How to Save Tax from Budget 2015?

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
Salary Income           1,000,000          1,000,000
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
Total Tax                 37,245                51,582
Tax Saved                 14,338
*assuming one self occupied house property

 

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