21 Deductions a Taxpayers can Claim while Filing Income Tax Returns (ITRs)

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Hello Dear CA Students,

We are Sharing With You 21 Deductions a Taxpayers can Claim while Filing Income Tax Returns . So kindly Check Out our http://www.castudynotes.com website for more details.

CA STUDY NOTES

21 Deductions a Taxpayers can Claim while Filing Income Tax Returns:

1) Section 80C is one of the most popular and favourite sections amongst taxpayers. It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayer’s total income. Some Investment / Expenditure are Life insurance premium for the policy
ELSS funds
NPS Scheme
ULIP
Tax saving FD
PPF – Public Provident Fund Account
Senior citizen savings scheme
National Savings Certificate
Sukanya Samriddhi Yojana
Certain payments for purchase/construction of residential house property
Tuition fees
Post Office Time Deposit Rules etc

2) Section 80CCD (1B) Investments of up to Rs.50,000 in NPS.

3) Section 80GG – Income Tax Deduction on House Rent Paid Section 80GG deduction is available for rent paid when HRA is not received.

a. Rent paid minus 10% of adjusted total income

b. Rs 5,000/- per month

c. 25% of adjusted total income

4) Section 80E – Interest on Education Loan A deduction is allowed to an individual for interest on loans taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian. 80E deduction is available for a maximum of 8 years (beginning the year in which the interest starts getting repaid) or till the entire interest is repaid, whichever is earlier. There is no restriction on the amount that can be claimed.

5) Section 80D – Deduction on Medical Insurance Premium Claim a deduction of Rs.25,000 under on insurance for self, spouse and dependent children. An additional deduction for insurance of parents is available up to Rs 25,000, if they are less than 60 years of age. If the parents are aged above 60, the deduction amount is Rs 50,000 In case, both taxpayer and parent(s) are 60 years or above, the maximum deduction available under this section is up to Rs.1 lakh. From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for preventive health check.

6) Section 80DD – Deduction for Medical Treatment of a Dependent with Disability Section 80DD deduction is available to a resident individual or a HUF and is available on:

a. Expenditure incurred on medical treatment (including nursing), training and rehabilitation of handicapped dependent relative

b. Payment or deposit to specified scheme for maintenance of handicapped dependent relative. i. Where disability is 40% or more but less than 80% – a fixed deduction of Rs 75,000.

ii. Where there is a severe disability (disability is 80% or more) – a fixed deduction of Rs 1,25,000.

7) Section 80DDB – Deduction for Specified Diseases A deduction up to Rs.40,000 is available to a resident individual any expense incurred towards treatment of specified medical diseases or ailments for himself or any of his dependents. In case the individual on behalf of whom such expenses are incurred is a senior citizen, the individual or HUF taxpayer can claim a deduction up to Rs 1 lakh

8) Section 80U – Deduction for Disabled Individuals A deduction of Rs.75,000 is available to a resident individual who suffers from a physical disability (including blindness) or mental retardation. In case of severe disability, one can claim a deduction of Rs 1,25,000.

9) Section 80G – Income Tax Benefits Towards Donations for Social Causes Donations with 100% deduction or 50% deduction depends upon the Trust. Donations above Rs 2000 should be made in any mode other than cash to qualify for an 80G deduction.

10) Section 80GGC – Deduction on Donations By a Person to Political Parties Deduction under section 80GGC is allowed to an individual taxpayer for any amount contributed to a political party or an electoral trust.

11) Section 80RRB – Deduction on Income via Royalty of a Patent 80RRB Deduction for any income by way of royalty for a patent, registered on or after 1 April 2003 under the Patents Act 1970, shall be available for up to Rs.3 lakh or the income received, whichever is less.

12) Section 80TTB – Interest Income on Deposits for Senior Citizens

Deductions with respect to interest income from deposits held by senior citizens will be allowed. The limit for this deduction is Rs.50,000.

13) Section 80TTA – Interest on Savings Accounts If you are an individual or a HUF, you may claim a deduction of a maximum Rs 10,000 against interest income from your savings account with a bank, co-operative society, or post office.

14) Section 80EEB – Loan interest paid on purchase of electric vehicle Interest payable on loan taken by an individual from any financial institution for the purpose of purchase of an electric vehicle subject to certain condition. (Maximum deduction 1,50,000)

15) Section 80IA – 80JJAA – For Certain Business and Assessee Depending upon certain conditions various deductions are available to the businessman

16) Section 16 i – Standard Deduction Rs. 50,000 or the amount of salary, whichever is lower

17) Section 16 ii – Entertainment allowance
Actual or at the rate of 1/5th of salary, whichever is less [limited to Rs. 5,000]

18) Section 23/24 –
Municipal taxes on property paid when rent received

19) Section 24 – Interest on borrowed capital Rs. 30,000/Rs. 2,00,000, subject to specified conditions

20) Section 57 – Any reasonable sum paid by way of commission or remuneration for purpose of realising dividend Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income

21) Section 57 ii – Family Pension In the case of family pension, 331/3 per cent of such pension or Rs. 15,000, whichever is less Remember to read the rules and keep evidence or proof ready before claiming any expenditure.

Happy Filing and Hope you can save some Tax.

#Tax #IncomeTax #ITRFiling

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