Important Deductions for Salaried Employees

Last updated at April 16, 2024 by

Deductions Under Chapter Vi A

Section 80C

  1. Life Insurance Premium
  2. Mutual Fund
  3. EPF ( Employee Contribution to PF (Normally 12% Of Basic + Da )
  4. PPF(Public Provident Funds)
  5. NSC (National Saving Certificates)
  6. KVP/IVP (Kisan Vikas Patra)
  7. FD>5Yrs 
  8. Tuition Fees Of Children
  9. Housing Loan :( Principal Interest Repaid only)

Maximum Deduction is 150000 for Section 80C

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Section 80D

Medical Insurance( Family 25000 + Parents 25000)

( Family 25000 + Parents 25000)( If Senior Citizen Then 30000)

( If Senior Citizen Then 30000)(Included In Above 5000 For Medical Lab Test)

(Included In Above 5000 For Medical Lab Test)

 

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Section 80G 

Certain Donations have100% Deduction like Pm Relief Fund

100% Deduction like Pm Relief Fund50% Deduction like Temple/NGO

50% Deduction like Temple/NGO

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Existing (Financial Year 2016 - 2017 or AY 2017-18)

If Donation amount is more than 10000,it cant be made in Cash

New(Financial Year 2017 - 2018 or AY 2018-19)

If Donation amount is more than 2000,it cant be made in Cash

If made in cash,then deduction not allowed

Section 80TTA

Saving Bank Interest

Maxmium 10000 Deduction,

 

Section 80TTB

 For Senior citizen Interest Income Deduction upto 50000 

from F.Y 2018-19,  

 

Interest Earned on Both Savings and FD

Total Interest Earned whether FD or Savings is Income from Other Sources

80TTA Deduction is only for Interest on Savings Max 10000 and

For Senior citizen under Section 80TTB  Deduction for Interest earned on both saving and FD is  50000 

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Examples

Introduction

Suppose My Salary Income is 30000 per month. What is My Income from Salary?

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Suppose My Salary Income is 30000 per month. Also I have Interest Income is 5000 per annum of Savings Account
What is My Income from Salary? Also what is my Gross Total income?

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Suppose My Salary Income is 30000 per month. Also I have Interest Income is 5000 p.a of Savings Account. What is My Income from Salary?

Also what is my Gross Total income and Net Total Income

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Suppose My Salary Income is 30000 per month. Also I have Interest Income is 15000 per annum of Savings Account. What is My Income from Salary?
Also what is my Gross Total income and Net Total Income?

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Suppose My Salary Income is 30000 per month

Also I have Interest Income is 15000 per annum of Savings Account+8000 on FD Account

What is My Income from Salary

Also what is my Gross Total income and Net Total Income

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Suppose My Salary Income is 30000 per month. Also I have Interest Income is 8000 on FD Account. What is My Income from Salary?
Also what is my Gross Total income and Net Total Income?

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DOWNLOAD AND TRY

Employee Savings Assignment Question.xls
 

Q1 Calculate Gross Total Income, Deductions and Net total Income in following Cases

Particulars Case 1 Case 2 Case 3 Case 4
Income from Salaries 400000 400000 400000 400000
         
I nterest Income        
On FD 3000 13000 30000 0
On Savings 2000 12000 0 40000
Total 5000 25000 30000 40000
View Answer

Q2

Particulars Case 1 Case 2 Case 3 Case 4
Income from Salaries 400000 400000 400000 400000
         
Medical Insurance Made        
Self 8000 10000 10000 30000
Wife 8000 10000 10000 30000
Children   10000 10000 30000
Father (Senior Citizen) 0 0 30000 60000

Calculate Gross Total Income,Deductions and Net total Income 

View Answer

Q3

Particulars Case 1 Case 2 Case 3 Case 4
Monthly Flat Salary 20000 35000 80000 200000

Employees has no Savings,However his PF Deducted @ 12%

View Answer

If we Repay Housing Loan EMI

In case of Self Occupied Property,

 We can claim loss from House Property of Maximum 200,000 of Interest Amount

Also,we can claim Deduction of Principal Amount under Section 80C

(Max Deduction of 80C is 150000)

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Q4

Particulars Amt Remarks
Basic Salary 60000  
Children Education Allowance 4500 (1500*3 children)
Variable Pay 15000  

Employee pays Tuition fees of Rs.6000(per quarter) per child

Out of which Rs.900 is reimbursed by the company

Also he has 4800 savings bank interest

Emploee PF @12% is deducted

View Answer

 

Q5

Particulars Case 1 Case 2 Case 3 Case 4
Monthly Salary 20000 30000 50000 100000
         
Interest Income        
On FD 3000 13000 30000 0
On Savings 2000 12000 0 40000
Total 5000 25000 30000 40000
         
Donation made through cheque        
NGO 15000 60000 20000 40000
Kerala Relief fund 5000 20000 20000 30000

Employees PF is deducted @ 12%

View Answer

 

Q6

Particulars Amt
Basic Salary p.m 60000
Special Pay p.m 40000
Uniform Allowance p.m 2000
(Declaration Given)  
Transport Allowance p.m 2500
   
Annual Income  
Free Alto Car and Driver Given by Co  
Car Cost 350000
Car cc 1000
Driver Salary p.m 8000
(for Partly official Partly personal)  
   
Annual Savings  
EPF 12%
Life Insurance 10000
   
Medical insurance   
Self 11000
Spuse 11000
Mother 11000
Father (Senior Citizen) 11000
  44000
Donation to PM Relief fund 3000
Donation to Temple 2000
   
Interest income   
on FD 3000
On Savings 14000
View Answer

Q7

Suppose in last question

Housing Loan int repaid
Principal 160000
Interest 260000
Total 420000

All other Data Same

View Answer

Q9

Particulars Amt Remarks
Basic Salary 40000  
Lunch Allowance 4000  
Transport Allowance 2500 (No Bill Submitted)
Children Education Allowance 4500 (1500*3 children)
Variable Pay 30000  
HRA 15000 (He had given declaration that he would submit Rent receipts by march of 18000 of Noida but in March had failed to do so)

Employee Savings Declared

Housing Loan Declared Submitted
Principal 40000 38000
Interst 30000 32000
Medical ins (Self) 15000 14000

Calculate TDS from April to Feb and in March

View Answer
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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.