Things that you should know about tax deductions
Tax deductions– Things that you should know
A tax deduction is nothing but reducing the taxable income of individuals who pay income tax regularly. It helps to reduce the overall tax liabilities, and you save money, according to the type of claim that you make on the tax deduction type. The amount of deduction depends on the tax. You can claim the tax amount spent on the children’s education, medical expenses and also charitable contributions. Besides, one can also save tax by investing in several schemes like Equity linked savings scheme, PPF, Fixed Deposits ( 5 Year ), life insurance plans, national saving schemes and more. There are tax exemptions for several expenses that occur during different activities relating to social benefits.
Get to know tax deductions better.
Tax deduction details for those who pay income tax
Section 80C is very useful for the people who are into jobs or into business. There is a reduction available in this section for up to Rs. 1, 50,000 whose gross salary is Rs. 2, 50,000 or more and are entitled to utilize Rs. 1, 50,000 limits. One can enjoy deduction of taxes when it comes to tuition fees of children and the principal amount that they have to pay towards a home loan that is paid during the financial year. The deduction is also available to those who contribute to employee provident fund or the public provident fund, accrued interest on the National saving certificate, Life insurance Premium, 5 years fixed deposits with banks and post office and equity-linked savings schemes.
Tax deduction under 80C
- Under section 80 CCD the individual who contributes in NPS can claim the deduction and the amount should not exceed Rs. 1,50,000.
- 80CCC – the deduction is arising from the various contributions to LIC or other insurance companies of up to Rs. 1,50,000 is available.
- 80CCD – the deduction that is related to the pension scheme from the Central Government can get a deduction of up to 10% of the salary.
- 80CCF – in this section one can get a tax deduction of Rs. 20,000 for a subscription to the notified long term infrastructure bonds.
- 80 CCG – deduction of Rs. 25,000 is possible when one notifies for an equity, savings scheme for those who are in the Hindu undivided family.
Tax deduction under 80D
Under this section, one can get a tax deduction for medical premiums for self and dependents but, by other means of payment apart from LIC or insurance providers.
- 80D– you get the benefit of deduction of Rs. 25,000 is allowed to those who have paid health insurance policy for dependents as well as self. Another Rs. 25,000 deduction for a premium on health insurance policy of the parents is available. The limit is Rs. 30000 for senior citizens.
- 80DDB – deduction is possible on medical treatment in illness like cancer, AIDS and neurological diseases of Rs. 40,000. For senior citizens, the deduction is available for up to Rs. 60,000 and for super senior citizen Rs. 80,000.
Tax deduction under 80E, 80G, 80TTA, 80U
- 80E provides for taking a loan for education from financial intuitions.
- 80G helps when donations are paid but to a certain limit of up to Rs. 10,000.
- 80TTA section provides a tax deduction to those in the HUF only. The interest earned around Rs. 10,000 from bank savings can be deducted from total income.
- 80 U sections allow a 40% deduction for those who have a disability of any kind on Rs. 75,000 and in severe disability, there is a tax deduction of Rs. 1, 25,000.
There are several other tax deductions under various schemes that should be learnt from the reliable offices of the government. it helps to save tax, and there are various benefits that the government provides for the taxpayers in various forms of a tax deduction.
Our Tax calculator will make your income tax calculation very easy. Calculate income tax with our free income tax calculator, according to latest assessment year http://hirannyafinplan.com/income-tax/