Major Expenses to Write Off I-T Deductions While ITR Filing

ITR Filings are prime indicators of both the moral and the economic compass of a Nation. India, as a nation, has long been suffering from a below-par tax base. This shows up subsequently in government budgetary allocation to various public welfare schemes. A strong tax base is the lifeline of a strong economy and a stronger nation.

It is a common citizen and the only way to become a participant in the Nation’s growth and prosperity. The current government’s impetus on increasing the tax base is a refreshing move in this regard. But more than a compulsion, it is also important that citizens realise that paying taxes is Dharma or Duty, which must be followed.

Income Tax Return (ITR) provisions can be a real blessing in disguise. A planned income tax return (ITR) filing can help you get rid of a truckload of expenses that, if left untreated, can cause a dent in your salary accounts.

The Income Tax (IT) department provides a host of claim options in ITR Returns, which provide cover against several expenses like loan payments, medical expenditures, etc. Most importantly, even losses in capital gains can be used to claim ITR relaxations.

Below we list 5 expenses that Employees can set off during ITR Filings.

Education Loan Repayments

Education is not cheap. Most of us have opted for an education loan. One of the benefits of ITR filing is that we can claim a deduction on interest paid on education loans u/s 80E

HRA (House Rent Allowance)

Salaried individuals living in a rented house can claim HRA under section 10(13A) if not included in the salary. where the maximum deduction can be claimed least of the following:

• Actual HRA received
• Rent paid – 10% of Salary
• 50% of Salary (if living in Metro city)
  40% of Salary (if living in a non-metro city)

Salary for HRA =

• Basic Salary + Dearness Allowance (forming part of retirement benefits) + Commission (if based on fixed % of turnover)

National Pension Scheme (NPS)

NPS offers a plethora of investment options. Employees between the age group 18-70 can invest part of their pension fund into NPS options. A maximum deduction of 10% of the employee’s salary (basic + DA) is allowed towards NPS. Section 80CCD(1B) is an additional benefit of Rs 50000. Maximum deduction can take Rs 2 lakhs under Section 80CCD(1) + Section 80CCD(1B).

Routine Health Check-Ups and Medical Insurance

Employees can also claim benefits up to Rs. 25,000 against medical insurance premiums of self as well as their first blood relations (spouse, children, and parents). The benefits further increase to Rs 50,000 for senior citizen parents. Also, annual benefits up to Rs 5,000 can be claimed on preventive health check-ups by employees. Preventive health check-ups can be paid for in cash.

Capital Gains Settlement

Any loss made in a capital asset sale can be carried forward in IT returns. However, keep in mind that capital gain or loss can be settled against capital gains only.

Recommended: How to Download Income Tax Return E-Filing Software?

Hence, it is paramount to realise that instead of getting saddened or mulling over ITR, it is important to use ITR for benefits and claims. Using these benefits, taxpayers can participate in nation-building while at the same time paying less in taxes. In addition to ITR benefits, section 80C under the Income Tax Act also provides a benefit of Rs 1.50 lakh on investment.