How much tax deduction can I claim?

Question

My annual salary is INR 1,44,000. I am paying INR 5400 towards repayment of education loan (interest and principal combined), starting from May, 2006. The repayment period is 48 months. I have no savings except an LIC policy with a monthly premium of INR 200. My employer gives no HRA but I am paying INR 2500 as rent. Will I be able to save the entire tax amount of INR 4400?

Answer 1

Since you are paying Rs.5400 per month it would amount to Rs.64800/-. But section 80E of Income Tax Act allows a maximum permissible deduction of Rs.40000/- only. So the remaining Rs.24800 is taxable.

You LIC premium of Rs.2400 per month is deductible from taxable income.

But as for you House Rent, since HRA is not given, it is not deductible.

So your taxable income
= 144000 - 40000 - 2400 = Rs.101600/-
Since there is an exemption of Rs.100000/- the remaining 1600 is taxable. But if you are a woman, then there is an exemption of Rs.125000. In that case, your tax liability is ZERO :)

Answer 2

See you have not given complete details , but you can follow following points for computing your total income :

1. Out of 5400 per month, segregate INTEREST and multiply with 11 months .That amount can be deducted under Section 80E of the I T Act.

2. Deduct 2400 under Section 80C
3. Since you are not getting HRA but paying Rent, deduction under 80GG is also applicable in your case. The deduction is equal to [ Rent paid - 10% of total income ] . But deduction can not be greater than 24000 per annum. Thus there is possibility that substantial amount of deduction for rent payment shall also be given in your case.

Answer 3

Congratulation its Zero = 0

For women no tax till 1.25 lacks,
Remaining 19 thousand is taxable

as you already paying education loan nad lic policy this also become void

Party time :)

Answer 4

If you are a woman, then you get 5000 tax rebate, thats the tax not taxable income. Also check out indiainfoline.com for help