Tax Planning
Tax planning is done to determine how to gain maximum tax benefit from existing tax laws and for planning of income , expenses and investments taking full advantage of tax breaks. It involves making strategies to reduce time or shift either current or future income tax liabilities.
By repositioning one’s investment and seeking out potential tax savings opportunities to take advantage of, it is possible to increase one’s income and savings, which otherwise would have gone to the tax authorities.
| Section | Deduction On | Applicable |
|---|---|---|
| 80C | ||
| 80CCC | For amount deposited in annuity plan | |
| 80CCD(1) | Employees contribution to NPS account | |
| 80CCD(1B) | Additional contribution to NPS | |
| 80CCD(2) | Employer's contribution to NPS account | |
| 80D | Medical Insurance - Self, Spouse, Children | |
| Parents more than 60 years old | ||
| 80DD | Medical Treatment for handicapped dependent or payment to specified scheme for maintenance of | |
| Disability is 80% or more | ||
| 80DDB | Medical Expenditure on self or Dependent Relative for diseases specified in Rule 11DD | |
| For more than 60 years old | ||
| 80E | Interest on education loan | |
| 80EE | Interest on home loan for first time home owners affordable housing | |
| 80GG | For rent paid when HRA is not received from employer | |
| 80TTA(1) | Interest income from savings account | |
| 80TTB | Exemption of interest from banks, post office, etc., senior citizens | |
| 80U | Self-suffering from disability : An individual suffering from a physical disability (including blindness) | |
| An individual suffering from severe disability | ||
| 80RRB | Deductions on income by way of Royalty of a Patent |
Income tax has classified three categories of "Individual" taxpayers such as:
- individuals (aged less than of 60years)
- Resident Senior Citizens (60 to 80 year of age)
- Resident Super Senior Citizens (aged more than of 80years)
| AGE < 60 YRS. | AY:2021-22 | ||
|---|---|---|---|
| Taxable Income | Tax Rate | ||
| Upto 2,50,000 | Nill | ||
| From 2,50,000 Upto 5,00,000 | 5% | ||
| 5,00,001 Upto 7,50,000 | 10% | ||
| 7,50,001 Upto 10,00,000 | 15% | ||
| 10,00,001 Upto 12,50,000 | 20% | ||
| 12,50,001 Upto 15,00,000 | 25% | ||
| 15,00,001 And Above | 30% |
| Total Income Exceeds | Surcharge of | ||
|---|---|---|---|
| 50,00,000 | 10% | ||
| 1,00,00,000 | 15% | ||
| 2,00,00,000 | 25% | ||
| 5,00,00,000 | 37% |