GK
TAXES IN INDIA
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Total income
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Gross total income
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Tax on total income
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None of these
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Detailed explanation-1: -Section 80C of the Income Tax Act of India is a clause that points to various expenditures and investments that are exempted from Income Tax. It allows for a maximum deduction of up to Rs.1.5 lakh every year from an investor’s total taxable income.
Detailed explanation-2: -The maximum amount of deduction permissible is Rs. 1, 50, 000. However, the amount of deduction mentioned here is clubbed with 80C and 80CCD (1). Contribution made towards notified pension schemes by Central Government i.e. New pension scheme (NPS) are allowed deduction under Section 80CCD on individual.
Detailed explanation-3: -You have the standard deduction of Rs 50, 000 per year. You will then have to deduct the eligible expenses and investments under Section 80C. Suppose you have invested Rs 1.5 lakh in an ELSS fund. The taxable income reduces to Rs 9, 00, 000 – Rs 50, 000 – Rs 1, 50, 000 = Rs 7, 00, 000.