TaxCal

Tax benefit on medical insurance premium

Posted on April 20, 2020 at 5:56 pm. Written by w

Tax benefit on medical insurance premium comes under Section 80D of Income Tax Act. This benefit is in addition to Section 80C. Under this Section 80D, the maximum benefit one can claim can go up to ₹ 1,00,000/- based on the age of the parents or the eldest of the family.

Under Section 80D, any individual can claim tax benefit by paying medical insurance premium to self, family and/or parents. Check the below rules for more clarity on medical insurance premium.

Tax Benefit on Medical Insurance

Up to ₹ 25,000/- can be claimed on medical insurance premium paid for self and family.
Additionally if the medical insurance premium is paid for parents, then one can claim a total of ₹ 50,000/-
If the parents age is above 60 years, then you can additionally claim ₹25,000/- per parent. ie, If both the parents are above 60yrs of age, then under Section 80D, you can claim a total of ₹1,00,000/- for the whole family.

So under Section 80D of the income tax act, medical insurance premium paid towards family members and parents can be tax deducted anywhere between ₹25,000/0- and ₹ 1,00,000/-

Please take a look at our Free Income Tax Calculator which is designed to simplify tax calculations by considering mostly used income tax saving instruments.

Points to consider on New Income Tax Regime

Posted on April 20, 2020 at 11:37 am. Written by w

Government has introduced a totally new income tax regime under which there are better income tax slabs but doesn’t allow almost all of tax deductions. Most commonly used deductions like HRA, Housing loan, insurance and tax saving mutual funds will not allowed.

Points to consider if you want to opt into New Income Tax Regime.

New and better income tax slabs will apply.
Deductions on contribution to National Pension Scheme will apply.
No other deductions will apply. Ex: HRA, Housing loan benefits, Section 80C benefits etc.
This is fairly simple tax calculation system without any overhead of multiple deductions with complex rules.
This new income tax regime doesn’t benefit individuals who are in 30% tax slab and have total deductions of at least ₹2,00,000/-
Individuals with income from salaries can switch between new and old tax regimes any time. But those with income from business can only switch once.

NPS deduction on new tax regime.

There is only one deduction that is allowed in new income tax regime is ‘National Pension Scheme’. This is a fairly new pension scheme that came into effect in the year 2009. Before that, it was available to Govt. employees on a voluntary contribution basis. Read more about NPS on 80c.in

New Income Tax Slabs for Financial Year 2020-21

Posted on April 20, 2020 at 10:59 am. Written by w

In the union budget for the year 2020, new income tax slabs has been introduced in a completely new tax regime by the Govt. This new tax regime is optional. Anyone who wants to opt into this new tax regime can avail new income tax rats but should give up almost all of tax deductions.

Income Tax Slabs in New Tax Regime

New Tax Regime – FY 2020-21	Income Tax Rate
Up to ₹ 2,50,000/-	NIL
From ₹ 2,50,001/- to ₹ 5,00,000/-	5%
From ₹ 5,00,001/- to ₹ 7,50,000/-	10%
From ₹ 7,50,001/- to ₹ 10,00,000/-	15%
From ₹ 10,00,001/- to ₹ 12,50,000/-	20%
From ₹ 12,50,001/- to ₹ 15,00,000/-	25%
From ₹ 15,00,001/- and above.	30%

Income Tax Slabs in Old Tax Regime

Old Tax Regime (FY 2020-21)	Income Tax Rate
Up to ₹ 2,50,000/-	NIL
From ₹ 2,50,001/- to ₹ 5,00,000/-	5%
From ₹ 5,00,001/- to ₹ 10,00,000/-	20%
From ₹ 10,00,001/- and above.	30%

Below are the few exceptions to the above income tax slabs on both tax regimes.

Pls note that, on both the tax regimes, if the total taxable income is less than ₹ 5,00,000/- then it becomes its totally tax free.
For senior citizens (above 60yrs age and below 80 yrs), first income tax slab will be up to ₹ 3,00,000/-.
For super senior citizens for the age above 80yrs, the first tax slabs will be up to ₹5,00,000/-. and there will be no 5% income tax slab.
On New Tax Regime, no deductions are allowed except NPS (National Pension Scheme). This new tax regime will benefit only those who have nothing to claim as deductions.

