Important Deductions for Salaried Employees

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)

Maximum Deduction is 150000 for Section 80C

Learn More

 

Section 80D

Medical Insurance( Family 25000 + Parents 25000)

( Family 25000 + Parents 25000)( If Senior Citizen Then 30000)

( If Senior Citizen Then 30000)(Included In Above 5000 For Medical Lab Test)

(Included In Above 5000 For Medical Lab Test)

 

Learn More

 

Section 80G 

Certain Donations have100% Deduction like Pm Relief Fund

100% Deduction like Pm Relief Fund50% Deduction like Temple/NGO

50% Deduction like Temple/NGO

Learn More

Existing (Financial Year 2016 - 2017 or AY 2017-18)

If Donation amount is more than 10000,it cant be made in Cash

---

New(Financial Year 2017 - 2018 or AY 2018-19)

If Donation amount is more than 2000,it cant be made in Cash

If made in cash,then deduction not allowed

Section 80TTA

Saving Bank Interest

Maxmium 10000 Deduction,

 

Section 80TTB

 For Senior citizen Interest Income Deduction upto 50000 

from F.Y 2018-19,  

 

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 and

For Senior citizen under Section 80TTB  Deduction for Interest earned on both saving and FD is  50000 

Learn More  

 

Examples

Introduction

Suppose My Salary Income is 30000 per month. What is My Income from Salary?

View

Particular	Amount
Monthly Salary	30000
Income from Salary	360000
less Standard Deduction	40000
Net Income From Salary	320000 (Annual Salary)

Suppose My Salary Income is 30000 per month. Also I have Interest Income is 5000 per annum of Savings Account
What is My Income from Salary? Also what is my Gross Total income?

View

Paticular		For Senior Citizen
Monthly Salary	30000	30000
Income from Salary	360000	360000
less Standard Deduction	40000	40000
Net Income From Salary	320000	320000
Income from Other Sources	5000	5000 (Total interest Income covered here)
Gross Total income	325000	325000

Suppose My Salary Income is 30000 per month. Also I have Interest Income is 5000 p.a of Savings Account. What is My Income from Salary?

Also what is my Gross Total income and Net Total Income

View

		For Senior Citizen
Monthly Salary	30000	30000
Income from Salary	360000	360000
less Standard Deduction	40000	40000
Net Income From Salary	320000	320000
Income from Other Sources	5000	5000 (Total interest Income covered here)
Gross Total income	325000	325000
Deduction Section 80TTA	5000	5000 (Deduction of Savings Bank Interest Available of 10000 max)
Net Total Income	320000	320000

Suppose My Salary Income is 30000 per month. Also I have Interest Income is 15000 per annum of Savings Account. What is My Income from Salary?
Also what is my Gross Total income and Net Total Income?

View

		For Senior Citizen
Monthly Salary	30000	30000
Income from Salary	360000	360000
less Standard Deduction	40000	40000
Net Income From Salary	320000	320000
Income from Other Sources	15000	15000   (Total interest Income covered here)
Gross Total income	335000	335000
Deduction Section 80TTA	10000	10000
Net Total Income	325000	320000

Suppose My Salary Income is 30000 per month

Also I have Interest Income is 15000 per annum of Savings Account+8000 on FD Account

What is My Income from Salary

Also what is my Gross Total income and Net Total Income

View

		For Senior Citizen
Monthly Salary	30000	30000
Income from Salary	360000	360000
less Standard Deduction	40000	40000
Net Income From Salary	320000	320000
Income from Other Sources	23000	23000 (Total interest Income covered here)
Gross Total income	343000	343000
Deduction Section 80TTA	10000	0  (Deduction of Savings Bank Interest Available of 10000 max (in our case 5000 is Interest, so 5000 Deduction)
Deduction Section 80TTB	0	23000 (Deduction of Savings Bank Interest & FD Available of 50000 max for senior citizen)
Net Total Income	333000	320000

Suppose My Salary Income is 30000 per month. Also I have Interest Income is 8000 on FD Account. What is My Income from Salary?
Also what is my Gross Total income and Net Total Income?

