Income Tax Act, 1961- Chapter VI A provides for various deductions that are available from the total income of an assessee while computing the taxable income. People are normally aware of few common tax deductions such as deduction under section 80C in respect to contribution made towards LIC, PF (provident fund), deduction under section 80D for mediclaim premium paid etc.
There are few deductions that are not commonly known to the assesees, but benefits can be availed. Here is the list of deductions:-
1. Deduction u/s 80CCF:
A deduction of upto INR 20,000 can be availed under section 80CCF in respect of an amount paid towards subscription of long-term infrastructure bonds notified by the central government. Examples for this are Infra Bonds issued by IFCI, LIC etc.
2. Deduction u/s 80DD:
This deduction will be applicable for maintenance and medical treatment of a person with disability. Any expenditure done by a resident individual on the medical treatment, nursing, training and rehabilitation of a dependent person whether it is spouse, children, parents, or siblings with a disability, shall be allowed a deduction of upto INR 75,000. If the disability is severe (80% or more) then deduction of INR 100,000 shall be allowed instead of INR 75,000.
Deduction for following disabilities of more than 40% suffered by the dependent person shall be allowed:-
- Blindness and Low vision
- Leprosy-cured
- Hearing impairment
- Locomotor disability
- Mental retardation and Mental illness
- Autism
- Cerebral Palsy
- Multiple Disability
3. Deduction under Section 80DDB:
This deduction will be applicable for medical treatment of certain diseases. A deduction of up to INR 40,000/- (Rs.100, 000 in case of a senior citizen) paid by a resident individual in respect of the medical treatment of a dependent person for following diseases will be allowed:
- Neurological Diseases where the level of disability has been certified to be of 40% and above:
- Motor Neuron Disease
- Hemiballismus
- Aphasia
- Ataxia
- Chorea
- Parkinsons Disease
- Dementia,
- Dystonia Musculorum Deformans
- Malignant Cancer
- Chronic renal failure
- Hemophilia and Thalassaemia
- AIDS
4. Deduction under Section 80E:
This deduction will be applicable for Interest on higher education loan. Interest paid on loan which is taken from a financial institution for higher education (Above Senior secondary) of self/spouse/ children or person of whom assessee is a legal guardian shall be allowed as a deduction while figuring the taxable income.
5. Deduction under Section 80EE:
This deduction will be applicable for Interest on housing loan. Interest on a housing loan of up to INR 3500000 sanctioned between 01 April 2016 to 31 March 2017 for a residential property whose value does not exceed INR 5000000 shall be allowed as a deduction. The maximum deduction available under this section is INR 50,000. The only condition for getting this deduction is that the assessee should not own any other residential house as on the date of sanction of loan.
6. Deduction under Section 80EEA:
This deduction will be applicable for Interest on housing loan. Where an assessee is not eligible to claim deduction under section 80EE, he/she can resort to claiming a deduction u/s 80EEA.
Interest on housing loan sanctioned between 01 April 2019 to 31 March 2020, where the stamp value of the property does not exceed INR 45 lacs shall be allowed as a deduction. The maximum deduction available under this section is INR 1,50,000. This section also have pre-condition that the assessee should not own any other residential house as on the date of sanction of the loan.
7. Deduction under Section 80EEB:
This deduction will be applicable for interest on loan taken for purchase of electric vehicle. A deduction of up to INR 1,50,000/- can be availed on interest payment on loan taken for purchase of electric vehicle. The loan should be sanctioned between 01 April 2019 to 31 March 2023.
8. Deduction under Section 80GG:
This deduction will be applicable for Rent paid. This tax deduction is available to individuals not having income in form of HRA under the head salary. A deduction in respect of rent paid is available in case the rent paid is in excess of 10% of his/her total income subject to the condition that such excess expense does not exceed 25% of his/her total annual income or INR 5000/ per month whichever is less.
No deduction under this section will be available if the residential accommodation is owned by the assessee his/her self, spouse, minor child or the HUF of which the assessee is a part at the place where the assesee carries the duties of his/her profession.
9. Deduction under Section 80GGC:
This deduction will be applicable for Donation to political parties. A deduction of any amount donated (in ways other than cash) to a political party registered under section 29A of the Representation of the People Act, 1951 is available while computing the taxable income of an individual.