Deductions Allowable from Income refers to claims that one makes to reduce his taxable income against various investments made and expenses incurred by him. Deductions Allowable from Income in FY 2022-23 are allowed only to the individual and HUF tax payers who have opted for the old tax regime for filing their ITR in the FY 2022-23.
Benefits of Deductions Allowable from Income in FY 2022-23
- Deductions will reduce your taxable income and help in saving income tax.
- Deduction initially reduces the income which is under the highest tax brackets hence saves more tax.
- Deductions reduce your overall burden.
List of Deductions Allowable from Income in FY 2022-23
- Standard Deduction: Standard deduction is a flat deduction of Rs. 50,000 from your Income that is taxable under the head salaries
- Interest on Home Loan: Under Section 24 of the Income Tax Act, an individual can claim tax deduction of the interest payment on the home loan taken for a self-occupied property for maximum up to Rs. 2 lakhs. You have to buy or complete construction of the house within 3 years of availing the loan.
- Setion 80C: under section 80C of the Indian Income Tax Act, 1961
- Bank Fixed Deposits (Tax Saver FDRs): You can claim tax deduction by investing in fixed deposits of any scheduled bank or post office for a tenure of 5 years or more
- Life Insurance Premiums: You can claim income tax deduction for paying life insurance premium towards policies for self, spouse or children
- Public Provident Fund (PPF): You can claim income tax deduction by contributing to your PPF account (minor accounts are also allowed)
- Contribution by an employee to a recognised provident fund or an approved superannuation fund
- Subscription to notified savings certificates (Post Office NSC, etc.)
- Contribution in Unit-Linked Insurance Plan (ULIP)
- Contribution to notified equity linked savings schemes (ELSS) of Mutual Funds
- Tuition Fees: Tuition fee paid for your children's education which needs to be paid for full-time education in an Indian university, college and school for any two children
- Home Loan EMIs: Equated monthly installments paid to repay the principal amount of your home loan taken for a self-occupied property
- Contribution to Pension Fund: By contributing to pension fund offered approved mutual fund
- Senior Citizen Savings Scheme: Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004
- Sukanya Samriddhi Account Scheme: Contributions made under Sukanya Samriddhi Account Scheme
Deductions Under section 80CCC
Under section 80CCC, deductions are allowed for maximum up to Rs. 1.5 lakhs per annum for contributions made by an individual towards specified pension funds offered by LIC or any other life insurance company. However, the pension receivable will be included in taxable income of the tax payer.
Deductions Under section 80CCE
The maximum limit of Rs. 1,50,000 is the aggregate of the deduction that may be claimed under sections 80C and 80CCE
Income Tax Deductions under Section 80 CCD(1B)
Section 80 CCD(1B) offers an additional deduction of up to Rs. 50,000 for contributions made by individual taxpayers towards the NPS. The additional deduction of Rs. 50,000 under Section 80CCD(1B) is available to assessee over and above the benefit of Rs. 1.50 Lakhs.
Deductions under Section 80D
Individual or HUF taxpayers can claim a deduction of maximum upto Rs 25,000 for the medical insurance premium and expense incurred towards preventive health checkup for self, spouse, dependent children and parents. Any other entity cannot claim this deduction.
In the case of senior citizens, the deduction limit allowed under Section 80D is Rs 50,000.
An additional deduction for parents' insurance is available to the extent of Rs 25,000, if they are less than 60 years of age, or Rs 50,000, they are aged above 60.
Section 80D includes a deduction of Rs 5,000 for any payments made towards preventive health check-ups. This deduction will be within the overall limit of Rs 25,000/Rs 50,000, as the case may be.
If medical expenses incurred for senior citizens, who do not have any health insurance, one can claim deduction for the said expenses incurred for maximum Rs 50,000.
Deductions under Section 80DDB
- Deduction under section 80DDB is allowed to taxpayer has spent money on medical treatment of self or the dependant who is suffering from a specified disease
- Amount allowed as a deduction will be Rs. 40,000 or the amount actually paid, whichever is less
- In the case of a senior citizen and super-senior citizen, amount allowed as a deduction will be Rs.1,00,000 or amount actually paid, whichever is less.
Deductions under Section 80TTA
Under Section 80TTA, the interest income from deposits (i.e. savings deposit, fixed deposit and recurring deposit) held by an assessee (who is aged below 60 years) will be allowed which is maximum of Rs. 10,000 in any financial year.
Deductions under Section 80TTB
Under Section 80TTB, the interest income from deposits (i.e. savings deposit, fixed deposit and recurring deposit) held by senior citizens will be allowed which is maximum of Rs.50,000 in any financial year. No further deduction under section 80TTA shall be allowed.
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