View

		For Senior Citizen
Monthly Salary	30000	30000
Income from Salary	360000	360000
less Standard Deduction	40000	40000
Net Income From Salary	320000	320000 (Total interest Income covered here)
Income from Other Sources	8000	8000 (Total interest Income covered here)
Gross Total income	328000	328000
Deduction Section 80TTA	0	0 (Deduction of Savings Bank Interest Available of 10000 max)
Net Total Income	328000	320000

 

DOWNLOAD AND TRY

Q1 Calculate Gross Total Income, Deductions and Net total Income in following Cases

Particulars	Case 1	Case 2	Case 3	Case 4
Income from Salaries	400000	400000	400000	400000
I nterest Income
On FD	3000	13000	30000	0
On Savings	2000	12000	0	40000
Total	5000	25000	30000	40000

View answer

Particulars	Case 1	Case 2	Case 3	Case 4
Monthly Salary	40000	40000	40000	40000
Income from Salaries	480000	480000	480000	480000
Less Standard Deduction	40000	40000	40000	40000
Net Income From Salary	440000	440000	440000	440000
Income from Other Sources	5000	25000	30000	40000 (Total interest Income covered here)
Total Gross Income	445000	465000	470000	480000
Less Deduction - Chapter VIA
80 TTA	2000	10000	0	10000    (Deduction of Savings Bank Interest Available of 10000 max (no deduction of fd)
Net Total Income	443000	455000	470000	470000
TAX	9650	10250	11000	11000
REBATE	0	0	0	0
NET TAX	9650	10250	11000	11000
CESS	386	410	440	440
TAX+ CESS	10036	10660	11440	11440
MONTHLY TDS	836	888	953	953
Gross Salary	40000	40000	40000	40000
TDS	836	888	953	953
Net Salary	39164	39112	39047	39047

Q2

Particulars	Case 1	Case 2	Case 3	Case 4
Income from Salaries	400000	400000	400000	400000
Medical Insurance Made
Self	8000	10000	10000	30000
Wife	8000	10000	10000	30000
Children		10000	10000	30000
Father (Senior Citizen)	0	0	30000	60000

Calculate Gross Total Income,Deductions and Net total Income 

View answer

Particulars	Case 1	Case 2	Case 3	Case 4
Monthly Salary	40000	40000	40000	40000
Income from Salaries	480000	480000	480000	480000
Less Standard Deduction	40000	40000	40000	40000
Net Income From Salary	440000	440000	440000	440000
Income from Other Sources	0	0	0	0
Total Gross Income	440000	440000	440000	440000
Less Deduction - Chapter VIA
Section 80D
Family	16000	25000	25000	25000 (MAX 25000 FOR SELF,WIFE AND CHILDREN)
Parents	0	0	30000	50000  (MAX 25000 FOR PARENTS,50000 FOR SENIOR CITIZENS)
Total 80D	16000	25000	55000	75000
Net Total Income	424000	415000	385000	365000
TAX	8700	8250	6750	5750
REBATE	0	0	0	0
NET TAX	8700	8250	6750	5750
CESS	348	330	270	230
TAX+ CESS	9048	8580	7020	5980
MONTHLY TDS	754	715	585	498
Gross Salary	40000	40000	40000	40000
TDS	754	715	585	498
Net Salary	39246	39285	39415	39502

Q3

Particulars	Case 1	Case 2	Case 3	Case 4
Monthly Flat Salary	20000	35000	80000	200000

Employees has no Savings,However his PF Deducted @ 12%

View answer

Particulars	Case 1	Case 2	Case 3	Case 4
Monthly Salary	20000	35000	80000	200000
Income from Salaries	240000	420000	960000	2400000
Less Standard Deduction	40000	40000	40000	40000
Net Income From Salary	200000	380000	920000	2360000
Income from Other Sources	0	0	0	0
Total Gross Income	200000	380000	920000	2360000
Less Deduction - Chapter VIA
80C	28800	50400	115200	288000  (12% PF is allowed as deduction under 80C)
Total Deduction	28800	50400	115200	288000
Net Total Income	171200	329600	804800	2072000
TAX	0	3980	73460	434100
REBATE	0	2500	0	0
NET TAX	0	1480	73460	434100
CESS	0	59	2938	17364
TAX+ CESS	0	1539	76398	451464
MONTHLY TDS	0	128	6367	37622
Gross Salary	20000	35000	80000	200000
TDS	0	128	6367	37622
Net Salary	20000	34872	73633	162378

If we Repay Housing Loan EMI

In case of Self Occupied Property,

 We can claim loss from House Property of Maximum 200,000 of Interest Amount

Also,we can claim Deduction of Principal Amount under Section 80C

(Max Deduction of 80C is 150000)

