BANKING AFFAIRS

Detailed explanation-1: -Goyal said people are not required to pay any income tax on the annual income up to Rs 5 lakh as they will get the full rebate. Those with the gross income up to Rs 6.50 lakh can also save themselves from paying any income tax if they make the right investments in provident funds, specified savings, insurance etc.

Detailed explanation-2: -Section 80C is one of the most popular and favourite sections amongst the taxpayers as it allows to reduce taxable income by making tax saving investments or incurring eligible expenses. It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayers total income.

Detailed explanation-3: -It Is Important to Know That: 5 lakhs annually are eligible for tax rebate under Section 87A, making the tax liability NIL. Exemption limit in case of NRIs (Non-Resident Indians) is Rs. 2, 50, 000 irrespective of the age. 4% health and educational cess is applicable to the income tax liability.

Detailed explanation-4: -Employer’s contribution to your EPF account is exempt from tax. This exemption is subject to 12% of your basic salary plus DA. The interest on employer’s contribution is also exempt from tax. The employee contribution toward EPF is also eligible for tax deduction under section 80C.

Detailed explanation-5: -The third slab in the income tax slab table is Rs 5 lakh and Rs 10 lakh, taxed at 20%. This means that out Rs 9, 65, 000, Rs 5, 00, 000 will be taxed at 20%. The tax payable here will be Rs 1, 00, 000.