You can plan to maximize your tax savings and reduce income tax liability by availing the benefit of provisions relating to deductions/exemptions from taxable income under various sections of Income Tax Act.
If investments are properly made, a resident individual assessee aged below 60 years having income of ₹ 9,85,000/- (net of Standard Deduction of ₹ 50,000/- under section 16(1a) for salaried tax payers) from salary / business or profession / other sources including saving bank interest of ₹ 10,000 and living in house / flat acquired with borrowed funds will not be required to pay income tax. The exempted amount will be more in case of senior and very senior citizens and assessees eligible for other deductions.
|Income from salary / Business or Profession / Other Sources||₹ 9,85,000|
|Less : Interest on funds borrowed for acquiring the house property||₹ 2,00,000|
|Gross Total income||₹ 7,85,000|
|Less : Deduction available under Sec. 80C||₹ 1,50,000|
|Less : Deduction u/s 80CCD(1B) (Contribution to NPS scheme)||₹ 50,000|
|Less : Deduction u/s 80D for medical insurance of self / family||₹ 25,000|
|Less : Deduction u/s 80D for medical insurance of parents (presumed that the parents are senior citizen)||₹ 50,000|
|Less : Deduction u/s 80TTA for Saving account interest||₹ 10,000|
|Total Income||₹ 5,00,000|
|Tax payable||₹ 12,500|
|Less : Rebate u/s 87A||₹ 12,500|
|Net Income Tax Liability||Nil|
|Tax Savings||₹ 113,880|