Learn more

 

Q4

Particulars	Amt	Remarks
Basic Salary	60000
Children Education Allowance	4500	(1500*3 children)
Variable Pay	15000

Employee pays Tuition fees of Rs.6000(per quarter) per child

Out of which Rs.900 is reimbursed by the company

Also he has 4800 savings bank interest

Emploee PF @12% is deducted

View answer

Particulars	Amt Recd	Exmpt	Taxable
Basic Salary p.m	60000	0	60000
Children Education Allowance	4500	200	4300
School Fees reimbursement	0	0	0
Variable Pay	15000	0	15000
Total	79500	200	79300

Particulars	Amt
Monthly Taxable Salary	79300
Income from Salaries	951600
Less Standard Deduction	40000
Net Income From Salary	911600
Income from Other Sources	4800
Total Gross Income	916400
Less Deduction - Chapter VIA
80C	150000
80TTA	4800
Total Deduction	154800
Net Total Income	761600
TAX	64820
REBATE	0
NET TAX	64820
CESS	2593
TAX+ CESS	67413
MONTHLY TDS	5618
Gross Salary	79500
Monthly TDS	5618
NET SALARY	73882

Working note for 80C

Particulars	Amt
Provident Fund	86400
Tuition Fees	72000
	1 58400
Max deduction allowed	150000

 

Q5

Particulars	Case 1	Case 2	Case 3	Case 4
Monthly Salary	20000	30000	50000	100000
Interest Income
On FD	3000	13000	30000	0
On Savings	2000	12000	0	40000
Total	5000	25000	30000	40000
Donation made through cheque
NGO	15000	60000	20000	40000
Kerala Relief fund	5000	20000	20000	30000

Employees PF is deducted @ 12%

View answer

Particulars	Case 1	Case 2	Case 3	Case 4
Monthly Salary	20000	30000	50000	100000
Income from Salaries	240000	360000	600000	1200000
Less Standard Deduction	40000	40000	40000	40000
Net Income From Salary	200000	320000	560000	1160000
Income from Other Sources	5000	25000	30000	40000
Total Gross Income	205000	345000	590000	1200000
Less Deduction - Chapter VIA
80C	28800	43200	72000	144000
80TTA	2000	10000	0	10000
80G	12500	49180	30000	50000
Total deductions	43300	102380	102000	204000
Net Total Income	161700	242620	488000	996000
TAX	0	0	11900	111700
REBATE	0	0	0	0
NET TAX	0	0	11900	111700
CESS	0	0	476	4468
TAX+ CESS	0	0	12376	116168
MONTHLY TDS	0	0	1031	9681
Gross Salary	20000	30000	50000	100000
TDS	0	0	1031	9681
Net Salary	20000	30000	48969	90319

 

Working Note for 80G

Particulars	Case 1	Case 2	Case 3	Case 4
Calculation of Qualifying amount
Gross total income	205000	345000	590000	1200000
Less:Deduction Under cht VIA	30800	53200	72000	154000
Adjusted GTI	174200	291800	518000	1046000
10% of Adjusted GTI	17420	29180	51800	104600
Deductions covered under qualifying limit
NGO Donation(50%)	7500	30000	10000	20000
Max donation allowed	7500	29180	10000	20000
Deductions not covered under qualifying limit
Kerala Relief fund	5000	20000	20000	30000
Total deduction under 80G	12500	49180	30000	50000

Deduction u/s 80G

Amount of deduction

1. On certains deductions 100% deduction is allowed
2. On certain deductions 50% deduction is allowed

Some of these deductions (both 50%/100% are subject to qualifying limit)

 

Q6

Particulars	Amt
Basic Salary p.m	60000
Special Pay p.m	40000
Uniform Allowance p.m	2000
(Declaration Given)
Transport Allowance p.m	2500
Annual Income
Free Alto Car and Driver Given by Co
Car Cost	350000
Car cc	1000
Driver Salary p.m	8000
(for Partly official Partly personal)
Annual Savings
EPF	12%
Life Insurance	10000
Medical insurance
Self	11000
Spuse	11000
Mother	11000
Father (Senior Citizen)	11000
	44000
Donation to PM Relief fund	3000
Donation to Temple	2000
Interest income
on FD	3000
On Savings	14000

