#80DDB Deductions

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Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB

What are Tax Deductions?

Tax deductions are specific expenses or investments that reduce an individual’s taxable income, thereby lowering the amount of income tax they are required to pay. These deductions in income tax are allowed by the government to encourage individuals to save and invest, purchase insurance policies, and contribute to specific funds and schemes.

Various Types of Tax Deductions in India Understanding the nuances of tax deductions is crucial for taxpayers to make informed decisions about their financial choices and ensure compliance with tax regulations. This knowledge empowers individuals and businesses to explore legitimate ways to maximize tax benefits while contributing to the nation’s economic growth.

Income Tax Deduction Under Section 80C Section 80C is one of the most popular tax-saving provisions in India. Under this section, taxpayers can claim deductions up to ₹1.5 lakhs in a financial year. Some eligible investments and expenditures under Section 80C include

a. Employee Provident Fund (EPF)

b. Public Provident Fund (PPF)

c. Equity-Linked Savings Scheme (ELSS)

d. National Savings Certificate (NSC)

Income Tax Deduction Under Section 80CCD This section includes the contribution to the Atal Pension Yojana. It allows a contribution of up to 10% of the total salary of salaried employees and 20% of the gross income of non-salaried to the government-notified pension schemes. The contribution can be deducted from the taxable income under Section 80 CCD (1). If the employer also contributes to the scheme, the entire contribution amount can be claimed as a tax deduction under Section 80CCD (2).

It is important to remember that the complete deduction under Section 80C, Section 80CCC, and Section 80CCD (1) cannot exceed ₹15,00,000 in aggregate. However, the additional tax deduction amounting to ₹50,000 under Section 80CCD (1B) is above this limit.

Income Tax Deduction Under Section 80DD An amount of ₹75,000 may be claimed as a deduction for spending on medical treatments of dependents with a 40% disability. This limit is ₹1,25,000 in case of severe disability.

Income Tax Deduction Under Section 80DDB Deduction for Medical Expenditure on Self or Dependent Relative:

Deduction for Medical Expenditure for individuals and HUFs below age 60Income Tax Deduction under Section 80DDB, a deduction of up to ₹40,000 is available to an individual or a HUF below 60 years of age. It is for any expenses towards treating specified critical ailments for self and dependents.Deduction for Medical Expenditure for senior citizens and super senior citizensPreviously, for FY 2017-18, the limit was ₹60,000 for senior citizens and ₹80,000 for super senior citizens. It has been changed to ₹1,00,000 for all senior citizens, including super senior citizens. Income Tax Deduction Under Section 80CCG This section which offered the tax benefits of the Rajiv Gandhi Equity Savings Scheme, has been withdrawn. Still, if an individual has claimed a deduction in the previous financial year, you are eligible to continue with the same for the next two financial years.

Income Tax Deduction Under Section 80EE Individuals buying a home for the first time may claim an additional deduction of ₹50,000 on the home loan interest paid. This includes a clause that the loan should be sanctioned in or after FY 2016-17, and the loan amount should be less than ₹35,00,000. Furthermore, the house’s value should not exceed ₹50,00,000, and the individual should not own any other residential house under his name.

Income Tax Deduction Under Section 80EEA Section 80EEA allows a deduction for interest payments up to ₹15,00,000. This deduction is over and above the deduction of ₹2,00,000 available under section 24. An individual should not own any house on the date of a loan sanction to claim this deduction.

Income Tax Deduction Under Section 80GG The deduction amount for this section is ₹60,000 per annum, and the section applies to only those who neither own a residential house nor receive a House Rent Allowance. Therefore, the amount of deduction will be the least of the following:

25% of the total income ₹5,000 per month amounts of 10% of the adjusted total income deducted from the rent paid

Income Tax Deduction Under Section 80U This section allows a deduction for individuals who are physically and mentally challenged.

Income Tax Deduction Under Section 80D Section 80D provides deductions on health insurance premiums paid by individuals and HUFs (Hindu Undivided Families). The eligible deduction amount varies based on the age of the insured and the number of family members covered under the policy. Additionally, deductions for preventive health check-ups are also available.

Income Tax Deduction Under Section 24(B) Section 24(b) deals with deductions on the interest paid on home loans. For self-occupied properties, taxpayers can claim up to ₹2 lakhs per annum. In the case of let-out properties, there is no upper limit on claiming the interest paid on the home loan.

