New Delhi: How much tax will you pay? If you are a female and not a senior citizen, the first Rs 1.35 lakh of your total income (from all the sources except short-term capital gains) will be tax-free.
Beyond that, the following tax rates would apply:
In addition, you will have to pay an education cess of 2%. This will be calculated on your tax amount.
If you are earning an income of over Rs 10 lakh, you will also have to pay a surcharge of 10%, over and above the education cess.
Will you file a return of income?
One by six is a criterion that needs to be met when you file your returns. In simpler terms, if you fulfill any one of the six criteria, you will have to file a return of income tax even though your income maybe below the tax-free limit of Rs 1 lakh. At the moment the six criteria are mobile phones, travel abroad, credit card, car, immoveable property, and club membership.
In this Budget, the finance minister has replaced mobile phones with electricity bill exceeding Rs 50,000 per annum. So if you had been filing tax returns because you own a cell phone, even though your annual income is below Rs 1 lakh, you need not do so in the future. As against that, if your electricity bill exceeds Rs 50,000 every year, you will be brought under the net of filing returns.
Deductions and Exemption
The recent budget has prescribed a consolidated ceiling of Rs 1 lakh as investments allowable deduction under the new section 80C. What this means is that out of your total taxable income, up to Rs 1 lakh will be deductible if you invest in certain specified instruments.
While a number of instruments have been included in this section, the good part is that there are no sub ceilings within these instruments. So you can choose to invest the entire sum of Rs 1 lakh in any one of these instruments or diversify the amount among these instruments in the proportion that you desire.
The following is an exhaustive list of all the instruments that you can invest in to get the benefit of section 80C.
1. Premiums paid towards life insurance policy for self and immediate family
2. Any amount paid towards a deferred annuity scheme like those offered by mutual funds
3. For government and semi-government employees, any amount which is deducted from your salary towards a deferred annuity scheme
4. Your contribution towards a Provident Fund, provided that the fund is covered under the Provident Fund Act
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5. Provident Fund opened in the name of immediate family members
6. Contribution to a recognized provident fund
7. Contribution to an approved superannuation fund
8. Contribution to a government savings certificate. This would include post office savings schemes
9. Premium paid towards a ULIP
10. ULIP of UTI Mutual Fund and LIC Mutual Fund
11. Any payments made to keep in effect an annuity plan of any insurance company
12. Equity Linked Savings Scheme (ELSS)
13. Contribution to a pension fund set up by a mutual fund subscription
14. Subscription to any such deposit scheme of, or as a contribution to any such pension fund set up by, the National Housing Bank
15. As subscription to any such deposit scheme of an authorized company which provides long term finance for construction or purchase of residential houses
16. Home loan principal repayment
17. Public offerings of equity shares or debentures
18. Pension policy where benefits were available under section 80CCC. However, here, the sub-ceiling remains at Rs 10,000
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