ways to save a tax

Areas where one who save his tax : *House rent Allowance: The employee is entitled to claim tax exemption least of the following. a) House rent allowance Received b) Actual rent paid less 10% of basic salary c) 40%(in case of non metro cities) or 50% (in case of metros) of basic salary. *Conveyance: As per the Income tax act 1961, a tax exemption is allowed on conveyance allowance to the extent of Rs 800/- per month, provided the employee does not use the company vehicle for commuting to and from home. *Medical Reimbursement: An employee can claim exemption for medical expense under income tax act 1961 upto a max. amount Rs 15000/-per annum subject to production of original bills. Expense incurred for self, spouse, children and parent are to be considered. *Leave travel Assistance (LTA) - An amount spent towards Journey within India (to & fro) Original travel ticket & xerox copy of leave card during the travel.Only one to & fro travel will be eligible Specified Deductions: Sec 80D 15000/- (20000/- if covered Sr.Citizen) Premium in respect of Medical Insurance Medical Reimbursment U/s 17(2) Original medical bills between 01/04/2008 to 31/03/2009 Sec 80DD Max.limit is 50,000 (In case of severe disablity more than 80% maximum limit is 75,000) (Medical treatment of handicapped dependents) Certificate from a doctor working in Government Hospital required Declaration by employee of amount incurred during the year Sec 80DDB 40000 or 60000 (Senior Citizen) (Medical treatment for specified ailments) Government Doctor(not less an MD) certificate in Form 101 Declaration by employee of amount incurred during the year Sec 80E Actual Interest(Proof By bank Certificate) Interest paid on loan availed for higher education Certificate from Financial Institution ( Only Interest part will be given as deduction and not Principal amount) Sec 80U Maximum limit is 50,000 (In case of severe disablity maximum limit is 75,000) Physically handicapped or totally blind employee) Certificate from a doctor working in Government Hospital required Interest on Housing Loan (Interest & Principle bifercation statement from Financial Institution) Deduction U/s 80C & 80CCC if investment made in / contribution made to / expenditure incurred on(Max. Limit 100000/-) -Premium Paid towards Pension Plan (80CCC) -LIC premium paid -Voluntary Provident Fund Contribution (VPF) -Unit Linked Insurance Plan(ULIP) -FD with Scheduled Bank with maturity period not less than 5 yr (Max 100000/-) -National Savings Certificate(New Purchases) & Interest Accured on NSC -Tuition fees(Max 100000/-for two children -Public Provident Fund(PPF)( max 70000/-) -Equity Linked Savings Scheme -Payment towards Principal repayment on -housing loan etc(Max 100000/-) -Mutual Fund Bonds /UTI -PF deduction from Salary -Contribution towards an approved superannuation fund -Infrastructure Bonds -Amount deposited in a 10 or 15 Year account under the Post office Saving Bank Tax slab List: for Assessment Year 2009-10 For Male Upto Rs 150000/- 10% Rs 150001/- to Rs 300000/- 20% Rs 300001/- to Rs 500000/- 30% Rs 500001/- and above 30% plus surcharge @ 10% For Female Upto Rs 180000/- 10% Rs 180001/- to Rs 300000/- 20% Rs 300001/- to Rs 500000/- 30% Rs 500001/- and above 30% plus surcharge @ 10% For Senior Citizen Upto Rs 225000/- 10% Rs 225001/- to Rs 300000/- 20% Rs 300001/- to Rs 500000/- 30% Rs 500001/- and above 30% plus surcharge @ 10%