Income Tax Deduction Under Section 80E This section allows taxpayers to claim deductions on the interest paid for education loans. These loans must be taken for higher education, either for the taxpayer, spouse, children or for a student the taxpayer is the legal guardian of.

Income Tax Deduction Under Section 10(14) Section 10(14) offers deductions on various allowances received by salaried individuals, such as House Rent Allowance (HRA), conveyance allowance, and medical allowance.

Income Tax Deduction Under Section 80G Donations made to specified funds and charitable institutions are eligible for deductions under Section 80G. The deduction varies from 50% to 100% of the donated amount, depending on the nature of the recipient organization.

Income Tax Deduction Under Section 80TTA And 80TTB Under Section 80TTA, individuals can claim deductions of up to ₹10,000 on interest earned from savings accounts. For senior citizens, Section 80TTB provides deductions of up to ₹50,000 on interest earned from savings accounts, fixed deposits, and recurring deposits.

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Tax on income

Both your protection and tax savings are provided by life insurance. This article investigates the consequences of tax on income.

Let’s first examine how your taxable income is determined in relation to the tax-saving investments you make in order to comprehend how you might save tax on life insurance. Let’s say Rs 5,00,000 is the taxable share of your income. According to your income category, this means that your tax obligation for the year would be calculated at Rs 5,00,000. Accordingly, if, for instance, a particular investment choice is reported to provide a tax benefit of up to Rs 50,000 per year, this Rs 50,000 is subtracted from your taxable income, i.e. Rs 5,00,000. Your tax obligation would therefore be based on Rs. 4,50,000.

Your taxable income decreases as you invest in additional tax-saving strategies. To significantly lower your taxable income component, it is advised that you research a number of tax-saving strategies spanning various sections of the Income Tax Act, of 1961. These choices include health insurance, mutual funds, PPF (Public Provident Fund), NPF (National Provident Fund), home loans, and life insurance policies that save on taxes. Section 80C of the Income Tax Act of 1961 has provisions that provide life insurance tax benefits. A maximum of Rs. 1,50,000 can be deducted from the premiums for life insurance coverage each year. Plans for life insurance that save taxes include those taken out for you, your spouse, or your dependent children.

However, you must be able to demonstrate that you are using your money to pay the premiums for these options. Do keep in mind that you cannot claim life insurance tax benefits on the same plans in a given year with your employed spouse.

If the insurance was obtained after April 1, 2012, and the premium paid does not exceed 10% of the total assured under the policy, you may be eligible for a deduction under Section 80C. The premium cannot exceed 20% of the sum guaranteed if the insurance was purchased before April 1, 2012. If the premium paid does not exceed 15% of the sum assured and you have obtained a life insurance policy for a disabled family member or yourself, you may be entitled to claim a deduction under Section 80C to reduce your tax on the premium. However, the handicap must be registered under Section 80U of the Income Tax (IT) Act, and the terminal illness must be listed under Section 80DDB.

If the premium does not exceed 10% of the sum assured, the maturity amount paid under the policy is not subject to Section 10D taxation, which is another benefit of life insurance. If the premium is more than 10% of the amount assured, the exemption is not applicable. On plans, however, whose maturity amount exceeds Rs 1,00,000, TDS is deducted; nevertheless, this TDS can be reclaimed by filing an ITR for the following year.

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A Guide to Salary Tax Exemptions and Deductions

What are the different salary components?

Two types of components

Fixed components (e.g., HRA)

Variable components (bonus, commission, etc.)

Basic salary (to be 50% of CTC)

Allowances (monetary benefits for housing, dearness allowance, etc.)

Perquisites (e.g., car for GM or CFO)

Bonus, commission & leave travel concessions

Social security benefits (ESI, PF, etc.)

Gratuity

Retrenchment compensation

Other components with different names (all are taxable)

How is income tax calculated for salaried employees?

Income tax for salaried employees is calculated based on five different heads of income.

The five heads of income include salary, income from house property, profit and gains from business and profession, capital gains (which includes stocks) and income from other sources.

If one sells stocks for a profit, the gains will be taxable as either short-term or long-term capital gains.

Short-term capital gains (holding period of less than one year) will be taxed at 15%.

