List of taxation Deductions to avoid wasting taxation from F.Y. 2018-2019
There square measure many tax deductions that a payer will claim to avoid wasting taxation. Some square measure applicable to salaried workers and a few square measures applicable to business people. several people don’t understand a number of the taxation saving choices that we will claim per annum. If you’re searching for a comprehensive list of taxation Deductions to avoid wasting taxation from the year 2018-2019 forrader, this text is for you. this text conjointly provides a list of tax deductions that were claimed in FY2018 beside the relevant IT section, eligibility and also the most limits.
How the financial gain attained square measure classified?
The financial gain attained by a personal, HUF, firm or company is classified into 5 categories:
1) financial gain from earnings
2) financial gain from house property
3) financial gain from business and profession
4) financial gain from the financial gain
5) different financial gain
The collection of financial gain from these higher than heads is termed as gross total financial gain. From this gross total financial gain, there square measure sure deductions that are allowed by the law to be subtracted from the gross total financial gain. this text explains of these deductions in an exceedingly simplified manner.
What square measure taxation deductions?
There square measure sure deductions that square measure nominal beneath sections 80C to 80U. These deductions square measure claimed by Associate in Nursing assessee to lower his rateable financial gain and find some relief in tax. These deductions square measure subtracted from the gross total financial gain.
List of taxation Deductions to avoid wasting taxation from FY2018-2019
Here is that the list of all the deductions which is able to be quite handy for the assessee and can facilitate them with their tax-filing.
1) Section 80C – Tax exemption up to Rs one.5 Lakhs
The maximum exemption which will avail u/s 80C, 80CCC along is Rs. 150,000. It is availed solely by people and HUFs. There square measure sure investments and expenditures which might be claimed in it:
Amount got Tuition fees for two youngsters.
Amount contributed towards the provident fund
The amount endowed in NPS, Sukanya Samriddhi Account, Post workplace Deposits, ELSS Mutual Funds.
5 years old person Saving theme
Principal reimbursement of home equity loan
5 years Tax saving Bank FDs
Premium paid towards life assurance
Section 80CCC – any quantity paid in any rented of the LIC or the other no depository financial institution for receiving a pension from a fund.
The aggregate quantity of all higher than investments is claimed to a most of Rs 1.5 Lakhs.
2) Section 80CCD(1B) – Investment in Pension theme – Tax exemption up to Rs 50,000
It includes contributions towards Government notified Pension schemes. The contribution is most of 100% of the earnings (for salaried individuals) and two-hundredths of the gross financial gain (for self-employed). the most quantity which will be claimed is Rs 50,000. you’ll be able to invest in National Pension theme, that is one in all the foremost common pension schemes.
3) Section 80D – insurance Premium
This deduction is obtainable to individual and HUF for the quantity paid towards insurance premium. the most deduction allowed is Rs. 25,000 for the premium got self, better half or dependent youngsters. One will even claim for the premium paid towards their oldsters conjointly. the fogeys of better half don’t seem to be enclosed in it. For senior voters, this limit is Rs. 30,000. you must perceive a way to claim 80D – insurance Premium from taxation.
4) Section 80DD – Medical expenses for disabled persons – up to Rs one.25 Lakhs
This section deals with the medical expenses incurred on disabled persons which incorporate better half, children, oldsters or siblings. you’ll be able to claim up to Rs. 75,000 for four-hundredth incapacity and Rs. 1,25,000 just in case of severe incapacity.
5) Section 80DDB – Medical expenses for specific ailments up to Rs 40,000 (up to Rs 80,000 for Senior Citizens)
This deduction is allowed for the medical treatment of specific ailments. the quantity of deduction is Rs. 40,000 or actual expenses incurred whichever is lower. just in case of senior voters, it is Rs. 60,000 and for super senior voters, it is Rs. 80,000.
6) Section 80E – Interest on loan taken for educational activity
This deduction pertains to the interest paid towards a loan obtained for the following educational activity. there’s no limit on the quantity. there’s no deduction for reimbursement of principal quantity and it’s allowed for optimum eight years.
7) Section 24B – Loss from Self-Occupied House property / set free property – Up to Rs 2 Lakhs
You can claim home equity loan interest on self-occupied house property for tax exemption up to Rs 2 Lakhs. This limit is most of Rs 2 Lakhs and not per home. unwanted loss (if any) will shift and set-off in next eight money years.
7) Section 80EE – initial time home patrons – Rs 50,000 further exemption
This section has been recently introduced by the govt. for people who square measure initial time home patrons and have obtained their home equity loan throughout or when F.Y. 2016-17. the worth of the house ought to be but Rs. 50,000 large integer and residential loan ought to be below Rs 35 Lakhs. Such home patrons will claim a further deduction up to Rs. 50,000 on home equity loan interest payments. you’ll be able to browse additional concerning section twenty-four and Section 80EE wherever you’ll be able to claim tax exemption on home loans here.
8) Section 80G – Donations
Payments created to sure relief funds and authorized charitable establishments square measure claimed beneath this section. Any donations created to registered establishments square measure exempted for 500 or 100% limit as per prescribed.
9) Section 80GGC – Donations to political parties
Any donations created to political parties is claimed beneath this section. From the year 2017-18 forrader, it’s been dominated out that donations created higher than Rs. 2,000 can’t be in money mode.
10) Section 80GG – Claim in part of not having own house and don’t receive HRA
This deduction pertains to people who don’t possess a residence of their own and doesn’t receive House Rent Allowance (HRA). it’s in respect of expenditure created towards rent. the most quantity claimed beneath this section is Rs. 60,000. The deduction is the least kind the following-
a) Rent paid minus 100% of the adjusted total financial gain
b) Rs 5,000 per month
c) 25th of the entire financial gain
11) Section 80TTA – Deduction for SB Interest up to Rs 10,000
It provides a deduction up to Rs. 10,000 on combination to Associate in Nursing assessee (being a personal or HUF) in respect of any financial gain by means of interest on deposits in an exceedingly saving A/c.
12) Section 80U – Exemption for specific disabilities
This deduction is availed by solely those people World Health Organization square measure stricken by some incapacity of some reasonably not but four-hundredth.
15) Rebate beneath section 87A – Rs 2,500
Additional tax edges of Rs 2,500 has been provided to those taxpayers whose lucre is a smaller amount than Rs. 350,000.