| Surcharge on income tax
If the total income exceeds Rs. 10,00,000, there would be a
surcharge@10%
Education cess on income tax
Education cess @ 2% will be payable on the amount of income
tax (including surcharge).
Premiums paid for life insurance - Section 80C - Category
of assessees allowed deduction
Individual assessee and Hindu Undivided Family assessee.
Eligible savings:
Premiums paid or deposited assessee to effect or to keep in
force insurance on the life of the individual assessee, spouse
or children of such individual; any member in case of Hindu
Undivided Family assessee.
20% limit :
If the amount of premium paid in a financial year for a policy
exceeds 20% of the actual capital sum assured, then deduction
will be allowed only for premiums upto 20% of the sum assured.
Limit on amount of deduction:
Deduction will be restricted to investments of upto Rs. 1,00,000
in savings specified under Section 8CC (including life insurance
premiums). If investments have been made under Sections 8OCCC
and 8OCCD, then the qualifying amount under Section 8CC will
stand reduced to that extent.
Deduction Limit:
The amount of deduction will be equal to the difference between
the income tax payable on such total income and the amount by
which the total income exceeds Rs. 1,00,000.
Premiums paid for pension plans : Section
8OCCC
Permitted deduction : Section 8OCCC allows for deduction of
premiums paid under a pension plan. Under this section, premiums
upto Rs. 10,000 paid by an individual is allowed to be deducted
from his total income.
Disallowance: This benefit will be reversed
if the pdlicy lapses or, is cancelled.
Limit:
From FY 2005 - 06, the limit of deduction under Section 8OCCC
will be part of the overall limit prescribed under Section 8OCCE.
Premiums paid for medical insurance
Section 80 D Category of assesses allowed deduction : Individual
assessee and HUF assessee.
Eligible premiums :
Premiums paid by assessee by cheque out of his taxable income
to effect or to keep in force an insurance on the health of
the individual assessee, spouse, dependent children and dependent
parent.
In case of an Hindu Undivided Family assessee, any member.
Deduction and upper limit :
The qualifying amounts under Section 80D of Income Tax Act is
upto Rs. 10,000.
However, a higher amount upto Rs. 15,000 is permitted if the
person, for whose health insurance the premium was paid, was
aged 65 years or more at any time during the financial year
in which the premium was paid.
Such amounts of premium paid would be allowed as deduction
from the total income of the assessee.
Overall deduction limit :
Section 8OCCE As per the new Section 8OCCE of the Income Tax
Act, which has been introduced from Financial Year 2005 -06,
the maximum amount of deduction that,Mn assessee can claim under
Sections 80C, 8OCCC and 8OCCD will be limited to Rs. 1,00,000.
Benefits under insurance policy :
Section 10 (1OD) As per Section 10 (lCD) of Income Tax Act,
1961, any sum received under a life insurance policy, including
the sum allocated by way of bonus on such policy, is exempt
from tax. However, this rule does not apply to the following
Sum received under Section 8ODD(3)
Any sum received under a Keyman Insurance Policy.
Any sum received other than as death benefit under an insurance
policy which has been issued on or after April 1, 2003, and
if the premium paid in any of the years during the term of the
policy is more than 20% of the sum assured.
Tax Rates for Individuals
The rates of income tax for financial year 2005 - 08 are as
follows:
Total income (Rs.)
|
Senior citizen |
Women below
65 years |
others |
| Up to Rs. 1,00,000 |
Nil |
Nil |
Nil |
| Above Rs. 1,00,000 to 1,35,000 |
Nil |
Nil |
10% |
| Above Rs. 1,35,000 to 1,50,000 |
Nil |
10% |
10% |
| Above Rs. 1,50,000 to 1,85,000 |
Nil |
20% |
20% |
| Above Rs. 1,85,000 to Rs. 2,50,000 |
20% |
20% |
20% |
| Above Rs. 2,50,000 |
30% |
30% |
30% |
|
