Month of March is very taxing especially to salarised person. All tax planning and major tax deduction from salary if amount could not be invested in tax saving schemes. This year with the infotech boom, tax liability on capital gain also would be on higher side for many assessees.

Under the Indian Income Tax Act 1961, there are various options under which tax can be saved by proper investment of money.Main sections are section 80 and 88 where tax payers can claim deduction from income and income tax as the case may be.

Some of the prominent deductions from income are:

• U/S 80CCC Investment in annuity scheme of Life Insurance Copr.for receiving pension, a deduction up to Rs.10000/-from income is possible. At the end of the scheme pension amount will be subject to normal rate of tax. So, for higher income tax payer, investment in the scheme can save 33% of the tax for assessment year 2000-2001 as compared to 20% benefit under section 88.
• U/S 80D mediclaim /health insurance premium paid for self, wife or husband, dependent parents or dependent children of the assessee is deductible from income up to Rs.10000/-. Similar benefit for senior citizen under this section is up to Rs.15000/-.
• U/S 80R, any income of an individual ,Who is a citizen of India, received from educational institutions abroad for services rendered outside India as a professor, teacher or research worker, 75% of the income brought into India within 6 months from the end of financial year.
• U/S 80RR, any income of an individual ,Who is a citizen of India and also an author, artist, playright, musician, sportsman received from abroad & derived by him in exercise of his profession for services rendered outside India, 75% of the income brought into India within 6 months from the end of financial year.
• U/S 80RRA , If gross total income of an individual, who is a citizen of India includes remuneration in foreign currency from foreign employer or an Indian concern for services rendered outside India, 75% of remuneration received into India within 6 months from the end of financial year to which it pertains is deductible. So under all the three sections above, amount should have been received in India in foreign exchange and amount must be received with in six months from the end of previous year to which it pertains.

Now we will see taxability of expatriates technician, employed in a business carried on in India. U/S 10(5B) such a person is given relief for 48 months for not grossing up of salary if the employer pays the tax and he is paid net of tax salary. So, for 48 months expatriate technician can get tax-free income in India.

Similarly, foreign citizens employed in India get free passage money or value of any free or concessional passage for him and spouse /children for home leave out of India is exempted, for any number of times he travels abroad.

So, these are some of the tax-free aspects of otherwise taxing Income Tax Act. Over and above normal rebate from tax is available through investment in National Saving Certificate/Public Provident Fund/Provident Fund /repayment of housing loan /NSC accrued interest up to 20% of the amount of investments, subject to maximum of RS.60000/-. Additional Rs.10000/- can be invested in infrastructure bond. Interest on housing loan Repayment of housing loan up to Rs.30000/- is deductible from gross income. Dividend and interest on Public Provident Fund is tax-free. Tax on long term capital gain can be saved if the sale proceed is invested in specified mutual funds schemes with 3 years lock in or if only capital gain amount is invested, investment lock in period is 7 years.

Happy investing. Say good bye to current financial year with cheer.