If you are filing your income tax return (ITR) this year by using the pre-filled forms, you may miss out on claiming certain tax deductions that do not reflect on your Form 26AS or Annual Information Statement and thereby, not get auto-populated on the ITR forms.
If you are filing your income tax return (ITR) this year by using the pre-filled forms, you may miss out on claiming certain tax deductions that do not reflect on your Form 26AS or Annual Information Statement and thereby, not get auto-populated on the ITR forms, say tax experts.
You need not worry if you are filing your ITR under the new tax regime that has done away with nearly 70 tax deductions and exemptions. However, if you are filing your ITR under the old regime, you need to closely scrutinize your expenses of last financial year in order to maximize the tax benefits available to you.
Here are four tax deductions you may forget to claim if you are using pre-filled ITR forms.
Exemption on house rent without HRA
Salaried individuals who live in rented accommodation can use the House Rent Allowance (HRA) component in their salary package to lower their tax outgo. However, if HRA is not a component in your salary structure, then as per Section 80GG of Income Tax Act 1961, you have an option to claim deduction on house rent paid. Here the quantum of deduction will be the minimum of the following three:
- Actual rent paid minus 10% of the taxpayer’s total income
- Rs 5,000 per month
- 25% of the total income
The taxpayer also needs to meet some other conditions to claim this deduction under Section 80G. That is the taxpayer should not own a house in the same city where he is living on rent, nor should there be a house in the name of the taxpayer’s spouse, minor child or HUF of which he is a member of, in the city where his/her office is located or business is carried out
Deduction on savings account interest
Under Section 80TTA, taxpayers can claim a deduction up to Rs 10,000 on interest earned from savings bank account. If the interest earned from savings bank account is less than Rs 10,000, then the entire amount will be tax-free.
Worth mentioning here is that the deduction available under Section 80TTA is not applicable to interest earned from fixed deposits, recurring deposits or time deposits.
Deduction on medical bills of uninsured parents
If you have senior citizen parents who are not covered under any medical insurance policy but have undergone medical treatment during the previous financial year, then you can claim deduction on their medical bills.
Under Section 80D, you can claim up to Rs 50,000 as a deduction on the amount spent on medical treatment of dependent parents aged 60 years and above. Even money spent on buying medicines for senior parents can be claimed as deduction, tax experts say.
Worth mentioning here is that most of the taxpayers miss out on claiming this deduction despite spending more than Rs 50,000 on their senior citizen parents' medicines and regular check-ups every year.
However, to claim this deduction, you must have made the payment in any more other than cash. Though the taxpayer doesn’t have to furnish bills or receipts at the time of filing ITR, they must keep the supporting transaction documents ready with them.
Deduction on donations
If you have made any donations to any Covid-19 relief fund or to any charitable institution recognised by the government in the previous financial year, then also you can claim a deduction on that amount under Section 80G. But the quantum of deduction will depend on where the donation is made.
For example, donations made to central government-recognised institutions are eligible for 100% deduction. In case, the institution is a private one, then only 50% of the total amount will be eligible for deduction. However, donations made in kind cannot be claimed as a deduction.
Further, if you have made cash donation, then the deduction available is only up to Rs 10,000, provided the donor has receipts to back the transaction. Also to claim this deduction the taxpayer must have the PAN of the donee..
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