TAX PLANNING

Tax Savings is an important aspect of tax planning. It is therefore essential to know the provisions where tax savings are allowed. Followings are the important Income tax saving sections that allow deductions to lower the tax outgo. An individual tax payer or HUF can avail of these sections:

Section 80C:

A gross amount of Rs. 1, 00,000/- (Rs. One lakh), invested/or contributed in specified qualifying instruments, (list available on separate page) is allowed as deduction from the gross total income under this section 80C. Gross amount for deductions include amounts contributed towards Sections 80CCC and 80CCD.

Section 80D:

An Amount up to Rs. 15,000/- for Resident Individual & up to Rs. 20,000/- for Resident Sr. Citizen is allowed as deductions under this section 80D on account of payment of medical insurance premiums subject to fulfillment of following conditions:

1. The taxpayer is an individual (may be resident / non-resident or Indian citizen / foreign citizen) or a Hindu undivided family (may be resident or non-resident).
2. Insurance premium is paid in accordance with the scheme framed in this behalf by the General Insurance Corporation of India * and approved by the Central Government or in accordance with a scheme framed in this behalf by any other insurer and approved by Insurance Regulatory and Development Authority.
3. The aforesaid premium can be paid by any mode other than cash (before the assessment year 2008-09, the premium was required to be paid by cheque).
4. It is paid out of income changeable to tax.
5. Mediclaim policy is taken on the health of the following persons

Tax Payer	Insured Person
Individual Hindu undivided family	On the health of the taxpayer, spouse, dependent parents or dependent children of the taxpayer. On the health of any member of the family.

Note: An additional Rs. 5,000/- is allowed as deductions if policy is taken on the health of sr. citizen (Resident in India and age 65 years+).