Know 15 deductions you can claim if you are filing salary tax returns

An income tax return (ITR) is fundamentally an archive that is recorded according to the provisions of the Income Tax Act, reporting one’s income, profits and losses and other deductions as well as details about tax refund or tax liability. Part VI An of Income Tax Act contains different sub-sections of section 80 that permits an assessee to guarantee derivations from the gross complete pay because of different duty sparing ventures, allowed consumptions, gifts and so on

Such deductions permit an assessee to impressively decrease the expense payable. Since the current tax filing includes the pay procured during the financial year 2019-20, one should check all derivations permitted in that financial year. Salaried workers while recording their Income Tax Returns can profit the advantage of various deductions.

Here are 15 deductions you can claim if you filing salary returns:

1. Standard Deduction

A standard deduction of Rs. 50,000 from salary income is accessible to employees. Standard deduction permits salaried people to guarantee a flat deduction from pay towards costs that would be caused with connection to their work. There is no confirmation needed to claim the deduction.

2. Exemption of House Rent Allowance (HRA)

Rent expense is the expense brought about by a business to use a property or area for an office, retail space, processing plant, or extra room. Rent expense is a kind of fixed working expense or an assimilation cost for a business, rather than a variable cost. Rental expenses are frequently dependent upon a couple of year contract between the lessor and tenant or a landlord and tenant, with alternatives to reestablish. Salaried people, who live in leased houses, can guarantee the House Rent Allowance (HRA) to bring down their duties – mostly or completely under the Income Tax Act. The derivation accessible is the least of the accompanying amounts:

• Actual HRA received
• 50% of [basic salary + DA] for those living in metro cities (40% for non-metros) or
• Actual rent paid less 10% of basic salary + DA

3. Leave Travel Concession/Allowance

LTC is an exception for recompense/help got by the worker from his boss for going on leave. The exception is accessible just on the genuine travel costs i.e., the air, rail or actual travel cost caused by the representative. No costs, for example, nearby movement, touring, inn convenience, food, and so forth, are qualified for this exception. The exclusion is additionally restricted to LTA given by the business.

For instance, if LTA granted by employer is Rs 25,000 and actual eligible travel cost incurred by employee is Rs 15,000, exemption is available only to the extent of Rs 15,000 and balance Rs 10,000 would be included in taxable salary income.

4. Deduction under Section 80C

One can guarantee an allowance of Rs 1.5 lakh your all out pay under section 80C. Citizens can lessen up to Rs 1,50,000 from their all out available pay, and it is accessible for people and HUFs. A few speculations qualified for derivation under Section 80C of The Income Tax Act are:

• Investment in Sukanya Samriddhi Yojana
• Investment in ELSS, NPS, SCSS, ULIP, NSC
• Premiums paid towards life insurance policies
• Any contribution towards Public Provident Fund (PPF)
• Investment in Rural Bonds offered by NABARD etc

5. Deduction under Section 80CCC

Section 80CCC gives an allowance to a person for any sum paid or kept in any annuity plan of LIC or some other insurer. The provision should be for getting a benefits from an asset alluded to in Section 10(23AAB). Benefits got from the annuity or sum endless supply of the annuity, including revenue or reward gathered on the annuity, is available in the time of receipt.

6. Deduction under Section 80CCD

Section 80CCD identifies with the deductions accessible to people against commitments made to the National Pension Scheme (NPS) or the Atal Pension Yojana (APY). Commitments made by the businesses towards the NPS, likewise go under this segment. NPS is an advised annuity plot from the Central Government.

Section 80CCD(1) manages giving tax deductions to all assessee's whether employed by the government, any other employers or self-employed individuals. The deduction is restricted to a limit of 10% of compensation (essential + dearness recompense just) if there should arise an occurrence of salaried representatives and 10% of gross pay in the event of independently employed citizens. As far as possible can't surpass Rs.1 lakh in a financial year.

Section 80CCD(2) deals with the employer contribution toward an employee’s NPS funds. Employees can claim this amount as deductions u/s Section 80CCD (2). The amount of deduction is limited to 10% of the employee’s salary.

