Tax Planning AY 2015-2016

When it comes to savings, the tax planning is equally important and can lead to good amount of save if you fall in higher tax bracket.  

Please refer below link for this year tax brackets – http://financialfreedomplanningindia.blogspot.com/2016/01/income-tax-slabs-for-ay-2015-2016.html

Various options available for tax savings in are as follows

Generic Options – Usually applicable to all

·         80C – Investment upto 1.5 Lakh is exempted from Tax

·         80DD –

o   Insurance policy for self and family upto 15,000

o   Insurance policy for parents upto 15,000 and  20,000 in case of senior citizens

·         80G – Donations to selected organizations and trusts are exempted from incomes tax

·         Medical Expenses – Medical expense of 15,000 in one financial year is exempted from tax

·         LTA – Leave Travel Allowance can also helps to reduce the tax burden considering that you are salaried and your employer provides this component in your salary.

Other Options – Applicable depending upon individual condition

·         There are other options available like exemption due to disease and disability.

·          Exemption against house rent is available if you are staying in a rented house, Please refer to article in information session which explains this in detail.

·         Exemption interest paid against the home loan, please refer to the article in information session for details of application

	Person A	Person B	Person C
Income	600,000.00	1,000,000.00	1,500,000.00
80C	150,000.00	150,000.00	150,000.00
80DD	15,000.00	35,000.00	35,000.00
80G	-	25,000.00	50,000.00
Medical Expense	10,000.00	10,000.00	10,000.00
HRA	100,000.00	100,000.00	100,000.00
Exempted Income	275,000.00	320,000.00	345,000.00
Taxable Income	325,000.00	680,000.00	1,155,000.00
upto 2,50,000	-	-	-
from 2,50,000 to 5,00,000	7,500.00	43,000.00	25,000.00
from 5,00,000 to 10,00,000	-	36,000.00	100,000.00
beyond 10,000	-	-	46,500.00
Total Tax	7,500.00	79,000.00	171,500.00

Note – These examples are designed with very basic data in mind, for exemptions applicable to you please research further or take advice from financial planner.