How will the tax liability be calculated? – This calculation is for senior citizens.

For example, if the general income of a senior citizen is Rs 2 lakh and short term capital gain income from listed shares is Rs 5 lakh, then how will the tax be calculated on it.

Normal Income: ₹2 lakh (mainly interest income).

Short-term capital gains: ₹5 lakh (from listed shares).

Deduction under Section 80C: ₹1.50 lakh (under the old tax regime).

After deductions, your normal income will be ₹50,000. The basic tax exemption limit for senior citizens is Rs 3 lakh.

Short-term capital gains and tax exemption limit

Because in this case the normal income is Rs 2.50 lakh less than the exemption limit of Rs 3 lakh. This shortfall will be adjusted against your short-term capital gain. After this, tax will be applicable on the remaining short-term capital gain of Rs 2.50 lakh.

This tax rate will be like this

• Profits earned before July 23, 2024: Taxed at the rate of 20%.
• Profits earned on or after July 23, 2024: Taxed at 15%.

Use of section 80C

The benefits of section 80C are available only on normal income. This benefit is not available on short-term capital gains. However, if you have got short-term gain or loss from any other source, then it will be considered as normal income. The benefit of section 80C can then be applicable on it.

Important things for investors

Choose old tax regime : The benefit of Section 80C is available only in the old tax system.

Use short-term capital losses: If you incur any short-term losses in a financial year, the same can be set off against short-term capital gains.

Non-resident rule: If you are a non-resident, you will have to pay tax at the rate of 20% or 15% on the entire amount of short-term capital gains.

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Under the Income Tax Act 1961, it has remained at Rs 1.5 lakh for the last decade. While inflation and income are constantly increasing, the limit of 80C has not been increased for a long time.

What is Section 80C?

Section 80C of the Income Tax Act is used by most taxpayers. It allows individual taxpayers and Hindu Undivided Families (HUFs) to claim tax exemption on investments and expenses. Exemption under 80C is available to taxpayers who file returns under the old tax regime. In the current system, a maximum exemption of Rs 1.5 lakh can be availed in a financial year.

Investments – Options under 80C

• Equity Linked Savings Schemes (ELSS)
• Public Provident Fund (PPF)
• National Savings Certificate (NSC)
• Employee Provident Fund (EPF)
• Unit Linked Insurance Plans (ULIP)
• Sukanya Samriddhi Scheme
• Senior Citizen Savings Scheme (SCSS)
• Five Year Tax Saving Fixed Deposit
• Tuition fees for up to two children
• Home Loan Principal
• Life insurance premium
• Contribution to National Pension System (NPS)

How to claim discount?

To claim deductions under section 80C, taxpayers must make investments or expenditures within the financial year (April 1 to March 31). These amounts have to be reported in the relevant section while filing income tax returns (ITR). Attaching certificates of investment and payment eases claim processing.

What are the expectations from Budget 2025?

The limit of Section 80C has been stagnant at Rs 1.5 lakh since 2014. Taxpayers and financial experts say it should be increased in line with the current economic situation. Rajiv Gupta, President, PB Fintech, said that since Section 80C covers investments like PPF and home loans, the exemption limit gets exhausted quickly. If term insurance is put in a separate tax exemption category, it will encourage life insurance and provide better protection to Indian families.

What does this limit mean for taxpayers?

If this limit is increased in Budget 2025, it will not only provide relief to taxpayers but will also encourage more investments in financial savings schemes.

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The Government of India is running many pension schemes. Insurance companies are also currently offering different types of pension plans. SBI Life’s Smart Annuity Plan is also included in this list.

About the plan

It is a non-participating annuity pension plan, offering the option of both deferred and immediate plans. Along with this, joint life option is also available. The minimum investment age for deferred annuity is 45 years and for immediate annuity is 30 years. In which premium is paid. After retirement, one gets the benefit of pension in the form of annuity payout.

Investors can opt for half yearly or annual or monthly pension. Many annuity options are provided under the plan. The annuity rate is greater than the amount of premium paid. Tax exemption is also available under Section 80C and Section 10 (10A) of Income Tax. A free look period of 15 days is also available in this. Besides, the facility of Accidental Death Benefit Rider would also be available. The pension amount depends on investment. You can also avail pension of Rs 1 lakh under the plan.

How much will have to be invested for one lakh rupees?

If you buy immediate annuity at the age of 60, you will have to invest Rs 1,55,92,516 for a monthly pension of Rs 1 lakh. To buy a life annuity with the return of purchase price, a 60-year-old person will have to invest Rs 1,88,32,392. On taking life annuity with return of balance purchase price, one will have to pay Rs 1,60,40,636.

By taking life annuity for 10 years, a 60 year old person will have to invest Rs 1,57,77,018. If you take life annuity for 20 years, you will have to deposit Rs 1,62,38,160. At 3% compounded growth annually, one will have to pay Rs 2,20,83,180 and at 5% compounded growth, one will have to pay Rs 2,90,27,676. Other annuity options are also available. Let us tell you that under the plan, you can avail the benefit of monthly pension of at least Rs 200.

(Disclaimer: The purpose of this article is to share general information only. Rightsofemployees.com does not recommend investing in any plan or scheme.)

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Currently, investments up to Rs 1.5 lakh per annum in various tax saving schemes, home loans and life insurance policies are eligible for deduction under Section 80C. Savings schemes eligible for deduction under section 80C include PPF, EPF, NSC, NPS, SCSS, FDs for five years in banks and post offices, ELSS and mutual funds etc.

Taxpayers have been demanding to increase the section 80C limit for many years. Even many groups had demanded to increase it to 3 lakhs, in which ICAI, in its pre-budget 2023 recommendations, had demanded the government to increase the limit under section 80C from Rs 1.5 lakh to Rs 3 lakh.

Will the government increase the limit

The Central Government has so far decided not to increase the limit under section 80C. This information has been given in the statement issued by the Ministry of Finance. At the same time, a new tax regime has been introduced without Section 80C deduction with lower rates by not increasing the limit. State Finance Minister Pankaj Chowdhary said in the Lok Sabha on July 31 that it has been the declared policy of the government to simplify the Income Tax Act, 1961 by reducing the rates of taxes. In such a situation, there is no proposal to increase the exemption under Section 80C of the Income Tax Act under consideration.

Increased interest of these schemes

Minister of State for Finance Pankaj Chowdhary said that in the second quarter (July to September) of the financial year 2023-24, the rate of interest on National Savings Fixed Deposit Scheme (1 year and 2 years) and National Savings Recurring Deposit will be increased by 10 bps and 30 bps respectively. has been increased. Chaudhary also said that the net collection under small savings for the first quarter of the financial year 2023-24 was Rs 74,937 crore.

The post Section 80C Limit: Big News! New update regarding increasing the limit of Section 80C of the Income Tax Department first appeared on Rightsofemployees.com.

But, to take advantage of this discount, you have to fulfill certain terms and conditions. People paying stamp duty and registration charges under section 80C can claim exemption while filing Income Tax Return (ITR) in the year in which they buy the house.

Tax exemption on stamp duty can be claimed by individual owners, co-owners or Hindu undivided families. In case of joint ownership, exemption is given to the co-owners according to their share. For this, it is mandatory for the property to be registered in the name of all the owners and stamp duty has to be paid by them. If someone other than the co-owners of the property pays the stamp duty, then the benefit of tax deduction will not be available to the co-owners of the property.

Exemption only on residential property

Section 80C (xviii) (d) of the Indian Income Tax Act, 1961 provides for tax exemption on expenses such as stamp duty and registration fees incurred on the purchase or transfer of property. Under this, a deduction of up to Rs 1.5 lakh can be claimed. It is to be noted here that this exemption can be availed only on residential property and not on commercial property.

Tax exemption on stamp duty paid in the same financial year

can be availed in the same financial year for which ITR is being filed. This means that while filing ITR for the financial year 2022-23, you can claim exemption only on the stop duty paid in this financial year and not for the house purchased in the previous financial year.

Occupancy required

You can claim exemption on stamp duty paid only for the residential property which is in your possession as the first owner. That is, you should have possession of the property. Under-construction properties are not eligible for stamp duty tax benefits.

Lock-in period of 5 years

The property for which Tax Benefits on Stamp Duty has been availed for the purchase cannot be sold for five years. If one sells the property before this period, then the ITR of the year in which the exemption is availed gets revised and the stamp duty deducted is taxed.

This is also a condition , for tax deduction on applicable stamp duty, it is also necessary that you have not crossed the maximum exemption limit of 1.5 lakhs under section 80C. This means that if you have already taken exemption up to 1.5 lakhs on investments in EPF, PPF, SCSS, life insurance policy, ELSS etc.,

then you cannot claim tax exemption on stamp duty. If you have availed less than 1.5 lakhs exemption after claiming the deduction on these investment options, then you are entitled to tax deduction on stamp duty also.

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But apart from these, there are many such sections in the Income Tax Act, through which you can save tax on your income. Let’s know about it from CA Rahul Kumar Agarwal.

First know section 80C
First of all, we will talk about section 80C. In this matter, Rahul says that most of the people think that income up to Rs 5 lakh is tax free, which is not correct. In fact, income up to 2.5 lakhs comes under the ambit of tax exemption. After this, for the next Rs 2.5 lakh, a rebate of up to Rs 12,500 is available under section 87A. In this way, the benefit of tax exemption is available on the total salary of 5 lakhs. Apart from this, under section 80C, tax exemption can be availed on investments up to Rs 1.50 lakh in schemes like term insurance, 5-year FD, senior citizen savings schemes and ELSS mutual funds.

Section 80CCD

If you invest money in the National Pension Scheme, you can claim tax exemption under section 80CCD. You get tax exemption on Tier 1 account in NPS. Under NPS, under Section 80CCD (1B) of the Income Tax Act, tax exemption can be availed on investments up to Rs 50,000. NPS can also help you in extra tax savings if you have met the limit of up to Rs 1.5 lakh under section 80C.

Section 80D
You can save tax on your income by taking health insurance premium for the health of yourself, family and dependent parents. If your age is less than 60 years, then you can get a rebate of up to Rs 25,000 by paying premium for yourself, life partner and children under this section. Those whose age is more than 60 years, they can claim deduction of up to 50 thousand rupees under section 80D. On the other hand, if both the taxpayer and his parents are above 60 years of age, then a deduction of up to Rs 1 lakh can be claimed.

Section 80DDB

If a dependent person in your family is suffering from a serious illness, then the amount spent on his illness is also tax exempt. All diseases like cancer, hemophilia, thalassemia and AIDS have been included in this list. Under section 80DDB, you can take this deduction on the expenses incurred for the treatment of parents, spouse, children or dependent siblings. But you must have a medical certificate. According to age and other conditions, this deduction can be from 40 thousand to 1 lakh.

Section 80EE
If your home loan is less than Rs 35 lakh and the value of your property does not exceed Rs 50 lakh, then under section 80EE you can claim an additional deduction of Rs 50,000 (Section 24) on home loan EMI interest. But the condition is that no other property should be registered in his name at the time of loan approval.

Section 80EEA
If you have taken a home loan, you can claim an additional tax deduction of Rs 1.5 lakh on home loan interest under section 80EEA. But the condition is that the stamp value of the house should not exceed Rs 45 lakh. Apart from this, the home loan must have been taken between April 1, 2019 and March 31, 2022. If you have bought a house in metro cities, then the carpet area for it should not be more than 60 square meters, for other cities this limit may be different.

Section 80E
If you have taken a loan for higher education of yourself, life partner or child, then you can claim tax exemption on the interest earned on this loan. But the condition is that it is taken from a recognized institution or bank. This exemption can be available for the immediately coming assessment year and up to 7 assessment years thereafter.

Section 80GG
Salaried people who live in a rented house can reduce their tax burden through house rent allowance. 60,000 annually under section 80GG. (Rs. 5,000 per month) is the maximum exemption allowed.

Section 80TTB
Under Section 80TTB, tax exemption can be taken on earning a maximum of Rs 50,000 annually on the interest earned from deposits. This section is available for senior citizens from 1st April 2018. However, under Section 80TTA, the deduction of up to Rs 10,000 on the interest earned from savings account is not available to senior citizens.

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If your salary for February and March also gets deducted, then understand that the company has equalized the tax calculation on the basis of income tax rules. But if you do not come under the income tax net, and yet the tax has been deducted, then what is the option? Today we explain you the easy way. First of all, the employee has to give information about his investment i.e.

Investment Proof and HRA details to his company. Most of the companies ask their employees to submit Investment Proof Submission from the end of January to February. So that it can be submitted to the Income Tax Department after verification.

At the same time, most people in the country take steps to save tax in the last three months i.e. January, February and March. Especially by investing, people try to free themselves from tax liability. If your organization also had the last date for submission of investment proof till February, then what option is left now? You will also have this question in your mind. Now the last date for investment to save tax is March 31, then companies take the details so early, then how can they invest till March 31 and take advantage of income tax exemption.

Actually, according to the Income Tax rules, if you have submitted the Investment Proof for the financial year 2022-23 to your organization where you work, then there is nothing to panic. You can take advantage of tax exemption by investing till March 31. There are very easy ways for this.

Mention the investment till March 31 in ITR

According to the rule, if you want to take advantage of income tax exemption for the financial year 2022-23, then you can take advantage of it by investing till March 31 without worrying. Even if you have submitted investment proof and HRA documents related to income tax where you work. You can avail full exemption by investing till 31st March and filing ITR before 31st July. In which you can submit all investment documents including HRA, which is valid under income tax rules.

That is, being tension free, you can claim life insurance, PPF, NPS and medical insurance by 31st March, filing ITR on the basis of this document by 31st July. Not only this, if your salary is deducted due to tax in the months of February and March, then that amount will also be returned as soon as you claim it. Always consider March 31 as the deadline.

How to save tax money?

By investing under Section 80C of the Income Tax Act, you can deduct up to Rs 1,50,000 from your taxable income. These include amounts such as premium paid for life insurance policies, children’s school tuition fees, PPF, KVP, Sukanya Samriddhi Yojana, principal amount paid under the head of NSC home loan. Apart from this, by investing in NPS, you can get an additional benefit of 50 thousand rupees. Also, by purchasing medical insurance, you can take advantage of tax exemption.

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