"Ever wondered if your hard-earned salary holds more value than meets the eye? What if I told you that within your income lies a treasure waiting to be discovered—one that could significantly boost your earnings?
Paying taxes might feel like an obligation, but it’s a contribution towards the welfare of society. It is crucial for the functioning of a society as it helps in the development of infrastructure and public services, education and research, economic stability, defence and security, equal distribution of resources and social welfare.
Firstly, Let’s learn about Tax Deductions.
It is mandatory to pay your taxes every year. However, the government of India has provided certain provisions to reduce the burden on the common people.
They are offered under various sections of the Income Tax Act, allowing taxpayers to claim benefits on eligible expenditures and investments. Here are some key deductions available in India:
1. Section 80C Deductions:
One of the most useful sections that allows deductions up to a maximum of ₹1.5 lakh per financial year. It covers investment in
a. Provident Fund (PF)
b. Public Provident Fund (PPF)
c. Equity Linked Savings Scheme (ELSS)
d. National Savings Certificate (NSC)
e. Payment of Life Insurance Premiums, etc.
2. House Rent Allowance (HRA)
Salaried individuals who accommodate house rent can claim deductions on the HRA received, subject to certain conditions.
3. Savings Account Interest (Section 80TTA)
Interest earned from a savings account is eligible for deduction up to ₹10,000 per year.
4. Education Loan Interest(Section 80E)
One is eligible for a deduction on the interest paid on educational loans for higher studies in India and abroad.
5. Housing Loan Interest (Section 24)
One is eligible for a deduction on the interest paid on home loans. The maximum limit for individual properties is ₹2 lakh per year.
6. Medical Insurance Premium (Section 80D)
One is eligible for a deduction on the premiums paid for health insurance policies for an individual, family members or parents. The deduction limit varies based on the age of the insured and the coverage.
Health insurance premiums paid in any mode other than cash:
1)Up to ₹25,000 paid for self, spouse, dependent children or parents.
2)Up to ₹50,000 if family or your parents are senior citizens (60 years and above
In conclusion, these are some deductions that help taxpayers reduce their taxable income, thereby lowering their overall tax liability. However, each section has its specific criteria and limits, and individuals need to comply with the requirements outlined by the Income Tax Act to claim these deductions.
We will discuss each of the sections in detail in later blogs. Till then Stay Tuned..!!!
[Disclaimer: The information provided in this blog is for informational purposes only and should not be construed as legal or financial advice. Readers are advised to consult with qualified professionals regarding their specific tax and investment situations.]
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