Tax Savers » Legal Corner

Will I be eligible for any deduction if I take a loan for some major repairs and renovation of my house?

editor — Fri, 15 Jan 2010 12:48:52 +0000

Yes. You will be eligible for a deduction up to Rs. 30,000 in such a case. However it is essential to make sure that the repair is major or something which results in the substantial change in the structure. For example constructing a new marble floor is a major repair however whitewashing your house is not.

The different incomes taxed under the head ‘Salaries’

editor — Thu, 14 Jan 2010 05:08:27 +0000

Basically there are three different incomes taxable under the head Salaries:

Salary Due: The due income of an employee from his employer, whether paid or not. It is also applicable if the income is due from a former employer.
Advance Salary: A salary paid by an employer to his employee before the due date. The salary paid by the former employer can also be counted under this section.
Arrears of Salary: Any arrears of salary for which income tax had not been deducted previously when given to an employer comes under this section. When a former employee pays arrears then it can also be counted.

Most common tax deductions

editor — Thu, 14 Jan 2010 04:46:08 +0000

Basically there are four common deductions which people can avail for tax savings. They come under the section of the Income Tax Act.

80C deduction: Up to Rs.1 lakh, and used towards certain investments, payment of insurance premium, repayment of home loan principal amount, provident fund etc.

80D deduction: Up to Rs.15,000, and used towards annual medical expenses

80E deduction: Deduction of entire amount of interest paid on higher education loan for any family member

80G deduction: Deduction for contribution to charitable organization

Apart from these there are various other deductions which are not so common or might not apply to you.

Tax Deductions

An item which allows you to take a tax benefit up to the entire amount of the deduction is tax deduction. It reduces your taxable income by the amount of deduction.

Let’s take an example:

Arun’s annual income is Rs. 100

Arun’s eligible deduction is Rs. 30

Therefore, Arun’s taxable income is Rs. 70

If Arun did not have a deduction then his taxable income would have been Rs. 100

By using the deduction Arun has saved taxes on up to Rs. 30

Tax Rebates given under Indian Income Tax Act

editor — Wed, 13 Jan 2010 11:13:12 +0000

Investment Schemes under section 80C

Premium payments of life insurance
Maximum of Rs. 70,000/ year in contributions to Employees Provident Fund.
National Savings Certificates
Contributions to Employees Provident Fund/GPF
Unit Linked Insurance plan(ULIP)
Housing loan repayment (Principal)
Equity Linked Savings Scheme (ELSS)
Admission fees or college fees paid for full-time education of any two children of the assessee. (Any development fee or donation will not be eligible for deduction)
Infrastructure bonds issued by Institution/ Banks such as IDBI, ICICI, REC, PF etc.
Interest accrued in respect of NSC VIII issue.

Deduction under section 80 CCC (1)

Under this section an individual gets a deduction of up to Rs. 10,000 in respect to contribution to ‘Pension’ scheme of LIC of India or any other Insurance Co.

Some of the tax saving pension plans available in market is LIC’s Jeevan Suraksha, ICICI Pru Life Time Pension, Max Easy Life Policy, Aviva Life Pension Plus, Tata AIG’s Nirvana Plus etc.

Deduction under section 80 CCE

Under section 80 C, 80CCC and 80CCD an aggregate deduction ca