Long-term capital gains (holding period of more than one year) will be taxed at 10% with an exemption of up to INR 1 lakh.

Gross total income is the sum of five heads of income.

Deductions are made under Section 80 to arrive at the net income (which is taxable).

The tax is payable along with the surcharge and education cess.

What are the tax exemptions for salaried employees?

Old regime:

Three categories: general, senior citizen and super senior citizen

Tax slabs vary based on age and income

Exemption limit for general category: INR 2.5 lakh

Education cess and surcharge are applicable as per income

New regime:

Different tax categories (as above)

Exemption limit: INR 2.5 lakh

No deductions are allowed

New budget changes:

Exemption limit is increased to INR 7 lakh

Standard deduction of INR 52,500 is available for a salary above INR 15.5 lakh

What are the different income tax deductions for salaried employees?

Salaried employees can avail of various deductions under different sections such as Section 80, Section 24 and Section 10. Section 80C is the most important section that covers a wide range of investments for deductions up to INR 1.5 lakh.

Other sections include 80CCD1B, 80D, 80DD, 80DDB, 80E, 80EEA, 80EEB, 80G, 80TTA, 80TTB and 80U. Deductions for interest paid on loans for a self-occupied property are limited to INR 2 lakh under Section 24. A physically challenged person can get a deduction of INR 75,000 to 1.5 lakh.

What is Sukanya Samriddhi Yojana, and what are its benefits?

Sukanya Samriddhi Yojana is a government scheme started in 2015 under the “Beti Bachao Beti Padhao” campaign. It allows investment in the name of a girl child under 10 years, with a minimum amount of INR 250 and a maximum of INR 1.5 lakh per annum. The scheme offers around 7–8% interest rates and tax benefits under Section 80C. The maturity amount and interest earned are fully tax-exempt.

What are the eligibility criteria for tax benefits under Section 80E?

Under Section 80E, individuals can claim a deduction on interest paid on higher education loans, taken for themselves, their spouse, children or legal guardians, from banks, financial institutions or charitable organisations. There is no limit on the deduction, and it is available for eight years starting from the year of loan repayment. It is different from the deduction available under Section 80C for tuition fees.

What is Section 10 of Income Tax, and what are its exemptions?

Section 10 of the income tax covers various allowances and exemptions, including:

Fully exempt allowances for High Court judges, UN employees and government employees working outside India.

Fully-taxable allowances such as compensatory and caffeine house allowances.

Partly taxable and exempt allowances, with some exemptions limited to actual amounts spent or specified limits set by the government.

Allowances include the ones for Sodexo coupons, hilly areas, borders, tribal areas and children’s education allowances, as well as transport and underground allowances for mines.

What is Section 80D, and how can a salaried person benefit from it?

Section 80D allows individuals to claim a deduction on health insurance premiums paid for themselves, their spouse, children, and parents. The deduction cap is INR 25,000 for non-senior citizens and INR 50,000 for senior citizens. If the individual and their parents are both senior citizens, they can claim a deduction of up to INR 1 lakh. Additionally, individuals can claim a deduction of up to INR 50,000 on medical expenses incurred for themselves or their family members if they cannot get health insurance for some reason.

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Section 80DDB Deductions: Income Tax Act, 1961

The deduction under Section 80DDB is given on the expenditure on the medical treatment of specified diseases for the dependent of a taxpayer or HUF if they are solely dependent on the taxpayer for support and maintenance.

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MAKE THE WISE DECISION BY LEARNING THE DIFFERENCE BETWEEN NEW & OLD TAX REGIME IN INDIA

Effective from April 1, 2020 in India, an individual salaried taxpayer has been given the option to continue with the old tax regime and avail deductions/tax exemptions such section 80C, 80D deductions, HRA, LTA tax exemptions etc. or to opt for the new tax regime and forgoing approximately 70 deductions and tax exemptions. The new tax regime offers lower tax rates as compared to the old tax regime.

The new tax regime is different in two ways from the old one. Firstly, it has more slabs with lower tax rates. And secondly, all the major exemptions and deductions available to taxpayers in the existing (old) tax regime are not allowed if the new tax regime is chosen.

Choosing an old or new tax regime is completely your own decision and it will depend on your income structure, available deductions, and circumstances. While deciding to choose between the old & new tax regimes, one should look at the pros and cons of both regimes in order to make a wise decision.

