Deductions from Taxable Income Beyond 80 C
Deductions from Taxable Income Beyond 80 C
Section 80C of Income Tax Act allows tax payers to claim
deductions from their taxable income (up to Rs 1.5 Lakh) by investing in
certain instruments. However, many tax payers are not aware that, there are
other sections of the Income Tax Act that allows tax payers to claim further
deductions from their taxable income, beyond the 80C limit of Rs 1.5lakh.
Interest Paid on Home Loan: Under Section 24, up to Rs 1.5 lakhs per annum can be claimed
as deduction from your taxable income, on account of interest paid on home
loan, for a self occupied property. If the property is rented out, then there
is no limit and the total interest paid can be claimed as deduction. However
the rental income will be added to the “Income from other sources” in your
Income Tax return, for the purpose of tax calculations.
Premium paid for Medical Insurance: Medical insurance premium for self, spouse,
dependent children and parents are eligible for deduction under Section 80D of
the Income Tax Act. The maximum allowable deduction is Rs 15,000 for self,
spouse and dependent children. The applicable deduction for senior citizens is
Rs 20,000. If an individual pays for medical insurance of parents who are
senior citizens, then he or she can claim an “additional” maximum deduction of
Rs 20,000. However, if the parents are not senior citizens, then a maximum of
Rs 15,000 can be claimed as additional deduction. Therefore the total amount of
the deduction the individual claim for medical insurance for self, spouse,
dependent children and senior citizen parents is Rs 35,000.
Treatment of specified diseases: Medical treatments for specified serious
diseases, like cancer, AIDS, Parkinson’s disease, chronic kidney failure etc,
either for self or dependents are eligible for deduction under Section 80DDB.
Actual expenses or Rs 40,000, whichever is lower, is eligible for deduction
under this section. For senior citizens the upper limit is Rs 60,000.
House Rent Allowance: If you are paying rent for your accommodation, you should claim
house rent allowance from your employer, if allowed under your company’s
policy. This will reduce your taxable income and your tax obligation. If you
are self employed or a salaried individual who does not receive House Rent
Allowance (HRA) from the employer, do not despair. You can still claim
deduction for rent paid in respect of the property occupied for residential
use, under Section 80GG of the Income Tax Act. Maximum allowable deduction is
the least of the following:-
25% of your total income
Rs 2,000 per month
Rent paid in excess of 10% of total your income
However in order to avail of this benefit, the tax payer should
satisfy three conditions:-
The tax payer must pay the rent for the house he or she lives in
He or she should not own or occupy any other residential
accommodation
The tax payer’s spouse or children should not own any
residential accommodation in the city where the tax payer resides
Leave Travel Allowance: If allowed within your company’s policies, use your Leave
Travel Allowance for your holidays, which is available twice in a block of four
years. If you do not avail of the Leave Travel Allowance, your employer will be
pay it to you in your monthly pay cheque as part of your salary, after
deducting tax at source at your applicable income tax slab rate. To claim
deduction on taxes, you will be required to furnish copies of tickets as proof
to claim the tax deduction. If you are been unable to claim the benefit in a
particular four year block, you could carry forward one trip to the succeeding
block of 4 years, but make sure you claim it in the first calendar year of that
block.
Repayment of Loan taken for higher education: Interest paid on educational loan for higher
studies qualifies as deduction under Section 80E of the Income Tax Act. The
entire amount of interest paid in the year is eligible for deduction. There is
no upper limit. However, there is no tax benefit for principal repayment. One
should note that this benefit not only extends to the loan taken by the tax
assessee, but also towards loans for higher education of spouse and children.
Higher education is defined as means any course of study pursued after passing
the Senior Secondary Examination or its equivalent from any school, board or
university recognized by the Central Government or State Government or local
authority or by any other authority authorized by the Central Government or
State Government or local authority to do so. The deduction is available for a
maximum of 8 years or till the interest is paid, whichever is earlier.
Deduction for Charitable Donations: Section 80G of the Income Tax Act, allows 50%
or 100% of donations, depending on the clauses specified in this section, for
deduction from taxable income
Subscribe to:
Post Comments
(
Atom
)
No comments :
Post a Comment