How to save tax for FY 2017-18 (AY 2018-19)?

Income Tax Slabs & Rates for FY 2017-18 (AY 2018–19)

Income Tax Slabs for Individual TaxPayers

Income Tax Slab	Income Tax Rate
Income upto Rs. 2,50,000	Nil
Income between Rs. 2,50,001 - Rs. 500,000	5%
Income between Rs. 500,001 - Rs. 10,00,000	20%
Income above Rs. 10,00,000	30%

Income Tax Slabs for Senior Citizens (Age 60 years or more but less than 80 years)

Income Tax Slab	Income Tax Rate
Income upto Rs. 3,00,000	Nil
Income between Rs. 3,00,001 - Rs. 500,000	5%
Income between Rs. 500,001 - Rs. 10,00,000	20%
Income above Rs. 10,00,000	30%

Income Tax Slabs for Senior Citizens (Age 80 years or more)

Income Tax Slab	Income Tax Rate
Income upto Rs. 5,00,000	Nil
Income between Rs. 500,001 - Rs. 10,00,000	20%
Income above Rs. 10,00,000	30%

**Surcharge and Cess applicable on the above rates.

**10% surcharge is applicable on income tax if the total income exceeds Rs. 50 lakhs but below 1 crore.

**15% surcharge is applicable on income tax if the total income exceeds Rs 1 crore.

**2% Education cess and 1% Secondary and Higher Education Cess is applicable on the income tax and applicable surcharge.

**For individuals whose income is equal to or less than Rs 3.5 lakh, a tax rebate of Rs. 2,500 or 100% of income tax (whichever is lower) is available under section 87A.

**There is no separate tax slab for men and women.

Some Tax Saving Options for FY 2017-18 (AY 2018-19)

Tax Saving Options under Section 80C

Equity Linked Savings Scheme (ELSS)

ELSS (Equity Linked Savings Scheme) is a diversified equity mutual fund and it invests in equity and equity-related products. ELSS funds have a lock-in period of three years. You can avail tax benefits under section 80C of Income Tax Act 1961 for an investment of up to Rs 1.5 lakh. Since ELSS is an equity mutual fund, returns from an ELSS reflect returns from the equity markets.
All about ELSS | Tax saving mutual funds

Public Provident Fund (PPF)

PPF (Public Provident Fund) is a popular and one of the best long-term investment schemes backed by government of India. It is open for general public and is very popular with salaried as well as self-employed class of individuals. Your investment in your PPF accounts can be claimed as tax exemptions under Section 80C. A maximum of Rs 1.5 lakh can be claimed in one financial year. The PPF has a tenure of 15 years. It offers risk-free returns with attractive interest rate and interest earned on deposits are exempted from Tax. This makes the PPF Scheme one of the most tax-efficient instruments.
Things you should know about PPF account

National Savings Certificate (NSC)

National Savings Certificate is an Indian Government saving bond, popularly known as NSC. NSC is primarily used for small savings and income tax saving investments in India. NSCs are eligible for tax breaks for the financial year in which they are purchased. The holder gets the tax benefit up to Rs. 1.5 lakh under Section 80C of Income Tax Act, 1961. NSCs can be purchased from Post Offices and come with a lock-in period of 5 years.
National Savings Certificate (NSC)

Employee Provident Fund (EPF)

Employee Provident Fund (EPF) is the most popular investment scheme with the salaried persons in India. A part of your salary (12% of your basic wages plus dearness allowance) gets contributed every month towards EPF. You can avail tax deduction up to Rs. 1.5 lakh for this contribution to your account under Section 80C. This fund is managed and maintained by the Employee Provident Fund Organization (EPFO) under the Ministry of Labour and Employment, Government of India.
Things you must know about EPF

Sukanya Samriddhi Account

Sukanya Samriddhi Account is a Government of India backed saving scheme targeted at the parents of girl children. The scheme is aimed at the betterment of girl child in the country. The minimum annual deposit is Rs 1000. Investment of up to Rs 1.5 lakh can be deposited to an SSA for tax saving under Section 80C. The scheme encourages parents to build a fund for the higher education and marriage expenses for their female child.
Sukanya Samriddhi Account

National Pension System (NPS)

The NPS is a pension scheme started by the Indian Government for the unorganised sector and working professionals to have a pension after retirement. Any contribution made by an individual up to Rs 1.5 lakh can be used to avail tax benefits under Section 80C. One can contribute a minimum amount of Rs.500 per month or Rs.6000 a year. The subscribers can choose from different NPS plans as per their risk profile.
What is NPS (National Pension System)?

