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Tax planning

31 January 2012

Hi friends this is regarding tax planning of my client

1.what is maximum amount of deduction available under section 80 c..?

2.my client has booked a flat in Kolkata which is under construction and against which he has taken loan from bank,whether he will get any deduction against interest paid on loan amount?if yes how much?

Regards

Sangeeta

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8 Replies

Sachin (Service Man) (81 Points)
Replied 31 January 2012

Originally posted by : Sangeeta Choudhury
	Hi friends this is regarding tax planning of my client 1.what is maximum amount of deduction available under section 80 c..? 2.my client has booked a flat in Kolkata which is under construction and against which he has taken loan from bank,whether he will get any deduction against interest paid on loan amount?if yes how much? Regards Sangeeta

1.Under 80 c deduction is 100000/- ( one lakhs)

2. When the flat's passetion is not get to owner that period will not any deduction of interest from his salary

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Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 31 January 2012

2. When the construction of the flat is completed then the client will get the deduction of the interest paid on the housing loan in 5 equal instalemnts commencing in the year in whihc the construction is being completed for the period upto prior to the year in whihc the construction is being completed.

Satyajeet (Auditor) (58 Points)
Replied 31 January 2012

Deduction u/s 80C

The most important aspect under this section needs to be kept in mind is that the total exemption limit is Rs. 1,00,000 only. This benefit is available to everyone, irrespective of his or her income levels.

For example, if an employee is in the highest tax bracket of 30%, & he invest the full Rs. 1,00,000/- Then he will save tax of Rs. 30,000. The following is section 80c deductions / exemption list.

a) Provident Fund (PF)

Any contributions to Provident Fund, Voluntary provident Fund (VPF) or savings made in Public Provident Fund (PPF Account) are eligible for income tax deduction under section 80C of Income Tax Act.

b) Life Insurance Premium

Any Life Insurance premiums (for one or more insurance policies) paid by him for himself, his/her spouse or children is eligible under income tax deduction under section 80C of Income Tax Act.

c) ELSS Equity Linked saving Scheme

Any investment made in certain Mutual Funds called equity linked saving schemes qualifies for section 80C deduction. Please note that not all mutual fund investments are eligible for this deduction. Some examples of ELSS funds are – SBI Magnum Tax Gain, HDFC Tax Saver, HDFC Long term advantage, etc.

d) ULIP Unit Linked Insurance Plan

Investments made in certain ULIPs of Unit Trust of India and LIC of India are eligible for 80C deduction.

e) Bank Fixed Deposit or Term Deposit for the Period more than 5 year.

According to a relatively new provision amount saved in fixed deposits of term at least five years is eligible for income tax deduction under section 80C of Income Tax Act.

f) Principal Part of EMI on Housing Loan deduction u/s 80C

If Employee is paying EMI on a housing loan, he would be aware that the EMI (equated monthly installments) consists of two parts – principal part and interest part. The principal part of the EMI on his housing loan is eligible for income tax deduction under section 80C. The interest part is also eligible for tax deduction u/s 24.

g) Tuition fees deduction u/s 80C

Amount paid as tuition fee for the education of two children of the employee is eligible for deduction under section 80C of Income Tax Act.

h) Other deduction u/s 80C

Amount saved in National Saving Certificate (NSC), Infrastructure Bonds or Infra Bonds, amount paid as stamp duty and registration charges while buying a new home are eligible for income tax deductions under section 80C of Income Tax Act.

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C.A / C.S. DHARMESH SOJITRA (C.A/C.S - PRACTICE ) (149 Points)
Replied 31 January 2012

First of all, the interest of loan on House propery is is available only when the Construction is complited,

In Your Client case, the house is under construstion, so there is no benefit availabe at present.

the interest on housing loan is available in 5 equal installment, which accure before complition of house property.

the Loan installment repayment is also available for deduction u.s 80 C, up to maximum amount Rs.100000 including all other deduction of u.s 80C, 80CC, 80CCD.( but after construction of House).

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 01 February 2012

First of all, the interest of loan on House propery is is available only when the Construction is complited,

In Your Client case, the house is under construstion, so there is no benefit availabe at present.

the interest on housing loan is available in 5 equal installment, which accure before complition of house property.

the Loan installment repayment is also available for deduction u.s 80 C, up to maximum amount Rs. 100000 including all other deduction of u.s 80C, 80CC, 80CCD.( but after construction of House).

Right said....

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darshan (bookkeeper) (50 Points)
Replied 06 February 2012

Investments in Bank Fixed deposits are deductible u/s 80 or not? plz. help me..............

Vignesh Killur (Articled Assistant) (1671 Points)
Replied 06 February 2012

Hi Darshan!

Investment in Bank FD qualify for deduction U/s 80C only if they are invested for a term of 5 years (60 months) or more. In the Bank ask for Tax Saver FD. They will provide you with FD option whose term will definitely be 5 years or more.