CORPORATE TAX PLANNING (CTP)

ASSIGNMET 3rd AND 4th

SUBMITTED BY:

SATYENDRA KUMAR-P61086 SECTION-2 NICMAR PUNE

Section 80D: Save Tax and Insure your Health

Besides the investments of 1 Lakh under Section 80C, there are other options for saving tax. Section 80D: Investments made towards medical insurance premium paid qualifies for deduction under section 80D from your income up to a defined limit.

Tax Benefits under Section 80D

How much can you save? As per Section 80D, the premium paid for medical insurance is deductible from your income up to Rs. 15,000 per year. However, if you are a Senior Citizen (56 years and above) the limit increases up to Rs. 20,000 per year.

If you are paying the medical insurance premium for your parents, an additional deduction of Rs. 15,000 per year can be claimed under section 80D. Again, if your parents are Senior Citizens, you can claim an additional amount of Rs. 20,000. Thus, you can deduct up to Rs. 35,000 from your taxable income for medical insurance premiums paid. The premiums paid for self, spouse (dependent or not dependent), parents (dependent or not dependent) and children are considered for deduction under section 80D. (Note: You can not claim premiums paid for your in-laws).

Sec 80D and Hindu Undivided Family (HUF) Even when you file the Income Tax return as an HUF, the medical premiums paid for any member of the HUF can be claimed for deduction under section 80D as per the above limit. In this case, the deduction can be claimed only if the premium is paid by the HUF.

Section 80D and Private Insurers There is no restriction on who you can buy the medical insurance from. Irrespective of whether you buy medical insurance from a Public Sector Undertaking (PSU) insurer or from a Private Insurer, you can claim deduction under section 80D.

Mode of Payment Any mode of payment, except cash, is acceptable for claiming deduction under Section 80D.Other Factors You must remember that the medical insurance premium has to be paid from your taxable income of that year only if you want to claim the deduction under section 80D. You should not have paid the premium from your savings or gifts received by you.

Sec 80C of the Income Tax Act

The most well-known among these tax savings benefits and one of the main clauses that have lead to you reading this article is Sec 80C of the Income Tax Act. As per the provisions under section 80C you are allowed to show pre-defined investments up to a maximum of Rs. 1 Lakh, which are deductible from your income. This translates such that your income gets reduced by this investment amount (of up to Rs. 1 Lakh), whereby you are exempted from paying any tax on that amount.This benefit is available to everyone, irrespective of an individuals income levels. Even if you fall in the highest tax bracket of 30%, you can still invest up to Rs. 1 Lakh, and end up saving Rs. 30,000.

What are the Sections under which one can avail Tax Benefits? Now that we have understood what Income Tax is and its implications, we can move on to learning about the various investments that help us reduce our tax liability.

Provident Fund (PF): Most salaried individuals will be glad to know that the payments you make towards your PF are counted towards Sec 80C investments. This is a mandatory deduction for every salaried individual, which not only translates in to future savings but also tax savings.

Voluntary Provident Fund (VPF): As the name suggests, VPF enables you to increase your PF contribution over and above the statutory limit defined by your employer. This investment also counts as a deduction under section 80C.

Public Provident Fund (PPF): Investments made in a PPF can also be included in Sec 80C deduction. However, the minimum and maximum allowed investments in PPF are Rs. 500/- and Rs. 70,000/- per year respectively. Life Insurance Premiums: The premiums that you pay towards your life insurance policy can also be included in Section 80C deduction. These deductions are only applicable on life insurance policies bought for self, spouse or children.

Note: Life insurance premium paid by you for your parents (father / mother / both) or your inlaws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included under tax saving options. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) even insurance bought from private players can be considered here.

Equity Linked Savings Scheme (ELSS) : ELSS is a type of Mutual Fund (MF) scheme that has been specially created to offer tax savings. Investments made in ELSS are eligible for deduction under Sec 80C.