7. Deduction under Section 80D

Each individual can claim a deduction under Section 80D for their clinical protection which is taken from their all out pay at whatever year. Allowance under Section 80D is accessible for the underneath referenced clinical uses:

• Medical Insurance Premium
• Preventive Health Check Up expenses and
• Medical expenses like Purchase of medicines, Doctor consultation fees and hospitalization expenses

An individual can claim a deduction of up to Rs 25,000 for the insurance of self, spouse, and dependent children. An additional deduction for the insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age, or Rs 50,000 if parents are aged above 60.

8. Deduction under section 80DD

This deduction is in regard of support including clinical treatment of a reliant who is an individual with inability. Deduction is took into account a dependant of the taxpayer and not the taxpayer himself.

The taxpayer isn't permitted this derivation if the dependant has asserted an allowance under section 80U for himself/herself. Dependant if there should be an occurrence of an individual taxpayer implies companion, youngsters, guardians, siblings and sisters of the taxpayer. In the event of a HUF implies an individual from the HUF.

The taxpayer has incurred expenses for medical treatment (including nursing), training & rehabilitation of the differently abled dependant or the taxpayer may have deposited in a scheme of LIC or another insurer for maintenance of the dependant. Disability of the dependant is not less than 40%.

Amount of deduction allowed is –

• Rs 75,000 where disability is more than 40% and less than 80%.
• Rs 1,25,000 where disability is more than 80%.

These deductions are allowed irrespective of your actual expenditure.

9. Deduction under section 80DDB

Deduction is accessible in regard of consumption up to Rs 40,000 on clinical treatment of indicated illness from a nervous system specialist, an oncologist, a urologist, a hematologist, an immunologist or such other trained professional, as might be endorsed. On account of a senior citizen and super-senior citizen, deduction is Rs 1,00,000 or sum really paid, whichever is less.

10. Deduction under section 80TTA

Section 80TTA provides a deduction of Rs 10,000 on interest income. This deduction is available to an Individual and HUF.

This deduction is allowed on interest earned:

• From a savings account with a bank
• From a savings account with a co-operative society carrying on the business of banking
• From a savings account with a post office

This deduction is not allowed on interest earned on time deposits:

Deduction under Section 80TTA shall not be allowed for:

• Interest from fixed deposits
• Interest from recurring deposits
• Any other time deposits

11. Deduction under Section 80GG

Section 80GG deduction is available for rent paid when HRA is not received. The taxpayer, spouse or minor child should not own residential accommodation at the place of employment. The taxpayer should not have self-occupied residential property in any other place. The taxpayer must be living on rent and paying rent. The deduction is available to all individuals

Deduction available is the least of the following:

• Rent paid minus 10% of adjusted total income
• Rs 5,000 per month
• 25% of adjusted total income

Adjusted Gross Total Income is arrived at after adjusting the Gross Total Income for certain deductions, exempt income, long-term capital gains and income related to non-residents and foreign companies.

12. Deduction under Section 80E

A deduction is allowed to an individual for interest on loans taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian.

The loan should be taken from any bank / financial institution or any approved charitable institutions. Loans taken from friends or relatives do not qualify for this deduction. The deduction allowed is the total interest part of the EMI paid during the financial year.

There is no limit on the maximum amount that is allowed as deduction. The loan should be taken to pursue higher studies. It does not matter whether such education loan is taken for higher studies in India or outside India. Higher studies include all the fields of study pursued after passing the senior secondary examination or its equivalent exam. It includes both vocational as well as regular courses.

13. Deduction under Section 80EE

This deduction is in respect of interest on loan taken for residential house property. The deduction under this section is available only to individuals.

Value of the house should be Rs 50 lakhs or less. Loan taken for the house must be Rs 35 lakhs or less

The loan must be sanctioned by a Financial Institution or a Housing Finance Company. The loan must be sanctioned between 01.04.2016 to 31.03.2017. As on the date of the sanction of loan, no other house property must be owned by the individual.

14. Deduction under Section 80U

A deduction of Rs.75,000 is available to a resident individual who suffers from a physical disability (including blindness) or mental retardation. In case of severe disability, one can claim a deduction of Rs 1,25,000.

15. Deduction under Section 80GGC

Deduction under section 80GGC is allowed to an individual taxpayer for any amount contributed to a political party or an electoral trust. It is not available for companies, local authorities and an artificial juridical person wholly or partly funded by the government. Individuals can avail this deduction only if they pay by any way other than cash.