Introduction:-
Filing your Income-Tax Return (ITR) can be a daunting task, but it's essential to ensure you're not missing out on any potential deductions that could help reduce your tax liability. In this article, we will explore some of the top tax deductions you should consider when filing your ITR. By taking advantage of these deductions, you can optimize your tax return and potentially increase your refund.
1.Home Loan Interest:
If you have taken a home loan, you can claim deductions on the interest paid under Section 24(b) of the Income Tax Act. The maximum limit for deduction is ₹2 lakh per year for self-occupied properties.
2. Education Loan Interest:
Interest paid on an education loan can be claimed as a deduction under Section 80E of the Income Tax Act. This deduction is available for the interest paid on loans taken for higher education for yourself, your spouse, children, or a student for whom you are a legal guardian.
3. Section 80C Deductions:
Under Section 80C, you can claim deductions for various investments and expenses, including:
- Employee Provident Fund (EPF)
- Public Provident Fund (PPF)
- National Savings Certificates (NSC)
- Tax-saving Fixed Deposits (FDs)
- Equity-linked Savings Scheme (ELSS)
- Tuition fees for children
- Principal repayment of home loan, etc.
4. Medical Insurance Premium:
Premiums paid for a health insurance policy for yourself, your family, and your parents are eligible for deductions under Section 80D. This deduction helps in ensuring that you and your family are adequately covered in times of medical emergencies.
5. House Rent Allowance (HRA):
If you are a salaried individual staying in a rented accommodation, you can claim deductions on the rent paid. This is calculated based on your HRA, salary, and the rent paid and is subject to certain conditions.
6. Standard Deduction for Salaried Individuals:
As of the financial year 2021-22, a standard deduction of ₹50,000 is available for salaried individuals. This deduction is applicable to all salaried taxpayers, irrespective of their actual expenses.
7. Deductions under Section 80TTA:
This section allows a deduction of up to ₹10,000 on interest income earned from savings bank accounts. This deduction is applicable for individuals and HUFs (Hindu Undivided Families).
8. Deduction for Senior Citizens under Section 80DDB:
Senior citizens can claim a deduction for expenses incurred on medical treatment of specified diseases under Section 80DDB. The maximum deduction limit varies based on the age of the individual.
Conclusion:-
The process of filing ITR is a crucial financial responsibility, and by being aware of the various deductions available, you can make the most of your tax return. It's advisable to consult with a tax advisor or use tax-filing software to ensure you claim all the deductions you are eligible for. Taking advantage of these deductions can not only reduce your tax liability but also help you plan your finances more effectively.