The time has come. Filing Income Tax Returns is the priority now.
A lot of us do not know what all is exempted from calculating the taxable income of an Individual. Well, here is the answer. The following points (for deductions) are to be kept in mind to avail the benefit of IT deductions:
Deductions under Section 80
Section 80C of the Income Tax Act allows certain investments and expenditure to be tax-exempt. The total limit under this section is Rs. 1,00,000 (Rs. 1.0 lakh) which can be any combination of the below:
- Contribution to Provident Fund or Public Provident Fund
- Payment of life insurance premium
- Investment in pension Plans
- Investment in Equity Linked Savings schemes (ELSS) of mutual funds
- Investment in specified government infrastructure bonds
- Investment in National Savings Certificates (interest of past NSCs is reinvested every year and can be added to the Section 80 limit)
- Payments towards principal repayment of housing loans. Also any registration fee or stamp duty paid.
- Payments towards tuition fees for children to any school or college or university or similar institution. (Only for 2 children)
The investment can be from any source and not necessarily from income chargeable to tax.
Deductions under Section 80D: Medical Insurance Premiums
Medical insurance, popularly known as Mediclaim Policies, provide deduction up to Rs 15,000 . For senior citizens, the deduction up to Rs. 20,000 is allowable. This deduction is available for premium paid on medical insurance for oneself, spouse, parents and children.
Deductions for Interest on Housing Loans
For self occupied properties, interest paid on a housing loan up to Rs 1,50,000 per year is exempted from tax. However, this is only applicable for a residence constructed within three financial years after the loan is taken and also the loan if taken after April 1, 1999.
For let out properties, the entire interest paid is deductible under section 24 of the Income Tax act. If the house is not occupied due to employment, the house will be considered self occupied.
