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Follow UsBANGALORE, INDIA: While there are tax relief under various Sections, there is also surcharge of 10 per cent for those who earn Rs 10 lakh per annum or more.
Relief under Section 89
Relief when salary is paid in arrears or in advance
This is applicable if an assessee gets paid in arrears or in advance, like receiving one financial year's salary for more than twelve months or receiving a payment apart from the regular salary. Then he/she is considered to have gained a profit in lieu of salary under the provisions of clause (3) of section 17, and his income is assessed at a rate higher than that at which it would otherwise be assessed by the Assessing Officer.
The arrears of salary are to be taxed in the year of receipt along with the regular salary. However, the employee will be entitled to certain relief under section 89(1) as computed in accordance with Rule 21A.
Relief under Section 90/91
Relief in case of tax paid outside India
If an individual has worked overseas and has paid taxes for using the services and the earning, he/she is eligible for some tax relief under the Section 90/91.
Deductions under Chapter IV A
Tax deduction against investments in other accounts
The deductions in respect to contributions to certain family or personal pension fund schemes such as those with the Life Insurance Corporation of India (LIC). The regular pension received by the personer or his nominee is taxable but the amount received on full maturity of the pension will be granted tax exemption.
Chapter IV A section (80C): investment in approved schemes
Chapter IV A section (80CCC):contribution to annuity plans
Chapter IV A section (80CCD):pension scheme of govt. employees
Chapter IV A section (80D): mediclaim insurance
Chapter IV A section (80DD): medical treatment for dependent relative
Chapter IV A section (80DDB): medical expenditure of specified diseases
Chapter IV A section (80E): interest on educational loan
Chapter IV A section (80G): deduction on donations
Chapter IV A section (80GGA): donation or contribution to specified institutions
Chapter IV A section (80GGC): donation to registered political party
Chapter IV A section (80U): deductions for handicapped people
Interest Payable U/s 234 A, B, C
Interest payable under U/s 234 A: interest calculated in case of delay in filing return
Interest Payable U/s 234 B: interest calculated in case of default in payment of advance tax
Interest Payable U/s 234 C: interest calculated in case of default in appropriate payment installment of advance tax
Fringe Benefit Tax (FBT)
FBT was introduced in the 2005-06 Union Budget and is levied on employers. However, from this year, this tax is exempted.
Surcharge
Surcharge is 10 per cent of those earning at least Rs 10 lakh per annum. It is deducted on the total amount. But from this year, surcharge is also removed.