A gentle reminder from the EAdvisors team, please file your Income Tax Return (ITR) at the earliest to avail deductions and exemptions timely. Delaying the filing of ITR may lead to penalty. So, stay penalty-free and contact us to get your ITR filed.

THE LAST DATE TO FILE ITR IS 31^st July.

Deductions you can claim while filing ITR

The Income Tax Deductions have been introduced in order to bring down the tax liability in a financial year. The deductions have come to promote the habit of savings in people that can be beneficial in the future.

The deductions allowed under Income Tax are covered under Section 80 of the Income Tax. And for claiming the deductions, individuals are eligible to claim and it is necessary to meet certain criteria.

The deduction that can be claimed by the individuals are as follows:-

1. Section 80C – maximum of upto Rs. 1.5 Lakh (aggregate of 80C, 80CCC and 80CCD) (to be claimed by individuals and HUFs)
2. Section 80CCC – maximum of upto Rs. 1.5 Lakh (aggregate of 80C, 80CCC and 80CCD) (to be claimed by individuals)
3. Section 80CCD –

• Employee Contribution under Section 80CCD(1)Maximum of upto 10% of salary (for employees) or 20% of gross total income (for self-employed individuals). The limit is capped at ₹1.5 lakh (aggregate of 80C, 80CCC, and 80CCD)
• Self Contribution under Section 80CCD(1B): Individuals can claim an additional deduction of ₹50,000 (available to both salaried and self-employed individuals) for contributions towards NPS. With this, the maximum deduction available under Section 80C increases to ₹2 lakh.
• Employer’s Contribution under Section 80CCD (2): Additional deduction up to 10% of an employee’s salary for employer’s contributions towards NPS.

4. Section 80CCG – Deductions under this section were specific to the Rajiv Gandhi Equity Savings Scheme (RGESS). The deduction allowed under RGESS is 50% of the total amount invested and is capped at ₹50,000.

Note: Deduction under Section 8CCG has been discontinued starting from April 1, 2017. (It was eligible for individuals with income less than Rs. 12 Lakh

5. Section 80D – Deduction for health insurance premium and medical expenses for senior citizens is allowed under this section. Individuals below 60 years can claim up to ₹25,000; whereas senior citizens can claim up to ₹50,000. (To be claimed by individuals and HUFs)
6. Section 80DD – ₹75,000 for those with 40%-80% disability; ₹1.25 lakh for severe disability (80% or more) (To be claimed by individuals and HUFs with a handicapped dependant.
7. Section 80DDB – Deduction can be claimed for medical treatment of a dependent who is suffering from a specific illness (explained in the article below). The amount allowed as deduction is as follows:

• A maximum of ₹40,000 or amount paid, whichever is less (for individuals under 60 years)
• A maximum of ₹1 lakh or the amount paid, whichever is less (for senior citizens and super senior citizens)

8. Section 80E – Deduction is provided only on the interest part of the education loan. It is available only for eight years, starting from the year your loan repayment begins or until the interest is fully repaid, whichever is earlier. (individuals are eligible to claim)
9. Section 80EE – Deduction is provided on the interest part of the residential house property loan availed from a financial institution. A maximum of ₹50,000 can be claimed under this section. (individuals are eligible to claim)
10. Section 80EEA – This section allows a deduction up to ₹1.5 lakh for interest paid by first-time homebuyers for a loan sanctioned from a financial institution. (individuals are eligible to claim)
11. Section 80G – Deduction is provided on donations made towards charity. Donations of up to 100% or 50% can be claimed as a tax deduction under this section. (Can be Claimed by individuals, HUF, Companies, Firms)
12. Section 80GGB – Indian companies or enterprises can claim tax deductions under this section for contributions made to a political party or an electoral trust registered in India. They can claim up to 100% tax deduction against the amount donated. (To be Claimed by Individual Companies)
13. Section 80GGC – Individuals can claim deductions under this section for contributions made to political parties. The tax deduction claimed can range from 50-100% of the amount contributed. (Individuals are eligible to claim)
14. Section 80GG – Person paying rent for residency can claim deduction of:-5,000 per month or 25% of total income or rent – 10% of adjusted gross total income, whichever is less. ( To be claimed by individuals not receiving HRA i.e House Rent Allowance)
15. Section 80RRB – Income of up to ₹3 lakh received from royalties is eligible for tax deduction under this section. (To be Claimed by Resident Indians)
16. Section 80TTA – Income of up to ₹10,000 earned from interest on savings accounts can be claimed as a tax deduction under this section. (To be Claimed by Individuals and HUF)
17. Section 80TTB – This section allows senior citizens (aged 60 years and above) to claim up to ₹50,000 as a tax deduction from their gross total income. (To be Claimed by Senior Citizens that are above 60 years of age)
18. Section 80U – Deduction of up to ₹75,000 can be claimed for people suffering from a disability and up to ₹1.25 lakh for people with severe disability. ( To be Claimed by Individuals with disabilities )

