Income Tax deductions
We often try to save up on taxes by investing in
different schemes and options. The tax-savings season is nearly coming to an
end. Often, we consider well-known options like insurance (endowment or
moneyback policies), equity-linked savings schemes (ELSS), or small-saving
instruments like National Savings Certificates (NSC). However, you might be
unaware of a number of other choices that provide you with tax benefits.
What Are Tax Benefits?
Section 80C: for all savings and expenditures.
Many investments qualify for the Rs 1.5 lakh
deduction under Section 80C. Even some of the most important expenses are
eligible for tax deductions. Tuition fees for your children, stamp duty charged
on the registration of a home, and principal repayment on a home loan are just
a few of the significant expenses that can be deducted under the same section.
You must make some investments before March 31 if you have not completely utilized
the Section 80C limit. Alternatively, include the qualifying expenses in your
Preventive wellness checkups are eligible for
a deduction in taxes.
Section 80D provides
you income-tax deduction when you buy health insurance policies. Did you know, that it even covers preventive
health checks? These, too, are qualified for an 80D deduction. A limit of Rs
5,000 can be claimed by each taxpayer. This is under Section 80D''''s total limit.
If you spent money on a health check-up, you can demand it or schedule one
before March 31. However, one cannot use cash for the payment, any other form
of payment can be done.
Additional Investments in new pension scheme.
Section 80C income-tax exemptions are
available if you participate in the National Pension Scheme (NPS). Only the NPS
is exempt from section 80CCD (1B) of the income tax act, which provides for a
deduction for investment. This segment allows for an additional deduction of Rs
50,000. This is in addition to the Rs 1.5 lakh limit set by section 80C of the
Income Tax Act.
NPS investors can seek benefits of up to 10%
of their salary (basic + DA; this increases to 20% of gross total income for
self-employed individuals) under Sec 80 CCD (1), up to a limit of Rs 1.5 lakh
under Sec 80 C.
LTA's cash voucher scheme
Many citizens who would have been availing the
Leave Travel Concession (LTC) Scheme would have been unable to do so due to the
lockdown and restrictions on movement. Other options for claiming the allowance
were announced by the government.
The incentive is applicable to taxpayers who
purchased products and services with a GST rate of 12 percent or higher. You
can use your bills to demand the LTA scheme if you purchased appliances or
Deduction for rent paid.
salaried individuals who do not receiving any home rent allowance can claim
deduction of rent paid. Section
80GG incentives are also available to people who live with their parents in a
residence owned by their parents. This clause provides for a maximum deduction
of Rs 60,000 per year. The assesses must file Form 10BA in order to assert the
benefit of this provision.
Make sure to submit the proof to your
If you are a salaried employee, apart form
making investments and incurring additional expenses, it is essential to submit
the proof of your investments and expenses to your employer. “Normally, all
salaried persons file Form 12BB at the start of the fiscal year, specifying the
investments they plan to make during the year. Employers subtract tax at the
source after accounting for investment-related tax deductions. If you haven't
yet submitted proofs, your employer can calculate your total income without
accounting for deductions and subtract tax at source from your March salary.
However, you can also account for your
investments and expenditures by July 31 when you file your income tax return.