Home Loan (Principal Repayment): The Equated Monthly Installments (EMI) that goes towards the repayment of your home loan is divided in to two main components, viz. the Principal and the Interest. The Principal component of the EMI qualifies for deduction under Sec 80C. (Note: The Interest component can also help reduce your Income Tax under section 24 of the Income Tax Act.)

Stamp Duty and Registration Charges for a home: The amount you pay as stamp duty and registration when buying a house, also qualifies as deduction under section 80C in the year of purchase of the house.

National Savings Certificate (NSC): The amount that you invest in National Savings Certificate (NSC) can be included in Sec 80C deductions.

Infrastructure Bonds: Investments in Bonds issued by private infrastructure companies can also be included in Sec 80C deductions.

Pension Funds: Section 80CCC allows for an investment in pension funds to be eligible for deduction. Investments under Section 80CCC are clubbed with Section 80C and subject to a limit of Rs. 1 Lakh as total deduction available.

Bank Fixed Deposits: Bank Fixed Deposits or Term Deposits that have a maturity of 5 years or more can be included for deductions under Sec 80C investment.

Senior Citizen Savings Scheme (SCSS): SCSS is a deposit scheme specially meant for elderly citizens and qualifies for deductions under section 80C.

Post Office Time Deposit Account: Similar to the Bank Fixed Deposit scheme, this fixed / term deposit offered by the Department of Posts (Government of India) through the post offices in India is eligible for deductions under section 80C if it is opened for a duration of 5 years or more.

Childrens Education Expense: Childrens Education Expense also be used to claim deductions under Sec 80C, provided you have appropriate receipts to support the same.

TDS (Tax deduction at source)

Tax Deducted at Source is one of the modes of collecting Income-tax from the assessees in India This is governed under Indian Income Tax Act, 1961, by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS), Ministry of Finance, Govt. of India. In simple terms, TDS is the tax getting deducted from the person the amount (Employee/Deductee) by the person paying such amount. Under the process of TDS, Deductor is a person/company who is liable to deduct the Tax at source, from the payment being made to the party. Deductor is also termed as Employer in cases where the payments are under Salaries. TDS Certificates A tax Deductor is also required to issue TDS certificate to the deductee within specified timed under section 203 of the I T Act. The certification from the Deductor, for the deduction and payment of the respective TDS amount to the bank, issued to the deductee is a TDS certificate. The deductee should produce the details of this certificate, during the regular assessment of income tax, to adjust the amount of TDS against the Tax payable by the Deductee [assessee]. Types of TDS certificates Salaries - Form 16: In case of Salaries, the certificate should be issued in FORM 16 containing the Tax computation details and the Tax deducted & Paid details. This refers to the details submitted over Form 24Q. Non-salaries - Form 16A: In case of Non-Salaries, the certificate should be issued in FORM 16A containing the Tax deducted & Paid details. Separate certificates should be prepared for each Section [nature of payment]. This refers to the details submitted over Form 26Q and 27Q. TCS Certificates - Form 27D: There is a separate certificate Form 27D, which is falling under Tax Collected at Source (TCS)

Section 80CCF Infrastructure Bonds

From April, 1 2010, a maximum of Rs. 20,000 is deductible under section 80CCF provided that amount is invested in infrastructure bonds. This is in addition to the 100,000 deduction allowed under Section 80(C). Infrastructure Development Finance Company (IDFC) has launched its second tranche of public issue of long term infrastructure bonds, under section 80CCF. Section 80CCF provides tax payers an additional tax deduction to the extent of Rs 20,000 for investments in long term infrastructure bonds. This deduction would be over and above the Rs. 1,

00,000 existing under section 80C. The interest received on these bonds shall be treated as income from any other source and shall form part of the total income of the assesses in that financial year in which they are received. A minor is not eligible to apply for subscription to these bonds. 80CCF Infrastructure Bonds in 2011-12 Here is a list of the new infrastructure bonds and its issuing authority LIC Infrastructure bond L & T Infrastructure bond IDFC Infrastructure bond Infrastructure bond PFC.

