Deductions Under Chapter Vi A

Section 80C 
1) Life Insurance Premium
2)  Mutual Fund 
3) EPF ( Employee Contribution to PF (Normally 12% Of Basic + Da )
4) PPF(Public Provident Funds)
5)  NSC (National Saving Certificates)
6)  KVP/IVP (Kisan Vikas Patra)
7)  FD>5Yrs 
8)  Tuition Fees Of Children
9)  Housing Loan: (Principal Interest Repaid only)
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Section 80D
1) Medical Insurance
( Family 20000 + Parents 20000)
( If Senior Citizen Then 25000)
(Included In Above 5000 For Medical Lab Test)
Maximum Deduction is 150000 for Section 80C
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Section 80G 
Certain Donations have
100% Deduction like Pm Relief Fund
50% Deduction like Temple/NGO
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Section 80TTA
1) Saving Bank Interest
Maximum 10000 Deduction

Interest Earned on Both Savings and FD
Total Interest Earned whether FD or Savings is Income from Other Sources
80TTA Deduction is only for Interest on Savings Max 10000
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Q1
What is the PGBP Income of a proprietorship (Individual) as per Section 44AD in following case ?

   
Turnover 5000000
Profit 1500000
Interest Income on FD 18000
Interest Income on Savings 4000
Mutual Fund Saving 15000
Life Insurance Premium 40000
Medical Insurance  
Self 12000
Wife 11000
View Answer

Q2
Suppose in last question,person wants to pay 6000 tax What should be his PGBP Income 
-a-

TURNOVER 5000000
   
PROFIT AND GAIN OF BUSINESS AND PROFESSION 458456
(MINIMUM 8% OF TURNOVER)  
INCOME FROM OTHER SOURCES 22000
GROSS TOTAL INCOME 480456
Less  
DEDUCTIONS  
80C 55000
80D 20000
80TTA 4000
TOTAL DEDUCTIONS 79000
   
NET TOTAL INCOME 401456
TAX 7573
REBATE 0
NET TAX 7573
CESS 227
TAX+ CESS 7800
Less  
Annual TDS 1800
Net Tax Payable 6000

Note:-

We can use goal seek formula for the same in excel.

Learn Goal seek Here

 

  1. Practical Income Tax
  2. Income Tax for Small Business
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
  • hem1717's image

    Hi Team There! Would you please explain as how did PGBP calculated to Rs. 4,23,019 in question 2 where person wants to pay Tax Rs. 5000.

     

    Thanx in advance!

    View answer
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