The following sheet contains the information in a very brief, Such a brief note is ok from the point of general awareness. But when it comes to actual application one needs to have indepth and up to date  knowledge.

Application of Income Tax provisions involves the application of  Income Tax Act, the Rules made thereunder for valuations and formats for furnishing the information, various clarifications and circulars issued from time to time. Some times a referrance has to be made to the case laws, Industry practices. A wrong claim  can lead to default , interest , penalty etc.

I have made my best attempts to bring the summary from the above together and presented it in easy to understand format.

WRITEUP ON TAX
As we all near the end of the financial year 2008-09, we start to worry about planning our investments to ensure maximum tax savings. The fear of finishing and furnishing our Income Tax details, and filing the IT returns on time engulfs us. We either rush to our CA’s, or start bothering the income tax personnel within our organization to understand what is it that we can do to save the maximum amount of Tax.
Knowing and learning about Income Tax is not as difficult as it seems. If we know all applicable sections and deductions correctly, there is a possibility we will save the money that we pay to our CA’s.
Through this booklet our aim is to help you understand Income Tax and the related laws better. Our motto would be to talk in your language and make Income Tax planning more interesting and much simpler to understand.

Various Sections relating to Income Tax
As per The Income Tax Act 1961, amended in 2008, there are 9 major sections that we need to understand:

Section 80C: One of the most important sections under the act. This section allows investments up to a maximum of Rs. 1,00,000 under various instruments. These instruments range from Tuition Fee for your child’s education to investments in Public Provident Fund.

Section 80C: Deduction for Investments including Life Insurance and Provident Fund.

Section 80C was inserted from assessment year 2006-2007. It provides deductions from gross (total) income for qualified amounts paid or deposited by the assessee in the previous year.

Main Provisions:

• The deduction is available only to an individual or a HUF from the gross total income,
• The deduction is allowed irrespective of whether such amount is paid or deposited by the taxpayer out of his income chargable to tax,
• The deduction is available on the basis of specified qualifying investments/contributions/payments made by the taxpayer during the previous year,
• The maximum amount deductible under section 80C is Rs. 1,00,000. Also the total amount of deductions under sections 80C, 80CCC and 80CCD is Rs. 1,00,000.

Gross Qualifying Amount for the Deduction:

Following nature of payments are qualifying amounts:

• Life insurance premium (Bajaj Allianz Life Insurance)on the life of self, spouse or child or a member of HUF subject to a maximum of 20 per cent of sum assured,
• Payment in respect to non-commutable deferred annuity plan taken in the name of self, spouse or child,
• Deferred annuity deducted from Government employee (subject to maximum of 20 per cent of salary),
• Contributions (not the repayment of loan) towards statutory provident fund and recognised provident fund,
• Contribution towards an approved superannuation fund,
• Subscription to National Saving Certificates, VIII Issue,
• Contribution to ULIP (unit-linked insurance plan) of Unit Trust of India and or LIC Mutual Fund,
• Payments for notified annuity plan of LIC.
• Subscription towards notified units of Mutual Fund,
• Contribution to notified pension fund set up by Mutual Fund,
• Any sum paid (and accrued interest) as subscription to Home Loan Account Scheme of National Housing Bank or contribution to any pension fund of National Housing Bank,  (AT present Not available)
• Any sum paid as subscription to any scheme of public sector company engaged in providing longterm finance for purchase/construction of residential houses or from the housing board in India engaged in planning and development of cities.
• Any sum paid as tution fees for the admission or otherwise to any university/college/educational institution in India for full time eduction for any two children of the taxpayer,
• Any payment towards the cost of construction/purchase of residential property including payment of loan taken from Government bank, cooperative bank, LIC, National Housing Bank, taxpayer's employer where such employer is a public company, public sector company, university or cooperative society,
• Amount invested in approved debentures of, and equity shares in, a public company engaged in  infrastructure including power sector or units of mutual fund utilised for infrastructure,
• Amount in fixed deposits of 5-years or more with a scheduled bank in accordance with a scheme framed and notified by the Central Government (applicable from assessment year 2007-2008),
• Subscription to any notified bonds of National Bank for Agriculture or Rural Development (applicable from assessment year 2008-2009),
• 5-year time deposit in an account under Post Office Time Deposits Rules 1981, and
• Deposit in an account under the Senior Citizen Saving Scheme Rules, 2004.