To avoid the cumbersome procedure of choosing which tax regime is best suited, a financial planner may offer specialized services in tax planning and asset allocation. A Certified Financial Planner also helps clients in risk management; retirement and estate planning to meet their current money needs and long-term financial goals. They use a structured process to guide clients toward careful financial decisions to maximize their potential for meeting life goals. Using their knowledge of personal finance, taxes, budgeting, and investments—combined with analytical tools and data that can illustrate potential outcomes—financial planners make recommendations, which help clients make informed decisions.

Under both income tax regimes, tax rebate of up to Rs 12,500 is available to an individual taxpayer under section 87A of the Income-tax Act, 1961. This would effectively mean that individuals having net taxable income of up to Rs 5 lakh would not pay any income tax irrespective of the tax regime chose by them.

List of the main exemptions and deductions that taxpayers will have to forgo if they opt for the new regime.

Leave travel allowance exemption which is currently available to salaried employees twice in a block of four years.

House rent allowance normally paid to salaried individuals as part of salary.

Standard deduction of ₹50,000 currently available to salaried tax payers.

Deduction available under section 80TTA/80TTB i.e. Deduction in respect of Interest on deposits in savings account) and 80TTB (Deduction in respect of Interest on deposits to senior citizens) will not be available to the taxpayers.

Deduction for entertainment allowance (for government employees) and employment/professional tax as contained in section 16.

Tax benefit u/s 24 on interest paid on housing loan taken for a self-occupied or vacant house property.

Deduction of ₹15000 allowed from family pension under clause (iia) of section 57.

The deduction claimed for medical insurance premium under section 80D will also not be claimable.

Tax benefits for disability under sections 80DD and 80DDB will not be claimable.

Tax break on interest paid on education loan will not be claimable-section 80E.

Tax break on donations to charitable institutions available under section 80G will not be available.

All deductions under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E,80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA,etc. will not be claimable by those opting for the new tax regime.

However, deduction under sub-section (2) of section 80CCD (employer contribution on account of the employee in a notified pension scheme—mostly NPS) and section 80JJAA (for new employment) can still be claimed.

Income level (INR)Old tax rate regime*New tax rate regime Up to 2,50,0000%0% 2,50,001 to 5,00,0005%5% 5,00,001 to 7,50,00020%10% 7,50,001 to 10,00,00020%15% 10,00,001 to 12,50,00030%20% 12,50,001 to 15,00,00030%25% Above 15,00,00030%30%

To ensure you’re making the right decision, thorough learning about both the tax regimes is as paramount as staying updated about new amendments proposed by the government. A financial consultant in Bangalore will help you decide what’s best for you, making sure you make the right decision.

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Deduction under Chapter VI A of Income Tax Act

Chapter VI A of Income Tax Act contains various sub-sections of section 80 that allows an assessee to claim deductions from the gross total income on account of various tax-saving investments, permitted expenditures, donations etc. Such deductions allow an assessee to considerably reduce the tax payable.

The Chapter VI A of Income Tax Act contains the following sections:

80C: Deduction in respect of life insurance premium, deferred annuity, contributions to provident fund (PF), subscription to certain equity shares or debentures, etc. The deduction limit is Rs 1.5 lakh together with section 80CCC and section 80CCD.

80CCC: Deduction in respect of contribution to certain pension funds. The deduction limit is Rs 1.5 lakh together with section 80C and section 80CCD (1).

80CCD (1): Deduction in respect of contribution to pension scheme of Central Government – in the case of an employee, 10 per cent of salary and in any other case, 20 per cent of his/her gross total income in a FY will be tax free. Overall limit is Rs 1.5 lakh together with 80C and 80CCC.

80CCD (1B): Deduction up to Rs 50,000 in respect of contribution to pension scheme of Central Government (NPS).

80CCD (2): Deduction in respect of contribution to pension scheme of Central Government by employer. Tax benefit is given on 14 per cent contribution by the employer, where such contribution is made by the Central Government and where contribution is made by any other employer, tax benefit is given on 10 per cent.

80D: Deduction in respect of Health Insurance premium. Premium paid up to Rs 25,000 is eligible for deduction for individuals, other than senior citizens. For senior citizens, the limit is Rs 50,000 and overall limit u/s 80D is Rs 1 lakh.

