POSTED BY December 18, 2013 2:19 pm ONE COMMENTON
I have a query regarding tax deduction. Assuming that after all deductions (HRA, PF, Medical, Variable Pay etc) my taxable income is 4 lakhs per annum, and if I now show 1 lakh under 80c the taxable income would be 3 lakhs. So I need to pay 10% tax on 3 lakhs i,e 30,000 + 3% Educational Cess tax. Is this correct?
I have heard from some of my friend that though we show 1 lakh towards 80c, only 20% will be taken into tax exemption but not total 1 lakh. Can you please suggest who is correct in this case and how much amount would I be paying towards tax even if I show 1 lakh under 80c.