All you need to know about income tax deductions in India
In India, every individual is expected to pay taxes corresponding to their
Understanding tax deductions
The amount that is deducted will depend on the type of tax deduction you claim. Some of the popular categories include medical expenses, charitable donations and tuition fees. You can also invest in schemes like retirement savings, life insurance and national saving scheme that have tax benefits. The ultimate purpose of such tax deductions is to stimulate the growth of commercial institutions and individuals.
How do tax deductions help?
Income tax deductions make it possible to reduce the taxable income thereby lowering the tax liability on the whole. This can lead to some gains by saving on taxes. The eligibility criteria for availing of tax benefits depend on a number of factors. Also the limits of these rebates are different for different purposes.
Here are the types of income tax rebates available under the Indian Income Tax Act”
This is one of the most popular kind of tax saving through investments.
Section 80-CCC & 80-CCD
In this section, tax laws permit deductions on contributions made towards the pension funds of the individual.
The provisions in this section is meant for the interest on saving accounts with banks.
This section enables savings by investing in equity saving schemes.
As per this section, the taxpayer can claim deductions for paying towards the medical insurance premiums.
Section 80 DD & Section 80 U
Under this section, differently-abled people can avail of tax deductions on account of their disabilities.
Section 80 E
This section of the Income Tax Act gives room for saving on the interest on educational loan.
Section 80 GGA, 80 GGB, 80 G & 80 GGC
All these sub-sections allow the taxpayer to claim deductions for the donations done to charitable causes.
Section 80 GG
This section is applicable for people living in rented homes and it makes it possible for them to claim deductions on the rental charges they pay.
Many day-to-day expenses we incur can quality us for income tax deductions. Therefore rebates can help save a good amount of money and make informed decisions when it comes to managing the spending.