ALL ABOUT DEDUCTION U/S 80D FOR MEDICLAIM

Deduction u/s 80D is available to the following:
1.An Individual;
2.A hindu undivided family(HUF)

Deduction u/s 80D is available to an individual for his own health , spouse and dependent children. An individual can also claim deduction u/s 80D for his parents(whether dependent or not). deduction in respect of parents health of an individual is in addition to the above deduction.

PERMISSIBLE DEDUCTION U/S80D:

1. Amount paid for medical insurance or Rs. 15,000/- for his own health or his family(spouse & dependent children)
2.Amount paid for the health of his parents whether dependent or not OR Rs. 15,000(Maximum). but if the parents are senior citizens, the above amount of deduction increased to Rs. 20,000(maximum).

therefore , an individual can get maximum deduction u/s 80D either Rs. 30,000(Rs.15,000 for himself & family & Rs. 15,000 for parents) OR Rs. 35,000( if the parents are senior citizens)

Example:
An individual assessee pays (through any mode other than cash) for Medical insurance premium during the previous year out of his taxable income as under:

a) Rs. 12,000 on his own health & on the health of his wife & dependent children.
b) Rs. 17,000 on the health of his
parents.

total amount paid by the individual is Rs. 29,000. but he will get deduction only for Rs. 27,000 (Rs. 12,000 for himself & family & Rs. 15,000 for his parents).

But if the parents are senior citizens he will get benefit of Rs. 29,000 because in case of senior citizen deduction is allowed upto Rs. 20,000.

NOTE:

1.Deduction in respect of dependent children in case of male is upto the age of 25 years is allowed & in case of female child upto her marriage.
2.Ddependent children includes legitimate of legally adopted childrens.

CONDITIONS TO AVAIL THE DEDUCTION U/S 80D:
1.Payment shall be made by any mode of payment other than cash. If the payment for the policy is made in cash than deduction under this section is not allowed.
2.Payment shall be made out of income chargeable to Tax.
3.Payment shall be as per GIC scheme approved by the central government or any other insurer as approved by IRDA.

What is PROVIDENT FUND (PF)

WHAT IS PROVIDENT FUND?

“Provident fund is a fund which is composed of contributions made by the employeeduring the time he/she worked along with an equal contribution by his employer”

RATE : Provident fund is calculated as 12% of his/her basic salary & the same amount is contributed by the employer.however employee have a option to contribution more than 12%

DEPOSIT OF CONTRIBUTIONS:

Employers contribution of 12% of basic salary is totally deposited in provident fund account whereas out of employees contribution of 12% , 3.67% is contributed to provident fund & 8.33% is deposited in Pension scheme.

IS IT COMPULSORY FOR ALL EMPLOYEES TO CONTRIBUTE TO THE PROVIDENT FUND?

employees drawing basic salary upto Rs. 1,5000/- have to compulsory contribute to the provident fund . however , employees drawing above Rs. 15,000/- say Rs. 15,001 have an option to become member of the provident fund.

ADVANTAGES:

1. Tax benefit u/s 80C
2. retirement benefit
3. withdrawal benefit

NOTES:
1.However if a person withdraw the amount of provident fund before the end of 5 years all the benefits he got u/s 80C against Provident fund will get reversed & added with the income in which withdrawal has been made & fully taxable . So be careful about the timing of withdrawal.
2.Benefits under the pension fund is available only after the continuous service of 9.6 years & after completing the age of 58 years . continuous service of ten year does not means to work with the same company but every time when a person change job ,the PF account must be transferred & continuous for ten years.

FORMS REQUIRED:

1.Form NO. 2 is required to be filled to become the member of the provident fund.it is called a Nomination Form .
2.Form no. 13 is required for transfer of Provident fund.
3.Form no. 19 is required for withdrawal of provident fund
4. Form no. 10C is required for withdrawal of pension fund.

All the forms are available with the HR department of the company .

provident fund plays a very important role because at the time of retirement a person get a healthy sum & pension amount subject to the conditions fulfilled as per provident fund Act.