80DD: Deduction in respect of maintenance including medical treatment of a dependent who is a person with disability. The maximum deduction limit under this section is Rs 75,000.

80DDB: Deduction in respect of expenditure up to Rs 40,000 on medical treatment of specified disease from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed.

80E: Deduction in respect of interest on loan taken for higher education without any upper limit.

80EE: Deduction in respect of interest up to Rs 50,000 on loan taken for residential house property.

80EEA: Deduction in respect of interest up to Rs 1.5 lakh on loan taken for certain house property (on affordable housing).

80EEB: Deduction in respect of interest up to Rs 1.5 lakh on loan taken for purchase of electric vehicle.

80G: Donations to certain funds, charitable institutions, etc. Depending on the nature of the donee, the limit varies from 100 per cent of total donation, 50 per cent of total donation or 50 per cent of donation with a cap of 10 per cent of gross income.

80GG: Deductions in respect of rent paid by non-salaried individuals who don’t get HRA benefits. Deduction limit is Rs 5,000 per month or 25 per cent of total income in a year, whichever is less.

80GGA: Full deductions in respect of certain donations for scientific research or rural development.

80GGC: Full deductions in respect of donations to Political Party, provided such donations are non-cash donations.

80TTA: Deductions in respect of interest on savings bank accounts up to Rs 10,000 in case of assessees other than Resident senior citizens.

80TTB: Deductions in respect of interest on deposits up to Rs 50,000 in case of Resident senior citizens.

80U: Deduction in case of a person with disability. Depending on type and extent of disability maximum deduction allowed under this section is Rs 1.25 lakh.

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Benefits to Senior Citizens under Income Tax Act

Who is Considered as a Senior Citizen in India?

According to the law, a senior citizen is an individual resident between the age group of 60 to 80 years.

Who is Considered as a Super Senior Citizen in India?

A super senior citizen is an individual resident who is above 80 years.

Why should Senior Citizens have special Income Tax Benefits?

India’s history comes from a culturally enriched background where elderly aged are taken care of to guide the generations on both happy and odd events. Their idea is to relieve them from stress at this crucial phase of life.

Here are some of the benefits which may ease out financial responsibilities for senior citizens in our country:

1. Benefits under Medical Insurance:

Under section 80 D, the senior citizens are offered a benefit on account of payment of the health insurance premium up to Rs.50,000/-. Earlier, this limit of deduction for health premium payment was Rs.30,000/- for senior citizens.

For super citizens, under section 80 D, the deduction for the payment of medical premium as well as the actual expenses expensed on their treatment are permitted.

2. . No Advance Tax:

While ordinary individuals have to pay an advance tax if their tax liability is Rs.10,000/- or more in a financial year, senior citizens are free from this burden unless they make income from business or profession. Those not owning a business only have to pay the Self-Assessment Tax.

Advance Tax is an amount paid in advance to the Indian Government which all citizens are bound to pay. The government restricted the involvement of senior citizens in this tax.

3. Allowance on the treatment of specified diseases:

The Government of India gives an allowance to its senior citizens to not pay tax if the cost of treatment is close to Rs.40,000/- Under section 80DDB of the Income Tax, senior citizens get a deduction limit of Rs.1 lakh if they undertake any treatment for specified disease or critical illness in a financial year.

4. Standard Deductions from Pension Income:

The government of India has allowed  a standard deduction of ₹50,000 on account of their pension income to the senior citizens.

6. Privilege on Interest Income:

The senior citizens who are residents of India will have to pay no tax on their interest earned up to Rs.50,000/- in a financial year. When filing their Income Tax Return, the senior citizens will have to fill the form 15H. The amount of interest earned over Rs.50,000/- would attract the tax as per the slab rate of senior citizens. Applicable under section 80 TTA of Income Tax, this will take into account interest earned in the savings bank account, deposits in a bank, and/or deposits in post-office.