View answer

SALARY

Particulars	Amt Recd	Exmpt	Taxable
Basic Salary p.m	60000	0	60000
Special Pay p.m	40000	0	40000
Uniform Allowance p.m	2000	2000	0
Transport Allowance p.m	2500	0	2500
Car			600
Driver			900
Total	104500	2000	104000

 

Particulars	Amt
Monthly Taxable salary	104000
Income from Salaries	1248000
Less Standard Deduction	40000
Net Income From Salary	1208000
Income from Other Sources	17000
Total Gross Income	1225000
Less Deduction - Chapter VIA
80C	96400
80D	44000
80G	4000
80TTA	10000
Total Deduction	154400
Net Total Income	1070600
TAX	133680
REBATE	0
NET TAX	133680
CESS	5347
TAX+ CESS	139027
MONTHLY TDS	11586
Gross Salary	104500
Monthly TDS	11586
Net salary	92914

Q7

Suppose in last question

Housing Loan int repaid
Principal	160000
Interest	260000
Total	420000

All other Data Same

View answer

Particulars	Amt
Monthly Salary	104000
Income from Salaries	1248000
Less Standard Deduction	40000
Net Income From Salary	1208000
Income From House Property	-200000
Income from Other Sources	17000
Total Gross Income	1025000
Less Deduction - Chapter VIA
80C	150000
80D	44000
80G	4000
80TTA	10000
Total Deduction	208000
Net Total Income	817000
TAX	75900
REBATE	0
NET TAX	75900
CESS	3036
TAX+ CESS	78936
MONTHLY TDS	6578
Gross Salary	104500
Monthly TDS	6578
NET SALARY	97922

Working note for 80C

Particulars	Amt
Provident Fund	86400
LIC	10000
Interest	160000
Total	256400
Max Deduction allowed	150000

Q9

Particulars	Amt	Remarks
Basic Salary	40000
Lunch Allowance	4000
Transport Allowance	2500	(No Bill Submitted)
Children Education Allowance	4500	(1500*3 children)
Variable Pay	30000
HRA	15000	(He had given declaration that he would submit Rent receipts by march of 18000 of Noida but in March had failed to do so)

Employee Savings Declared

Housing Loan	Declared	Submitted
Principal	40000	38000
Interst	30000	32000
Medical ins (Self)	15000	14000

Calculate TDS from April to Feb and in March

View answer

Apr-Feb

Particulars	Amt Recd	Exmpt	Taxable
Basic Salary	40000	0	40000
Lunch Allowance	4000	0	4000
Transport Allowance	2500	0	2500
Children Education Allowance	4500	200	4300
Variable Pay	30000	0	30000
HRA	15000	14000	1000
Total	96000	14200	81800

 

Particulars	Amt
Income from Salaries	981600
Less Standard Deduction	40000
Net Income From Salary	941600
Income From House Property	-30000
Income from Other Sources	0
Total Gross Income	911600
Less Deduction - Chapter VIA
80C	40000
80D	15000
80G	0
80TTA	0
Total Deduction	55000
Net Total Income	856600
TAX	83820
REBATE	0
NET TAX	83820
CESS	3353
TAX+ CESS	87173
MONTHLY TDS	7264
Gross Salary	96000
Monthly tds	7264
NET SALARY	88736

 

Calculation For HRA

Particular	Amount
Actual Received	15000
Rent Paid-10% of Basic+DA	14000
40% of Basic+DA	16000
Whichever Is Less	14000

 

March

Particulars	Amt Recd	Exempt	Taxable
Basic Salary	40000	0	40000
Lunch Allowance	4000	0	4000
Transport Allowance	2500	0	2500
Children Education Allowance	4500	200	4300
Variable Pay	30000	0	30000
HRA	15000	0	15000
Total	96000	200	95800

 

Particulars	Amt
Income from Salaries	1149600
Less Standard Deduction	40000
Net Income From Salary	1109600
Income From House Property	-32000
Income from Other Sources	0
Total Gross Income	1077600
Less Deduction - Chapter VIA
80C	38000
80D	14000
80G	0
80TTA	0
Total Deduction	52000
Net Total Income	1025600
TAX	120180
REBATE	0
NET TAX	120180
CESS	4807
TAX+ CESS	124987
MONTHLY TDS	45083
Gross Salary	96000
Monthly tds	45083
NET SALARY	50917

Working Note
Total Tax	124987
Less Tax Already Deducted	79904
Balamce Tax	45083
Balance Months	1
TDS	45083