6 Income Tax Deductions You Don't know about

Studying the Income Tax Act of India is a frightening task for many people. Most of the individuals are aware of some of the most common tax deductions available to them. However they do not take advantage of the several benefits hidden in the complex clauses of the Act. , There are many other deductions apart from the familiar deductions like 80C and 80D. Listed below are some little-known tax benefits that can help you save a considerable amount in taxes every year.

1. Section 24: Have you ever heard of this section? Probably isn’t it. Section 24 deals with the interest on the home loan and the tax aspect of the interest on house loan repayment. It is not at all mandatory that you need to live in your own house to claim this benefit instead you can live in another house too. The maximum limit under this section is 1,50,000, but there is no limit on the number of houses as well as location of houses you can claim for. Your tax liability decreases as the interest payment is

Deduction is also available on the donations made by an individual to certain funds or charitable institutions under Section 80G of the I-T Act. Under this section there is no restriction on the amount of charity and the rate of deduction, is either 50 or 100 per cent, that too depending on the choice of trust. But the, donations must be made to registered institutions only. This also includes any amount contributed to a recognized political party and that can be claimed as a deduction under Section 80GGC. This is a new deduction and was introduced in 2010. Even donations done to an institution that involves scientific research or rural development also get exemption under Section 80GGA. However, you cannot use this route to evade tax by bringing down your income tax slab. The amount of deduction allowed under this section is only up to 10 percent of the gross total income of the donor. Also, remember only cash donations are taken into account, donations of food, clothes and medicines do not qualify for such a deduction

3. Section 80DDB: Deductions are available on the expenses on medical treatment of specified ailments like AIDS, cancer and neurological diseases which can be claimed under Section 80DDB. The limit of maximum amount deduction allowed from gross total income is limited up to 40,000 and it can go up to 60,000 if the age of the person treated is 60 years or more. But the condition applied is that, no medical reimbursement should be received from any insurance company or employer for this amount. To claim this deduction, the only thing you have to do is to submit Form 10-1 from a specialist doctor working in a government hospital in India, with the confirmation of the treatment of the disease.

4. Section 80EE: A new section 80EE was introduced for the Annual Year 2014-2016 by the finance minister. This section is related to the additional deduction in respect of interest on loan taken for residential house property. Assesses can actually avail the benefits of this section in two A.Y. 2014-15 & 2015-16. The main purpose of this section is to promote house ownership & give a fillip to a number of industries like steel, cement, brick and wood, in addition to jobs to thousands of construction workers.

5. Section 80GG: Section 80GG allows deduction for the individuals for the rent paid by them for their own residence. Such deduction is allowable for the individual who has not received any House Rent Allowance from his employer specifically granted which qualifies for exemption under section 10(13A), for individuals who file the declaration in Form No. 10BA, for an employee who does not own any residential accommodation himself or by his spouse or minor child or where such individual is a member of a Hindu Undivided Family.

6. Section 80TTA: A new section 80TTA in the Income Tax Act – 1961 was introduced in 2012. This section provides deduction up to 10,000 to an Individual or HUF from Gross Total Income towards interest on saving bank A/c that too maintained with a bank or society or post office. The deduction allowable shall be interest received or 10,000 or whichever is lower. This section is also proposed to provide income referred to in this section is derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons or a body of individuals and also no deduction shall be allowed under this section in respect of such income in computing the total income of any partner of the firm or any member of the association or any individual of the body.