Income Tax Deductions

As per the Income Tax Act, there are some deductions that can help you to save tax. You can invest money as per these deductions and achieve the dual objective of making investments as well as save tax. Here’s a list of some of the different deductions.

Deductions

Section 80C – You have the option of investing Rs. 1.5 lakhs under the options mentioned in this section. Some of the popular options that people opt for in this section are Unit Linked Insurance Plan (ULIP), Tax-saving Fixed Deposits, and Public Provident Fund, Etc.

Here’s a list of popular investment options to save tax under section 80C.

1. Public Provident Fund.
2. National Pension Scheme.
3. Premium Paid for Life Insurance policy.
4. National Savings Certificate.
5. Equity Linked Savings Scheme.
6. Home loan’s principal amount.
7. Fixed deposit for a duration of five years.
8. Sukanya Samariddhi account.

Section 80D – This section is all about encouraging people to purchase health insurance policies. You can benefit from this section by paying health insurance premium for you, your spouse, and your parents as well. Not just health plans, money spent for preventive health check-ups can also be eligible for tax deductions.

Section 80DD – If a person’s family member is diagnosed with a disability (note that the disability should be more than 40%) then the person can be eligible for deduction.

Section 80DDB – Deductions are on the basis of expenses made for treating specified diseases faced by the dependent.

Section 80E – Deduction on the basis of repayment of education loan.

Section 80EE – Maximum deductions of Rs. 50000 related to interest on loan payable for buying residential house property.

Section 80G – This section is dedicated towards money spent on making donations to registered organizations.

Section 80CCD(1B) – This type of investment is for pension fund. It has a maximum limit of Rs. 50000 for investing money in the National Pension Scheme.

Section 80CCD(2) – Contribution towards National Pension Scheme by employer. The investment limit for this is 10% of basic salary and dearness allowance.

Section 80GG – Rent paid in case of HRA not received.

Section 80TTA – Interest generated on money in savings accounts in banks and post offices.

Section 80TTB – Interest generated on different kinds of deposits in banks and post offices.

TAX RATES

For Individual and HUF

DEDUCTION AND EXEMPTION IN OLD REGIME

Deductions	Option -I	Option -II	Option –III
Standard Deduction	50,000	50,000	50,000
PT	2,500	2,500	2,500
80C	1,50,000	1,50,000	–
80D	25,000	25,000	25,000
House loan Int	2,00,000	–	–
	4,27,500	2,27,500	74,500

COMPARE TAX UNDER EXISTING AND NEW REGIME

QUICK REFERENCER

• First you calculate your gross total income
• On the basis of gross total income plan your saving, investment for retirement and off course for tax saving.
• Invest your fund in long term as well as in short term
• Save your fund in Gov. securities, FDR, PPF, RD also
• Take mediclaim, Life Insurance for family
• Your senior citizen parents can also help to save tax eg. Take mediclaim, invest in the name of parents.
• In new option various deduction ,exemption are not available.
• Choose new option only if its beneficial to you
• Continue your saving, investment , if you choose new option
• Investment in RD is not getting benefit of Sec 80C