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Tax slabs & benefits

In India, Income Tax is the tax imposed by the government on any income earned by an Indian citizen in India and abroad. Taxes are imposed on Hindu Undivided Family (HUF), companies, firms, associations of persons, body of individual, local authorities.

A tax benefit is a deduction allowed on a tax return intended to reduce the taxpayer burden, while supporting a specific type of commercial activity.

Income Slabs

Income tax in India is charged according to a certain slab of income, it is not the same for every earning or business entity. Income tax department has prescribed limits of income over which the tax which will be charged at a certain percentage. The slab is also different for different demography.

For example, women and senior citizens are charged at a lesser rate than normal male individuals. Below is the matrix of the tax slab for the financial year 2012-2013.

For Financial Year 2013-14
For Individual Woman (Below 60 Years) Senior Citizen (Above 60 Years but below 80 Years) Super Senior Citizen (Above 80 Years) Tax Rate
Up to Rs. 2,00,000 Up to Rs. 2,00,000 Up to Rs. 2,00,000 Up to Rs. 5,00,000 NIL
Rs. 2,00,001 - Rs. 5,00,000 Rs. 2,00,001 -
Rs. 5,00,000
Rs. 2,00,001 - Rs. 5,00,000 - 10%
Rs. 5,00,001 - Rs. 10,00,000 Rs. 5,00,001 -
Rs. 10,00,000
Rs. 5,00,001 - Rs. 10,00,000 Rs. 5,00,001 - Rs. 10,00,000 20%
Above Rs. 10,00,001 Above Rs. 10,00,001 Above Rs. 10,00,001 Above Rs. 10,00,001 30%

Like Income Tax, the government of India has also prescribed certain deduction in the income as benefits for the individuals. Below is the list of deductions.

Income Tax Section Gross Annual Salary How Much Tax Can You Save?
Sec. 80C Across all income slabs Up to Rs. 30,900/- saved on investment of Rs. 1,00,000/-
Sec. 80CCC Across all income slabs Up to Rs. 30,900/- saved on Investment of Rs. 1,00,000/-
Sec. 80DD - Any premium paid for the health insurance of a dependent disabled person qualifies for deduction
Sec. 80 D* Across all income slabs Up to Rs. 9,270/- saved on investment of Rs. 30,000/- (Inclusive of Rs. 15,000/- towards health insurance of parents)
Up to Rs. 10,815/- saved on investment of Rs. 35,000/- (Inclusive of Rs. 20,000/- towards health insurance of parents who are senior citizens)
Sec 80CCF Across all income slabs Up to Rs. 6,810/- saved on investment of Rs. 20,000/- (Investment In Infrastructure Bonds over and above 80C limit of Rs. 1,00,000/-)
Total Savings Possible ** Rs. 47,895/-
  • Rs. 30,900/- under Sec. 80C and Sec. 80CCC
  • Rs. 9,270/- or Rs. 10,815/- under Sec. 80D
  • Rs. 6,180/- under Sec. 80CCF
  • Above figures calculated for a male with gross annual income exceeding Rs. 10,00,000/-
Sec. 10 (10)D Under Sec. 10(10D), the benefits received by you are completely tax-free
  • Applicable to premiums paid for all Health Insurance Plans, Critical Illness Benefit, Accelerated Sum Assured and Waiver of Premium Benefit.
  • ** These calculations are illustrative

Contact Us to know how Au Insurance Brokers help plan your taxes and maximize tax benefits.