December 30, 2022
Shreeja Ray

Income Tax Deductions List

Whether an individual is employed or a businessperson, submitting income taxes is one of the most crucial responsibilities for every Indian citizen. In light of this, the Indian Finance Ministry releases a budget each year that details the dos and don'ts of IT deductions. Every citizen is unsure about making an investment that will help them save taxes at the same time.

Although it may appear that everyone must pay some sort of tax each year, there are a few ways to reduce your taxes or obtain a refund. Tax exemptions under section 80C are provided through tax-saving investment choices like PPF and EPF. Similar to this, other such parts that you might not be aware of can help you save taxes.

1. Section 80C Income Tax Deduction

For every taxpayer, this is the most important area regarding deductions. The section's maximum exemption amount is $15,000.00. Under section 80C, a number of options, including PPF, EPF, term insurance, NPS, etc., may be claimed. Here is the whole list:

a. National Savings Certificate National Pension Scheme Public Provident Fund

b. Employees' Provident Fund Tuition costs Postal deposits that reduce taxes

c. a five-year bank commitment

2. Section 80CCC Income Tax Deduction

This provision permits a maximum deduction of $15,000 and includes the payment paid to a life insurance company's annuity plan in order to receive a pension from the fund.

3. Section 80CCD Income Tax Deduction

The Atal Pension Yojana contribution is included in this section. It permits contributions to the government-notified pension plans of up to 10% of the entire compensation of paid employees and 20% of the gross income of non-salaried individuals. Under Section 80 CCD, the contribution may be subtracted from taxable income (1). If the employer also makes contributions to the plan, Section 80CCD permits a tax deduction for the total amount of contributions (2).

It's crucial to keep in mind that the total deduction allowed under Sections 80C, 80CCC, and 80CCD (1) cannot exceed $15,000,000. The additional tax deduction of 50,000 under Section 80CCD (1B) is higher than this cap, nevertheless.

4. Section 80D Income Tax Deduction

Section 80D of the Income Tax Code allows for a deduction for medical insurance premiums. This clause permits deductions for individual or HUF health insurance premiums. You may deduct up to an additional $25,000 for the insurance of parents under the age of 60 in addition to the deductions of $25,000 for yourself, your spouse, and your dependent children. As of Budget 2018, parents over 60 can now request a deduction of 50,000 instead of 30,000.

Additionally, the maximum deduction allowed by Section 80D is up to $1,000,000 if both the taxpayer and the parent(s) are over the age of 60.

5. Section 80DD Income Tax Deduction

For expenses incurred on medical care for dependents with a 40% handicap, a deduction of 75,000 may be made. If the disability is severe, the cap is set at 1,25,000.

6. Section 80DDB Income Tax Deduction

Medical expenses for oneself or a dependent relative may be deducted:

Deduction for Medical Expenses for Persons and HUFs Under 60

An individual or HUF under 60 years of age may deduct up to 40,000 from their income tax under Section 80DDB. It is for any costs associated with treating particular serious illnesses for oneself and dependents.

7. Section 80CCG Income Tax Deduction

This part, which provided the Rajiv Gandhi Equity Savings Scheme's tax advantages, has been removed. However, if a person has once claimed a deduction in a prior fiscal year, they may do so again for the next two fiscal years.

8. Section 24B Income Tax Deduction

Individuals may make a loss claim under the heading "Income from House Property" in accordance with this clause. It permits a tax break of up to $2,000 on the repayment of a second mortgage. For a period of eight years, the unclaimed loss amount may be carried forward and offset against income from real estate.

9. Section 80E Income Tax Deduction

Section 80E applies to interest on student loan debt. Please be aware that loan principle repayment cannot be deducted. The borrower should have been the borrower, the borrower's spouse, the borrower's children, or the borrower's legal guardian.

10. Section 80EE Income Tax Deduction

First-time home buyers are eligible for an additional deduction of 50,000 on their home loan interest payments. This specifies that the loan must be sanctioned in or after the fiscal year 2016–17 and that it must be for less than $35,000,000. Additionally, the house shouldn't be worth more than $50,000.

11. Section 80EEA Income Tax Deduction

A deduction for interest payments up to $15,000 is permitted by Section 80EEA. This deduction is in addition to the section 24 deduction of $2,000,000. To be eligible for this deduction, a person must not be a homeowner on the day the loan is sanctioned.

12. Income Tax Deduction Under Section 80G

All gifts to charitable organizations and funds for disaster assistance are covered by Section 80G. The donation should be made in the form of a cheque, cash, or direct deposit. The maximum deduction allowed is $2,000. Moreover, under 80GGC, the same deduction might be made for contributions made to political parties.

13. Section 80GG Income Tax Deduction

This section only applies to people who don't own a home and don't receive a house rent allowance, and the deduction amount is 60,000 per year. The least of the following will therefore be the amount of the deduction:

25% of overall revenue Rent is reduced by 5,000 per month, or 10% of the total adjusted income.

14. Deduction for income taxes under Section 80TTA

Individuals or Hindu Undivided families may deduct 10,000 from their total gross income under this section. The interest on deposits made to a savings account at a bank, cooperative society, or post office is deductible.


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