Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

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 Return.

One of the most common expenditure of the general public is on medical/health insurance. Deduction regarding health insurance is allowed u/s 80D if health insurance premium is paid during the previous year out of income chargeable to tax and it is paid by any mode other than in cash. Deduction regarding health insurance is allowed to individuals and HUF's. It is allowed in respect of medical/health insurance premium paid towards notified schemes taken up in respect of specified persons as follows:

Deductions to look out for while filing your Income Tax Return

Medical Insurance Policy or Policies of individual, spouse and dependent children and contribution made to CGHS

Least of 2 amounts shall be allowed as deduction :

(1) Actual premium deposited in any mode other than cash regarding medical insurance policy hr policies of assessee, his/her spouse and all dependent children put together and preventive health check up amount upto Rs. 5,000 only and contribution made to CGHS. OR

(2) Rs. 25,000 (in case of senior citizen Rs. 50,000)


Medical Insurance Policy or Policies of parent or parents Least of 2 amounts shall be allowed as deduction

(i) Actual premium deposited in any mode other than cash regarding medical insurance policies of parent/parents and preventive health check-up. Parents may or may not be dependent upon the assessee. OR

(ii) Rs. 25,000 (in case of senior citizen Rs. 50,000).

Medical Insurance Policy taken by H.U.F

 In case of H.U.F, deduction under section 80D shall be the amount of medical insurance premium paid in any mode other than cash on the health of any member of H.U.F. as does not exceed in the aggregate Rs. 25,000 ( Rs. 50,000 in case of senior citizen). Deduction regarding parents shall be allowed in addition to the deduction available to the assessee for the medical insurance of self, spouse and children


Medical Expenditure of senior citizen (Age 60 years or above)

In case a senior citizen has not got health insurance coverage (sometimes insurance companies do not provide such coverage to senior citizens), a deduction upto a maximum of 50,000 shall be allowed regarding any payment made on account of medical expenditure incurred in respect of a senior citizen. In case one parent has been medically insured and the other being senior citizen is not medically insured but has to incur medical expenses, the aggregate deduction regarding health insurance premium and medical expenditure incurred will be allowed but is shall be limited to Rs. 50,000.

Savings play an important role in the economic development of any country. To boost saving habits, an incentive in the form of a deduction out of one's taxable income has been allowed. To use those savings, various schemes have been framed and if the assesses deposits those savings in these approved schemes, a deduction shall be allowed. Total amount deposited in various approved savings schemes or Rs. 1,50,000 p.a. w.e, is less shall be allowed as deduction. This limit of 1,50,000 also includes the amount of deduction allowable to the assessee u/s 80CCC and 80CCD.

Amount saved and deposited by the employee or assessee in following savings schemes shall qualify for deduction u/s 80C.

Deposits made in Public Provident Fund

This Provident Fund account can be opened in the name of an individual (salaried or non-salaried), his/her spouse or children and amount deposited by the assessee during the previous year in any of these accounts shall qualify for deduction under section 80C.

Payment of Life Insurance Premium

Actual amount of premium deposited by the assessee or on his behalf by his employer or 20% of sum assured (10% for policy issued on or after 1-4-2012) w.e. is less shall qualify for deduction. Life insurance policies can be obtained in the name of the assessee, spouse and children and in of HUF in the name of any or all the co-parceners of the HUF. The children means all the sons and daughters of the assessee whether minor or major, whether dependent upon assessee or are independent or may be married or unmarried. It also includes step or adopted children.

Amount invested in National Savings Certificates-VIII or IX issues

Amount invested in National Savings Certificates-VIII or IX issue fully qualifies for deduction u/s 80C. Interest accrued on these certificates purchased earlier is deemed to be re-invested, hence such interest also fully qualifies for deduction every year.

Deposit in Sukanya Samriddhi Account

Any amount paid or deposited as a subscription in the name of a girl child of the individual or in the name of any girl child for whom such individual is the legal guardian will qualify for this deduction under section 80C.

Term Deposits with Banks

Term deposits with certain banks of not less than 5 years duration and as per scheme by Central Govt. shall also qualify for deduction u/s 80C.

Repayment of Housing loan for purchase/construction

Any amount repaid under housing loan taken from Govt.., LIC, Bank, HDFC, HUDCO or other housing finance institutions or employer. [Not from friends or relatives] OR Amount repaid as full price or installment of price approved agency shall qualify up to actual amount repaid. The amount repaid must not include interest on loan or ground rent but shall include stamp duty and registration charges. Lock-in-period. The house acquired cannot be transferred before the expiry of 5 years from the end of the financial year in which the possession is obtained by assessee.

Payment of Tuition Fees of two Children

Any amount paid as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature) whether at the time of admission or thereafter to : (a) any school, college or university or other educational institution situated in India, (b) for the purpose of full time education of any two children of the individual. The amount, which shall qualify under this section, shall not exceed actual amount paid as tuition fee for two children only.

"Loved reading this piece by Ritik Chopra?
Join CAclubindia's network for Daily Articles, News Updates, Forum Threads, Judgments, Courses for CA/CS/CMA, Professional Courses and MUCH MORE!"


Category Income Tax, Other Articles by - Ritik Chopra