While no extra money was put into the pockets of the common man and what may seem like a budget which actually took money away from us (with the increase in service tax rates); here’s how you still make the budget work for you.
Here are 3 smart way to make the most of this budget-
Invest in a pension fund
Buy health insurance
Ask your employer for transport allowance
Remember to maximize your Section 80C
Pension Fund – A deduction of Rs 50,000 can be claimed by investing in a pension fund under a new sub section 80CCD. Do note that this deduction shall be outside the Rs 1,50,000 limit set for Section 80C, Section 80CCC and Section 80CCD.
Health Insurance – you can now claim Rs 25,000 against premium paid by you to insure the health of your own self, your spouse, your children (dependent). [ you can also pay health insurance premium for your parents and in case they are more than 60 yrs old an additional Rs 30,000 can be claimed by you.]
Transport Allowance – this is the allowance paid to you for commute between residence & office. The allowance was exempt up to Rs 800pm and is now increase to Rs 1600 per month.
Here is how these 3 changes in the Budget of 2015, can save you Rs 14,000 in taxes –
|FY 2015-16||FY 2014-15|
|Less : Interest on Home Loan*||(200,000)||(200,000)|
|Gross Total Income||800,000||800,000|
|Less : Deduction 80C||150,000||150,000|
|Less : 80D||25,000||15,000|
|Less : 80CCD||50,000|
|Less : Transport allowance (allowed from salary)||19,200||9,600|
|Net Taxable Income||555,800||625,400|
|Minimum Exempt Income||250,000||250,000|
|Tax on remaining Income||36,160||50,080|
|Cess at 3%||1,085||1,502|
|*assuming one self occupied house property|