The financial year close is behind us and the tax filing for returns for financial year 2014-15 has begun. If you are not satisfied with your tax saves, here are some deductions which can help you save some tax.
Employee Provident Fund or EPF – Your employer deducts 12% of your Basic Salary towards your contribution to the Employee’s Provident Fund. The contribution made by you is eligible to be claimed as deduction under Section 80C, which allows a maximum deduction of Rs 1,50,000 from your Gross Total Income. Assuming your basic salary is Rs 30,000, a 12% PF of Rs 3,600 is deducted each month from your salary towards EPF. This adds up to Rs 43,200 for the year and you can claim this full amount as a deduction under Section 80C, at the time of filing your return.
Life Insurance Premium – The life insurance policy holder is eligible for tax benefits under Section 80C. When you pay a premium on a life insurance policy to insure your own life, or your spouse’s life, or the lives of children who may be dependent/independent, minor/major, or married/unmarried – a deduction is available under Section 80C for the premium paid by you. The only condition is the premium paid should not be in excess of 10% of the sum assured in the policy. If you have paid a premium for a life insurance policy- do remember to claim it as a deduction under section 80C.
Tuition Fees of Children – Tuition fees paid to any school, college, university or other educational institution, which is situated in India for full time education of your children, can be claimed as a deduction under Section 80C. These expenses are allowed to be claimed for up to 2 children. In case your children are small deduction is available for fees paid for play school, pre nursery and nursery as well.
Interest on Savings Bank Account – Interest earned by you from a savings bank account is taxable under the head ‘Income from Other Sources’. A maximum of Rs 10,000 can be claimed a deduction from this interest income under section 80TTA. If your interest earned is lower than Rs 10,000 such lower amount shall be exempt. This interest may have been earned in a savings bank account or a post office savings account. When earn such interest income and file with websites like ClearTax, they automatically give you the deduction – so you don’t end up paying any additional tax.
Differently abled Dependants – In order to provide tax benefit to those who are differently abled or those caring for dependents that are differently abled – Income Tax Act has laid out deductions under Section 80DD and Section 80DDB. Under Section 80DD, if you have spent money for medical treatment (including nursing), training & rehabilitation of a disabled dependant or you have paid for insurance scheme for caring for the dependant, this deduction is allowed from your Income. If the disability is more than 80% deduction allowed is Rs 1,00,000, and where the disability is 40% to 80% a deduction of Rs 50,000 is allowed. This deduction is for these fixed amounts and is available irrespective of the actual money spent by you.
Under Section 80DDB, deduction is allowed when money is spent by a tax payer for medical treatment of a specified disease or ailment for a dependant. Where the dependant is less than 60 years old – the actual amount spent or Rs 40,000 whichever is less can be claimed as a deduction. If the dependant is more than 60 years old – deduction is Rs 60,000 or actual amount spent whichever is lower. Deduction under section 80DDB can also be claimed by the tax payer for his own treatment provided it’s a specified disease as per the section and the other conditions in the section are met. Taking benefit of these tax deductions can reduce your tax burden significantly. We have an exhaustive guide of all the deductions available under section 80.
source: cleartax.in
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