Introduction
Filing your Income-Tax Return (ITR) is a crucial financial responsibility, and it’s essential to make the most of the deductions available to you. This article will guide you through some of the top tax deductions you shouldn’t overlook when filing your ITR online.
1. Standard Deduction
Introduced in the 2018 Union Budget, the standard deduction is a fixed amount that can be deducted from your taxable income. For the assessment year 2023–24, this amount stands at Rs. 50,000. This deduction is available to salaried individuals and pensioners.
2. Home Loan Interest
If you’ve taken a home loan for a self-occupied property, you can claim a deduction on the interest paid on the loan under section 24(b) of the Income Tax Act. For a self-occupied property, the maximum deduction allowed is Rs. 2 lakh per annum.
3. Section 80C Deductions
Section 80C offers a range of deductions, covering various investments and expenses:
a. Employee Provident Fund (EPF): Contributions to your EPF account are eligible for deduction up to a maximum of Rs. 1.5 lakh.
b. Life Insurance Premiums: Premiums paid for life insurance policies for yourself, your spouse, or your children are eligible for deduction.
c. Public Provident Fund (PPF): Investments in PPF accounts are eligible for deduction.
d. Tuition Fees: Fees paid for the education of up to two children are eligible for deduction.
e. Sukanya Samriddhi Yojana: Investments in this scheme for the benefit of a girl child are eligible for deduction.
4. Medical Insurance Premiums (Section 80D)
Under section 80D, you can claim a deduction for the premiums paid for medical insurance policies. This includes policies for yourself, your spouse, children, and parents. The maximum deduction varies depending on the age of the insured persons.
5. House Rent Allowance (HRA)
If you live in a rented accommodation and receive HRA as part of your salary, you can claim a deduction for the rent paid. The deduction is calculated based on the least of the following three amounts: actual HRA received, 50% of your salary, or the excess of rent paid over 10% of your salary.
6. Interest on Education Loan
Interest paid on loans taken for higher education can be claimed as a deduction under section 80E. There is no maximum limit on the amount that can be claimed as a deduction.
7. Donations (Section 80G)
Donations made to specified charitable institutions and funds are eligible for deduction under section 80G. The deduction amount varies depending on the fund or institution.
Conclusion
As you embark on the online ITR filing process, ensure you don’t miss out on these crucial deductions. They can significantly reduce your taxable income and save you money. Keep proper records of all relevant documents to substantiate your claims. Consulting a tax advisor or using tax-filing software can also help ensure you maximize your deductions while filing your Income-Tax Return. Remember, a little extra effort in understanding and utilizing deductions can go a long way in optimizing your tax liability.
