13. Under section 80D, deduction up to Rs 15,000 paid as medical insurance premiums on the health of assessee himself, his spouse, parents (dependent or not) and dependent children is allowed. Where an individual has insured a senior citizen (parent or himself) a higher ceiling of Rs 20,000 is available. Additional deduction up to Rs 15,000 on premiums paid for parent/s of the assessee has been made available w.e.f. 1.4.08.
14. Professional tax paid by an employee is deductible u/s 16(iii).
15. ESOP was brought under the purview of FBT by Finance Act 07. The employer has a right to collect the FBT tax paid by him on ESOP from the employee. In that case, it will be treated as tax paid by the employee.
16. In respect of HRA, the least of the following is exempt from tax u/s 10(13A):
(a) 40 per cent of salary (50 per cent for Mumbai, Kolkata, Delhi and Chennai).
(b) HRA for the period the house is occupied by the employee.
(c) The excess of rent paid over 10 per cent of salary.
An employee living in his own house or where he does not pay any rent is not eligible for this exemption. If you are staying in a house belonging to your family members (preferably not your wife), start paying rent to the owner and ask for HRA from the employer.
17. A helper engaged for the performance of the duties of an office or employment of profit is not considered as a perk.
18. If the employer employs a gardener for the building premises belonging to the employer, it would not be treated as a perk. The possibility of it being extrapolated to other servants is logical.
[Excerpt from Taxpayer to Taxsaver by A. N. Shanbhag and Sandeep Shanbhag, published by Vision Books.] (C) All rights reserved.
Image: Young women wait to receive their first car at a car dealership in Bangalore. | Photograph: Uriel Sinai/Getty Images
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