Want to save on tax? Here are deductions you can use while filing ITR

You can legally reduce your taxable income with these common tax-saving deductions

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Let’s be honest, if given a choice, none of us would like to pay tax on the income we earn. But we have to and we should, because income tax is an important source of revenue for the government. This revenue is used by the government to build the nation. India is a developing nation and very few Indians earn an income that can be taxed. This is why if you’re one of those who earn a taxable income, you should proudly and honestly pay income tax.(economy policy)

But having said that, there are certain ways by which you can legally reduce your taxable income that you should make use of. The government allows for certain tax-saving deductions that you can use to lower your taxable income. You can effectively use these deductions to pay less tax. The following table lists common tax-saving deductions and their limits.

Section Deduction on FY 2016-17
Section 80C
  • Investment in PPF
  • Employee’s share of PF contribution
  • NSCs
  • Life Insurance Premium payment
  • Children’s Tuition Fee
  • Principal Repayment of home loan
  • NPS
  • Investment in Sukanya Samridhi Account
  • ULIPS
  • ELSS
  • Sum paid to purchase deferred annuity
  • Five-year deposit scheme
  • Senior Citizens savings scheme
  • Subscription to notified securities/notified deposits scheme
  • Contribution to notified Pension Fund set up by Mutual Fund or UTI
  • Subscription to Home Loan Account Scheme of the National Housing Bank
  • Subscription to deposit scheme of a public sector or company engaged in providing housing finance
  • Contribution to notified annuity Plan of LIC
  • Subscription to equity shares/ debentures of an approved eligible issue
  • Subscription to notified bonds of NABARD
Rs. 1,50,000
80CCD(1B) Additional contribution to NPS Rs. 50,000
80TTA(1) Interest Income from Savings account Maximum up to 10,000
80GG For rent paid when HRA is not received from employer Least of rent paid minus 10% of total income Rs. 5000/- per month 25% of total income
80E Interest on education loan Interest paid for a period of 8 years
80EE Interest on home loan for first-time homeowners Rs 50,000
80D Medical Insurance – Self, spouse, children

Medical Insurance – Parents more than 60 years old

Rs. 25,000

 

Rs. 30,000

80DD Medical treatment for handicapped dependant or payment to specified scheme for maintenance of handicapped dependant

  • Disability is 40% or more but less than 80%
  • Disability is 80% or more
  • Rs. 75,000
  • Rs. 1,25,000
80DDB Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD

  • For less than 60 years old
  • For more than 60 years old
  • For more than 80 years old
  • Lower of Rs 40,000 or the amount actually paid
  • Lower of Rs 60,000 or the amount actually paid
  • Lower of Rs 80,000 or the amount actually paid

All of these deductions are popularly known as Section 80 deductions. A taxpayer can claim the deductions that are applicable to him or her. (read more)

 
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