Page 15 - HDFC Bank TPP Flipbook

Example 2 -
Mr. Shyam, age 40 years earns r 18 Lakhs as annual salary. He pays r 35,000 towards his life insurance
premium. He also invests in ELSS Mutual Funds through SIP, total amounting to r 30,000, invests r 50,000 in
Fixed Deposits for a period of 5 years and r 40,000 in PPF. He has also invested in National Pension Scheme
(r 50,000). He has also invested in a Health Insurance Plan - Self (r 25,000) and Parents Senior Citizens
(r 50,000).

Sec 80 C & Sec 80 D Benefits
Mr. Shyam’s Salary - r 18 lakhs
Computation of Tax

A) Taxable Income without any investment = r 18 lakhs
Tax payable on r 18,00,000
Tax Slab Amount earned Tax Tax Amount
Up to r 2,50,000 2,50,000 Nil Nil
r 2,50,001 to r 5,00,000 2,50,000 5% 12,500
r 5,00,000 to r 10,00,000 5,00,000 20% 1,00,000

Above r10,00,000 8,00,000 30% 2,40,000
Income Tax (i) 3,52,500
Educational Cess @ 4% on (ii) 14,100

Total Tax Liability [(i)+(ii)] 3,66,600 (A)
Mr. Shyam invested in instruments eligible for deduction under Sec 80C amounting to r 1,50,000
[Life Insurance (35,000), Mutual Funds (30,000), 5 Years Fixed Deposit (50,000) and in PPF (40,000)]
He also invests in National Pension Scheme Rs 50,000 eligible for deduction under Sec 80CCD(1B)
He further takes Health Plan eligible for deduction under Sec 80D amounting to r 75,000
[Self (r 25,000) and Parents Senior Citizens (r 50,000)]
B) Taxable Income after any investment = r 18 lakhs – r (1.5 + 0.50 + 0.75) lakhs
= r 15.25 lakhs
Tax payable on r 15,25,000

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