Exemptions available to Salaried Employees, Income -Tax 2014-15, Plus Tax Preparation Excel Utility for FY 2014-15

As per the Finance Budget 2014 the following changes relating to determination of Income Tax payable by Salaried Employees, which provide income tax exemption varied from Rs.15,000 to Rs. 30,000 on the basis of taxable income of individual.

  1. Income Tax Slab has Raised  from Rs. 2 lakh to Rs. 2.5 lakh
  2.  80 C deduction limit has Raised from 1 Lakh to 1.5 Lakh
  3. Income Taxexemption on Interest paid on housing loan under Section 24 of the Income TaxAct increased from Rs. 1.5 lakh to Rs. 2 lakh

Income Tax Rebate of Rs. 2000 for taxable income up to Rs. 5 lakh will be continues this year also under Section 87A .

Click here to download Income Tax Calculator 2014-15 (A. Year 2015-16) with Form 16 [ This Excel utility can prepare at a time Tax Compute sheet + HRA Calculation + Form 16 Part A&B and Form 16 Part B]

Allowances exempted under Section 10 of Income Tax Act

House Rent Allowance:

When rent is actually paid by an individual, he / she is entitled to exemption in respect ofHouse Rent Allowance which is limited to least of the following

  1. Actual HRA received.
  2. Rent paid less 10% of salary.
  3. 40% of Salary (50% in case of Mumbai, Chennai, Kolkata, Delhi) Salary is defined as Basic Pay. Dearness allowance will form part of salary if the same enters into computation of retirement benefits

Click here to download Exemption on HRA Calculator

Leave Travel Allowance or Leave Travel Concession :

LTC or LTA is exempted if the same is actually spent

Transport Allowance:

Transport Allowance granted to an employee to meet expenditure for the purpose of commuting between the place of residence and place of duty. Income Tax Exemption on Transport Allowance is restricted to Rs.800 per month.

Children Education allowance:

Rs. 100/- per month per child up to a maximum of 2 children.

Hostel Allowance:

Rs. 300/- per month per child upto a maximum of two children.

Income Tax Exemption on Interest paid on Housing Loan / Income or loss from House Property:

Total deduction for interest paid on Housing Loan when the property is self occupied has been increased to Rs. 2 lakh as per amendment made in Under Section 24 B

Clickhere to Download automated Form 16 Part B for Financial Year 2014-15 ( This Excel Utility can prepare at a time 50 employees  Automatic Form 16 Part B)

Section 80C: [Click to view total deduction of U/s 80C]

The total deduction under this section (along with section 80CCC and 80CCD) is limited to Rs. 1.50 lakh. Some investments, savings, expenditure etc covered under Section 80 C.

Deductions under Chapter VIA of Income Tax Act [Click to view Chapter VIA]

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

As per the Budget 2012 announcements, a new scheme Rajiv Gandhi Equity Saving Scheme (RGESS) will be launched. Those investors whose annual income is less than Rs. 10 lakh (proposed Rs. 12 lakh from A.Y. 2014-15) can invest in this scheme up to Rs. 50,000 and get adeduction of 50% of the investment. So if you invest Rs. 50,000 (maximum amount eligible forincome tax rebate is Rs. 50,000), you can claim a tax deduction of Rs. 25,000 (50% of Rs. 50,000).

Section 80D: Deduction in respect of Medical Insurance

Deduction is available up to Rs. 20,000/- for senior citizens and up to Rs. 15,000/ in other cases for insurance of self, spouse and dependent children. Additionally, a deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 20,000/- if parents are senior Citizen and Rs. 15,000/- in other cases. Therefore, the maximum deductionavailable under this section is to the extent of Rs. 40,000/-. From AY 2013-14, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available.

Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative

Deduction of Rs. 50,000/- w.e.f. 01.04.2004 in respect of

  1. Expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative.
  2. Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Further, if the defendant is a person with severe disability a deduction of Rs. 100,000/- shall beavailable under this section. The handicapped dependent should be a dependent relative suffering from a permanent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist. Note: A person with ‘severe disability’ means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the ‘Persons with disabilities (Equal opportunities, protection of rights and full participation)’ Act.

Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative

A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less isavailable for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.

Section 80E: Deduction in respect of Interest on Loan for Higher Studies

Deduction in respect of interest on loan taken for pursuing higher education. The deduction is also available for the purpose of higher education of a relative w.e.f. A.Y. 2008-09.

Section 80G: Deduction in respect of Various Donations

The various donations specified in Sec. 80G are eligible for deduction upto either 100% or 50% with or without restriction as provided in Sec. 80G

Section 80GG: Deduction in respect of House Rent Paid

Deduction available is the least of

  1. Rent paid less 10% of total income
  2. Rs. 2000/- per month i.e.Maximum Deduction available is 24,000/-
  3. 25% of total income, provided
  4.               Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
  5.                He should not be in receipt of house rent allowance.
  6.               He should not have self occupied residential premises in any other place.

Section 80 TTA: Deduction from gross total income in respect of any Income by way of Interest on Savings account

Deduction from gross total income of an individual or HUF, upto a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account ( not time deposits ) with a bank, co-operative society or post office, is allowable w.e.f. 01.04.2012 (Assessment Year 2013-14).

Section 80U: Deduction in respect of Person suffering from Physical Disability

Deduction of Rs. 50,000/- to an individual who suffers from a physical disability(including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 100,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

Click here to Download Income Tax Calculator 2014-15 (Assement Year 2015-16) with Arrears Relief Calculation with Form 10E

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