Bank Fixed Deposits (FD)

Bank fixed deposits are the safest option for investment, but comes with a lock-in period of 5 years. You will get a fixed return after the maturity. Currently, different banks offer different interest on these FDs. These FDs also qualifies for deduction up to a maximum amount of Rs.1.5 lakh under section 80C. The returns are guaranteed but the interest earned on it is taxable.

Five-year Post Office Time Deposit (POTD)

Post Office Time Deposits are similar to bank fixed deposits. POTDs are available for different time periods like one, two, three and five years. The investment made towards 5 Years TD is eligible for the benefit of Section 80C. Interest payable annually but calculated quarterly. The interest earned on it is taxable. You can open any number of accounts in any post office.
Post Office Time Deposit

Life Insurance Premium

The premium amount paid for life insurance for self, spouse, and children is an also eligible for tax deduction under Section 80C. Please note that you will not get any tax deduction under Section 80C for the premiums paid by you for your parents or in-laws. If you are paying premium for more than one insurance policy, all the premiums can be included. The limit for claiming these benefits is Rs. 1.5 lakhs.
Why do you need life insurance?

Unit Linked Insurance Plans (ULIP)

Unit Linked Insurance Plans are a mix of life insurance and investment. They provide you with the dual benefit of equity investment and life insurance. A portion of the invested amount in ULIPs is used to provide life insurance and the rest of the amount is invested in the equity market. Investments of up to Rs 1.5 lakh in ULIPs are eligible for claiming tax benefits under Section 80C.

Senior Citizens Savings Scheme (SCSS) Account

This scheme is exclusively meant only for senior citizens. Individuals (55 years or more but less than 60 years) who have retired on superannuation or under VRS can also open SCSS account subject to the condition that he/she should open this account within one month of receipt of his/her retirement benefits. The amount should also not exceed the amount of retirement benefits. Tenure of the SCSS account is 5 years. Investment of up to Rs 1.5 lakh under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961.
Senior Citizens Savings Scheme (SCSS)

Payment of Children’s Tuition Fees

Paying your children's school or college fees is a huge expenditure in the modern times. You can claim the deduction up to Rs.1.5 lakh under section 80C. You can claim this deduction only for two children and that too for the school, college, university or educational institute situated in India only. It is available for Full-Time courses only. Please note that there is no deduction is available for part-time or distance learning courses.

Home Loan Repayment

One can avail tax benefits on the repayment of the principal amount of a home loan. The maximum tax deduction allowed is Rs.1.5 lakhs under Section 80C. This deduction is also applicable on stamp duty charges and registration fees.

Tax Saving Option under Section 80CCD (1B)

National Pension System (NPS)

An additional Rs 50,000 can also be contributed in NPS for tax benefits under Section 80CCD(1B). NPS savings are mainly done for retirement purpose. One can contribute a minimum amount of Rs.500 per month or Rs.6000 a year. The subscribers can choose from different NPS plans as per their risk profile.
What is NPS (National Pension System)?

Tax Saving Option under Section 80D

Medical Insurance

Premium paid for health insurance for self, spouse, children, and parents are eligible for claiming tax benefit under section 80D. You can claim a maximum deduction of Rs. 25000 if your age is below 60 years and Rs. 30000 if your age is above 60 years. You can also claim an additional deduction of Rs 25000 for buying health insurance for your parents. It will be Rs. 30000 in case of either parent being senior citizens. You can claim this deduction if the premium is paid in any mode other than cash. A deduction of Rs 5000 is also allowed for preventive health checkup for self, spouse, children, and parents provided it should be within the limit of Rs. 25000/30000.
Mediclaim Policy | Mediclaim Insurance | Health Insurance

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Tuesday, 2 January 2018