Taxes are an integral part of our country. Taxes are the main source of income of the government and are used to provide the basic provisions to the citizens of the country. Individuals earning more than a particular amount are required to pay taxes to the government according to the various tax slabs. These taxes can be harsh on the bank balance of the government and hence the government provides some provisions where one can make tax savings. These provisions reduce the taxable income and thus reduce the tax liability. But there are certain eligibility criteria which have to be fulfilled to enjoy the benefits of these deductions. Tax can be saved by making use of the clauses under Section 80 of the Income Tax Act, 1961. The various clauses under Section 80 for tax deductions are:-
According to this section, a total of Rs. 1, 50,000 can be deducted from the total income of a person. This deduction is applicable to an individual or an HUF (Hindu Undivided Family)
According to this section, an individual is provided a deduction for any payment made for an annuity plan of LIC or any other Insurer but if the annuity is surrendered before its maturity, then the amount received is taxable in the same year.
This section provides deduction for contributions to pension accounts. This section has 3 sub sections:-
- Section 80CCD (1) :- Under this section, an employee is allowed a deduction of 10% on his salary and a self employed person is allowed a deduction of 10% on his gross income for making deposit to his pension. This deduction comes with an upper limit of Rs. 1,50,000.
- Section 80CCD (1B):- Under this section, deductions on contributions of upto Rs. 50, 000 is allowed for National Pension Scheme and Atal Pension Yojana.
- Section 80CCD (2) :- If an employer contributes to the Pension Scheme of his employee, he is allowed a deduction of upto 10% of the salary of the employee.
This section states that a deduction of upto Rs.10, 000 can be claimed against the interest earned from a savings bank account. This deduction can be claimed by an individual or an HUF. This deduction is only allowed on savings account and not in fixed deposits, recurring deposits or interest from corporate bonds.
This deduction is allowed if the rent of a house is paid but HRA is not received. The taxpayer, his spouse or his minor children should not own a residential property at the place of employment and the taxpayer should not own any other residential property at any other place.
Deduction is allowed for the interest on loan taken for pursuing higher education for self spouse, children or a student for whom the person is a legal guardian. This deduction is allowed for a maximum period of 8 years or the clearance of the loan, whichever is earlier. There is no upper limit on the amount for which this deduction is allowed.
This deduction is allowed on the interest paid on home loans for a person who is a first time home owner. The deduction can be claimed under the condition that the value of the property must be less than 50 Lakh and the loan must be less than 35 Lakhs. The maximum deduction which can be claimed is Rs. 50,000 in addition to Rs. 2,00,000 under section 24 of the income tax act for a self-occupied house property.
Under this section, a person can claim deduction by investing in the Rajiv Gandhi Equity Saving Scheme (RGESS). Any investor whose gross income is less than 112 Lakh can invest in this scheme and claim deduction of upto 50% of the amount invested.
Deduction of upto 25,000 is allowed for the insurance of self, spouse and dependent children under this section. A deduction of 30,000 is allowed for the insurance of senior citizens or parents whose age is more than 60 years.
Under this section a deduction on the medical treatment, training, etc of a handicapped relative can be claimed. Deduction is also allowed on the payment made for the any specific maintenance scheme of the dependent handicapped relative.
A fixed deduction of Rs. 50, 000 is allowed where disability is more than 40% but less than 80% and Rs. 1,00,000 where disability is more than 80%.
To claim this deduction a certificate of disability is required from an authorized medical authority.
Under this section, a deduction of upto 40,000 can be claimed for the medical treatment of self or dependent relative. For senior citizen (more than 60 years), a deduction of upto 60,000 is allowed and for very senior citizen (more than 80 years), a deduction of 80,000 can be claimed.
According to this section a deduction of 75,000 is allowed to a person with disability or mental retardation. If the disability is severe, the deduction allowed is 1,25,000 to claim this deduction, a certificate is required by a government doctor under Rule 11D. This is a fixed deduction and is not based on bills or expenses.
To encourage donations, the Government allows deduction on charity and donation. Not all donation schemes are eligible for 100% deduction. Different schemes are allowed different percentages of tax deduction. Schemes such as Prime Minister’s National Relief Fund, Flood relief fund, Earthquake Relief Fund, Swachh Bharat Kosh, etc is eligible for 100% tax deduction.
According to this section, deduction is allowed to an Indian company on the amou]nt contributed to a registered political party or an electoral trust. The contribution made can be in any form other than cash.
According to this section, deduction is allowed to an individual on the amount contributed to a registered political party or an electoral trust. The contribution made can be in any form other than cash.
Under this section, a deduction of upto 3 Lakh can be claimed for income from royalty for a patent which is registered on or after 1/04/2003. The patentee must be a resident of India. To claim the deduction, the patentee must furnish the required certificate duly signed by the concerned authority.
For any help on ITR Filing feel free to consult the tax experts at Taxraahi. You can file ITR yourself via our ITR software or get CA’s help on filing income tax return. You can also use the option of Business Return, and Bulk Return.