Section 80 E defines education loans

We can claim a deduction on the interest paid on loans taken for higher education for ourself, our spouse and children. There is no limit on the amount of deduction we can claim. The only thing to keep in mind is that the program for which the loan is taken should be a graduate or post-graduate program in engineering, medicine or management or a post-graduate course in the pure or applied sciences. The entire payment of interest is deductible. The deduction is available for a maximum period of 8 years or till the principal and interest amount have been repaid, whichever comes earlier. The education loan should be taken from either a financial institution or an approved charitable trust. Loans taken from friends, employer or relatives do not qualify for a deduction. Key Factors to Keep in Mind a) Loan should be in the name of individual claiming deduction. No deduction can be claimed for loans in the name of parents, spouse or sibling; even if the loan was taken for your studies. b) The course need not be pursued in India. Loans for overseas courses are also permissible for a deduction. c) Deduction would be applicable only when the individual starts repaying the loan.

AVIVA I-LIFE PLAN

Overview
n todays fast-paced life, rarely do we stop and take stock of the life cover we provide for our families in case something unfortunate was to happen to us. To ensure your families are secure and lead a comfortable life, in case you are not around, we bring to you Aviva i-Life - A pure life insurance cover for your loved ones at a very nominal cost. To offer you convenience at your fingertips, you can buy this term plan online to save the time and effort that would have been otherwise required.

Aviva i-Life Term Insurance Plan Review

Aviva i Life is a pure protection plan which is available for online purchase without any agent intervention. Pure Term Plans have Death Benefit if the life insured dies within the policy tenure and no Maturity Benefit if he survives the entire term. It is a vanilla term plan with no fringes attached.

What are the benefits?

Death Benefit: Incase of your unfortunate death during the policy term, the Sum Assured will be paid to the beneficiary in your family to take care of their future needs. Maturity Benefit: This is a pure protection plan and hence there is no maturity benefit payable. Tax Benefit: Tax Benefits as per Section 80C will be applicable. Tax laws are subject to change. Service Tax: Service tax & Education cess will be charged, as applicable from time to time

Specifications
Eligibility conditions and other restrictions in Aviva i Life Term Plan Minimum: Rs. 25,00,000 Sum Assured Maximum: no limit (depends on underwriting) Minimum: 18 years last birthday Entry Age Maximum: 55 years last birthday Maturity Age Premium Frequency Policy Term Maximum: 35 years Equal to the policy term Yearly, half-yearly (the modal factors are: 1.0000 & 0.5108 respectively). Alteration between yearly and half-yearly modes of premium payment is allowed at Payment Frequency any policy anniversary subject to payment of alteration charge which is Rs. 100 at present and subject to review from time to time. Premium rates depend on the size of the Sum Assured ranges less than Rs. 50 lacs, Rs. 50 lacs to less Rebate on Large Sum than Rs. 1 Cr, Rs. 1 Cr to less than Rs. 5 Cr and Rs. 5 Cr & above. Please refer to the premium Assured quotation for the ins tallment premium for your proposal. An additional rebate for female lives of 5% on the Rebate for Female Lives tabular premium rates for male lives. Premium Payment Term Payment Maximum: 70 years last birthday Yearly, half-yearly Minimum: 10 years

More about this product When premiums are not paid within grace period If regular premiums are not paid within the grace period of 30 days from due date of premium, your policy will lapse and the life cover will cease immediately. The policy will not acquire any surrender or paid up value.

