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Tax Saving options & deductions under 80D to 80U

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Hopefully, you are claiming deduction upto Rs 1 Lakh under Section 80C by investing  in various eligible options. If not, please read the article here about 80C tax deductions.

After exhausting the limit of Rs 1 Lakh u/s 80C, you must be thinking – Are there more avenues to save tax?  

So, here are some options which are allowed as deduction from your income for purpose of tax calculation (other than 80C):

Section 80C –  Deductions for eligible investments (upto Rs 1 lakh)
Under this section, you can claim deduction upto Rs 1 lakh if you make eligible investments. Read my article on 80C deduction.

Section 80D – Deduction for  health insurance premium (upto Rs 20000)
You can claim deduction upto Rs 15000  – for any medical insurance premium paid for yourself, spouse, dependent children, parents. If any of parents is senior citizen, then deduction upto Rs 20000 is allowed.
To claim this deduction, you need to pay by mode other than Cash – i.e. by cheque, credit card, debit card etc. If you pay in cash, you cannot claim this deduction.

Section 80DD – Deduction for maintenance including medical treatment of a dependant who is a person with disability. (upto Rs 1 lakh)
If you are paying for medical treatment of a dependant person (who has disability), you can claim deduction of Rs 50000.  If the person has severe disability, you can claim deduction of Rs 1 lakh
This deduction is allowed for yourself, spouse, children, parents, brothers and sisters.

Section 80DDB – Deduction for medical treatment of specified disease (upto Rs 60000)
If you are incurring expenditure for medical treatment of specified disease such as AIDS, cancer, neurological diseases, etc., you can claim deduction upto Rs 40000. The limit is increased to 60,000 in case of expense incurred for a senior citizen.
This deduction is allowed for individual, the spouse, children, parents, brothers and sisters.

Section 80E – Deduction for interest on loan taken for higher education.
If you have taken education loan for yourself, spouse, or children, and paying interest on such education loan, you can claim deduction u/s 80EE for a maximum of 8 years.
The loan must be taken from any financial institution or any approved charitable institution for the purpose of higher education and for the purpose of higher education.

Section 80EE – Interest on Housing Loan sanctioned during FY 2013-2014  (New)
This is newly inserted section, wehre you can claim deduction for home loan interest paid upto  Rs 1 lakh if your loan is sanctioned during FY 2013-2014  and Value of the property is below  Rs 50 Lakh and maximum loan sanctioned should be Rs 25 lakh.   Read my article on 80EE deduction

Section 80G  – Deduction for donations to certain funds, charitable institutions, etc.
If you are making donations to charitable institutions, NGO, government relief schemes etc, you may be eligible to claim deduction upto 50% or 100% of the donation amount. (depending on charity). For e.g. , donation to funds like Prime Minister’s National Relief Fund enjoy 100% deduction and NGOs such as Helpage India, CRY etc is approved for only 50% deduction.
Although, there is no ceiling on the amount that can be claimed as deduction, in some cases the total deduction is limited to 10% of the gross total income of the donor.
From 01-4-2013, u/s 80G (5D), you claim deduction for donation exceeding Es 10000 only if it is made by mod other than cash (by cheque, DD etc)

Section 80GG – Deductions of rent paid
If you are self-employed, oe employee who donot receive HRA, you can claim deduction for your house rent paid, upto maximum of Rs 2000 per month.
The amount of Rs 2000 is very less in today’s condition and government should review this limit.

Section 80GGC – Deduction for contribution made to political parties
If you have made any donation / contribution to any political party, you can claim deduction u/s 80GGC. There is no limit for this deduction , but the payment must be made other than cash.

Section 80TTA – Deduction for Interest on Savings bank Account (upto Rs 10000)
Under this new section 80TTA, you can claim deduction for Interest earned earned inSavings account upto Rs 10000. Please ntoe that such Interest is taxable & should be shown as Other Income and then the deduction should be taken u/s 80TTA upto Rs 10000.
Read my article on 80TTA deduction

Section 80U –   Deduction for disabled person
If you are suffering from physical disability, then you can claim deduction of Rs 50000 or Rs 1 lakh under Section 80U of Income Tax Act. You need to submit the medical certificate in prescribed format.

Section 87A – Tax rebate of Rs 2000
If you taxable income is less than Rs 5 Lakh, you can claim a tax rebate of Rs 2000 under this new Section 87A.
Read my article on 87A rebate / tax credit

Section 24 – Interest paid on a second home loan is fully deductible
If you have taken home loan & the property is self-occupied , then you can claim deduction for home loan interest upto Rs 1.50 Lakhs.
But, if you take loan for buying second house, buys a second house and give it on rent, you can claim FULL Interest as deduction.  The 2nd house is deemed to be let out and rental income or deemed rental income needs to be shown under “Income from house property”. But at the same time, you can claim FULL Interest against such income.

