Tax Planning will help us to reduce the Tax burden and below are list of tax exemption and deduction which we can claim if you have proper documents

Before we go for Tax Planning we better to follow the few guidelines like.

1. Avoid Bank FD's
For FD amount we can claim deduction under 80C Cumulative Ceiling (1,50,000 rs) however Interest Income is Taxable. Max exemption allowed for interested income is 10,000 rupees so If any income received more than 10,000 rupees is totally taxable. Ex: If you received any interested amount 1,00,000 and your are in with 30% slab then 100000 * 30% is table 30000 is tax amount.

Investing in the Bonds are better option compare with FD as bonds will give simular return for investor however 30% income tax is applicable in Fixed income. Capital Gains Tax is applicable for bonds subject to duration like Short Term (Less than 12 months holding) capital gains are taxed as per the applicable slab rate of the investor while long-term capital gains are taxed at 10% without indexation and 20% with indexation.


2. Income From Supermarket
Any Income from Supermarket or Mutual Funds like Short Term or Long Term Capital Gain are totally Taxable


3. Avoid PF withdrawal before Maturity
Withdrawal of PF amount before maturity is taxble income


4. Invest in NPS Account
If you have other deductions to claim 80C cumulative ceiling 1,50,000 rs then you are advised to opt for NPS employer Contribution and NPS employee Contribution to get more benefits. Please refer the below table to get the idea how new change will help to get more benefit.


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Particulars		Central Government Employer Rs.	Private Employer (Employer has opted for NPS)	Private Employer (Employer has opted for PPF)	Business People
Basic salary and dearness allowance		5,50,000	5,50,000	5,50,000	Nil
Special allowance		1,00,000	1,00,000	1,00,000	Nil
Employer's contribution towards NPS (13% of Rs.5,50,000)		71,500	71,500	Nil	Nil
Employer's contribution towards RPF (in excess of 12% of salary)		Nil	Nil	5,500	Nil
Gross salary		7,21,500	7,21,500	6,55,500	Nil
Less: standard deduction		50,000	50,000	50,000	Nil
Income under the head "salaries"		6,71,500	6,71,500	6,05,500	Nil
Business income		Nil	Nil	Nil	8,10,000
Income from other sources		2,10,000	2,10,000	2,10,000	2,10,000
Gross total income (GTI)		8,81,500	8,81,500	8,15,500	10,20,000
List of Deduction
DEDUCTIONS NOT COVERED BY CUMULATIVE CEILING- Under section 80CCD(1B) (contribution by the assessee towards NPS up to Rs.50,000)	(a)	50,000	50,000	40,000	50,000
Under section 80CCD(2) [Contribution by employer towards NPS, subject to maximum of 14% of salary in the case of central Government employee or 10% of salary in the case of any other employee]	(b)	71,500	55,000	Nil	Nil
Under section 80D (mediclaim insurance premium) (limited to Rs.25,000 in the case of a person who is not a senior citizen)	(c)	25,000	25,000	25,000	25,000
DEDUCTIONS COVERED BY CUMULATIVE CEILING OF Rs.1,50,000-Under section 80C (ppf and contribution towards recognized provide fund)	(d)	(96,000)	(96,000)	(1,50,000)	(30,000)
Under section 80CCC (annuity plan of LIC)	(e)	(5,000)	(5,000)	(5,000)	(5,000)
Under section 80CCD (1) [contribution of X towards NPS (excluding the contribution considered above in section 80CCD(1B)), subject to a maximum of 10% of salary in the case of an employee or 20% of GTI in the case of a person other than employee]	(f)	(54,000)	(54,000)	Nil	(2,04,000)
Maximum deductible amount [i.e.,(d) + (e) + (f), subject to a maximum of Rs.1,50,000]	(g)	1,50,000	1,50,000	1,50,000	1,50,000
Net income [GTI-(a)-(b)-(c)-(g)]		5,85,000	6,01,500	6,00,500	7,95,000
Tax Planning with 20L Salary



Description	Gross	Exempt	Taxable
Basic salary	780,684		780,684
House rent allow	3,40,348	3,40,348
special allowances	4,65,425	2,00,000	2,00,000
Driver allowance	1,18,000	1,18,000
fuel allowance	1,47,500	1,47,500
Car maintenance	29,500	29,500
other allowance	90,000		90,000
Leave Travel allowance	90,060	90,060
Books and periodicals	30,000	30,000
wellness&Fitness	87,655		87,655
Food allowance	36,000	36,000
Taxable salary before Deduction	22,15,172	9,91,408	11,58,339
80C,80CCCand80CCD(1)			-1,50,000
80CCD 1B ( Employee Contribution Pri Emp and Gov Max 50,000 rupees)			-50,000
80CCD2 (Employer Contribution Pri Emp 10% and Gov Emp 15% on Basic)			-50,000
80D			-50,000
80EEA			-1,50,000
standard Deduction			-50,000
salary income after Deduction			6,58,339
House rent Loss			-2,00,000
Taxable income	22,15,172		4,58,339

Under section 80CCD(1B)(Contribution by the assessee towards NPS up toRS,50,000)

Under section 80CCD(2)(contribution by employer towards NPS,subject to maximum of 14%of salary in cases of central Government employee or 10%of salary in the case of any other employee)

under section 80D(mediclaim insurance premium)(limited to Rs.25,000 in the case of a person who is not a senior citizen)