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 25000 + Parents 25000)
( If Senior Citizen Then 30000)
(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 |
| Interest Income on FD | 18000 |
| Interest Income on Savings | 4000 |
| Mutual Fund Saving | 15000 |
| Life Insurance Premium | 40000 |
| Medical Insurance | |
| Self | 14000 |
| Wife | 11000 |
Answer
Income Tax Computation
| TURNOVER | 5000000 |
| PROFIT AND GAIN OF BUSINESS AND PROFESSION | 400000 |
| (MINIMUM 8% OF TURNOVER) | |
| INCOME FROM OTHER SOURCES | 22000 |
| GROSS TOTAL INCOME | 422000 |
| Less | |
| DEDUCTIONS | |
| 80C | 55000 |
| 80D |
25000 |
| 80TTA | 4000 |
| TOTAL DEDUCTIONS | 84000 |
| NET TOTAL INCOME |
338000 |
| TAX | 4400 |
| REBATE | 2500 |
| NET TAX | 1900 |
| CESS | 76 |
| TAX+ CESS | 1976 |
Q2
Suppose in last question,person wants to pay 10000 tax What should be his PGBP Income
Answer
| TURNOVER | 5000000 |
| Profit and Gains of Business and Professions | 479308 |
| Income from Other Sources | 22000 |
| Gross Total income | 501308 |
| Less | |
| Deduction Under 80C | 55000 |
| Deduction Under 80D | 25000 |
| Deduction Under 80TTA | 4000 |
| Net Total income | 442308 |
| Tax | 9615 |
| Rebate | 0 |
| Net Tax | 9615 |
| Cess @ 4% | 385 |
| Net Tax+Cess | 10000 |
Note:-
We can use goal seek formula for the same in excel.
