Monday, August 17, 2015

Claiming LTA deduction

 

1 LTA can be claimed as a deduction from taxable income where the employer provides LTA to employee and leave application has been made for a holiday either individually or with family.

2 The deduction is limited to the extent of actual travel costs incurred by the employee. The total cost of the holidays is not covered, only the travelling cost is covered.

3 Travel has to be undertaken within India only. Overseas destinations are not covered for deduction.

4 The tax rules provide for a deduction only in respect of two journeys performed in a block of four calendar years. The blocks are decided by government. They are 2010-2013, 2014-2017 and so on.

5 If the employee does not use their exemption during any block, the exemption can be carried over to the next block and used in the calendar year immediately following that block.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

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