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Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB

Income Tax Exemptions for Salaried Employees 2023-24 Here is the income tax exemption list for 2023-24:

House Rent Allowance

Leave Travel Allowance (LTA)

Food coupons

Salary component

Reimbursements

Proof

House rent allowance (HRA)

Rent amount for residential housing

Rent receipts, PAN of the employer (mandatory for rent > ₹1 Lakh annually)

Leave travel allowance (LTA)

Traveling costs within India, such as air and rail fare

Air and train tickets, bus or cab receipts/bills

Telephone reimbursement

Landline, inclusive of broadband, mobile phone

Telephone bills

Books and periodicals

Cost of books and periodicals

Bills or invoices for the books and periodicals

Benefits of Tax Deductions While tax deductions may seem complex and overwhelming, understanding their benefits can lead to more strategic financial planning and responsible decision-making.

Reduced Tax Liability One of the most apparent benefits of tax deductions is that they help reduce an individual’s or business’s overall tax liability. By deducting eligible expenses and investments from their taxable income, taxpayers can lower the portion of their income that is subject to taxation. This results in more money staying in the hands of individuals and businesses, enabling them to reinvest in their ventures, purchase goods and services, or save for the future.

Encouragement Of Charitable Contributions Tax deductions play a significant role in encouraging charitable giving. Many governments offer tax deductions to individuals who donate to registered charities or non-profit organizations. By providing this incentive, governments hope to promote philanthropy and support the vital work carried out by charitable entities. Not only does this benefit society as a whole, but it also allows individuals to contribute to causes they are passionate about while simultaneously reducing their tax burden.

Stimulating Investment And Economic Growth Tax deductions targeted at businesses can serve as powerful tools for stimulating investment and economic growth. Governments often grant deductions for capital expenditures, research and development, and other business-related expenses. By doing so, they encourage businesses to reinvest their earnings back into the economy, which can lead to job creation, innovation, and increased productivity.

Promoting Homeownership And Real Estate Investments Many countries offer tax deductions related to homeownership and real estate investments. Deductions for mortgage interest, property taxes, and certain home improvements aim to make homeownership more accessible and affordable. These incentives can motivate individuals to invest in real estate, fostering a stable housing market and supporting the construction industry. Moreover, homeownership often builds equity for individuals, helping them build wealth over time.

Facilitating Education And Skill Development Tax deductions can also be advantageous in the field of education and skill development. Various governments provide tax breaks for expenses related to higher education, including tuition fees and interest on student loans. Additionally, certain professional development expenses may be deductible for individuals seeking to enhance their skills and expertise. Tax deductions contribute to a more skilled and competitive workforce in the country by encouraging investment in education and continuous learning.

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Term plan tax benefit

Both your protection and term plan tax benefits are provided by life insurance. This article investigates the consequences of tax savings.

Let's first examine how your taxable income is determined in relation to the tax-saving investments you make in order to comprehend how you might save tax on life insurance. Let's say Rs 5,00,000 is the taxable share of your income. According to your income category, this means that your tax obligation for the year would be calculated at Rs 5,00,000. So, for example, if a particular investment option is reported to provide a tax benefit of up to Rs 50,000 annually, this Rs 50,000 is subtracted from your taxable income, which is Rs 5,00,000. Your tax obligation would therefore be based on Rs. 4,50,000.

Your taxable income decreases as you invest in additional tax-saving strategies. To significantly lower your taxable income component, it is advised that you research a number of tax-saving strategies spanning various sections of the Income Tax Act, of 1961. These choices include health insurance, mutual funds, PPF (Public Provident Fund), NPF (National Provident Fund), home loans, and life insurance policies that save on taxes. Section 80C of the Income Tax Act of 1961 has provisions that provide life insurance tax benefits. A maximum of Rs. 1,50,000 can be deducted from the premiums for life insurance coverage each year. Plans for life insurance that save taxes include those taken out for you, your spouse, or your dependent children.

However, you must be able to demonstrate that you are using your money to pay the premiums for these options. Do keep in mind that you cannot claim life insurance tax benefits on the same plans in a given year with your employed spouse. If the insurance was obtained after April 1, 2012, and the premium paid does not exceed 10% of the total assured under the policy, you may be eligible for a deduction under Section 80C. The premium cannot exceed 20% of the sum guaranteed if the insurance was purchased before April 1, 2012.

If the premium paid does not exceed 15% of the sum assured and you have obtained a life insurance policy for a disabled family member or yourself, you may be entitled to claim a deduction under Section 80C to reduce your tax on the premium. However, the handicap must be registered under Section 80U of the Income Tax (IT) Act, and the terminal illness must be listed under Section 80DDB. If the premium does not exceed 10% of the sum assured, the maturity amount paid under the policy is not subject to Section 10D taxation, which is another benefit of life insurance. If the premium is more than 10% of the amount assured, the exemption is not applicable.