For you to understand which tax regime fits you best, we have designed a new tax calculator which considers all the rules and calculates total tax under two regimes.

Check out list of Tax Saving Investments

Posted on April 14, 2020 at 8:44 pm. Written by w

Tax Saving Investments are the list of investment instruments listed by Income Tax Department to encourage tax payers towards investment and give tax incentives.

In general investment is a great idea than saving schemes as they yield better returns but they come with market risks. But when you are getting tax benefits on your income, risks can be lowers.

Tax saving investments are specially listed under following schemes to help users differentiate.

Unit Linked Insurance Plan (ULIP)

Unit Linked Insurance Plans or ULIPs are combined with insurance benefit as well as tax benefit. Pls note that all insurance schemes are not ULIP and you need to make sure you ask these questions to the agent you talk to.

Equity Linked Savings Schemes (ELSS)

Equity Linked Savings Schemes (ELSS) are pure investment instruments unlike ULIP above. ELSS are generally comes under mutual funds but not all mutual funds comes under ELSS for tax benefit.

Pls be noted, when you have opted to ELSS, your money is tax exempted (rules apply) but when you take our the money after maturity, it will be taxed. You need to check with tax consultant to manage this.

How to use our Income Tax Calculator

Posted on April 14, 2020 at 8:28 pm. Written by w

Our advanced income tax calculator is specially designed to help regular users to calculate income tax. However, as this income tax calculator is related to financial affairs, regular user is expected to know basic terminology used by tax calculators and finance experts.

Below are the list of broad array of terms which are generally used across our website while calculating income tax.

Income Details

Income details are nothing but the money you earn in various forms like salary, income from bank deposits, rent received on house rental property, tax gains etc. All of this money comes under tax radar and you are expected to disclose all this details to pay taxes to Income Tax Department.

Deduction Details

Deduction details are the list of items which are exempted from taxable income but some rules apply. This is the exact reason why we have developed an advanced income tax calculator to help to guide while calculating taxes.

Deductions are like life insurance premium paid, rent paid, any investments made under tax saving schemes. This is a very big list coming with a set of rules that defines maximum, minimum amounts.

Taxable Income

Taxable Income is the amount which is actually taxed based on the tax brackets. This amount is calculated based on the actual income you have received minus total deductions allowed by income tax department.

Tax Brackets

Taxes are calculated based on percentages. As the taxable income goes up, generally in India by Income Tax Act, taxable percentage also goes up.

On this website TaxCal.in, we will keep on writing blogs on how to save taxes on taxing saving schemes, tax saving investments etc.

Income Tax Saving Tips on Section 80C

Posted on April 14, 2020 at 7:33 pm. Written by w

“Section 80C” is an Income Tax Act by Govt. of India which lists a group of financial instruments which can help save money on income taxes. Currently Section 80C allows a maximum of ₹ 1,50,000/- INR before taxing the income.

80C has various subsections that can help save money on taxes. Below are the most popular tax saving instruments or schemes under this Section 80C.

Section 80C – Tax Saving Instruments

Total amount on life insurance premium paid. That includes insurance premium paid for individuals as well as immediate family members.
Housing Loan Principle repaid (only if the construction of the property is completed)
Any stamp duty and/or registration changers paid.
Children tuition fee paid.
All kinds of provident funds (PF, PPF, VPF) subjec to individual rules on provident funds.
Selected mutual funds ie, specially stated mutual funds designed to save tax on Section 80C
Special saving schemes like Sukanya Samriddhi Account, National Savings Certificate, Senior Citizen Savings Scheme.
5 Year Fixed deposits and Pension Funds / Retirement Schemes.
National Pension Scheme by Govt of India.

Finally on Section 80C, a total of ₹ 1,50,000/- can be saved on taxes when opted to one or more of the above mentioned instruments. When subsections combined, you can same further ₹ 75,000/- based on schemes like NPS and RGESS.