Save Income Tax- Know about deductions to claim in Income Tax Return (ITR)

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Following are the deductions which help in saving income tax of taxpayers

  1. Sec 80EEA:

This section saves income tax by providing deduction of interest on housing loans. The Limit of deduction is upto Rs.1,50,000/-. This deduction is available only when loan is availed between 1st April 2019 to 31st March 2019. This deduction is separately available along with the deduction of Sec 24 of upto Rs.2,00,000/-

  • Sec 80EEB:

Income tax can also be saved by using deduction of interest on loan taken for purchase of Electric Vehicles. The maximum amout of deduction is upto Rs.150,000/-

  • Sec 87A:

This is a rebate from Income Tax payable. The amount of Rebate is increased from Rs.2,500 to Rs.12,500/-. The taxable income of the individual must not exceed Rs. 5,00,000/-.

  • Standard Deduction :

This is a default deduction. Standard deduction for salaried class is increased from Rs.40,000/- to Rs.50,000/-

  • Sec 80C:

LIC premium, tution fees, PPF, FD, etc are covered under this Section. The limit of deduction is upto Rs.1,50,000/-

Principal repayment of housing loans  is also covered under this deduction.

  • Sec 80CCD:

This deduction is divided into 3 parts:

80CCD(1): You can avail this deduction irrespective of whether you’re in employment or self-employed on the amount deposited under pension scheme notified by the Central Government (NPS deduction for AY 2018-19). The deduction allowed in this section is lower of the following 3 amounts:

  1. 10% of your Salary (Basic salary+D.A) (in case you’re in employment) or 20 % of your Gross Total Income (in case you’re self-employed)
  2. Limit left under section 80CCE i.e. Rs 1,50,000 – deduction u\s 80C – deduction u\s 80CCC.
  3. Actual Amount paid under eligible NPS.

80CCD(1B):You can claim an additional deduction of up to Rs. 50,000 under this section for investment in NPS Scheme. This is in addition to 80CCD (1).

80CCD (2):Sec 80CCD(2) deduction for AY 2019-20 can be availed by you if you’re an employee and your employer makes contribution under NPS Scheme for employees. It is allowed only to the extent of 10% of your salary (Basic salary+D.A).

For AY 2020-21 the deduction limits under section 80CCD are same.

  • Sec 80 D

This deduction is provided regarding medical insurance premium or payment made towards preventive health check up.

Limits are given as under:

Various Cases Maximum Deduction allowed for Health Insurance Premium Total Deduction under 80D
Yourself, spouse & Dependent Children Parents
No family member is over 60 years of age Up to Rs. 25,000 Up to Rs. 25,000
Your parents are over 60 years of age and neither you nor your wife is more than 60 years. Up to Rs. 25,000 Up to Rs. 50,000
You or your wife has attained more than 60 years of age and also parents are over 60 years. . Up to Rs. 50,000 Up to Rs. 50,000
  • Sec 80 E

This deduction is for interest on education loan. Only individuals are eligible for this deduction. Only loans taken for pursuing higher education (including vocational studies) are eligible for deduction u/s 80E. You can take this loan either for yourself or your wife or children or for student of whom you are a legal guardian. There is no limit regarding this deduction.

  • Sec 80 DD

Deduction in respect of maintenance including medical treatment of a dependent with disability. This can also provide big relief in saving income tax.

You can claim Sec 80DD deduction for AY 2019-20 in respect of a dependent person with a disability when you incur expenditure on their training, rehabilitation, medical treatment, payment made to LIC, Unit Trust of India or any other specified scheme or deposit on behalf of such dependent.

The deduction is allowed from the following two amounts:

  1. Rs. 75,000 fixed, in case the dependent has 40% or more disability but less than 80%.
  2. Rs. 1,25,000 fixed, in case the dependent has 80% or more disability.

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