Different sections under the Income-Tax Act correspond to different savings or expenses, some of which are eligible for tax deductions and could be a great way to show that you are actually out of the taxable bracket. Here are 8 such deductions
If the net taxable income after all deductions does not exceed Rs 5 lakh, the taxpayer won’t have to pay any tax. Find out if you are eligible for any of these tax deductions to lower your income below the threshold.
1. Savings account interest Sec 80TTA Up to Rs 10,000 interest earned on a savings bank account balance is exempt from tax.
2. Medical insurance Sec 80D Up to Rs 25,000 premium for medical insurance of self and family and Rs 25,000 for parents (Rs 50,000 if they are senior citizens).
3. Education loan Sec 80E Interest paid on education loan for self or dependant. Deduction can be claimed for a maximum of eight financial years.
4. House rent without HRA Sec 80GG If taxpayer doesn’t get HRA, he can claim lowest of the following three: Rs 5,000 a month, 25% of income or rent paid minus 10% of income.
5. Donations Sec 80G Donations to eligible organisations can be claimed as deduction. Donations of over Rs 2,000 cannot be made in cash.
6. Purchase of electric car Sec 80EEB Up to Rs 1.5 lakh interest paid on loan to buy an electric vehicle is tax deductible.
7. Disability Sec 80DD and 80U If taxpayer or dependant suffers from disability, deduction of Rs 75,000-1.25 lakh can be claimed.
8. Medical treatment Sec 80DDB Up to Rs 40,000 if taxpayer or dependant suffers from any of the specified disease. Rs 1 lakh in case of senior citizens.
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