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Deductions to reduce tax burden.

March, 23rd 2010
Claim these & ease your tax burden The financial year 2009-10 is coming to an end. You can do some tax planning in the next few days and reduce your tax liability. The savings and investments must be made before March 31. You need to compute your tax liability and pay off the outstanding income tax before March 31. Some common deductions: HRA In order to claim the house rent allowance (HRA), you need to provide details of your rental expenditure along with the rental receipts. Medical reimbursement Medical expenditure, up to a limit of Rs 15,000 per annum, can be claimed as a deduction. Employees can reduce their tax burden by claiming the allowance with medical bills. It is to be noted that the total deduction allowed is limited to the amount of gross total income. LTA Leave travel allowance (LTA) can be claimed. The allowance is provided to enable professionals to travel on leave once a year. You have to provide details of the travel to claim it. The allowance, as per the Income Tax Act, is tax-free once in two years or twice in a block of four years. It is important to keep track of the year while claiming the tax benefit as it need not be taxed alternate years or twice in a block of four years. During the remaining two years, the allowance is taxable . Non-professional deductions Some deductions available to an individual not carrying out any business or profession: Section 80C Life insurance Provident Fund set up by the Government or a recognised Provident Fund Contribution to an approved superannuation fund Subscription to National Savings Certificates Tuition fees paid Home loan repayment. The aggregate amount of deduction here cannot exceed Rs 1 lakh. Section 80D, 80DD, 80DDB Medical insurance premium Maintenance, including medical treatment, of dependent person with disability Medical treatment Section 80E Interest on loan taken for higher education. Section 80G Donations to certain funds, charitable institutions etc Section 80GG Rent paid Section 80E Interest on loan taken for higher education Section 80G Donations to certain funds, charitable institutions etc Section 80G Rent paid