For the individuals or company in India, if the gross income is under taxable income, has to pay tax. However with the provisions available in the income tax sections exemptions are given on certain incomes. There are many tax saving options , on which an individual/company can avail tax exemption on total income.
Tax saving planning is one of the main objects for an individual who come under taxable income. Plan early to avoid confusions and analyze the various sections of tax deductions under the Income Tax Act .
We already discussed about the tax deductions under Section 80C (Click here to know about Section 80C deductions). Planning of tax doesn’t end with Section 80C. Apart from 80C several tax emption sections are available in Income tax act. So, its prudent to analyze other tax deductions provided by the Income Tax Act, 1961 and start looking beyond 80C. Here, we take an attempt to understand them briefly to benefit you.
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The premium which is paid towards Mediclaim/Health insurance for self, Spouse, children and parents is considered tax deduction under U/s 80D. The sudden medical expenses incurred for self and family members comes under this section. The maximum amount for claiming deduction is Rs.25,000. The individuals above 60years of age can avail tax deduction Rs 30,000.
If you having dependent who is differently abled, the there is provision to get deduction for expenses on his maintenance and medical treatment. Paying premium for the medical treatment of a dependent physically disabled person, you can avail exemption under the section 80DD. You can get these claim up to Rs 50,000 or actual expenditure incurred, whichever is lesser. For severe conditions this limit exempted up to 1lakh. The exemption applies those, the dependents(parents, spouse, children or sibling) should not have claimed any deduction for self. The diseases like Blindness and Vision problems, leprosy cured, Hearing impairment, Locomotors disability , mental retardness or illness with 40% or more considerable under this section.
The expenditure incurred for the medical treatment of self or your dependents can claim a deduction of up to Rs. 80,000 or the actual amount paid, whichever is less, under the section 80DDB. Dependent can be parents, spouse, children or siblings with completely dependent on you. For a senior citizen this exemption is Rs. 80,000, or the amount actually paid for medical expenses. The individuals who want to claim a deduction under this section need to submit a medical certificate from a doctor working in a government hospital. Diseases like Neurological, Parkinson, Malignant Cancers, AODS, Chronic Renal Failure, Hemophia, Thalassemia covered under this section. The expenses claimed by the insurance companies not considered under this section and cannot be exempted.
The education loan interest for pursuing higher education for self and dependent is completely tax exemptible. The exemption is only for interest on education loan and no deduction on principal paid. The loan education loan for self , spouse or children only. For pursuing full time courses only this loan interest deductible is applicable. This deduction is applicable for a period of eight years or till the interest is paid, whichever is earlier.
The donations given to charitable organizations can get tax deduction u/s 80G. The donations made under philanthropic ground are exempted for 100% of the amount donated while for others its 50% of the donated amount. Receipts issued by the charitable institution with singed , stamped and registration number issued by Income Tax Deparment printed on it , is must and considered for tax deduction. The name on the receipt should match with that on PAN number. The donations made to approved organizations and institutions qualify for deduction. Only donations made in cash or cheque are eligible for deduction.
For salaried individuals as a salary component or self-employed person staying in a rented house does not receive any kind of HRA, they can claim a deduction under 80GG. If you or your spouse or your children having own home can’t get tax deduction under this section. You can claim tax deduction Rs 2000 or 25% of annual income or rent paid 10% of annual income whichever is less.
The individual resident of India, who is suffering from specified disability can get tax deduction u/s 80U In order to avail this deduction one should from disabilities like Blindness and Vision problems, Leprosy cured, Hearing impairment, Locomotor disability, Mental retardation, Autism, Cerebral Palsy . For normal disabilities with 40% or more disabilities the tax deduction is Rs 75,000. For more than 80% disability can avail tax deduction Rs 1,25,000/- .
According to the 80TTA, which is newly introduced in Budget 2012, allows deduction of Rs 10,000 on interest earned on saving bank account.
In the Budget 2013 has introduced a new section 80EE, which gives additional exemption up to Rs 1 lakh on payment of interest on Home loan. The loan which is taken from banks or housing finance companies in the financial year 2012-13 is applicable to this and also the house, which Is not cost more than Rs.40 lakh. The borrower should not own any other property at the time of loan sanction. The additional deduction on interest payment of home loans can be claimed in financial year 2013-14. In case, if you are not able to exhaust the limit in financial year 2013-14, the balance can be claimed in FY 2014-15.