Dividend Distribution Tax (DDT) for Financial Year 2015-16

Dividend Distribution Tax (DDT) for Financial Year 2015-16

Dividends distributed by an Indian Company are exempt from income tax in the hands of all shareholders. DDT shall be computed on the amount determined after grossing up dividend paid by the rate of tax (excluding Surcharge and Cess) on such dividend.

Grossing up needs to be done only of the Basic Rate and not of the Effective Rate. The rates of DDT are as below:

DDT Rates for Companies for Financial Year 2015-16

Basic Rate	Effective Rate*
17.647	20.358

*including Surcharge of 12% & Education Cess

DDT Rates for Mutual Fund” (MF) for payments to –

Particulars	Basic Rate	Effective Rate*
(1)   Distribution by MF under an Infrastructure Debt fund scheme to a non-resident	5.263	6.071
(2)   To an individual or HUF excluding (1) above	33.33	38.449
(3) To any other Person excluding (1) a (2) above	42.85	49.432

*including Surcharge of 12% & Education Cess

- See more at: http://taxguru.in/income-tax/income-tax-slab-financial-year-201516.html#sthash.XxGr6e44.dpuf

MINIMUM ALTERNATE TAX (MAT) RATES FOR FINANCIAL YEAR 2015-16

MINIMUM ALTERNATE TAX (MAT) RATES FOR FINANCIAL YEAR 2015-16

SI.No.	Particulars	Tax(%)	Surcharge (%)	E. Cess (%)	S Et HE.Cess (%)	Effective Tax (%)
1	Domestic companies (with total income less than 1 Cr.)	18.5	–	2	1	19.055
2	Domestic companies (with total income more than 1 cr. but less than 10 Cr.)	18.5	7*	2	1	20.389
3	Other domestic companies	18.5	12#	2	1	21.342
4	Foreign companies (with total income less than 1 Cr.)	18.5	–	2	1	19.06
5	Foreign companies (with total income more than 1 cr. but less than 10 Cr.)	18.5	2	2	1	19.436
6	Other foreign companies	18.5	5	2	1	20.008

* Surcharge has been increased from 5% to 7%.

# Surcharge has been increased from 10% to 12%.

Alternate Minimum Tax (AMT)

It is applicable on all persons other than companies. In case of Individual, Hindu Undivided Family, Association of Persons and Body of Individuals, it applies only if Adjusted Total Income exceeds Rs. 20,00,000. Adjusted Total Income is computed by increasing Total Income by any Deduction claimed under chapter VIA [Sec. 80-IA to Sec. 8ORRB (Except Sec. 80P)] and Sec. 10AA.

AMT would be computed at the rate of 18.5% on adjusted total income. Surcharge has been increased from 10% to 12% where the adjusted total income exceeds Rs. 1,00,00,000. Education Cess is applicable at the rate of 2%. Secondary and Higher Education Cess is applicable ® 1% on income tax.

Securities Transaction Tax (STT) Rates for Financial Year 2015-16

STT is levied on the value of taxable securities transaction as under:

Sl.No.	Transactions	Rate	Payable by
1	Purchase/Sale of equity shares (delivery based)	0.1%	Purchaser/ Seller
2	Purchase of units of equity-oriented mutual fund (delivery based)	Nil	Purchaser
3	Sale of units of equity-oriented mutual fund (delivery based)	0.001%	Seller
4	Sale of equity shares, units of equity-oriented mutual fund (non-delivery based)	0.025%	Seller
5	Sale of an option in securities	0.017%	Seller
6	Sale of an option in securities, where option is exercised	0.125%	Purchaser
7	Sale of a futures in securities	0.01%	Seller
8	Sale of unit of equity oriented fund to the Mutual Fund	0.001%	Seller

Commodities Transaction Tax (CTT)

CTT is levied on the value of taxable commodities transaction:

Transactions	Rate	Payable by
Sale of commodity derivative (other than agricultural commodities) entered in a recognised association	0.1%	Seller

Income Tax Slab for FY 2015-16 AY 2016-17 (Companies)

Income Tax Slab for FY 2015-16 AY 2016-17 (Companies)

a. Domestic Company

The rates of income-tax in the case of companies are specified in Paragraph E of Part III of the First Schedule to the Bill. These rates are the same as those specified for the financial year 2014-15 i.e.  30% of taxable income.

