Kotak Assured Savings Plan
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Kotak Health Shield
Insurance against medical expenses related to heart, brain, liver and Cancer.
Income tax filing is one of the most important tasks for every Indian citizen, whether a salaried individual or a businessman. In light of this, every year, the Finance Ministry of India rolls out a budget explaining IT deductions’ dos and don’ts. At the same time, every citizen is perplexed about making an investment that will assist them in saving taxes.
Although this might seem like everyone has to pay some amount of tax every year, there are a few ways by which you can save the taxes or get a rebate. Tax-saving investment options like PPF, EPF, and others are commonly used, and they give you tax exemption under section 80C. Similarly, other such sections can help you save taxes, but you might not have heard of them.
This page will explain the tax exemptions available under Sections 80C, 80D, and 80DDB.
Income tax is a percentage of income paid to the government by the taxpayers for the betterment of the public in general.
TAX SLABS |
NEW REGIME |
0 - ₹2.5 Lakhs |
NIL |
₹2.5 Lakhs - ₹5 Lakhs |
5% of the total income |
₹5 Lakhs - ₹ 7.5 Lakhs |
₹12,500 + 10% of the total income |
₹7.5 Lakhs - ₹ 10 Lakhs |
₹37,500 + 15% of the total income |
₹10 Lakhs - ₹ 12.5 Lakhs |
₹75,000 + 20% of the total income |
₹12.5 Lakhs - ₹ 15 Lakhs |
₹1,25,000 + 25% of the total income |
> ₹15 Lakhs |
₹1,87,5000 + 30% of the total income |
Income Tax deduction chart for individuals below 60 years of age (Income Tax Exemption of ₹2.5 Lakh)
Taxable income |
Tax Rate |
₹0 to ₹2,50,000 |
Nil |
₹2,50,000 to ₹5,00,000 |
5% |
₹5,00,000 to ₹10,00,000 |
₹12,500 + 20% of total income exceeding ₹5,00,000 |
Above ₹10,00,000 |
₹1,12,500 + 30% of total income exceeding ₹10,00,000 |
Income Tax rates for individuals above 60 years but less than 80 years of age (Income Tax Exemption of ₹3 Lakh)
Taxable income |
Tax Rate |
₹0 to ₹3,00,000 |
Nil |
₹3,00,000 to ₹5,00,000 |
5% |
₹5,00,000 to ₹10,00,000 |
₹10,000 + 20% of total income exceeding ₹5,00,000 |
Above ₹10,00,000 |
₹1,10,000 + 30% of total income exceeding ₹10,00,000 |
Income Tax deduction chart for individuals above 80 years of age (Income Tax Exemption of ₹5 Lakh)
Taxable income |
Tax Rate |
₹0 to ₹5,00,000 |
Nil |
₹5,00,000 to ₹10,00,000 |
20% |
Above ₹10,00,000 |
₹1,00,000 + 30% of total income exceeding ₹10,00,000 |
As per the new tax regime, all categories’ tax rates are the same. This includes individuals and HUF below 60 years of age, senior citizens or those above 60, and super senior citizens or those above 80 years of age. Therefore, there has been no increase in the basic exemption limit benefit for senior and super-senior citizens.
Taxpayers now have two options – they can either take up the new tax regime and choose to pay income tax at lower rates without a few income tax exemptions and deductions. Or, they can continue with the old tax regime and pay higher rates but avail of certain deductions and exemptions.
However, a few deductions are allowed under the new tax regime. They are as follows:
Specially-abled individuals can avail of transport allowance, which is considered a deduction. The expenses incurred while travelling to work will be considered a conveyance allowance. Under Section 80CCD (2), investment in the NPS or Notified Pension Scheme will be deducted. Under Section 80JJAA, there are deductions available for newly appointed employees. Depreciation of assets (machinery) under Section 32, excluding additional depreciation expenses incurred by employees being transferred or travelling for employment purposes.
70 exemptions and deductions are not a part of the new tax regime. The most common exemptions under this list include –
Professional tax, House Rent Allowance (HRA), Children’s education allowance, Leave Travel Allowance (LTA), daily expenses incurred during employment relocation allowance, and Conveyance allowance, Interest on housing loan under Section 24. Other special allowances [Section 10(14)] helper allowance standard deduction on salary.
One of the most well-liked and popular sections among taxpayers is Section 80C because it enables taxpayers to lower their taxable income by making tax-saving investments or incurring qualified costs. The highest annual deduction from the taxpayer’s gross income is ₹1.5 lakh.