Minimum Period of Holding:

• Unit-linked Insurance Plan -- 5 years,
• Life Insurance Premium -- 2 years
• Cost of construction or purchase of residential property -- 5 years
• Time deposit in Post Office Rules, 1981 -- 5 years
• Senior Citizen Saving Scheme Rules, 2004 -- 5 years.

Section 80CCC: Retirement planning had never been so lucrative before. You can now save up to Rs. 1, 00,000 for your retirement every year. The earlier cap of Rs. 10,000 has now been removed. But the only point that we need to keep in mind is that we cannot avail of tax benefits for more than Rs. 1, 00,000 under Sec 80C and Sec80CCC combined.

Section 80CCC: Deduction for Contribution to Pension Funds
 
Section 80CCC provides deductions from gross (total) income for amounts paid or deposited by the assessee to any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the fund referred to in clause (23AAB).

Main Provisions:

• The deduction is available to an individual who is resident or non-resident, Indian citizen or foreign citizen
• The deduction is allowed only if such amount is paid or deposited by the taxpayer out of his income chargeable to tax,
• The maximum amount deductible under section 80C is Rs. 1, 00,000. Also the total amount of deductions under sections 80C, 80CCC and 80CCD is Rs. 1, 00,000.
• Surrender value received is taxable in the year of receipt in the hands of the assessee or nominee.
• If deduction is claimed under 80CCC, pension received will be taxable in the hands of assessee or the nominee in the year of receipt.

 Section 80D:. Health Insurance premiums paid for insuring your own health, or that of your spouse, parents and children also allows you to avail of tax rebates. The maximum amount that you can claim under this section is Rs. 35,000: Rs. 15,000 for self, spouse and dependent children, and Rs. 15,000 for your parents. In case your parents are senior citizens, the limit goes up to Rs. 20,000.
Eligible Assesses: Individual and Hindu Unified Families (HUF) only
Scope: Premium paid under:

• Medical insurance scheme of The General Insurance Corporation approved by the Central Government, or
• Any other insurer approved by the Insurance Regulatory & Development Authority (IRDA)

Mode of Payment:
Any mode of payment is accepted including payments made through credit cards, except cash.
Deduction:

• For non-senior citizens: The amount of mediclaim insurance premium paid or Rs. 15000, which ever is less
• For Dependent Parent  The amount of mediclaim insurance premium paid or Rs. 15000, which ever is less
• For senior citizens: The amount of mediclaim insurance premium paid or Rs. 20000, whichever is less.

Scope of Coverage:

• For an individual: Insurance paid on the health of an assessee, spouse, dependant parents, and dependent children
• For a HUF: Insurance on the health of any family member

 
Section 80DD: Any expenses incurred on the treatment of a handicapped dependent fall under this section. The upper limit currently stands fixed at Rs. 50,000, and may go up to Rs. 75,000 depending on the severity of the disability.
80DD. (1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,
(a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or
(b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability,
The assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of fifty thousand rupees from his gross total income in respect of the previous year:
Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words fifty thousand rupees, the words seventy-five thousand rupees had been substituted.
(2) The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:
(a) The scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;
(b) The assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.

Section 80DDB: A deduction of up to Rs. 40,000 is allowed for treatment of specific diseases. The patient needs to undergo treatment at a Government Hospitals. This deduction can go up to Rs. 60,000 for senior citizens. Expenses incurred on treatment of diseases like Chronic Renal Failure, Malignant Cancers and Full Blown Acquired Immuno-Deficiency Syndrome are exempted from tax under this section.
Under Section 80DDB, the deduction is allowed only for the diseases/ ailments prescribed in Rule 11DD.
The list is as follows:                                                                 
1. Neurological diseases where the disability level has been certified to be of 40% and above.
- Dementia
- Dystonia Musculorum Deformans
- Motor Neuron Disease
- Ataxia
- Chorea
- Hemiballismus
- Aphasia
- Parkinson's Disease
2. Malignant cancer
3. Full blown Acquired Immuno Deficiency Syndrome, commonly referred to as AIDS
4. Chronic renal failure
5. Hematological disorders
- Hemophilia
- Thalassaemia
You need to consult your doctor to ascertain if your wife's problem falls into any of the above categories.
If yes, deduction upto 40,000 (60000 in case of senior citizen) or the actual expenditure incurred, whichever is lower, would be eligible.

Section 24: The interest repaid on a Home Loan up to Rs. 1, 50,000 is also tax deductible. This capping is for a self occupied property. In case the property has been leased out, there is no cap on the Interest amount that you can claim for deduction.
Under Section 24 of the Income Tax Act, the interest paid for a personal loan taken for acquisition, construction and renovation of the house can be claimed for tax deduction up to Rs. 1.5 lakh. The borrower can claim tax benefits only after the construction is completed and possessing the property.

