8 Useful Income Tax Deductions for F.Y. 2022-23| The Income Tax Act sets out several income tax
deductions that can be claimed when filing income tax returns. The total taxable income (after reducing
any income tax deductions that have been claimed) would be taxed at the individual's income tax rates.
The Income Tax Department of India
encourages its citizens to make use of the various Income Tax Deductions,
Income Tax Exemptions and Income Tax Refunds allowed by the Income Tax Act.
Incomes that help taxpayers to lower their taxes in
8 Useful income tax deductions to save taxes
There are several income tax
deductions that an individual/HUF can claim. The most useful income tax deductions
that can be claimed easily and are helpful in reducing the tax burden are
explained below.
1. Investment Income Tax Deduction specified in
Section 80C
The most popular income tax
deduction is the Section 80C deduction, which is allowed for investments in
certain specific instruments. There are many instruments in which investments
can be made and the cumulative total of deductions allowed under this Section
is Rs. Rs 1.5 lakh per year Some examples of specific instruments are
PPF account
Mutual Tax Savings Fund
Fixed tax savings deposit
National Savings Certificate
Repayment of the home loan
principal
Life insurance policy premium
Equity Oriented Mutual Funds
Employee Pension Fund Contribution
2. Deductions for Contribution to Pension Funds under section 80CCC & 80CCD
Deductions under Section 80CCC and
Sec. 80CCD are income tax deductions allowable for the payment of any amount to
initiate or continue any annuity plan of any insurance company to receive any
pension from the person a deduction from the amount paid Under Section 80CCC.
And if the person has contributed
to the notified Central Government pension plan, ie the National Pension Scheme
(NPS), a deduction would be allowed Under Section 80CCD.
From the 2015-16 F.Y., an
additional deduction of Rs. An investment of 50,000 is allowed in the NPS U/s 80CCD(1B) account. This additional deduction of Rs. 50,000 is above the deduction
allowed in Section 80C and Section 80CCC. In other words, the cumulative total
of these must not exceed Rs. 2,00,000.
3. Income Tax Deduction Under Section 80TTA for Interest on Savings Accounts
A deduction of Rs. It is also
permissible to claim 10,000 under Section 80TTA (specified in Chapter VI-A) of
interest earned on the Bank Savings Account. Such interest income is first
added under the heading "Income from other sources" and then the
deduction of such income is permitted under Section 80TTA subject to a maximum
of Rs. 10,000 per year
4. Housing Loan Interest Income Tax Deduction pursuant to Section 24
If a taxpayer has taken out a home
loan, they can claim a deduction of the interest charged on that loan. It
should be noted that this deduction under Section 24 is for interest charged
and not interest paid.
The principal amount of the
Mortgage Loan repaid is permitted as a deduction under Section 80C and Interest
charged is permitted as a deduction under Section 24.
5. Section 80D: Deduction for Payment of the Medical Insurance Premium and Health Examination
If an individual/HUF has made any
health insurance premium payments for himself, his spouse or dependent
children, he may claim an income tax deduction for the same. The deduction
allowed in this section varies depending on whether the insured is an elderly
or non-elderly person.
If any amount was paid for
preventive health examinations, deduction of such payments would also be
allowed.
6. Section 80DD and Section 80U: Disability Income Tax Deduction
If the individual himself is
disabled, he will be entitled to a deduction under Section 80DD, and in the
event that any dependent family member of the individual is disabled, he will
be entitled to a deduction under Section 80U.
The disabilities for which
deductions are allowed in Section 80DD and Section 80U are also defined in the
income tax law.
7. Section 80E: Income Tax Deduction for Interest on Education Loans
A person is allowed a Section 80E
income tax deduction for repayment of interest on mortgage loans taken for the
higher education of himself or his spouse or dependent children.
It should be noted that this
deduction is only for the repayment of interest on the education loan and not
for the repayment of the principal amount of the education loan. The nice thing
about this income tax deduction is that there is no upper limit to the amount
of deduction that can be claimed.
This deduction is not only allowed
for education in
8. Income Tax Deduction for Income under Section 80GG
If a person has paid rent on the
home and has not claimed income tax deductions for rent paid under other
sections of the income tax law, he or she may claim a deduction under Section 80GG.
In other words, a salaried employee who has not benefited from the HRA Waiver or any other person who has not claimed rental expenses paid under any other section of the Income Tax Act may make a deduction under this section, subject to the limits prescribed in Section 80GG.
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