How to Claim these deductions

If you are a salaried employee, you can submit the receipts to your employer, and they can consider the deduction while deducting Tax.

Alternatively, you can claim the deduction while filing your Income Tax returns.

Now, you cannot attach any documents with Income Tax returns, you cannot attach these receipts with return. Just claim the deduction and keep the receipts with yourself, in case ITO ask for it later during assessment.

 

If you have any tax related queries, please use the comments box below & post your query.

If you have any queries related to this article or any other personal finance query ( Investment, Taxation etc), please comment below

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The author is a Chartered Accountant and loves to write about Personal Finance, Wealth Management, Taxation etc. Disclaimer - The articles on this website is for informational and knowledge purposes and should not be treated as financial advice, Please consult your financial advisor before taking any investment decision.

29 comments

  1. plz share your views on vat and service tax on resturant.

    • Normally restaurant charges following taxes in addition to normal food bill.

      1) Service Charges – Some restaurant charges compulsory service charge which should be mentioned clearly in their menu. It is kind of compulsory tip. Normally 5-10% of food bill

      2) Service Tax –

      2. Service Tax : AC restaurants can charge Service Tax. Service tax is applicable on 40% of the bill amount, not the total amount. As the service tax is around 12.36% at the moment, the final tax you need to pay is only 4.944% (12.5% X 40%) on the bill (inclusive of service charge).

      3) VAT – VAT is collected by State Govt and applicable to the food items which are prepared inside the restaurant. This is not applicable on packaged items which are not prepared by Restaurant like packaged water bottles etc.
      VAT Charges vary from state to state, but normally it is between 10% – 15%. For e.g in Maharashtra it is 12.5%, and in Karnataka its 14.5% . VAT is to be charged only on the main bill + service charges. (excluding service tax)

      Hope this clarifies.

      • Re your explanation on VAT and Service-Tax by restaurants – if Srvice-Tax is chargeable only on 40% of the bill, VAT at applicable rates should be charged only on the residual 60% being the food component? Thanks

  2. what does total income include and exclude to claim deduction u/s 80 gg in case of Hra not recd —–> suppose basic + conveyance allowance + bonus= gross salary less transport exemption u/s 10 (14) less prof. tax = total income. is this correct or we have to take deduction u/s 80 c & 80 d also to arrive at total income?. Also is int on fd added to arrive at total income ?

    • Hi Raheshree, Total Incoem means Total taxable inocme before claiming deduction under Chapter VI (80C to 80U)

      So, for calculating total income , you need to ake the following:
      basic + conveyance allowance + bonus= gross salary less transport exemption u/s 10 (14) less prof. tax = total income.
      PLUS – FD Interest

  3. please let me know whether employer can allow deduction u/s 80U while deducting income tax from salary income of his employee .
    Thanks
    Y.Rathaiah

  4. In my case, the bank has deducted TDS@10% on my FD interest, but I am in 20% tax slab so I am supposed to pay 10%extra. I have paid this amount last yaer but CPC, bangalore has not acknowledged it. I have filed rectification request but still it is not accepted and I got a tax demand notice. Please tell me the exact & detailed procedure like Head(Minor/major), section No, etc.. under which I have to pay this amount.Thank you.
    Praveen

    • Hi Praveen, What do you mean by You have paid the tax & CPC bangalore has not accepted it.

      1) You need to pay the additonal tax via challan either at Bank or by online. This will appear in your Form 26AS.

      Read – How to check Form 26AS –
      http://wealth18.com/check-or-view-your-tax-credit-form-26as-online/

      2) Make sure you make the tax payment with correct PAN and select correct Asessment year

      3) make sure you send the ITRV Acknowledgement (ITR form submitted online) to CPC Bangalore (not the tax paid reeipt)

  5. Fantastic explanation has been given

  6. How do I claim tax rebate under section 80C when I invest in ELSS Scheme ? What kind of proof need to be provided while submitting ITR

    • While submitting ITR, you donot need to attach any documents. You just need to show the amount in ITR u.s 80C.

      You should just keep the MF statement with you in case it is required during income tax assessment.

  7. Hi
    I had a query…i had a FD on my name and can my husband use it for his tax savings please let me know.
    Thanku

  8. Is agriculture income non taxable?
    Do farmers need to file income tax return?
    If someone earns 8 lac from farming then how much tax he is supposed to pay?

    • In general terms, Agricultural Income is not taxable in India. So if the income is derived from farming, no taxis payable.

    • Anitha Rajamohan

      Sir, I had undergone fertility treatment last year for Rs.2 Lakhs. No insurance claim for the said treatment. Please advice me whether I am eligible for tax rebate and if yes, under which section ?

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