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2 01:04) 5517.4

-0.17%

MONEY SCHOOL
Post Budget (2011) Tax Saving Strategy
Posted By - Mr. Vinod Kumar. K- On-10/03/11

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People are always concerned about the Tax and Tax related issues. They dont like to pay huge amount every year as to the government instead search for alternative ways to save tax. What is the way out from this? How to reduce the Ta How to avoid tax? All these are the questions rush into our mind when we think about tax. Is there any way to save Tax? are many ways to reduce the Tax burden. In this article we are going to discuss about the Tax saving Strategies after 2011. Highlights of Union Budget 2011

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The basic tax exemption limit has been increased to Rs 1,80,000 which will provide tax relief of Rs 2,060 to all tax bracke For senior citizen the exemption limit has been increased from Rs. 2,40,000 to Rs. 2,50,000/For senior citizen the qualifying age reduced from 65 years to 60 years. New tax slab for senior citizens of over 80 years in age (Super Seniors) who will not be required to pay taxes for incom 5,00,000 The Rs 20,000 exemption limit for investments into Infra bonds continues for this year also The Govt. is also thinking of doing away with the requirement of filing returns if salary is your only source of income being deducted.

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Ways to save Tax

Following are the ways to save tax after the budget 2011. There are so many sections which will help you to save tax ways. Here we are trying to point out some of the techniques to save tax. Restructuring of Salary Section 80C Medical insurance Medical Treatment Infrastructure bonds Donations House Rent Allowance Home Loans Leave Travel Allowance Tax on Bonus

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Restructuring of Salary Restructuring of your salary may not be possible always. But if your company permits, or if you are on good terms wi department, restructuring a few components of your salary could really help in reducing your tax liability. Followi components which should include in your salary. Food coupons Medical allowance Transport allowance Education allowance Uniform expenses (if any) Telephone expenses Company Cab

Food coupons are exempt from tax up to Rs 60,000 p.a. So opt for food coupons instead of lunch allowances. Op company car instead of using your own car will help you to reduce high prerequisite taxation. Produce bills of actual expenses incurred for all these allowances to reduce tax.

Section 80C Section 80C offers a maximum deduction up to Rs. 1, 00,000. You can avail this benefit by investing in different in options. Utilize this section to the fullest by investing in any of the available investment options. A few of the investme follows. Public Provident Fund Employee Provident Fund (EPF) Life Insurance Premium Unit Linked Insurance Plans (ULIPs) Equity Linked Savings Scheme National Savings Certificate 5 year fixed deposits with banks and post office. Home Loan principal repayment Tuition fees paid for childrens education, up to a maximum of 2 children. Deductions: Upto Rs. 1,00,000

Infrastructure Bonds (Section 80CCF) In addition to the Rs 1,00,000 deduction under 80C, a deduction of Rs 20,000 is also available for investments Infrastructure Bonds Deductions: Upto Rs. 20,000

Medical Insurance (Section 80D) By taking medical insurance for you, your spouse/ children and parents, you can avail tax benefit. For medical insura spouse and dependent children you can avail a deduction up to Rs. 15,000. If you are taking medical insurance for yo above 65 years you will get deduction upto Rs. 20,000. Deductions: Upto Rs. 35,000

Medical Treatment(Section 80DD) Amount spent for the medical treatment of dependents with a disability qualify for tax benefits under Section 80DD. In deductions up to Rs. 50,000 or 75.000 can be claimed based on the importance.

Deductions: Upto Rs. 75,000 Donations(Section 80G) Donations to specified funds or charitable institutions Deductions: There is no upper Limit House Rent Allowance (Section 80GG) Are you paying rent, you can get deduction on house rent paid even if you are not receiving any HRA (House Rent The least of the following could be claimed under Section 80GG.

25% of the total income or, Rs 2,000 per month or, Excess of rent paid over 10% of total income This deduction will however not be allowed, if you, your spouse or minor child owns a residential accommodation in t where you reside or perform office duties. If HRA forms part of your salary, then the minimum of the following three is available as exemption. The actual HRA received from your employer The actual rent paid by you for the house, minus 10% of your salary (this includes basic + dearness allowance, if any) 50% of your basic salary (for a metro) or 40% of your basic salary (for non-metro).

Home Loans (Section 24) You can use your home loan efficiently to save income tax. The principal component of your loan, is included under S offering a deduction up to Rs. 1, 00,000. At the same time the interest portion offers a deduction up to Rs. 1, 50,000 under Section 24.

Leave Travel Allowance (Section 10(5)) Use your (LTA) Leave Travel Allowance for your holidays, which is available twice in a block of four years. In case you unable to claim the benefit in a particular 4 year block, you could now carry forward one journey to the succeeding block in the first calendar year of that block. Thus, you may be eligible for three exemptions in that block.

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About the Author

Mr. Vinod Kumar. K
Manager - Product Development MBA

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Comments On this Article 1 Very nice, this would helpful to me

By. Mahesh

- On 0

Hi Vignesh, I think this will be useful to you for planning your savings
By. Vignesh Muralidharan

- On 0

sir plz send me the example of ITR1 &ITR4 with balance sheet @p& l a/c
By. MRS.Megha

- On 0

I want to know about salaried person tax saving areas and what documentation required, how much saving is their in particular h
By. Manoj Kumar

- On 0

Nice
By. venkatesh

- On 0

I have taken education loan for my daughter. She is studying in UK. Pls let me know if the interest component is deductible from yes what is the limit and under which section. would appreciate if you reply to me thru e mail tks

