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For Women below age of 65 years # For resident individuals, HUFs, etc #
Total Annual Income Rate of Total Annual Income Rate of
(Rs.) Income Tax (Rs.) Income Tax
Up to 1,90,000 NIL Up to 1,60,000 NIL
1,90,001 to 3,00,000 10% 1,60,001 to 3,00,000 10%
3,00,001 to 5,00,000 20% 3,00,001 to 5,00,000 20%
5,00,001 and above 30% 5,00,001 and above 30%
# For senior citizens of 65 years and above, the exemption limit is Rs 2.40 lakh
Cess for Education: At three per cent on income tax payable
In 2005-06, section 80C replaced old section 88. Under section 80 C, individuals and
HUFs are allowed deductions of up to a maximum Rs. 1,00,000/- from taxable
income for payments and contributions as given below; without any sectoral caps.
1 Life Insurance premia. Annual premium of any policy shall not be more than 20
per cent of the sum assured.
2 Contribution to a recognised provident fund
3 Voluntary contribution by employee to a recognised provident fund
4 Contribution to Public Provident Fund account (PPF scheme allows interest on
annual contributions of up to Rs 70,000 only)
5 Contribution by an employee to an approved superannuation fund
6 Contribution to National Savings Certificate (NSC) VIII issue
7 Interest accrued on NSC VIII issue during the current year except interest for the
sixth year
8 Contribution to Unit Linked Insurance Plans
9 Contribution to annuity plan of a life insurance company
10 Equity Linked Savings Scheme (ELSS) of a mutual fund
11 Contribution to pension schemes of two mutual funds, namely Templeton India
Pension Plan and UTI Retirement Benefit Pension Fund
12 Tuition fee paid to a college, school, etc, for education of any two children of an
assessee. However, the eligible amount shall not include any payment towards
any development fees or donation.
13 Instalments paid in a year towards Housing Loans
14 Bank fixed deposits for a period of not less than five years (wef April 1, 2006)
15 Deposits in a Senior Citizens Savings Scheme (SCSS)
(wef April 1, 2007)
16 Sums deposited in a Five-year time deposit scheme of a Post Office
(wef April 1, 2007)
SECTION 80CCC (Aggregate amount of deduction under this section shall not
exceed Rs one lakh) (Read with Section 80CCE)
Section 80CCC allows for a deduction from income of an amount of Rs one lakh
deposited by an individual towards any annuity plan of the Life Insurance
Corporation or any other insurer for receiving pension.
(Prior to April 1, 2006, only Rs 10,000 was allowed).
Section 80CCE states that the aggregate amount of deductions under section 80C,
section 80CCC and section 80CCD shall not, in any case, exceed Rs one lakh
The New Pension System has become operational since 1st January, 2004 and is
mandatory for all new recruits to the Central Government service from 1st January,
2004. Since then it has been opened up for employees of State Government, private
sector and self employed (both organized and unorganized). NPS is now open to all
citizens. An NPS Trust was set-up on 27th February 2008 to manage the funds of NPS.
NPS is regulated by Pension Fund Regulatory and Development Authority (PFRDA).
NPS will continue to be subjected to EET method of tax treatment of savings.
In the Union Budget 2009-10, the following amendments are made for NPS:
1) It is now proposed to exempt the income of the NPS Trust from income tax – section
10(44)
2) Any dividend paid to the NPS Trust shall be exempted from Dividend Distribution Tax –
section 115-O
3) Transactions by the NPS Trust will be exempt from the Securities Transaction Tax
4) NPS Trust shall receive all income without any tax deducted at source – section 197A
5) Till now, the tax benefit for contributions to NPS, under section 80CCD, was available to
public/private section employees only. However, it is now proposed to extend the NPS to
“self-employed” individuals also under section 80CCD.
The above amendments will take effect retrospectively from 1.4.2008 from FY 2008-09.
Note: Tax slabs and deductions are as proposed by the Finance Minister in his Budget 2009-10
speech on July 6, 2009. Sources: Finance Bill 2009, Union Budgets and others.