Surcharge at the rate of seven per cent shall be levied in case of a domestic company if the total income of the domestic company exceeds one crore rupees but does not exceed ten crore rupees. The surcharge at the rate of twelve percent shall be levied if the total income of the domestic company exceeds ten crore rupees. In case of companies other than domestic companies, the existing surcharge of two per cent. shall continue to be levied if the total income exceeds one crore rupees but does not exceed ten crore rupees. The surcharge at the rate of five percent shall continue to be levied if the total income of the company other than domestic company exceeds ten crore rupees.

However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees but not exceeding ten crore rupees, shall not exceed the total amount payable as income-tax on a total income of one crore rupees, by more than the amount of income that exceeds one crore rupees. The total amount payable as income-tax and surcharge on total income exceeding ten crore rupees, shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees, by more than the amount of income that exceeds ten crore rupees.

In other cases (including sections 115-O, 115QA, 115R or 115TA) the surcharge shall be levied at the rate of twelve percent.

For financial year 2015-2016, additional surcharge called the “Education Cess on income-tax” and “Secondary and Higher Education Cess on income-tax” shall continue to be levied at the rate of two per cent. and one per cent. respectively, on the amount of tax computed, inclusive of surcharge (wherever applicable), in all cases. No marginal relief shall be available in respect of such Cess.

b.  Normal tax rates applicable to a foreign company

A foreign company is taxed at a flat rate of 40%. Apart from tax @ 40%, Education Cess is levied @ 2% of income-tax and Secondary and higher Education Cess is levied @ 1% of income-tax.

Surcharge : In addition to tax at above rate, surcharge is levied @ 2% on the amount of income-tax if net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 5% on the amount of income-tax if net income exceeds Rs. 10 crore. In a case where surcharge is levied, EC of 2% and SHEC of 1% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a foreign company whose net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

In case of a foreign company whose net income exceeds Rs. 10 crore, marginal relief is available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.

MAT : In the case of a corporate taxpayer to whom the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “Book profit” as per section 1 15JB.

Income Tax Rate Chart In case of  Corporates for Financial year 2015-16

SI.No.	Particulars	Tax(%)	Surcharge(%)	E. Cess(%)	SHE. Cess (%)	Effective Tax(%)
1	Domestic companies (with total income less than 1 Cr.)	30	–	2	1	30.90
2	Domestic companies (with total income more than1 cr. but less than 10 Cr.)	30	7*	2	1	33.063
3	Other domestic companies	30	12#	2	1	34.608
4	Foreign companies (with total income less than 1 Cr.)	40	–	2	1	41.20
5	Foreign companies (with total income more than	40	2	2	1	42.024
	1 cr. but less than 10 Cr.)
6	Other foreign companies	40	5	2	1	43.26

* Surcharge has been increased from 5% to 7%.

# Surcharge has been increased from 10% to 12%.

Income Tax Slab for FY 2015-16 AY 2016-17 (Local authorities)

The rate of income-tax in the case of every local authority is specified in Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for the financial year 2014-15 i.e.  30% of taxable income..

The amount of income-tax shall be increased by a surcharge at the rate of twelve percent. of such income-tax in case of a local authority having a total income exceeding one crore rupees.

However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 115JC.

Income Tax Rate Chart In case of Local authorities for Financial year 2015-16

Particulars	Income Level
Taxable Income	Upto 1 Crore	1 Crore to 10 Crore	Above 10 Crore
F.Y. 2014-15	30.90%	33.99%	33.99%
F.Y 2015-16	30.90%	34.608%	34.608%