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TaxGenie presents the avenues for tax saving by way of tables (representing each avenue) one below another. All the data provided in the TaxGenie window are annual figures. Please scroll down the TaxGenie window to see all the tax-saving avenues.
The table pertaining to each tax-saving avenue contains 3 columns.
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"Benefit" refers to the extent to which your taxable income can be reduced. When the taxable income gets reduced your tax liability too gets reduced. The term Max Benefit refers to the maximum extent to which your taxable income can be reduced as per the Income Tax Act.
In the screenshot above, the maximum benefit (or the maximum extent to which the taxable salary can be reduced for the purpose of calculating tax) available as per the Income Tax Act under sections 80C, 80CCC and 80CCD(1) is Rs 150,000 for the year.
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"Benefit" refers to the extent to which your taxable income can be reduced. When the taxable income gets reduced your tax liability too gets reduced. The term Benefit Provided refers to the extent to which your taxable income has been reduced as per the investment declaration you have made. The Benefit Provided amount cannot exceed the Max Benefit amount.
In the screenshot above, the employee's Public Provident Fund contribution and life insurance premium paid for the year have been considered by HRWorks for tax saving. In other words, while the Max Benefit amount is Rs 150,000 (under sections 80C, 80CCC and 80CCD(1)), the employee has availed a benefit of Rs 99,000.
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In other words, Benefit Remaining = Max Benefit - Benefit Provided.
In the screenshot above, the employee can avail additional tax benefit to the extent of Rs 51,000 (under sections 80C, 80CCC and 80CCD(1)), since the employee has availed a benefit of only Rs 99,000. In other words, the employee can invest up to Rs 51,000 in avenues available under sections 80C, 80CCC and 80CCD(1) in order to reduce her tax liability.
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The TaxGenie window is linked to information on an underlying investment declaration window. Whatever you enter on the declaration screen gets reflected in TaxGenie.
For example, in the TaxGenie window shown above, the amount of Rs 8540,000 against "Deposits in Public Provident fund" under "80C, 80CCC and 80CCC and 80CCD(1) Investments" on the TaxGenie window comes from the "Deposits in Public Provident Fund" amount entered on the underlying investment declaration screen. Similarly, the amount of Rs 14,000 against "Life Ins. Premia" under "80C, 80CCC and 80CCD(1) Investments" on the TaxGenie window comes from the screen under the "Life Insurance" tab on the underlying investment declaration screen.
e. TaxGenie is linked to the heads of pay you are entitled to
TaxGenie calculates your annual tax on the basis of the heads of pay/deduction which are there in your pay structure. For heads of pay such as Medical and Leave Travel Allowance - which provide you with tax benefits if you submit bills - TaxGenie will consider them only if you have such heads of pay in your pay structure.
In the above screenshot, the employee receives salary contributes to Provident Fund under the head "Medical reimbursementEmployee PF Contribution" and hence TaxGenie considers the same. Since the employee has not submitted any declaration amount, the "Benefit Provided" amount is zero on TaxGenie.
How to use TaxGenie?
1. Check the scope for tax reduction on TaxGenie
On the TaxGenie window take a look at your annual tax liability at the bottom under the column "Earlier Tax". If the amount under "Earlier Tax" is zero, it means that you have no tax liability for the year (maybe on account of your salary being in the zero tax slab).
If your annual tax liability is greater than Rs 0, TaxGenie may be of some help. Let us assume that you have some tax to pay in a year, like the case below.
In the above screenshot, let us assume that your tax for the year is Rs 94260,725 677 and you haven't have taken any benefit under Section 80C only to the extent of Rs 146,000 as against the maximum available benefit of Rs 150,000. Consequently, TaxGenie is indicating that the "Benefit Remaining" under 80Cunder 80C, 80CCC and 80CCC and 80CCD(1) is Rs 14,50,000. This means that you can invest up to Rs 14,50,000 under 80Cunder 80C, 80CCC and 80CCC and 80CCD(1) in order to reduce your tax liability. You can select the checkbox in the "Benefits Remaining" column in order to see how much tax you can save by investing Rs 1504,000 under sections 80Csections 80C, 80CCC and 80CCC and 80CCD(1).
Similar to selecting "Benefit Remaining" under 80C, 80CCC and 80CCD(1), you can select "Benefit Remaining" under other avenues such as 80CCD(1B), 80D etc. to check how much more tax you can reduce by investing in the respective avenue. After taking a look at the extent of tax you can save, you can fill in the details of the additional investment on the investment declaration screen and submit the same in order to avail the benefit.
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