependent on stock
market , hence carries a high risk.

4 Steps to claim tax benefit in RGESS

The amount donated towards charity attracts deduction under section 80G of the Income Tax Act,
1961.
This deduction can be availed by any assessee who makes an eligible donation.
some of the donations are exempted for 100% (with and without qualifying limit) of the
amount donated, some for 50% (with and without qualifying limit) of the amount donated while
other for 10% of the adjusted gross total income.
Documentation Required for Claiming deduction U/s. 80G :-
a stamped receipt issued by the recipient trust is a must containing name, address, PAN of
the trust, name of the donor and the amount donated.
The most important requirement is the Registration number issued by the Income Tax
Department under Section 80G. This number must be printed on the receipt.
The donor must ensure that the registration is valid on the date on which the donation is
given.

The donations which are paid only in cash/cheques are eligible for deduction.
Employees can claim deduction u/s 80G provided a certificate from the
employer is received in which employer states the fact that the contribution
was made out from employees salary account.
Only deductions made to approved organizations and institutions are qualified
for deductions.
Section 80G: donation to charitable organizations


1. National Defense Fund.
2. Prime Ministers National Relief Fund.
3. Prime Ministers Amenia Earthquake Relief Fund.
4. Africa (Public Contributions-India) Fund.
5. National Foundation for Communal Harmony.
6. Approved University/ educational institution.
7. Chief Ministers Earthquake Relief Fund.
8. Zila Saksharta Samiti.
9. National Blood Transfusion Council.
10. Medical Relief Fund of State Government.
11. Army Central Welfare Fund, Indian Naval Ben.
Fund, Air Force Central Welfare Fund.
12. National Illness Assistance Fund.
13. Chief Ministers or Lt. Governors relief Fund.
14. National Sports Fund.
15. National Cultural Fund.
16. Govt./ Local authority/ institution/ association
towards promoting family planning.
17. Central Govt.s Fun for Technology Development &
Application.
18. National Trust for welfare of Persons with Autism,
Cerebral Palsy, Mental Retardation & Multiple
disabilities.
19. Indian Olympic Association or any other authorized
association.
20. Andhra Pradesh Chief Ministers Cyclone Relief
Fund.


1
0
0
%

D
e
d
u
c
t
i
o
n

1. Jawaharlal Nehru Memorial Fund.
2. Prime Ministers Drought Relief
Fund.
3. National Children Fund.
4. Indira Gandhi Memorial Trust.
5. Rajiv Gandhi Foundation.
6. Donations to govt./ local authority
for charitable purposes (other than
family planning) .
7. World Vision India.
8. Donations for repair/ renovations
of notified places of worship.
9. Authority corporation having
income exempt under erstwhile
section or u/s 10(26BB).
10. Udavum Karangal.
5
0
%

D
e
d
u
c
t
i
o
n

LIST OF ELIGIBLE ORGANISATIONS FOR DEDUCTION U/S 80G
The deduction allowable under this section is 100% of the donation made in the following for
scientific research :-
To a University, college or other institution to be used for research in social science
statistical research.
To a scientific research association or University, college or other institution for
undertaking scientific research.
To an association or institution, undertaking any programme for rural development.
To The National Urban Poverty Eradication Fund setup.
To a public sector company or a local authority or to an association or institution approved
by National Committee, for carrying out any project or scheme.
100% deduction is allowed for donation to the political party registered under section 29A of the
Representation of the People Act, 1951 under section 80GGC.
The maximum deduction is that you can claim under this section is 10% of the total gross annual
income.
Section 80gga: Donation to scientific research institutions or rural
development
Section 80ggc: Donation to political parties
The section is applicable with effect from April 01, 2013 and will apply from AY 2013-14 and
onwards.
Section 80TTA is proposed to be introduced to provide deduction to an individual or a HUF in respect
of interest received on deposits (not being time deposits) in a savings account held with banks,
cooperative banks and post office.
The deduction is restricted to Rs 10,000 or actual interest whichever is lower.

Under Section 80GG, an Individual can claim deduction for the rent paid even if he dont get HRA.
Such house rent deduction *is permissible subject to the following conditions :-
(a) the Individual has not been in receipt of any House Rent Allowance from his employer
specifically granted to him which qualifies for exemption under section 10(13A) of the Act;
(b) the Individual files the declaration in Form No. 10BA.
(c) You cannot claim this deduction if you or your spouse or your children own any house in India or
abroad.

*House Rent Deduction will be lower of the following three amount :-
Rs. 2,000 per month 25% of annual income
Rent paid less 10% of Annual
Income
Section 80tta: Interest on saving account
Section 80gg:deduction for house rent in case of no HRA

Drafted and Compiled by:

Pooja Choudhary
pooja.choudhary@lawcrew.in;
pjchoudhary01@gmail.com
Edited By: Shubham Garg [shubham.garg@lawcrew.in]
Our Team:
Mr. Rajat Sharma
rajat.sharma@lawcrew.in
Ph: +91 9017040100
Mr. Piyush Bansal
piyush.bansal@lawcrew.in
Ph: +91 9250584817
Mr. Rahul Matta
rahul.matta@lawcrew.in
Ph: +91 9034142888
Mr. Shubham Garg
shubham.garg@lawcrew.in
Ph: +91 8929009005
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