Reinstatement of a lapsed Policy If your policy lapses anytime during the term, it can be reinstated within two years from the date of first unpaid premium. To reinstate your policy you will have to provide proof of continued insurability as the Company deems suitable and pay revival fee along with all due premiums. The revival fee is Rs. 250 which is reviewable subject to IRDAs approval. Terms and Conditions Cost of medical examination At the time of purchase of the policy, the cost of medical examination and special tests, if any, will be borne by the Company. At the time of revival of a lapsed policy, the cost of medical examination and special tests, if any, will be borne by you. Exclusion No benefit amount will be payable if the death of the life insured has occurred directly or indirectly as a result of suicide within one year from the date of commencement of risk of policy and in case of reinstatement of the policy, from date of reinstatement. Nomination & Assignment Nomination, in accordance with Section 39 of Insurance Act, 1938, is permitted under this policy. Assignment, in accordance with Section 38 of Insurance Act, 1938, is permitted under this policy. Free look Period You have a right to review the Policy Terms and conditions within 15 days from the date of receipt of the policy document. If you cancel the policy during this free look period, the company will refund the premium paid after deducting proportionate risk premium and expenses incurred on medicals and stamp duty. Disclaimers Aviva Life Insurance Company India Limited. Insurance is a subject matter of solicitation. Advertisement Number: 2091 | UIN No.: 122N093V01 Section 41 In accordance with Section 41 of the Insurance Act, 1938, No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the

premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer: Provided that acceptance by an insurance agent of commission in connection with a policy of life insurance taken out by himself on his own life shall not be deemed to be acceptance of a rebate of premium within the meaning of this sub-section if at the time of such acceptance the insurance agent satisfies the prescribed conditions establishing that he is a bona fide insurance agent employed by the insurer. Any person making default in complying with the provisions of this section shall be punishable with fine which may extend to five hundred rupees. Section 45 In accordance with Section 45 of the Insurance Act, 1938, No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose: Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal. Process to Buy

The online buying application requires the use of Internet Explorer IE Ver. 6 and above. This product is available to Resident Indians only. All quotes are in Indian Rupees (INR) and are accepted only in INR. Premium rates are subject to reduction or increase basis your Profile and health status. If a cancellation is requested before the issuance of the policy, the Company shall refund the application money after deduction of the expenses incurred on medical examination, if applicable. If a cancellation is requested post the issuance of the policy, the Company shall refund the premium amount after deduction of the expenses incurred on medical examination and/or stamp duty, as applicable. Documents required for policy processing include Photo Identity Proof (copy of your PAN Card, Passport or Driving License)

Income Proof (copy of last 3 months salary slip, copy of latest ITR or Form 16) These document images can be e-mailed or uploaded on our website for faster processing

Key Features of Aviva i Life Term Plan

. It is a pure Term Insurance Policy with Death Benefit only and no Maturity Benefit. . Exclusively available on the internet for an online purchase and only available in select cities . An additional rebate for female lives of 5% on the tabular premium rates for male lives . There is a rebate for large Sum Assured.

Sample illustration of premium amount in i-Life Term Plan

The below illustration is for a healthy Male (non-tobacco user) opting for a Sum Assured = Rs. 50 lakhs and Policy Term = 25 years

Additional Features and Benefits of i-Life Term Plan

Riders No riders are available in this policy

What happens if?

You stop paying the premium - If the policy holder stops paying the premium, then all benefits of the policy will cease after the expiry of the grace period. It can however be re-instated the policy within 2 years of lapsation by paying up all due premiums with interest.

You want to surrender the policy

There are no surrender benefits under this term plan. No

paid Up Value is acquired under this plan. You want a loan against your policy Loan facility is also not available under this policy.

Close Competitors of Aviva i-Life:

1.

iProtect from ICICI Prudential

2. iTerm Plan from Aegon Religare 3. Met Protect from MetLife 4. India First Anytime Plan

Other term insurance plans from AVIVA Life Insurance

1.

Aviva Life Shield Platinum Aviva Life Shield Aviva Life Shield Plus Aviva Life Shield Advantage

2. 3. 4.

Policy bazaar takes on Aviva i-Life Plan:

Aviva i-Life is latest addition in Aviva life insurance products wide portfolio. Aviva i-Life is a good term life insurance plan but has no riders. i-Life is one of the cheapest term plans presently available in the market and can be bought online. For buying i-Life, click on this link- buy i-Life plan.