On plans, however, whose maturity amount exceed

ds Rs 1,00,000, TDS is deducted; nevertheless, this TDS can be reclaimed by filing an ITR for the following year.

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Top 10 ways to save tax in FY 2020-21

 Individuals are continually searching for approaches to settle less assessments and they search for all conceivable ways – like reaching out to the best tax experts, recruiting the best CA firm, or getting the data accessible on the web.

All things considered, nobody wants to pass up the chances to get a good deal on taxes. A few group have various inclinations with regards to saving expense. They here and there stick to the strategies they know about, and accordingly, they pass up more productive assessment saving freedoms.

In this article we have covered the main 10 different ways to save taxes yet before we should get what is Income Tax?

Income Tax is a bit of your pay that you pay to the Government. This duty is gathered on a yearly premise. This cash is utilized by the Government to complete regulatory exercises.

Directions to save tax in India:

By guaranteeing expenses

To get a good deal on personal taxes, you should guarantee the expenses you have brought about.

Investing in tax absolved     securities

The Government urges customers to get a good deal on taxes by putting resources into tax saving plans and that are recorded under different areas of The Income Tax Act, 1961, for example, segment 80C, segment 80CCD, 80G and so forth These plans support the personal citizens to likewise foster the propensity for saving alongside the way that it gives advantage in saving assessments. This way, you can guarantee that you have some kind of venture while likewise trying not to spend a lot of cash on taxes.

Top 10 ways to save tax in FY 2020-21 legally in India:

There are a few different ways to get a good deal on taxes as recorded underneath. They are partitioned into three classifications and separated for salaried workers and entrepreneurs. Peruse the accompanying thoughts in the event that you need to realize how to save Income Tax and other taxes in India other than 80C. Note that dependent on yearly updates, there might be minor deviations in these focuses.

1.    Income from farming:

Any pay got from rural land, as characterized in segment 10(1),is tax exempt. Lease from land,revenue from land, the sum acquired through horticulture items, and the sum produced through a homestead building are generally instances of such pay. Acquiring pay through these modes would we 100% tax-exempt pay.

2. HUF and additional pay:

On the off chance that you have an auxiliary pay notwithstanding your essential compensation, you can set aside cash by decreasing the measure of duty you pay on that pay. Cash acquired through outsourcing, for instance, will be viewed as an auxiliary kind of revenue. For the optional pay, you can open a different HUF record and course your pay from the HUF as HUF is a different individual according to The Income tax laws and an extra advantage could be profited of the fundamental exception and you can save your duties on a pay of upto Rs. 5 Lakhs.

3. Provisions under segment 80C:

The Government of India offers an office to contribute Rs. 1,50,000 under area 80C of the income tax act to energize reserve funds. Accordingly, putting resources into tax saving decisions under area 80C permits you to get a good deal on Income Taxes while likewise making ventures for what’s to come. Here’s an overview of the absolute most mainstream tax saving contributing alternatives under segment 80C.

Public opportune asset

National benefits conspire

Premium paid for disaster     protection strategy

National investment funds     testament

Equity connected investment     funds plot

Home credit’s chief sum

Fixed store for a span of     five years

Sukanya Samariddhi account

Children’s educational     expenses

4. Amount got according to deliberate retirement plot:

Numerous individuals decide for intentional retirement and get a fixed total. The cash got through the willful retirement conspire is tax exempt up to a roof of Rs. 5 lakhs.

5. When HRA isn’t a piece of compensation:

The tax reduction can be gotten in the accompanying manners if HRA is excluded from the compensation:

Deducting rent from 10% of     Total Income

A month to month level tax     of Rs 5000

One-fourth of absolute pay

These derivations are a piece of segment 80GG

6. When HRA is a piece of compensation:

To utilize this assistance, you should live in a rental premises and have the essential receipts to demonstrate the validity. It’s covered by area 10(13A) of The Income Tax Act,1961.