Section 80E: Repayment of interest on a loan taken for higher education falls under this section. Currently there is no upper limit on the amount that can be claimed under this section. Loan taken for education of children and spouse also qualifies for the same.

Section 80E: Deduction in respect of repayment of loan taken for higher education.
 (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan:
Provided that the amount which may be so deducted shall not exceed twenty-five thousand rupees.
(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until loan referred to in sub-section (1) together with interest thereon is paid by the assessee in full, whichever is earlier.
(3) For the purposes of this section, -  (a) "Approved charitable institution" means an institution specified in, or, as the case may be, an institution established for charitable purposes and notified by the Central Government under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) "Financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(c) "Higher education" means full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics 1002f ;
(d) "Initial assessment year" means the assessment year relevant to the previous year, in which the assessee starts repaying the loan or interest thereon.

Section 80G: Cash donations made to certain funds, charitable institutions, etc qualify for deductions under this section. No deduction is available for donations made in kind. A receipt from the institute to which the donation has been made should be attached to the return of income.  The maximum amount that can be claimed under this section is 10% of (the gross total income minus the rebate claimed under other sections)

Section 80G: Deduction in respect of donations to certain Funds, Charitable Institutions, etc.
 (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, - (i) In a case where the aggregate of the sums specified in sub-section (2) includes any sum or sums of the nature specified in sub-clause (iiia) or in sub-clause (iiiaa) or in sub-clause (iiiab) or in sub-clause (iiie) or in sub-clause (iiif)  or in sub-clause (iiig) or in sub-clause (iiih) sub-clause (iiiha) or sub-clause (iiihb) or sub-clause (iiihc) or sub-clause (iiihd) or sub-clause (iiihe) or sub-clause (iiihf) or sub-clause (iiihg) or sub-clause (iiihh) or sub-clause (iiihi) or in sub-clause (vii) of  clause (a) thereof, an amount equal to the whole of the sum or, as the case may be, sums of such nature plus fifty per cent of the balance of such aggregate; and
(ii) In any other case, an amount equal to fifty per cent of the aggregate of the sums specified in sub-section (2).
(2) The sums referred to in sub-section (1) shall be the following, namely :-  (a) Any sums paid by the assessee in the previous year as donations to -  (i) The National Defence Fund set up by the Central Government; or
(ii) The Jawaharlal Nehru Memorial Fund referred to in the Deed of Declaration of Trust adopted by the National Committee at its meeting held on the 17th day of August, 1964; or
(iii) The Prime Minister's Drought Relief Fund; or
(iiia) The Prime Minister's National Relief Fund; or
(iiiaa) The Prime Minister's Armenia Earthquake Relief Fund; or
(iiiab) The Africa (Public Contributions - India) Fund; or
(iiib) The National Children's Fund; or
(iiic) The Indira Gandhi Memorial Trust, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of February, 1985; or
(iiid) The Rajiv Gandhi Foundation, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of June, 1991; or
(iiie) The National Foundation for Communal Harmony; or
(iiif) A University or any educational institution of national eminence as may be approved by the prescribed authority in this behalf; or
(iiig) The Maharashtra Chief Minister's Relief Fund during the period beginning on the 1st day of October, 1993 and ending on the 6th day of October, 1993 or to the Chief Minister's Earthquake Relief Fund, Maharashtra; or
(iiih) Any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities.
Explanation : For the purposes of this sub-clause, "town" means a town which has a population not exceeding one lakh according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or
(iiiha) The National Blood Transfusion Council or to any State Blood Transfusion Council which has its sole object the control, supervision, regulation or encouragement in India of the services related to operation and requirements of blood banks.
Explanation : For the purposes of this sub-clause, -  (a) "National Blood Transfusion Council" means as society registered under the Societies Registration Act, 1860 (21 of 1960) and has an officer not below the rank of an Additional Secretary to the Government of India dealing with the AIDS Control Project as its Chairman, by whatever name called;
(b) "State Blood Transfusion Council" means a society registered, in consultation with the National Blood Transfusion Council, under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India and has Secretary to the Government of that State dealing with the Department of Health, as its Chairman, by whatever name called; or 
(iiihb) Any fund set up by a State Government to provide medical relief to the poor; or
(iiihc) The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants; or
(iiihd) The Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996; or
(iiihe) The National Illness Assistance Fund; or
(iiihf) The Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund in respect of any State or Union territory, as the case may be :
Provided that such Fund is -  (a) The only Fund of its kind established in the State or the Union territory, as the case may be;
(b) Under the overall control of the Chief Secretary or the Department of Finance of the State or the Union territory, as the case may be;
