The salary persons always ask from us that tell all the deductions which we can claim from salary for A.Y. 2018-19 & A.Y.2019-20.
So we are giving the list of all deductions from salary which you can claim while calculating taxable salary income or net total income after adding other sources incomes.
The deductions are given along with the income tax sections. So you can get all the complete details by going to that particular section in case of any doubt.
# Standard Deduction
W.e.f. A.Y. 2019-20, a standard deduction of Rs. 40,000 or the amount of salary, whichever is less, shall be allowed.
# Entertainment Allowance
The second deduction which you claim from salary is Entertainment Allowance. Entertainment allowance received is first included in the employee’s income and then a deduction is allowed in case of government employees, for a sum equal to 1/5th of salary (excluding all allowances, benefits and other perquisites) or Rs. 5,000, whichever is less.
# Professional Tax
Tax on employment by whatever name called, levied by a State under Article 276 of the Constitution shall be allowed as a deduction. [Sec. 16(iii)]
# Deductions Permissible under Chapter VI-A
- Certain deductions are available from the gross taxable income, under sections 80C to 80U. Important deductions are:
- Deposit/Contribution to Life Insurance Premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, bank deposits under the notified scheme, 5 years POTD, Senior Citizen Saving Scheme, etc. [Sec. 80C]
- Contribution to LIC Pension Plan (Jeevan Suraksha) or Pension Fund of other insurance companies. [Sec. 80CCC]
- Contribution to notified Pension Scheme by employees of Central Government or any other employer or by any other individual. [Sec. 80CCD]
- Tax deductions for pension funds are a global trend now, see this example from Australia.
- Investment in listed equity shares (w.e.f 1-4-2014) A.Y.2014-15 [or listed units of equity-oriented mutual funds] under Rajiv Gandhi Equity Savings Scheme. [Sec. 80CCG]
# Payment of Medical Insurance Premia (Mediclaim) or contribution to Central Government Health Scheme. [Sec. 80D]
Another important deduction from salary is Medical insurance premium i.e 80D.
The case I – You are below 60 Years – Rs.25,000 and Your parents are also below 60 years – Rs. 25,000 then aggregate Rs. 50,000.
Case II – You are below 60 Years – Rs.25,000 But Your parents are above 60 years – Rs. 30,000 then aggregate Rs. 55,000.
Case III – You are above 60 Years – Rs. 30,000 and Your parents are also above 60 years – Rs. 30,000 then aggregate Rs. 60,000.
More detail about deduction 80D Visit the following links
Download Automated Income Tax Arrears Relief Calculator U/s 89(1) with Automated Form 10E From the Financial Year 2000-01 to Financial Year 2018-19 [ Updated Version]
# Expenditure on medical Treatment etc. and deposit for maintenance of handicapped dependents. [Sec. 80DD]
A deduction is allowed to compensate for any expenditure incurred by an assessee, during a year, for the medical treatment (including nursing), training and rehabilitation of one or more handicapped relatives wholly dependent on him, and for amount deposited in an approved scheme of LIC or UTI, for the benefit of a handicapped dependent. As per the provision of section 80DD, the amount is allowed up to Rs.75,000 in aggregate. The deduction can be claimed up to Rs.1,25,000 if the person with severe disability. You can also claim the 80DD deduction from salary income.
# Expenditure or Medical Treatment of assess/dependent relative [Sec. 80DDB]
Deduction for the amount of expenditure incurred or Rs. 40,000, (Rs. 1,00,000 [w.e.f. 1-4-2019 A.Y. 2019-20] (Rs.60,000 for A.Y.2018-19) whichever is less, is allowable for any year during which expenditure is actually incurred for the medical treatment of specified diseases or ailments for the assesses himself or a dependent relative.
In case the patient is a resident senior citizen 60 years or more (omitted w.e.f. 1-4-2019 i.e. 2019-20)
Rs. 80,000 in case the patient is a resident very senior citizen 80 years or more.
# Interest on Loan taken for Higher Education. [Sec. 80E]
Any amount paid by way of interest on a loan taken from any financial institution or any approved charitable institution for the purpose of pursuing his higher education is a deduction without any limit. Don’t forget to get a deduction from salary income if you have a loan for higher education.
# Interest on Loan took for the first residential house. [Sec. 80EE]
A deduction is allowable for interest on housing loan from a bank/housing finance company, for allowable is Rs. 1, 00,000, subject to specified conditions. The deduction is allowable for A.Y. 2014-15 and A.Y. 2015-16 only.]
# Donation for Charitable Purposes [Sec. 80G]
There are a number of donations in respect of which deduction is permissible under Sec. 80G. Deduction @ 50% is available for donation to Jawaharlal Nehru Memorial Fund, Prime Minister Drought Relief Fund, [National Children’s Fund] Indira Gandhi Memorial Trust or Rajiv Gandhi Foundation etc. 100% deduction is allowed for donations to the National Defense Fund, Prime Minister’s National Relief Fund, [National Children’s Fund,]National Foundation for Communal Harmony, Chief Minister’s/Lt. Governor’s Relief Fund etc. Deduction is granted subject to the prescribed maximum ceiling and on furnishing of the appropriate certificate from the done organization. The deduction 80G is also available from salary.
# Expenditure on Rent. [Sec. 80GG]
Rent paid by an assesses not owning a house and not in receipt of house rent allowance u/s 10(13A) for residential accommodation whether furnished or unfurnished, is deductible subject to the prescribed ceilings.
# Physical Disability [Sec. 80U]
A resident individual suffering from any disability can claim the deduction under section 80U. You can also claim 80U deduction from salary.
Amount of Deduction: Rs. 75,000 for disability and Rs. 1, 25,000 for severe disability.
