Tips that will help salaried men to save taxes for the financial year 2012-2013

Before we discuss the “tax planning tips”, we need to understand the “tax slabs”. This will help us in making a better and detailed planning.

For a salaried man the tax slab for financial year 2012-2013 is mentioned as below:

For an income up to Rs. 2, 00,000 there are not taxes levied.

For an income range of Rs 2, 00,000 to Rs, 5, 00,000 a tax of 10% will be levied.

For an income range Rs. 5, 00,001 to 10, 00,000 a tax of 20% will be levied.

Any income above Rs. 10, 00,000 will attract a tax of 30%.

Also, a surcharge of 3% will be levied on final tax computation.

Where and how can you save taxes?

• ·         Under Section 80 C

You can invest up to an amount of Rs 1, 00,000. The deduction in yearly premium is only possible if the yearly premium is less than 10% of the Assured Sum, when it crosses the limit of 10% then the deductions will not beavailable under this section.

Various options to save taxes would be ELSS, Public Provident Fund, Employees Provident Fund, and Fixed Deposit for 5 years, Post Office SB, Infrastructure Bonds, Tuition fees of children and other expenditure on their education (barring Donations or Developmental Fee).

• ·         Under Section 80 CCD

You can get a deduction of 10% of the basic salary provided your employer contributes to your NPS account. NPS withdrawals are taxable though the returns are tax-free.

• ·         Under Section 80 D

When you pay a premium for any Tax consultant India yourself or for any of your dependents, then you get an exemption of Rest. 15,000.

If you pay a cost of Rs. 5,000 towards health check-up of self or any of the dependents then you get an exemption.

If you have a Senior Citizen who is depend on you then you can also get an exemption up to Rs. 20,000 towards the health check and any other medical expenditure you incur.

• ·         Under Section 80 DD

You can get a maximum deduction allowance up to an amount of Rs.50, 000 for the treatment or rehabilitation of disabled dependent and the deduction is increased up to Rs 1,000,000 if the extent of disability is severe.

• ·         Under Section 80 DDB

A deduction of Rs.40, 000 is given towards the treatment of life threatening diseases like Cancer or AIDS, however, this amount is increased up to Rs.60, 000 if the person is a Senior Citizen.

• ·         Under Section 80E

Deduction is allowed for repaying the interest of component of Education Loan beyond classXII.

• ·         Under Section 80 G

You may get an exemption of 25% or 50% or 75% or even 100% when you make donations to various charities and or political parties.

Apart from the above mentioned you may also get deductions on HRA, Conveyance allowance and other mode of income and expenditure depending upon the criteria of Various Sections.