Ms. Geetha has an annual income of ₹600000. She has invested in a life insurance plan, and the annual premium is ₹80000. In addition, she has invested in the ELSS of about ₹75000. Moreover, she also invested in the NSC for about ₹25000.
The calculation of taxable income is as follows:
Particulars |
Amount |
Gross income |
₹6,00,000 |
Standard deduction |
₹50,000 |
Life insurance |
₹80,000 |
ELSS |
₹75,000 |
NSC |
₹25,000 |
Taxable Income |
₹4,00,000 |
The contribution made to savings and investments is ₹180000. However, as the maximum limit for the 80C is ₹1.5 lakhs, the deduction can be up to that limit. Therefore, MS Geetha can avail of up to ₹1.5 lakhs deductions under Section 80C of the Income Tax Act and further the standard deduction of up to ₹50000, leading to a total taxable income of about ₹4,00,000.