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Scenario 3:
Mr. Ram invested in instruments eligible for deduction under Section 80C amounting to Rs.1,50,000
[Life Insurance (35,000), Mutual funds (40,000), 5 Years Fixed Deposit (35,000) and in PPF (40,000)]
He further takes Health Plan eligible for deduction under Section 80D amounting to Rs. 1,00,000
[Self (if senior citizen)(Rs. 50,000) and Parents Senior Citizens (Rs. 50,000)]
D) Taxable Income after investment = Rs. 12.25 lakhs – Rs. (1.50 + 1) lakhs = Rs. 9.75 lakhs
Tax payable on Rs. 9,75,000
Tax Slab Amount earned Tax Tax Amount
Up to Rs. 2,50,000 2,50,000 Nil Nil
Rs. 2,50,001 to Rs. 5,00,000 2,50,000 5% 12,500
Rs. 5,00,000 to Rs. 10,00,000 4,75,000 20% 95,000
Income Tax (i) 1,07,500
Educational Cess @ 4% on (ii) 4,300
Total Tax Liability [(i)+(ii)] 1,11,800 (D)
Total Tax Savings (A-D) Rs. 75,400
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*Based on Retail Loan book size (excluding mortgages). Source: Annual Reports FY 20-21 and No.1 on market capitalisation based on BSE data as on 31st Dec, 2021
