This document summarizes income tax in India. It discusses tax liability calculation using examples of 5 individuals with varying gross incomes. It also outlines the major tax deductions available under sections 80C, 80D, and 80G of the Income Tax Act. These include deductions for investments, health insurance premiums, and donations. The maximum deduction amounts are Rs. 1.5 lakh under 80C, Rs. 25,000 under 80D, and 50-100% of donations under 80G. In conclusion, the author feels the old tax regime is better than the new regime despite the new one.
3. INTRODUCTION
• Tax is a mandatory fee or financial charge levied
by any government or an individual or an
organization in order to fund government
spending and various public expenditures.
• Types : Direct taxes(Income tax),Indirect
taxes(GST)
• Tax collected by government for each financial
year
on total taxable income of an assesse earned
during
the previous year is called Income tax
• Individuals are required to file income tax return
each year if they have taxable income of more
than Rs.2.5 lakhs.
4. TAX LIABILITY
CALCULATION
INDIVIDUAL NAME Mr.A Mr.B Mr.C Mr.D Mr.E
GROSS INCOME 4,00,000 7,50,000 12,50,000 17,60,000 25,20,000
DEDUCTIONS BASED ON 80C 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000
DEDUCTIONS BASED ON 80D 25000 25000 25000 25000 25000
DEDUCTIONS BASED ON 80G 12590 12590 12590 12590 12590
GROSS TAXABLE INCOME 2,12,410 5,62,410 10,62,410 15,72,410 23,32,410
TAX PAYABLE(Inclusive of
cess(4%) and adding standard
deduction to gross taxable
income ) NIL 15581 120872 279992 517112
5. DEDUCTIONS
SECTION(OF
IT ACT
DEDUCTIONS DETAILS MAXIMUM AMOUNT
80C • PF SUBSCRIPTION
• GIS SUBSCRIPTION,
• LIC PREMIUM
• REFUND OF HOUSE BUILDING LOAN(PRINCIPAL)
• REFUND OF EDUCATION LOAN(PRINCIPAL)
• PAYMENT OF TUITION FEE FOR HIGHER
EDUCATION
• TERM DEPOSIT FOR NOT LESS THAN 5 YEARS IN
A SCHEDULED BANK
• POST OFFICE 5 YEARS TERM DEPOSIT
• CONTRIBUTION TO CERTAIN PENSION FUNDS.
Rs.1,50,000/-
80D EXPENSES ON PREVENTIVE HEALTH CHECK UP,
MEDICAL INSURANCE PREMIUM
Rs.25000/-
80G DONATION TO CERTAIN FUNDS, CHARITABLE
INSTITUTIONS.
50% OR 100% OF TOTAL
AMOUNT
AS NOTIFIED BY GOVT.
6. CONCLUSION
Based on observing the old tax regime and new tax
regime and their deductions and exemptions , I feel it
is wise to choose the old regime if given a choice and
I feel it is better than the new regime in spite of new