7. Distribution of benefit in organization firm

At the point when an organization firm causes a benefit and the entrepreneurs to select to part the benefit among themselves, no assessment is deducted from the accomplices and the portion of benefit is excluded in the possession of the Partners

8. Money spent on gift to ideological group

Expense allowances for cash spent on giving to ideological groups have no greatest breaking point. Area 80GGC takes into consideration such allowances, with a gift sum rising to a 100% derivation.

9. Expenses for treating explicit sicknesses

Segment 80DDB considers this derivation. Costs caused to treat determined conditions like dementia, disease, and HIV/AIDS are qualified for tax breaks. Duty derivations of up to Rs. 40000 are accessible for such illnesses. The whole duplicates to Rs. 1 Lakh if the costs are for a ward more seasoned resident.

10. Sum from fortunate assets

The premium procured on the opportune assets is tax exempt. You should stand by 5 years prior to pulling out cash from your opportune asset.

These are a portion of the little tips to save money on taxes yet I am certain if you could get a kick out of the chance to save considerably more book free a call with our duty master at Chhota CFO, Bangalore – where they will direct you every single approaches to get a good deal on taxes.

Contextual analysis – 1

Mr. Sinha has saved Rs. 63,56,890/ – on his yearly expense documenting with the assistance of Chhota CFO.

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Benefits to Senior Citizens under Income Tax Act

Who is Considered as a Senior Citizen in India?

According to the law, a senior citizen is an individual resident between the age group of 60 to 80 years.

Who is Considered as a Super Senior Citizen in India?

A super senior citizen is an individual resident who is above 80 years.

Why should Senior Citizens have special Income Tax Benefits?

India’s history comes from a culturally enriched background where elderly aged are taken care of to guide the generations on both happy and odd events. Their idea is to relieve them from stress at this crucial phase of life.

Here are some of the benefits which may ease out financial responsibilities for senior citizens in our country:

1. Benefits under Medical Insurance:

Under section 80 D, the senior citizens are offered a benefit on account of payment of the health insurance premium up to Rs.50,000/-. Earlier, this limit of deduction for health premium payment was Rs.30,000/- for senior citizens.

For super citizens, under section 80 D, the deduction for the payment of medical premium as well as the actual expenses expensed on their treatment are permitted.

2. No Advance Tax:

While ordinary individuals have to pay an advance tax if their tax liability is Rs.10,000/- or more in a financial year, senior citizens are free from this burden unless they make income from business or profession. Those not owning a business only have to pay the Self-Assessment Tax.

Advance Tax is an amount paid in advance to the Indian Government which all citizens are bound to pay. The government restricted the involvement of senior citizens in this tax.

3. Allowance on the treatment of specified diseases:

The Government of India gives an allowance to its senior citizens to not pay tax if the cost of treatment is close to Rs.40,000/- Under section 80DDB of the Income Tax, senior citizens get a deduction limit of Rs.1 lakh if they undertake any treatment for specified disease or critical illness in a financial year.

4. Standard Deductions from Pension Income:

The government of India has allowed  a standard deduction of ₹50,000 on account of their pension income to the senior citizens.

6. Privilege on Interest Income:

The senior citizens who are residents of India will have to pay no tax on their interest earned up to Rs.50,000/- in a financial year. When filing their Income Tax Return, the senior citizens will have to fill the form 15H. The amount of interest earned over Rs.50,000/- would attract the tax as per the slab rate of senior citizens. Applicable under section 80 TTA of Income Tax, this will take into account interest earned in the savings bank account, deposits in a bank, and/or deposits in post-office.

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r/IndiaInvestments - Section 80DDB queries

r/IndiaInvestments – Section 80DDB queries

Hi, Many people face this situation where they have to be treated for some disease and they have no health insurance or it wasn’t renewed. I came to find out that there is this section 80ddb which can help one in situations like these. The section https://cleartax.in/s/get-certificate-claiming-deduction-section-80ddb Few queries- As per the above link form 10l is not required, this is it btw…

[thegulfindians]

Medical expenses can be tax deductible

Medical expenses can be tax deductible

K. ARAVIND Tax exemptions are available for various health related expenses as per Section 80D, Section 80DD, Section 80U and Section 80DDB of the Income Tax Act. Premiums up to Rs 25,000 paid into a health insurance policy are tax deductible under Section 80D of the Income Tax Act. Premium of Rs.25,000 on health insurance policy in the name of parents below 60 years of age is also tax…