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Taxation Consulting

1.Type Of Assess e : We need to understand the category in Which we lies as there are only five Category in which One can be in those in the Category as Individual, HUF, Corporate, Trust/NGO etc. An Assess e may be any individual liable to pay taxes for himself or to pay tax on behalf of somebody else. The Income Tax Act, 1961 has classified Assess e in different categories. An Assess e may either be a normal Assess e , a Representative Assess e , a Deemed Assess e or an Assess e in Default.

  1. Permissive Tax Planning: Permissive Tax Planning means making plans which are permissible under different provisions of the law, such as planning of earning income covered by Sec.10, specially by Sec. 10(1) , Planning of taking advantage of different incentives and deductions, planning for availing different tax concessions etc.
  2. Purposive Tax Planning : It means making plans with specific purpose to ensure the availability of maximum benefits to the Assess through correct selection of investment, making suitable program for replacement of assets, varying the residential status and diversifying business activities and income etc.
  3. Short Term Tax Planning : Short term Tax Planning means the planning thought of and executed at the end of the income year to reduce taxable income in a accordance with the Provision as per the Act. E.g. Suppose, An Assess efinds his taxes have been too high in comparison with last year and he intends to reduce it at the end of the financial year, Now, he may do that, to a great extent by making proper arrangements to get the maximum tax rebate u/s 88 & or Sec 80 C. Such plan does not involve any long term commitment, yet it results in substantial savings in tax.
  4. Long Term Tax Planning : Long range tax planning means a plan chalked out at the beginning or the income year to be followed around the year. This type of planning does not help immediately as in the case of short range planning but is likely to help in the long run ; e.g. If an Assess etransferred shares held by him to his minor son or spouse, though the income from such transferred shares will be clubbed with his income u/s 64, yet is the income is invested by the son or spouse, then the income from such investment will be treated as income of the son or spouse. Moreover, if the company issue any bonus shares for the shares transferred, that will also be treated as income in the hands of the son or spouse.

Section 80 Deduction Table


Deduction on

Allowed Limit (maximum) FY 2018-19


Investment in PPF

Rs. 1,50,000

– Employee’s share of PF contribution

– NSCs

– Life Insurance Premium payment

– Children’s Tuition Fee

– Principal Repayment of home loan

– Investment in Sukanya Samridhi Account



– Sum paid to purchase deferred annuity

– Five year deposit scheme

– Senior Citizens savings scheme

– Subscription to notified securities/notified deposits scheme

– Contribution to notified Pension Fund set up by Mutual Fund or UTI.

– Subscription to Home Loan Account scheme of the National Housing Bank

– Subscription to deposit scheme of a public sector or company engaged in providing housing finance

– Contribution to notified annuity Plan of LIC

– Subscription to equity shares/ debentures of an approved eligible issue

– Subscription to notified bonds of NABARD


For amount deposited in annuity plan of LIC or any other insurer for a pension from a fund referred to in Section 10(23AAB)


Employee’s contribution to NPS account (maximum up to Rs 1,50,000)


Employer’s contribution to NPS account

Maximum up to 10% of salary


Additional contribution to NPS

Rs. 50,000


Interest Income from Savings account

Maximum up to 10,000


Exemption of interest from banks, post office, etc. Applicable only to senior citizens

Maximum up to 50,000


For rent paid when HRA is not received from employer

Least of :

– Rent paid minus 10% of total income

– Rs. 5000/- per month

– 25% of total income


Interest on education loan

Interest paid for a period of 8 years


Interest on home loan for first time home owners

Rs 50,000


Rajiv Gandhi Equity Scheme for investments in Equities

Lower of

– 50% of amount invested in equity shares; or

– Rs 25,000


Medical Insurance – Self, spouse, children

– Rs. 25,000

Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old

– Rs. 50,000


Medical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent

– Rs. 75,000

– Disability is 40% or more but less than 80%

– Rs. 1,25,000

– Disability is 80% or more



Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD

– Lower of Rs 40,000 or the amount actually paid

– For less than 60 years old

– Lower of Rs 1,00,000 or the amount actually paid

– For more than 60 years old



Self-suffering from disability :

– Rs. 75,000

– An individual suffering from a physical disability (including blindness) or mental retardation.

– Rs. 1,25,000

– An individual suffering from severe disability



Contribution by companies to political parties

Amount contributed (not allowed if paid in cash)


Contribution by individuals to political parties

Amount contributed (not allowed if paid in cash)


Deductions on Income by way of Royalty of a Patent

Lower of Rs 3,00,000 or income received

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