By. Ravi Chhabra

- On 0

need support
By. gunasekaran

- On 0

Hi! Appreciate the tax saving strategies mentioned by you. However, I am doubtful of the legitimacy of your cliams. For example mentioned that food allowance is exempt upto Rs. 60,000 p.a. As per the notification issued by the government on 18/12/2009 an effective till date, food allowance is exempted upto Rs. 50 per meal and to tea and snack per working day. Hence, if an average p for 20 days a month, he/she may be entitled for tax exempt meal allowance of Rs 1000 (for meal) and Rs. 1000 (for tea and snac one consumes snacks and tea equal in value to meals every day). This means, a maximum of Rs. 24,000 would be tax exempt. T lower for employees availing leaves of more than 2 per month. I am keen to know what assumptions you have taken to arrive at t Rs. 60,000 tax exempt meal allowance per year! Hope you are not assuming more than one meal per day since, the notification m tax exempt meal vouchers should be used during working hours. warm regards, Mani Shanker Ex- GM-Sales Accor services (Now Edenred is in the business of providing tax saving meal vouchers to employees
By. Mani Shanker

- On 0

pls send me articals

By. YOGESH BONDE

- On 0

10 If company car is not available and lease car is allowed. Whether I can buy the car on my spouse name and avail the same as le her. Is it allowed. If I buy the car on my name, whether depreciation is allowed as loss on capital/ income and how much fuel allow allowed for tax calculation.
By. Mathisekaran

- On 0

11 Really its very good information for the freshers who started their professional life and they dont know the ways that how can w taxes and it will help us a lot.
By. Manjunath. N

- On 0

12 its very good to to get the knowledge of tax

By. Mahesh

- On 0

13 Nice one!
By. Sachin

- On 0

14 quite good
By. vkshah

- On 0

15 Thanks for providing precious details. I want to know can we save the TAX on short term gain on stock traiding? as we are payin other charges at the time of trading. If yes How?
By. Narinder Kumar

- On 3

16 it\'s very good knowledge for newly tax payer,b\'cause nobody tell us in detail.pls use very simple language about tds.
By. santosh sawant

- On 3

17 Instructive.But sec.80GG NEEDS CLARIFICATIONS.

By. PROF. MUKHERJEE

- On 2

18 Inflation is in up swing. Only salaried employees tax is being deducted as TDS.Lot of scams uneven tons of money is flowing bu employees have no role in it. This year benifit to Salaried employees is only Rs 2060/- is it worth.
By. Etha Janardhana Rao

- On 2

19 How to get the restructuring of Salary from HR department, restructuring a few components of your salary could really help in re tax liability. please give me % wise calculation by gross salary for the month and to avoide tax liablity where tax will not eligiable
By. ravindran mariyal

- On 2

20

Very simple & understanding points.

By. Uttam Chavan

- On 2

21 I am a govt. employee. Please elaborate the following: If HRA forms part of your salary, then the minimum of the following three as exemption. The actual HRA received from your employer The actual rent paid by you for the house, minus 10% of your sala includes basic + dearness allowance, if any) 50% of your basic salary (for a metro) or 40% of your basic salary (for non-metro).
By. Sanjeev Dhami

- On 2

22 very good ...excellent

By. yash

- On 2

23 very good thing

By. birendra

- On 2

24 its very useful. thank u

By. Sumesh Payyadakkath

- On 2

25 Informative and well organised. It will help us a lot

By. G S Karmakar

- On 2

26 Good Home work done, Mr. K Vinod Kumar. May I suggest you to make a dashboard and allow user to fill their values, in order conclude the taxed amount, followed by suggestions, to reduce tax burden.
By. Prasanna Kumar

- On 2

27 limit for Sec 80DD is 1,00,000 not 75,000

By. rk

- On 2

28 it is excellent. The article is published in a right time where each person is planing for saving for Income Tax. But one thing i wou add that this type of article if published each week it will really helpful to readers like me.
By. LALATENDU PATI

- On 1

29

this is very intresting and knowladge full to know about saving the income from deduction. this is very helpfull to all the member earning and not having suffecient way to settele the income. thanks
By. vipin agrawal

- On 1

30 good very help full of incometax payer

By. Aniket Pathak

- On 1

31 appreciated info provided by author.

By. vishal

- On 1

32 good
By. sameer bakshi

- On 2

33 i have made my full investment of 1,00,000 under section 80C i have also made donation of 60,000 under section 80G , is i am e take tax exemption of 1,60,000
By. jasbir singh

- On 2

34 Useful Info
By. Shimauni

- On 1

35 good updated info.

By. deepak kumar

- On 1

36 i want details of central excise & service tax,tds & income tax new Amendment,and some changes tax matters.
By. Ranjan kumar jena

- On 1

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MONEY SCHOOL
Income Tax Slab for the FY 2011-12
Posted By - Mr. IndianMoney.com Research Team- On-05/03/11

odules

Finance minister Pranab Mukherjee presented Union Budget 2011 in Parliament on 28th February 2011. He did not individual tax payers either and raised the threshold income tax limit to Rs. 1,80,000 from the present Rs. 1,60,000.

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Eligibility age for senior citizens tax exemption has been reduced to 60 years from 65. Also the exemption for senio would be Rs. 2,50,000 from the present Rs. 2,40,000.

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Income tax rates vary from individual to individual depending on the status and type of citizenship he/she holds. For t of calculating income tax, Income Tax Act has classified assessees in to following categories, they are:-

change

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Individuals & HUFs AOPs & BOIs Co-operative Society Firm Local Authority Domestic Company Other Company

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ionary

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Following is the table of new income tax slabs proposed by Finance Minister Pranab Mukherjee in Budget 2011-12:

Updates

Individuals and HUFs

General Tax Payers

Income Level Tax Rate

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