INCOME TAX DEDUCTION
Here Income tax deduction explains to you about the liability of lowering the taxable amount. The tax deduction can be applied against or subtracted from the gross income to deduct the tax.
According to the Income Tax Act, 1961, there is 3 common income tax deduction available to the individuals and they can be claimed simultaneously.
Deduction for tax-saver fixed deposits: (FD), PPF, NSC, NPS, Tuition fee or ELSS funds, or Insurance Premium.
DEDUCTION OF INCOME TAX UNDER SECTION 80C
The deduction of tax is further divided into the following types.
- Public Provident Fund (PPF): with the tenure of 15 years, it is known to be the back savings scheme.
- National Savings Certificate: With the tenure of 5 years, it is known to be the government-backed saving scheme.
- Senior Citizen Saving Scheme: For elderly persons or senior citizen, it includes the scheme of 5 years with a high rate
- 5 YEARS TAX-SAVER FD
- Sukanya Samriddhi Yojana: With the tenure of 21 years the government established the saving scheme to the parents of the girl child for their betterment.
- Life Insurance Premiums: All the tax-deductible and it also include the types of life insurance including endowment plans, term plans, ULIPs
- The allowance of tuition fees is given to the children of aging max 2 years.
UNDER THE SECTION 80D
Under Section 80D, the tax deduction is available to both individuals and the Hindu Undivided Families (HUFs). The one is allowed to make insurance for their families as well as for an individual. For the senior citizens who are paying the premium can avail both deductions. In premium payments, the 80D deduction is not given in cash.
This section includes all the medical expenditures and it applies to the medical treatments especially on certain diseases like cancer, AIDs, and renal failure. The max limit increase is up to Rs.100,000 and the senior citizens above the age of 60 can avail the amount of Rs. 40,000 if they are the taxpayers and the total limit permissible of Rs. 40,000.
Under this section, the amount is deducted for the one who applies for the loan for the higher education of self or dependent. The deduction is available only to the people who pay the interest up to 5 years and there is no upper limit on the interest amount.
It is available to the resident individual, whose interest is deducted and for the one is planning to take a loan to buy a new residential property. This deduction applies only to the loan sanction in FY 2016-17 and therefore it is no more applicable.
Under this section, the deduction is available on the amount donated to various organizations. There are certain sub-limits which are mentions below:
100% deduction up to 10% of total income: it gives you a description of the charities, institutions for family planning promotions, a donation to local authorities, associations, for sports development, etc.
100% exemption without limit: it includes all the government funds such as Prime Minister’s Relief Fund, National illness assistance fund, National Defence Fund, and many more funds are included in it.
50% deductions up to 10% of total income: it includes the amount which is charitable, the amount or the donations to the religious services, institutions involved in charitable works, organizations that help in the promotion family planning promotions, etc. Under section 80G, the one needs to get registered under the organizations, NGOs, institutions involved in charitable work.
50% exemptions without any limits: this section is completely dedicated to relief funds like Drought Relief Fund, Flood Relief Fund, Rajiv Gandhi Foundation, and many more funds are still included in it.
Under this section, the deduction is available to the residential individuals who do not get any kind of House Rent Allowance (HRA) and the person whose amount paid as rent by them is eligible to avail this of deduction. Under this section Rs. 60,000 is the maximum limit.
Under this section the maximum of Rs. 10,000 is deducted from an individual who is eligible. Interest and savings accounts get collected in banks and earned by individual taxpayers as well as Hindu Undivided Families.
The fixed deposit and the interest on savings accounts are earned by the senior citizens are exempted up to Rs. 50,000 per annum.
Under this section, the one who is Indian taxpayers are who are disabled by any conditions such as unsound mind, autism, etc. is eligible to claim for the amount of maximum of Rs. 75,000 per year. The individual who is completely disabled or with a severe disability is eligible to get an amount of Rs. 1.25 lakh under certain conditions.