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Wednesday, April 18, 2012

Income tax slabs for AY 2013-2014 (FY 2012-13) & Deduction under section 80C

Here are the income tax slabs for AY 2013-2014 (FY 2012-13).

Income Tax Slabs – AY 2013-2014

General tax payers
Income tax slab (in Rs.)Tax
0 to 2,00,000No tax
2,00,001 to 5,00,00010%
5,00,001 to 10,00,00020%
Above 10,00,00030%

India Income tax slab 2012-2013 for Female tax payers

Income tax slab (in Rs.)Tax
0 to 2,00,000No tax
2,00,001 to 5,00,00010%
5,00,001 to 10,00,00020%
Above 10,00,00030%

India Income tax slabs 2012-2013 for Senior citizens (Aged 60 years but less than 80 years)

Income tax slab (in Rs.)Tax
0 to 2,50,000No tax
2,50,001 to 5,00,00010%
5,00,001 to 10,00,00020%
Above 10,00,00030%

India Income tax slabs 2012-2013 for very senior citizens (Aged 80 and above)

Income tax slab (in Rs.)Tax
0 to 5,00,000No tax
5,00,001 to 10,00,00020%
Above 10,00,00030%


Optimal tax planning with section 80C: Eligible schemes under section 80C for 2012-2013
1. Life Insurance Premiums
2. Contributions to Employees Provident Fund
3. Public Provident Fund
4. NSC (National Savings Certificates)
5. Unit Linked Insurance Plan (ULIP)
6. Repayment of Housing Loan (Principal)
7. Equity Linked Savings Scheme (ELSS) of Mutual Funds
8. Tuition Fees including admission fees or college fees paid for full-time education of any two children
of the tax payer.
9. Infrastructure Bonds issued by Institutions/ Banks such as IDBI, ICICI, REC
10.5-Year fixed deposits with banks and Post Office  Savings Schemes
11.Senior Citizens Savings Scheme (SCSS)

Step by Step Guide to File Income Tax Returns: How To File Income Tax Returns Online 
Besides the section 80C of the income tax law, you can save tax under section 80D.
All the health insurance products are eligible for tax saving under the section 80D
and you can save tax up to Rs. 35000 in case you buy a policy for your family and your dependent parents .

There are quite a few options you can opt for tax savings.

Tax saving Mutual Funds ("MF") --> which comes with a lock-in period of generally 3 yrs.
 i.e. you can not get back your money within 3 yrs. from the time you put them into MF. This is a Highest return given option and also the riskiest one.
 Fixed Deposits ("FD") --> put a money in a bank FDs which are "Tax-savings" for
 a fixed tenure (generally 5 yrs). You will get cumulative and safe interest.

 Life Insurance Corporation of India(LIC). You must be knowing about this.
It is advisable to secure your life against any danger. There are various plans provided by LIC out of which you can opt the best suited one.

 Public Providend Fund(PPF), same as normal PF which a Salaried employees possess.
 Difference is it is a scheme for a tenure of 15 yrs and you can withdraw the amount only once
 and that too after 5 yrs. You can open a PPF accnt from any SBI branch or Post-office.
You have to make sure to have atleast 1 entry per year
 i.e. you have to deposit atleast a minimum amnt (Rs. 500/- I guess)
atleast once in a year to continue healthy scheme.

NSC bonds --> National Saving Certificate bonds are available at Post-offices.
You will get safe return on this after a fixed tenure.

These are the widely used investment plans now a days. If you are a risk taker then go for 100% MF,
 if you are a moderate risk taker then go for 60% MF, 20% PPF and 20% FD and
if you do not want any risk then go for 100% PPF, FD and/or NSC. 

Thinking beyond Section 80C 

Section    Quick Description and DeductionLimit
80DPremium Paid on Medical InsuranceMaximum upto Rs.15000 or Rs.20000  in case of Senior Citizen
80DD Maintainance including Medical Treatment of a Handicappped Dependent  who is a person with disabilityRs.50000 irrespective of the amount 
80DDBExpenditure Incurred in respect of
 Medical Treatment
Actual Incurred with a ceiling of upto Rs.40000 or
 Rs.60000 in case senior Citizen whichever is lower
80ERepayment of loan taken for pursuing
 higher education
Maximum deduction for interest paid for a maximum
of 8 years ot till such interest paid which ever is earlier
80GDonations of certain funds and charitable InstitutionsMaximum deduction allowed can be 50% or 100%
of the donation subject to the stated limits as provided under this section
80GGRent paid in respect of property occupied for
residential use
Maximum deduction allowed is least of the following: Rs.2000 per month;
25% of total income;excess of rent paid over 10% of total income
80GGCContribution made to any political parties or
 electoral trust
Amount donated to Political parties is full exempt
80UPerson suffering from Specific disabilityRs.50000 irrespective of the amount incurred or deposited.
However incase of disability of more than 80% higher deduction of Flat Rs.100000 is allowed
80CCFInvestment in long term infrastructure fundsMaximum Deduction allowed is Rs.20000

I would suggest to secure your life with LIC along with other investments. 

Your home loan and tax planning 
Repayment of principal amount” and “Payment of interest” are eligible for tax benefit. 
Repayment of principal amount: Makes you eligible to claim a deduction up to a sum of 100,000 under section 80C (It is immaterial
 whether HP is Let Out or Self Occupied. Interest is eligible for deduction u/s 24(b) as follows:
Self Occupied- Maximum of Rs 150000 Let Out- Actual amount of interest payable is eligible.
It makes sense to include your spouse as a co-owner; especially if your spouse’s income is taxable. This will result in higher tax saving.


  1. Hello,

    The income tax slab justifies the return value on the earnings and each incometax slab has its own limits and financial roles. It helps in finding the right value of the return with the help of tax calculator. Thanks a lot...

  2. Right Saying that Income Tax Slab has its own limit and shows how much income will be taxable after savings. With Income Tax Slab person can easily check their tax liability. Thanks a lot for giving good Income Tax Slab information.