Deductions are important for tax planning. It reduces tax burden of an assessee. Let's take a look on important deductions in Income tax F.Y. 2016-17 / A.Y. 2017-18.
INCOME TAX
DEDUCTIONS F.Y. 2016-17 / A.Y. 2017-18
FOR INDIVIDUAL &
HUF
|
Section
|
Deduction
Limit
|
Investments
/ Expenses
|
|
80C
|
Up to
Rs. 1.5 lakh
In (80C,
80CCC & 80CCD(1) together)
|
Life Insurance Premium
P.P.F. (Public Provident Fund)
E.P.F. (Employee’s Provident Fund)
N.S.C. (National Savings Certificate)
ELSS Mutual Funds (Equity Linked Saving Schemes)
Five years Bank
or Post Office Tax Saving Deposits
S.C.S.S (Post Office Senior Citizen Savings Scheme)
Principle
repayment of Home Loan
Kid’s Tuition
Fees
Sukanya Samriddhi Account Deposit scheme
|
|
80CCC
|
Contribution to annuity plan of
L.I.C. or any other Life Insurance
Company for receiving pension from the fund is considered for tax benefit.
|
|
|
80CCD(1)
|
Allowed to an Individual who
makes deposits to his/her Pension account (like NPS). Maximum deduction
allowed is 10% of salary (in case of taxpayer being an employee) or 10% of
gross total income (in case of tax payer being self-employed).
|
|
|
80CCD(1b)
|
Additional
deduction
Up to
Rs. 50,000/-
|
Amount deposited by a
taxpayer to their NPS account. Contributions to Atal Pension Yojana are also
eligible.
|
|
80D
|
Up to Rs.
25,000/- &
Rs.
30,000/- for Senior citizens
|
Mediclaim
|
|
80EE
|
Up to
Rs. 50,000/-
|
Home Buyers can claim an
additional Tax deduction of up to Rs 50,000 on home loan interest payments.
The below criteria has to be met for claiming tax deduction under section
80EE.
|
|
80G
|
100% (generally in case of government
funds) or 50% (generally in case of non-governmental funds)
|
Contributions made to certain relief funds and charitable
institutions. This deduction can only be claimed when the contribution has
been made via cheque or draft or in cash. But deduction is not allowed for donations made in cash
exceeding Rs 10,000. In-kind contributions such as food material,
clothes, medicines etc do not qualify for deduction under section 80G.
|
|
80TTA
|
Up to
Rs. 10,000/-
|
Interest on deposits in SAVINGS BANK ACCOUNT , co-operative society
or post office can be claimed under this section. Section 80TTA deduction is
not available on interest income from fixed deposits.
|
|
24(b)
|
Up to Rs. 200,000/- in case of self
occupied property or no maximum limit if the property is let out
|
Interest on housing loan is allowable as deduction on accrual basis
not on paid basis (even if account books are kept on cash basis) if capital
is borrowed for the purpose of purchase, construction, repair, renewal or
reconstruction of the house property. Deduction can be claimed for two or
more housing loans.
|
|
87A
|
Up to
Rs. 5,000/-
|
This rebate is available on tax on
total income to a resident individual if his total income does not exceed Rs.
500,000/-
|
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