Deductions to look out for while filing your Income Tax Return

Ritik Chopra | Last updated: 22 November 2021

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Filing your income tax return presents an opportunity to reduce your tax liability by claiming eligible deductions. This article highlights important deductions under the Income Tax Act, 1961, such as those for health insurance premiums paid for yourself, your spouse, children, and parents under Section 80D, with specific limits for individuals, HUFs, and senior citizens. It also covers deductions for investments in various savings schemes like PPF, life insurance premiums, NSC, and Sukanya Samriddhi accounts under Section 80C, up to a limit of Rs. 1,50,000 annually, and includes repayments of housing loans and tuition fees for two children.

Income Tax Returns filing season is going on and every assessee just wants to reduce their tax liability. One way to reduce your tax liability is to avail the deductions provided in the Income Tax Act,1961. In this article I have discussed the deductions to look out for while filing your Income Tax

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FAQ :

For an individual, spouse, and dependent children, the deduction limit is the least of the actual premium paid (excluding cash payments) plus preventive health check-up up to Rs. 5,000, or Rs. 25,000. For senior citizens, this limit increases to Rs. 50,000.

Yes, if a senior citizen (aged 60 or above) has not taken health insurance, you can claim a deduction for medical expenditure incurred for them, up to a maximum of Rs. 50,000. This can be claimed in addition to health insurance premiums for others, but the aggregate deduction is capped at Rs. 50,000.

The total amount deposited or invested in various approved savings schemes qualifying for deduction under Section 80C is capped at Rs. 1,50,000 per annum. This limit also includes deductions under Sections 80CCC and 80CCD.

Investments that qualify for deduction under Section 80C include deposits in Public Provident Fund (PPF), payment of Life Insurance Premiums, investments in National Savings Certificates (NSC), deposits in Sukanya Samriddhi Account, certain Term Deposits with banks (minimum 5-year duration), and repayment of housing loans.

Yes, tuition fees paid for the full-time education of any two children at any school, college, or university in India qualify for deduction under Section 80C. This deduction is limited to the actual amount paid and excludes development fees or donations.