"Rule 3: Take Full Advantage Of Tax Deductions"



Various tax deductions are available under the I.T. Law. One should try to avail of the benefit of these deductions for each and every member of the family. The various investment options that offer tax rebates should be reviewed keeping in mind various aspects like the age factor, etc. A checklist should be prepared of the various deductions permissible under the Income Tax Law (See Chapter X). Check whether each and every tax paying family member is claiming these. If special care is taken of this aspect, then it is legally possible to save a lot of income tax. 

It is suggested that a chart be prepared of tax, deductions and exemptions for every family member for purposes of overall tax planning of the family. It would be worthwhile if a group tax chart is prepared containing details relating to income tax, tax deductions, net taxable income, tax deducted at source, rebate of tax, and, finally, the net amount of income tax paid in the case of each family member. With the help of this one simple chart, you can achieve substantial tax planning as it will show up those who have not made optimum use of tax deductions.
TAX DEDUCTIONS
Tax payers now enjoy straight deduction in terms of Section 80C in respect of stipulated investments and expenditure to the tune of ` 1.5 Lakh. Moreover, such investment can be made in any single stipulated item, or a combination of the stipulated avenues of investment. Similarly, within the above limit the investment can also be made in Pension Plans in terms of Section 8OCCC. .
TAX RATES

(I) For Individuals (Males and Females both below the age of 60 years), HUFs, AOPs, BOls
For A.Y. 20142015 

Income Slab 
Rates of income tax 
(1) 
where the total income does not exceed Rs. 2,00,000 
Nil; 
(2) 
where the total income exceeds Rs. 2,00,000 but does not exceed Rs. 5,00,000 
10% of the amount by which the total income exceeds Rs. 2,00,000; 



(3) 
where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000 
Rs. 30,000 plus 20% of the amount by which the total income exceeds Rs. 5,00,000; 



(4) 
where the total income exceeds Rs. 10,00,000 
Ps. 1,30,000 plus 30% of the amount by which the total income exceeds Rs. 10,00,000 
Important Note : For F. Y. 20132014 (A. Y .20142015), Tax Rebate of 2000 for individuals having total income upto 5 Lakh. This credit will not be available to HUF, AOP, BOl, etc
For A.Y. 20152016

Income Slab 
Rates of income tax  
(1) 
where the total income does not exceed Rs. 2,50,000 
Nil; 
(2) 
where the total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000 
10% of the amount by which the total income exceeds Rs. 2,50,000; 
(3) 
where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000 
Rs. 25,000 plus 20% of the amount by which income exceeds Rs. 5,00,000; 
(4) 
where the total income exceeds Rs. 10,00,000 
Rs. 1,25,000 plus 30% of the amount by which the total income exceeds Rs. 10,00,000. 

(II) For Senior Citizens
(individuals who is age of 60 years or more but less than 80 years).
For A.Y. 20142015 

Income Slab 
Rates of income tax 
(1) 
where the total income does not exceed As. 2,50,000 
Nil; 
(2) 
where the total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000 
10% of the amount by which the total income exceeds Rs. 2,50,000. 
(3) 
where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000 
Rs. 25,000 pIus 20% of the amount by which the total income exceeds Rs. 5,00,000. 
(4) 
where the total income exceeds Rs. 10,00,000 
As. 1,25,000 pIus 30% of the amount by which the total income exceeds Rs. 10,00,000. 
For A.Y. 20152016

Income Slab 
Rates of Income Tax 
(1) 
where the total income does not exceed Rs. 3,00,000 
Nil 
(2) 
where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000 
10% of the amount by which the total income exceeds Rs. 3,00,000 
(3) 
where the total income exceeds Rs. 5,00,000 but does exceed Rs. 10,00,000 
Rs. 20,000 pIus 20% of the amount by which the total income exceeds Rs. 5,00,000 
(4) 
where the total income exceeds Rs. 10,00,000 
Rs. 1,20,000 pIus 30%, of the amount by which the total income exceeds As. 10,00,000. 


(III) For senior citizens (individuals who is age of 80 years or more).
For A.Y. 20142015 & A.Y. 20152016 

Income Slab 
Rates of income tax 
(1) 
where the total income does not exceed Rs. 5,00,000 
Nil; 
(2) 
where the total income exceeds Rs. 5,00,001 but does not exceed Rs. 10,00,000 
20% of the amount by which the total income exceeds Rs. 5,00,000; 
(3) 
where the total income exceeds Rs. 10,00,000 
Rs. 1,00,000 plus 30% of the amount by which the total income exceeds Rs. 10,00,000. 

Notes:—
(1) Surcharge— ForA.Y. 20142015 &201 52016,10% Surcharge on Individual, HUF, AOP, BOl, if total income exceeds ` 1 crore.
(2) Education Cess — 2% of Incometax.
(3) Secondary & Higher Education Cess —1% of Incometax.
Marginal Relief: In the case of person mentioned above having total income exceeding one crore rupees the total amount payable as income tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees 





