Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions,
Deductions and Rebate for Salaried Employees under Section 10, Section
24, Section 89(1), Chapter VIA, and Section 87A
Income Tax Rate 2016-17
| TAXABLE INCOME RANGE | RATE OF INCOME TAX |
| Up to RS.2,50,000 | NIL |
| Rs.2,50,001 to Rs.5,00,000 | 10% of the amount by which the income exceeds Rs.2,50,000 |
| Rs.5,00,001 to Rs.10,00,000 | Rs.25,000 plus 20% of the amount by which the income exceeds Rs.5,00,000 |
| Above Rs.10,00,001 | Rs.1,25,000 plus 30% of the amount by which the income exceeds Rs.10,00,000 |
| Education Cess |
3% on Total Income Tax Payble
|
Section 10 (13A) - Exemption in respect of HRA:
Under
Sec. 10(13A), an employee who is in receipt of House Rent Allowance
(HRA) can claim exemption, if he does not live in his own house, and
pays rent in excess of 10% of his salary for his residential
accommodation.
Exemption u/s 10(13A) is the least of the following
1. Actual amount of HRA received
2. 50% (for Chennai, Mumbai, Kolkata and Delhi) / 40% (for other places) of the Salary for the relevant period
3. Rent paid Less 10% of Salary for the relevant period.
Section 87A - Rebate of Income Tax for Taxable income up to Rs. 5 Lakh
Finance Act 2016 provides for rebate of Income up to Rs. 5000/- in respect of Persons who have Taxable not exceeding Rs. 5 lakh.
Section 10(14) - Transport Allowance and Children Education Allowance (CEA)
Under
Section 10(14), the Budget FY 2016-17 lets you claim Rs. 19,200 tax
exemption as transport allowance and Rs. 2,400 tax exemption as Children
Education Allowance (CEA) in a financial year.
Section 24(b) - Home Loan
If
you have taken a Home Loan, then you can claim a tax deduction on the
interest component of the loan under Section 24(b). For self-occupied
properties, you can benefit from deductions of up to Rs. 2,00,000.
Section 89(1) - Income Tax relief in respect of Arrears of Salary pertaining to previous years
If
arrears of salary has been received in Financial year 2016-17 related
to previous years then Relief of Income Tax can be claimed u/s 89(1) by
accounting income from arrears in respective years on notional basis.
Deductions allowed under Chapter VI A of Income Tax Act
Deduction
Limit - Sec 80CCE. As per Section 80CCE, deduction can be claimed upto
Rs. 1,50,000 for the payments / contributions made under Sections
80C, 80CCC and 80CCD
Section 80C - Subject to overall limit of Rs. 1,50,000 under Section 80CCE
For investments in specified schemes, saving instruments etc.
- Life insurance premium for policy:a) in case of individual, on life of assessee, assessee’s spouse and any child of assessee
b) in case of HUF, on life of any member of the HUF
- Sum paid under a contract for a deferred annuity:a)
in case of individual, on life of the individual, individual’s spouse
and any child of the individual (however, contract should not contain an
option to receive cash payment in lieu of annuity)
b) in case of HUF, on life of any member of the HU
- Sum
deducted from salary payable to Government servant for securing
deferred annuity or making provision for his wife/children [qualifying
amount limited to 20% of salary]
- Contributions by an individual made under Employees’ Provident Fund Scheme
- Contribution to Public Provident Fund Account in the name of:a) in case of individual, such individual or his spouse or any child of such individual
b) in case of HUF, in the name of any member there of
- Contribution by an employee to a recognized provident fund
- Contribution by an employee to an approved superannuation fund
- Subscription to any notified security or notified deposit scheme of the Central Government.For
this purpose, Sukanya Samriddhi Account Scheme has been notified vide
Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the
year in Sukanya Samriddhi Account by an individual would be eligible for
deduction. Amount can be deposited by an individual in the name of her
girl child or any girl child for whom such an individual is the legal
guardian.
- Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
- Contribution for participation in unit-linked Insurance Plan of UTI:a) in case of an individual, in the name of the individual, his spouse or any child of such individual
b) in case of a HUF, in the name of any member thereof
- Contribution to notified unit-linked insurance plan of LIC Mutual Fund:a) in the case of an individual, in the name of the individual, his spouse or any child of such individual
b) in the case of a HUF, in the name of any member thereof
- Subscription
to notified deposit scheme or notified pension fund set up by National
Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax
Saving) Term Deposit Scheme, 2008]
- Tuition fees (excluding
development fees, donations, etc.) paid by an individual to any
university, college, school or other educational institution situated in
India, for full time education of any 2 of his/her children
- Certain payments for purchase/construction of residential house property
- Subscription
to notified schemes of (a) public sector companies engaged in providing
long-term finance for purchase/construction of houses in India for
residential purposes/(b) authority constituted under any law for
satisfying need for housing accommodation or for planning, development
or improvement of cities, towns and villages, or for both
- Sum paid towards notified annuity plan of LIC or other insurer
- Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
- Contribution
by an individual to any pension fund set up by any mutual fund which is
referred to in section 10(23D) or by the UTI (UTI Retirement Benefit
Pension Fund)
- Subscription to equity shares or debentures
forming part of any approved eligible issue of capital made by a public
company or public financial institutions
- Subscription to any
units of any approved mutual fund referred to in section 10(23D),
provided amount of subscription to such units is subscribed only in
‘eligible issue of capital’ referred to above. 21. Term deposits for a
fixed period of not less than 5 years with a scheduled bank, and which
is in accordance with a scheme framed and notified.
- Subscription to notified bonds issued by the NABARD.
- Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
- 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)
Section 80CCC - Subject to overall limit of Rs. 1,50,000 under Section 80CCE
Contribution to certain specified Pension Funds such as LIC or other authorised Insurance Companies
Section 80CCD(1) - Subject to overall limit of Rs. 1,50,000 under Section 80CCE
Deduction in respect of contributions to National Pension Scheme / System (NPS) notified by Central Government
Limit : 10% of salary in case of employees, 10% of gross total income in case of others
Section 80CCD(1B)
Deduction in respect of the deposit under a pension scheme notified by Central Government (NPS) up to Rs. 50,000/-
Section 80CCD(2)
Deduction
in respect of employer contributions to NPS - National Pension Scheme /
System - This deduction is available over and above the Rs. 1.5 lakh
limit
Section 80 CCG
Amount invested in listed
shares covered by Rajiv Gandhi Equity Equity Saving Scheme. Deduction of
50% of total investment subject to maximum of Rs. 25,000 is allowed for
3 consecutive assessment years, beginning with the assessment year
relevant to the previous year in which the listed shares or list units
of equity oriented funds are first acquired
Section 80D
Amount invested in Health Insurance
In
case of Individual, amount paid: a) For self, spouse and dependent
children: Up to Rs. 25,000 (Rs. 30,000 if specified person is a senior
citizen or very senior citizen) b) For parents: additional deduction of
Rs. 25,000 shall be allowed (Rs. 30,000 if parent is a senior citizen or
very super senior citizen) In case of HUF, up to Rs. 25,000 (Rs. 30,000
if specified person is a senior citizen or very senior citizen).
The aggregate amount of deduction cannot exceed Rs. 60,000/- in case of an individual.
Section 80DD
Expenditure
incurred for the medical treatment of a dependent (spouse, children,
parents, brothers and sisters of the individual) up to Rs. 75,000 (Rs.
1,25,000 in case of severe disability)
Section 80DDB
Expenditure
incurred for medical treatment of specified diseases for self, or
wholly dependent spouse, children, parents, brothers and sisters up to
Rs. 40,000 (Rs. 60,000 in case of senior citizen and Rs. 80,000 in case
of very senior citizen)
Section 80E
Interest paid on Educational Loan with no limit
Section 80EE
Interest
on loan for acquiring residential house property, sanctioned during the
financial year 2016-17. The Housing Loan availed should be up to Rs. 35
lakh and should have been availed in the year 2016-17
Section 80G
Deduction in respect of donations to certain funds, charitable institutions, etc.
Section 80GG
Rent paid for residential accommodation from the income of Tax Payer / assessee who is not in receipt of HRA
Least of the following shall be exempt from tax: a) Rent paid in excess of 10% of total income*;
b) 25% of the Total Income; or
c) Rs. 5,000 per month.
Section 80 TTA
Interest on Savings Bank accounts subject to maximum of Rs. 10,000
Section 80U
Exemption
of income tax for an income up Rs. 75,000 for persons with disability
(Rs. 1,25,000 in case of persons with severe disability)
Source:
Incometaxindia.gov.in