(c) Administered in such manner as may be specified by the State Government or the Lieutenant Governor, as the case may be; or
(iiihg) The National Sports Fund to be set up by the Central Government; or
(iiihh) The National Cultural Fund set up by the Central Government; or
(iiihi) The Fund for Technology Development and Application set up by the Central Government; or
(iv) Any other fund or any institution to which this section applies; or
(v) The Government or any local authority, to be utilised, for any charitable purpose other than the purpose of promoting family planning; or
(vi) Any authority referred to in clause (20A) of section 10; or
(via) Any corporation referred to in clause (26BB) of section 10; or
(vii) The Government or to any such local authority, institution or association as may be approved 1014 in this behalf by the Central Government, to be utilised for the purposes of promoting family planning;
(b) Any sums paid by the assessee in the previous year as donation for the renovation or repair of any such temple, mosque, gurdwara, church or other place as is notified by the Central Government in the Official Gazette to be of historic, archaeological or artistic importance or to be a place of public worship or renown throughout any State or States.
(4) Where the aggregate of the sums referred to in sub-clauses (iv), (v), (vi), (via) and (vii) of clause (a) and in clause (b) of sub-section (2) exceeds ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other  provision of this Chapter), then the amount in excess of ten per cent of the gross total income shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1). 
(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :-  (i) Where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (23) or clause (23AA) or clause (23C) of section 10 :
Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if -  (a) The institution or fund maintains separate books of account in respect of such business;  
(b) The donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and
(c) The institution or fund issues to the person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;
(ii) The instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose;
(iii) The institution or fund is not expressed to be for the benefit of any particular religious community or caste; 
(iv) The institution or fund maintains regular accounts of its receipts and expenditure;
(v) The institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India  or under section 25 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law or is an institution approved by the Central Government for the purposes of clause (23) of section 10, 1022 ] or is an institution financed wholly or in part by the Government or a local authority;
(vi) In relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Commissioner in accordance with the rules made in this behalf :
Provided that any approval shall have effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval. 
(5A) Where a deduction under this section is claimed and allowed for any assessment year in respect of any sum specified in sub-section (2), the sum in respect of which deduction is so allowed shall not qualify for deduction under any other provisions of this Act for the same or any other assessment year. 
(5B) Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent. of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply.
Explanation 1 : An institution or fund established for the benefit of Scheduled Castes, backward classes, Scheduled Tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community or caste within the meaning of clause (iii) of sub-section (5).
Explanation 2 : For the removal of doubts, it is hereby declared that a deduction to which the assessee is entitled in respect of any donation made to an institution or fund to which sub-section (5) applies shall not be denied merely on either or both of the following grounds, namely :-  (i) That, subsequent to the donation, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of [ 1024a section 11, section 12 or section 12A;
(ii) That, under clause (c) of sub-section (1) of section 13, the exemption under section 11 or section 12 is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of the capital of that concern.
Explanation 3 : In this section "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a religious nature.
Explanation 4 : For the purposes of this section, an association approved by the Central Government for the purposes of clause (23) of section 10 shall also be deemed to be an institution, and every association or institution approved by the Central Government for the purposes of the said clause shall be deemed to be an institution established in India for a charitable purpose.
Explanation 5 : For the removal of doubts, it is hereby declared that no deduction shall be allowed under this section in respect of any donation unless such donation is of a sum of money.

Instruments that help you Save Tax:

Life Insurance: All investments made towards Life Insurance are eligible for a rebate u/s 80C of the Income Tax Act. Life Insurance products with a minimum lock in period of 3 yrs only are eligible for the rebate. Premiums paid under pension plans of various life insurers are also eligible for Tax rebate. The major advantage of a Life Insurance product is that they provide tax free interest income.

Equity Linked Saving Schemes:
These are Mutual Fund products and carry market risk. These too, like life insurance products, are eligible for tax rebate u/s 80C, if they have a lock in period of 3 years. A major disadvantage of these instruments is that they do not provide life cover.

Public Provident Fund: 
These are 15 yearlong investments and provide tax-free returns. The current rate of returns is 8%. Maximum investment allowed under this instrument is Rs. 70, 000, which is eligible for a rebate u/s 80C.

