This chart of Deductions & Slab rates will help you to plan your Income & Investments for Financial Year 2018-2019 / Assessment Year 2019-2020 and help you to minimize your Tax before March 2019. List of All popular deductions with latest limits applicable to coming Income tax return filling season i.e for AY 2019-20. Please invest before March 2019. I hope this will be helpful in your Tax planning.

A. INCOME TAX SLABS FOR FY 2018-19 / AY 2019-20

This chart of Deductions & Slab rates will help you to plan your Income & Investments and help you to minimize your Tax before March 2019. This summary will cover maximum issues related to coming return filling season.

INCOME TAX SLABS FOR FY 2018-19 / AY 2019-20

INCOME TAX SLABS FOR FY 2018-19 AY 2019-20

1. Education + Health Cess of 4%

2. Tax Rebate : Tax rebate maximum upto Rs. 2500 for Gross Total income upto Rs. 3,50,000

CONSIDERING REBATE , LETS RECALCULATE THE MAXIMUM TOTAL INCOME AT WHICH , THERE IS NO TAX

CATEGORY <60 <80 >80
BASIC EXEMPTION LIMIT ₹ 2,50,000 ₹ 3,00,000 ₹ 5,00,000
RECALCULATING THE MAXIMUM TOTAL INCOME AT WHICH , THERE IS NO TAX
TOTAL INCOME AFTER DEDUCTIONS ₹ 3,00,000 ₹ 3,50,000 ₹ 5,00,000
TAX ON TOTAL INCOME ₹ 2,500 ₹ 2,500 ₹ 0
LESS: REBATE 87A ₹ 2,500 -₹ 2,500 ₹ 0
ACTUAL TAX LIABILITY ₹ 0 ₹ 0 ₹ 0
SO, EFFECTIVE  TAX EXEMPTION LIMIT AT WHICH , THERE IS NO TAX ₹ 3,00,000 ₹ 3,50,000 ₹ 5,00,000

B. POPULAR DEDUCTIONS UNDER INCOME TAX AVAILABLE TO ALL INDIVIDUALS

PLAN  MAXIMUM DEDUCTIONS / INVESTMENTS BEFORE MARCH 2019 TO MINIMIZE YOUR TAXABLE INCOME & ALSO TAX
24 24     =>  Home loan interest ₹ 2,00,000
80C 80C   =>  LIC / PPF / KVP / EPF / SSY / NSC / HOME LOAN PRINCIPAL / SCHOOL FEES/ ELSS/STAMP DUTY ₹ 1,50,000
80CCD(1B) 80CCD(1B)    =>   NPS ₹ 50,000
80DD 80DD   =>  Exp of  disabled dependent 75000/125000
80U 80U      =>  own Physical Disability 75000/125000
80TTA 80TTA   =>  Interest on Savings Account. Only available to Persons  other than Senior citizen / Very senior citizen ₹ 10,000
80TTB 80TTB   =>  Interest on Savings Account. and Interest on deposits with Post Offices, Banks, Co-operative bank. Only available to senior citizen & Very senior Citizen ₹ 50,000
80G 80G      =>  Donation ( Only if paid by cheque/ Bank Mode ) 50% of  Donation or 10% Total income ..W.E.IS HIGHER
80GG 80GG    => deduction for the rent paid (Available to all Individuals except to those who gets HRA from Employment ). Eligibility will be least amount of the following :-
1) Rent paid minus 10 percent the adjusted total income.
2) Rs 5,000 per month
3) 25 percent of the adjusted total income
80D 80D      =>  Mediclaim For self, spouse and dependent children ( Only if paid by cheque/ Bank Mode ) 25000/50000
Up to ₹ 25,000 [₹ 50,000 if specified person is a senior citizen or very senior citizen
80D 80D      =>  Mediclaim For Parents ( Only if paid by cheque/ Bank Mode ) 25000/50000
Upto Rs. 25,000 shall be allowed [Rs. 50,000 if parent is a Senior citizen / Very Senior Citizen
Note for 80D Within overall limit, deduction shall also be allowed up to ₹ 50,000 towards medical expenditure incurred on the health of specified person provided such person is a very senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person.

C. ALLOWANCES AND DEDUCTIONS ONLY ALLOWED TO SALARIED INDIVIDUALS

1 HRA EXEMPTION A salaried individual having a rented accommodation can get the benefit of HRA (House Rent Allowance). However, if you aren’t living in any rented accommodation and still continue to receive HRA, it will be taxable.  HRA exemption available to Lower of following three
 a.Total HRA received from your employer
 b. Rent paid less 10 percent of (Basic salary +DA)
 c. 40 percent of salary (Basic+DA) for non-metros and 50 percent of salary (Basic+DA) for metros
2 STANDARD DEDUCTION Rs. 40,000 Standard deduction for  Assessee who has Salary/ Pension Income
the standard deduction of Rs 40,000 replaces medical allowance of Rs 15,000 and transport allowance of Rs 1600 per month i.e. 19,200 per annum

LET’S FIND BREAK-EVEN INCOME , WHERE YOU HAVE NO TAX TO PAY

ASSUMPTION – THESE CALCULATIONS ARE  DONE KEEPING IN MIND SALARIED PERSONS

FINANCIAL YEAR 2018-2019    /   ASSESSMENT YEAR  2019-2020
<60 <80 >80
 GROSS INCOME                                  7,25,000                                  8,40,000                                  9,90,000
DEDUCTIONS FROM INCOME LESS
STANDARD DEDUCTION                                     40,000                                     40,000                                     40,000
24                                  2,00,000                                  2,00,000                                  2,00,000
80C                                  1,50,000                                  1,50,000                                  1,50,000
80TTA                                     10,000
80TTB                                     50,000                                     50,000
80D                                     25,000                                     50,000                                     50,000
NET INCOME WHERE THERE WONT BE ANY TAX  TOTAL INCOME                                  3,00,000                                  3,50,000                                  5,00,000
TAX ON ABOVE INCOME                                        2,500                                        2,500                                               –
 REBATE AS PER 87A                                      -2,500                                      -2,500                                               –
ACTUAL TAX LIABILITY 0 0 0

Author can be reached at ca.harshilsheth@gmail.com

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2 Comments

  1. Dr som Majumdar says:

    Very good submission very informative n useful. One important area is missing. If one has got a capital gain, it can be reduced by opting exemptions u/s 54 EC which may reduce taxable income significantly. Thanks from Australia

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