Exemptions you can claim while filing ITR

The Income Tax Exemptions are the monetary inclusion that helps in reducing taxable income. These have been into existence in order to encourage certain economic activities. The Income tax exemptions are as follows:-

1. Section 10(1) – Agricultural Income
2. Section 10(2) – Share from Income of Hindu Undivided Family
3. Section 10(2A) – Share of profit from firm whose taxes are filed separately
4. Section 10(3) – Income received in a casual form not exceeding Rs.5,000 and in case of horse race winnings, it should not exceed Rs.2,500
5. Section 10(10D) – Receipt from life insurance policy
6. Section 10(16) – Scholarship to meet cost of education
7. Section 10(17) – Allowances of MP and MLA. MLA’s allowance should not exceed Rs.600 per month
8. Section 10(17A) – Awards and rewards by central and state government, from approved awards by others and the approved rewards from central and state government
9. Section 10(26) – Income of members of scheduled tribes of North Eastern States or Ladakh region. The income should be arising from those regions itself
10. Section 10(26A) – Income of Ladakh resident. His income can arise in Ladakh or outside India
11. Section 10(30) – Subsidy from Tea Board under approved scheme
12. Section 10(31) – Subsidy from any concerned board under approved scheme of replantation
13. Section 10(32) – Income of minor clubbed with individual to a maximum of Rs.1,500
14. Section 10(33) – Dividend earned from Indian companies, income from Unit Trust of India, Mutual funds and income from venture capital
15. Section 10 (A) – Profits earned in free trade zones, electronic hardware technology park or on software technology park for up to 10 years
16. Section 10(B) – Profits form complete export oriented undertakings, manufacturing articles or computer software for 10 years
17. Section 10(C) -Profits from newly established undertakings in IIDC or IGC in the North-Eastern region for up to 10 years
18. Section 10(15)(i)(iib)(iic) – Interests, premiums, redemptions or any other payments that you get from securities, bonds, capital investment bonds, relief bonds, etc. that are notified. The exemption limit is to the extent that is notified
19. Section 10(15)(iv)(h) – Interest paid by public sector company on its bonds and debentures
20. Section 10(15)(iv)(i) – Interest that the government pays on the deposits made by employees of central and state government or public sector employees for their retirement under the notified scheme
21. Section 10(15)(vi) – Interest received on notified gold deposit bonds
22. Section 10(15)(vii) – Interest received on notified local authorities’ bonds
23. Section 10(5) – Leave travel assistance or concession received. The amount should not exceed the amount payable by the central government to its employees
24. Section 10(5B) – Remuneration received by technicians who have specialised knowledge in specific fields. Their service must commence after 31.3.93 and their tax should be paid by the employer. The exemption limit is in respect of tax paid by employer for a period of up to 48 months
25. Section 10(7) – Allowances and perquisites that the government provides to citizens of India who provide their services abroad
26. Section 10(8) – Remuneration received from foreign governments for duties in India provided it is under cooperative technical assistance programmes. You also get exemption for income arising outside India provided that the tax on that income is paid by the government
27. Section 10(10) – Death-cum retirement gratuity from government, payment made under Gratuity Act, 1972 the amount must be as per section(2), (3) and (4) of that Act and up to one and half month’s salary for each completed year of service
28. Section 10(10A) – Commutation of pension from funds set by LIC under section 10(23AAB) and government, statutory corporation, etc. Commutation of pension from employers; when gratuity is payable, 1/3rd value of the pension and when gratuity is not payable, half of the pension
29. Section 10(10AA) – Encashment of the earned leave that was unutilised from central or state government and from other employers up to an amount equal to 10 months’ salary or Rs.1,35,360, whichever is less
30. Section 10(10B) – Retrenchment compensation, where the amount is either the amount under section 25F(b) of Industrial Dispute Act, 1947 or the amount that the government notifies, whichever is less
31. Section 10(10C) – Amount received on voluntary retirement or on termination. The maximum limit is Rs.5 lakh
32. Section 10(11) – Payment received under Provident Fund act, 1925 and other central government notified bonds
33. Section 10(12) – Payments received from recognised provident funds to the extent provided in rule 8 of Part A of 4th schedule
34. Section 10(13) – Payments received from approved superannuation fund
35. Section 10(13A) – House rent allowance, the exemption is either the least of actual allowance, actual rent in excess of 10% of the salary or 50% of salary in Mumbai, Chennai, Delhi and Calcutta and 40% in other places
36. Section 10(14) – Prescribes special allowance or benefits granted to meet expenses that incur in performing your duties, the exemption is granted to the extent of expenses that actually incur.
37. Section 10(18) – Pension that includes family pension of recipients of notified gallantry awards

The Income Tax Exemptions are covered under Section 10, 11,12,13 and 24 of the Income Tax Act. All taxpayers may it be company or an individual, are qualified as per the Income-tax criteria to claim the exemptions specified above.

That was all about deductions and exemptions granted under Income Tax Act. For any query or consultation, feel free to reach us. We, at EAdvisors are always there for you to help you.