We all know about the very known saying “saving a penny is earning a penny”. Hence we could save on the taxes and raise the income with the property planning on our taxes. People who are not aware of Income-tax compliance permit the tax deduction along with the exemptions upon the additional expenditure excluding insurance policies, home loans, and medical insurance, etc.
List of 12 Expenses That A Taxpayer Can Claim Exemption
Below is the list of lesser-known expenditures that an assessee can claim tax exemption as per the income tax act, of 1961.
Health Treatment for Covid-19
No tax would be charged on the funds that an assessee obtained via their employers or family or friends for the covid-19 treatment said the government in 2021. These advantages would be forwarded to those who might have obtained ex-gratia from employers or well-wishers of a family member who died of Covid-19. Thus any qualified amount obtained in the FY2019, FY2020, or FY2021 could be claimed as an exemption in the present assessment year.
Children Tuition Fee Deduction U/S 80C, 80CCC, & 80CCD
A parent could claim for up to 2 children. Thus a maximum of 4 children deduction could be availed that is two by each parent. Every parent could claim a deduction of up to Rs 1.50 lakh each fiscal year. You must learn that the aggregate amount of deduction under sections 80C, 80CCC, and 80CCD would not be more than Rs 1,50,000 for the particular parent.
Tax Deduction on HRA
This type of benefit can only be claimed by salaried people. The additional along with the salaried employees who do not poses House Rent Allowance (HRA) as a part of their compensation package could avail of the tax deduction on the rent beneath section 80GG.
Home Loan Principal
The property must be held down for 5 years.
Deduction U/S 80C for Home Buying and Stamp Duty
Section 80C of the income tax act permits a deduction for the stamp duty, registration charges, and additional expenses directly linked with the transfer. The highest deduction amount beneath the same section would stand at Rs 1,50,000.
Medical Expenses Under Section 80D
The income tax rules permit the tax breaks for the uninsured senior citizen parents, on particular diseases and preventive health check-ups, besides from the deduction on the premium furnished for the health insurance. Assessees are enabled to avail of Rs 50,000 tax deduction under section 80D who pays towards the medical treatment, regular check-ups, or the medicines of their senior citizens’ parents.
Interest in Bank Saving Account
With up to Rs. 10,000 beneath BOTTA (not applicable to interest from the fixed deposit and recurring deposit)
Deduction on Donations Beneath Section 80G
Donations made by the government via a backed fund could be claimed fully while those who incurred to a private institution would be qualified for a 50% tax deduction beneath section 80G. (cash donations exceedings Rs 2000 would not be eligible).
Interest on Home Construction Loan
A maximum of Rs. 30,000 under Rs. 2 lakh (expenses that add value to a property)
Interest on National Savings Certificate
This could be claimed for four years because the interest is furnished in the 5th year.
Health Check-ups up to INR 5000 Deduction U/S 80D
Rs.25,000 (Rs.50,000 for senior citizens) ceiling of section 80D covers the deduction on the preventive health checkups.
Tax Relief on Playgroup, Pre-nursery & Nursery Fees
The same would be possible for any person who furnished the education fees towards their children for the sake of claiming the deduction beneath section 80C. The parents could deduct the whole amount which they have spent on the education of their children beneath section 80C. But under Section 80C the highest amount of the deduction would stand at Rs 1,50,000.
The same would be learned that excluding the sections 80D, 80C, 80CCC, and 80CCD there are various methods that save your money and would raise your total wealth over time.