Deductions under Income tax

eductions Available:

• Up to 50% of the amount invested in eligible equity instruments under the Rajiv Gandhi Equity Savings Scheme.

• The maximum deduction available is ₹25,000 per year.

Eligibility:

• This deduction is available only for first-time investors in the stock market, with an annual income of less than ₹12 Lakh.

Section 80D allows deductions for premiums paid for health insurance policies.

Deductions Available:

• For Self & Family:

  • Up to ₹25,000 (for individuals below 60 years).

  • Up to ₹50,000 (for senior citizens above 60 years).

• For Parents (additional):

  • Up to ₹25,000 (if parents are below 60 years).

  • Up to ₹50,000 (if parents are senior citizens above 60 years).

Important Notes:

• Includes premiums paid for medical insurance and preventive health check-ups.

• Preventive health check-ups are deductible up to ₹5,000 within the above limits.

Section 80DDB allows a tax deduction for expenses incurred for medical treatment of specified diseases.

Deductions Available:

• ₹40,000 for treatment of diseases like cancer, neurological diseases, etc.

• ₹1,00,000 for senior citizens (age 60 and above).

Section 80E allows a tax deduction on the interest paid on education loans.

Deductions Available:

• Deduction is allowed for interest paid on loans taken for higher education.

• There is no cap on the amount of deduction for interest, but it is allowed for a maximum of 8 years.

Important Notes:

• Applicable for loans taken for the taxpayer, spouse, children, or a student for whom the taxpayer is a legal guardian.

Section 24(b) provides a tax deduction for interest on home loans.

Deductions Available:

• Up to ₹2,00,000 per year for self-occupied property.

• No limit for a let-out property.

Important Notes:

• The property must be self-occupied or rented out.

• The deduction is allowed only for the interest portion of the home loan.

• If the house is rented out, no upper limit is applicable.

Section 80G allows deductions for donations made to recognized charitable organizations.

Deductions Available:

• 100% deduction for donations to charitable trusts that serve social, educational, and scientific causes.

• 50% deduction for donations to other registered organizations (like political parties or some types of NGOs).

• Limitations and restrictions may apply for specific donations.

Certain special allowances are exempted from income tax under Section 10(14).

Eligible Allowances:

• House Rent Allowance (HRA): Exempt, subject to specific conditions.

• Travel Allowance: For expenses incurred during official travel.

• Conveyance Allowance: For traveling from home to work.

Section 80TTA provides a deduction of up to ₹10,000 on the interest earned from savings accounts.

Deductions Available:

• Available for individuals and Hindu Undivided Families (HUFs).

• Interest earned from savings accounts with banks, post offices, and co-operative banks is eligible.

Important Notes:

• The deduction is allowed only for savings account interest, not for fixed deposits or recurring deposits.

Section 80U provides deductions for individuals with disabilities.

Deductions Available:

• Up to ₹75,000 for individuals with disabilities (disability of 40% or more).

• Up to ₹1,25,000 for severe disability (80% or more).

Important Notes:

• The disability must be certified by a medical authority.

Section 80EEA offers an additional deduction for interest on home loans under certain conditions.

Deductions Available:

• Up to ₹1,50,000 for first-time homebuyers (on home loans taken between 1st April 2019 and 31st March 2022).

• The loan amount should be up to ₹35 lakh and the property value should be up to ₹50 lakh.

We mentioned Section 80G above, but it's worth noting that some charitable contributions are 100% tax-deductible, while others are 50% tax-deductible.

Deductions Available:

• Donations to charitable organizations with 80G approval can be 100% or 50% deductible, depending on the organization.

• Examples include donations to PM CARES Fund, National Defence Fund, etc.

Section 80GG provides a tax deduction for rent paid if the taxpayer does not receive HRA (House Rent Allowance).

Deductions Available:

• The lesser of the following is allowed:

  • ₹5,000 per month

  • 25% of total income

  • Actual rent paid minus 10% of total income

This section allows deductions for contributions made to political parties or electoral trusts by companies or organizations.

Deductions Available:

• 100% of the amount contributed to registered political parties or electoral trusts is eligible for a tax deduction.

Important Notes:

• The contribution must be made by cheque or electronic transfer to qualify.

Section 80GGC provides a deduction for donations made to political parties.

Deductions Available:

• 100% of the amount donated to a political party is eligible for tax deductions.

• The donation must be made by individuals, HUFs, or other entities.

Important Notes:

• The donation should be made by cheque or electronic transfer to qualify.

This section provides tax benefits for businesses and individuals who hire new employees.

Deductions Available:

• A 100% deduction of wages paid to new employees in a specified business.

Eligibility:

• Available to taxpayers who hire more than 100 employees.

This section provides tax benefits for authors receiving royalty income from the sale of books.

Deductions Available:

• Up to ₹3,00,000 for royalty income earned from books written by an author.

Section 80RRB allows a deduction on royalty income earned from patents.

Deductions Available:

• Up to ₹3,00,000 for royalties or income earned from patents.

Important Notes:

• Available to inventors, and the patent must be registered under the Indian Patents Act.