 Bank Deposits:
Tax rebate is available for 5 yrs deposits in any scheduled bank. The point to remember is that the entire interest income is taxable.

National Saving Certificates:
 Government sponsored securities certificates, which are available in denominations of Rs. 100, Rs.500, Rs. 1000, Rs.5000 & Rs. 10,000 may be purchased from any post office, either directly or through authorized agents. They currently provide a rate of interest @ 8.16% p.a. compounded half yearly and paid after the maturity period of six years along with principal. Interest accruing annually is automatically reinvested and such re invested interest also qualifies for rebate u/s 80C of Income Tax Act. The interest earned is completely taxable.

Home Loans:
Section 24 of the Income Tax Act allows you to deduct the total interest paid on your home loan from your taxable income for the same financial year. You can also claim a rebate u/s 80C for the principal amount repaid on the home loan.

Tuition Fee:
The entire tuition fee paid for up to two children is exempted from tax. Donations of any kind like development fee etc. are excluded from the same.

Loan on Higher Education:
Those servicing a loan taken for higher education can claim a deduction on the interest paid for the loan u/s 80E of the Income Tax Act. Currently there is no ceiling on the interest amount that can be claimed under this section. The principle amount is however completely taxable.

Health Insurance Plans:
 Rebate is available u/s 80D of the Income Tax Act, for premiums paid for self, spouse, children and parents. A limit of Rs.15, 000 is fixed for premiums paid for self, spouse and children’s. There is an additional benefit of Rs. 15,000 on premiums paid for parent(s) and in case the parents are senior citizens, the upper limit increases to Rs. 20,000. 

SECTION 80C lists down the instruments, which you can invest in order to save tax.
You can invest a maximum of Rs 1 lakh in all these instruments put together and the entire amount of Rs 1 lakh will be deducted from your taxable income.
You can get a deduction for the following investments you make:
1. A life insurance policy or a unit-linked insurance plan (ULIP). The lock-in period for ULIPs is between 3 to 5 years and the returns vary depending on the performance of your fund.
However, if your annual premium exceeds 20 per cent of the sum assured on your policy, you will not get the tax benefit.
2. A retirement benefit plan offered by mutual funds. Examples are the UTI Retirement Benefit Plan and Templeton India Pension Plan.
3. A Provident Fund, provided that the fund is covered under the Provident Fund Act. This would mean investments made by you through salary deduction in the Employees Provident Fund (EPF) account as also investments that you make directly in the Public Provident Fund (PPF). You can invest up to Rs 70,000 in the PPF. The current rate of return on EPF is 8.5 per cent while that on PPF is 8 per cent.
4. An approved superannuation fund. Usually your employer, on behalf of you, does this by deducting the investment amount from your salary.
5. National Savings Certificates (NSCs).
6. Equity Linked Savings Scheme (ELSS) offered by mutual funds.
7. Pension policies offered by insurance companies where benefits were earlier available under section 80CCC. Earlier, there was a limit of Rs 10,000 on such investments; however that ceiling has now been removed.
8. Bank fixed deposits that provide the Section 80C tax benefit. They come in with a lock-in of 5 years.
Apart from the investments mentioned above, you can also get a deduction on certain expenses that you incur. Mainly, these include the principal repayment on your home loan and the tuition fees you pay on your children’s education.

   Even if there is no limit on maximum investments , The benefit is restructed to Rs 1.00 Lacs under 80 CCE.

Enjoy Dual Tax Benefits with Life Insurance:

• Save tax on Regular Premium payments - All the premiums paid towards insuring your life are exempted from tax up to Rs. 1,00,000/- as specified in section 80C of the Income tax act.
• Enjoy Tax free Maturity returns - One of the biggest advantages of investing in Life Insurance policies is that, the complete maturity amount is tax free.
• Thus, you save tax not only at the time of investing in a life insurance plan, you also get completely tax free returns after maturity.

Understanding the Tax Slabs:
Tax slab is the bracket under which your income falls, for the purpose of calculating your tax liability.
Your taxable income is arrived at by adding income from all sources, and then deducting all eligible deductions under various sections.

A surcharge of 10% is also levied, if the total income for a financial year exceeds Rs. 10,00,000. An education cess of 2% and a secondary and higher education cess of 1% is payable on the final amount of income tax and surcharge.

Example to help understand Tax liability calculation better:
For a male aged 30 years and earning Rs. 5,00,000, the tax liability would be calculated as: