Spend, Save and Invest Smartly
We have all heard the phrase “Nothing is Certain As Death And Taxes”. No matter how old you grow you have to pay tax. There is no age limit for taxation. Here in India we also have an Income tax slab for the above 80 Year age group. This clearly shows that life expectancy has increased in India. Why else would they have made an Income tax slab for an age group of 80 Years? Here the major difference between human beings and animals is “Animals Have Instincts We Have Taxes” .I would like to remind all of you that the team of Financial Planners at Moneymindz.com are always there for you to plan your Tax Planning needs in a most effective and efficient manner. You can explore this unique Free Advisory Service just by giving a missed call on 022 6211 6588.
Let us consider the case of Mr Manohar an 82 year old gentleman who works as a consultant. He earns INR 15 Lakhs per annum. Mr Manohar has seen the Ups and Downs of life and knows all about taxes. He is very spend thrifty and looks to save as much as he possibly can by using Income Tax Deductions .available to him. The Income Tax Slab shown below is the one that concerns him.
Income Tax Slab Rates for Male/Females For Very Senior Citizens Above 80 Years: FY 2012-2013
|Upto 5 Lakhs||NIL|
|INR 5 Lakhs - INR 10 Lakhs||20%|
|INR 10 Lakhs and above||30%|
Here had Mr Manohar not made use of the income tax slabs available to him the calculations shown below would have applied to him
|Heads||% of Income Tax||Income Tax|
|Up To INR 5.0 Lakhs||NIL||NIL|
|INR 5 Lakhs - INR 10 Lakhs Here we a range of 500000 To 1000000 which gives us 500000 (1000000-500000) We then calculate 20% of 500000||20%||INR 100000 (a)|
|INR 10 Lakhs Here Mr Manohar earns 1500000 Here we have a range of 1000000 to 1500000 which gives us 500000 We then calculate 30% of 500000||30%||INR 150000 (a)|
|Total||INR 100000 (a) (c)=(a)+(b)|
|Educational Cess||3% of total tax (250000*3%)||INR 7500 (a)|
|Net Tax Payable||INR 257500 (e)=(c)+(d)|
These would have been the income tax rates chargeable to Mr Manohar had he not used his tax deductions Here Mr Manohar invests a sum of INR 100000 towards Senior Citizens Saving Schemes. This is tax deductible under Section 80C.
• Here the maximum amounts available for self, spouse and dependents for mediclaim policies is INR 15000.In case of a senior citizen it is INR 20000.In case the parents of the taxpayer are senior citizens the deductions towards their medical policies is INR 20000. Here Mr Manohar makes a donation of INR 1 Lakh towards National Defence Fund as he feels that he needs to make a contribution to the growth and development of the nation
• Here this section offers a tax deduction for donations to certain prescribed funds and charitable institutions. Here the extent of deductions is either 50% or 100% of the contribution depending on the charitable institution donated to. For certain funds the aggregate deductions are limited to 10% of the adjusted gross total income
|Gross Taxable Income||INR 15,00,000 (a)|
|Less Senior Citizens Saving Schemes Under Section 80 C||INR 1,00,000 (b)|
|Less Tax Deductions Under Section 80D||INR 20,000 (c)|
|Less Tax Deductions Under Section 80 G||INR 100000 (d) (e) = (b)+(c)+(d)=220000|
|Total Taxable Income||INR 12,80,000 (f)=(a)-(e)|