Both individuals and HUFs are eligible to take advantage of this discount. Businesses, partnership businesses, and LLPs are not eligible for this deduction.
Subsections 80CCC, 80CCD (1), 80CCD (1b), and 80CCD are all part of Section 80C.
The overall ceiling for claiming a deduction, including the subsections, is ₹1.5 lakh, with the exception of an additional deduction of ₹50,000 permitted under Section 80CCD (1b).
Deduction for medical insurance premium
Section 80D allows you (as a person or HUF) to deduct ₹25,000 for insurance for yourself, your spouse, and your dependent children. If your parents are under 60, you may also deduct an additional ₹25,000 from their insurance. In the 2018 Budget, this sum was doubled from ₹30,000 to ₹50,000 for parents who are older than 60.
If both the taxpayer and the taxpayer’s parent(s) are 60 years of age or older, the maximum deduction allowed by this clause is ₹100,000.
Medical Expenses on Oneself or a Dependent Relative: A Deduction
A resident individual or a HUF is eligible for a deduction of up to ₹40,000. It can be used to cover any costs associated with the treatment of specific medical conditions for the owner or any of his dependents. Such a deduction is possible for a HUF in relation to medical costs related to these designated illnesses for any HUF member.
The individual or HUF taxpayer may claim a deduction of up to ₹100,000 if the elderly person for whose benefit the costs were incurred. Up till FY 2017–18, a senior citizen and a super senior citizen may each claim a deduction of ₹60,000 and ₹80,000. Unlike before, this is now a standard deduction that is available to all senior citizens, including super senior citizens, up to ₹100,000.
The amount of the deduction that the taxpayer may claim under this section shall be reduced by any reimbursement of medical expenditures by an insurance or employer.
Also keep in mind that in order to claim such a deduction, you must have a prescription for such medical treatment from the relevant physician. Take a look at our in-depth article on Section 80DDB.
Additionally, there is a surcharge of 10% if the total income exceeds ₹50,00,000 and a surcharge of 15% if the total income is more than ₹1 crore. There is also an education cess of 3% applicable over and above the surcharge.
The income tax exemption limit for all individuals below 60 years is ₹25,00,000; for individuals between 60 years and less than 80 years, ₹300,000 and for individuals above 80 years is ₹500,000.
Every individual is eligible for a deduction on the income invested in specific securities. We have listed all the deductions for FY 2019-20, which will help you easily prepare your income tax returns and make the most of the available tax deductions.
Here is a list of income tax deductions for FY 2019-20 and AY 2020-21 as per various sections of the Income Tax Act, 1961:
This is the most crucial section for deductions for every taxpayer. The maximum exemption limit in the section is ₹15,00,000. Various avenues, like PPF, EPF, term insurance, NPS, etc., could be claimed under section 80C. Below is the complete list:
This section allows a maximum deduction of ₹15,00,000, and it includes the contribution made to the annuity plan of a life insurance provider to obtain a pension from the fund.
This section includes the contribution to the Atal Pension Yojana. It allows a contribution of up to 10% of the total salary of salaried employees and 20% of the gross income of non-salaried to the government-notified pension schemes. The contribution can be deducted from the taxable income under Section 80 CCD (1). If the employer also contributes to the scheme, the entire contribution amount can be claimed as a tax deduction under Section 80CCD (2).
It is important to remember that the complete deduction under Section 80C, Section 80CCC and Section 80CCD (1) cannot exceed ₹15,00,000 in aggregate. However, the additional tax deduction amounting to ₹50,000 under Section 80CCD (1B) is above this limit.
Income Tax Deduction under section 80D is for the premium paid for Medical Insurance. This section allows deductions on the health insurance premium paid by an individual or HUF. You can claim a deduction of ₹25,000 for self, spouse and dependent children and an additional deduction for insurance of parents of less than 60 years of age, which is up to ₹25,000. Parents above the age of 60 can seek a deduction of ₹50,000, which was increased in Budget 2018 from ₹30,000.
And if the taxpayer and parent(s) are above 60 years of age, then the maximum deduction under section 80D is up to ₹1,00,000.
An amount of ₹75,000 may be claimed as a deduction for spending on medical treatments of dependents with a 40% disability. This limit is ₹1,25,000 in case of severe disability.
Deduction for Medical Expenditure on Self or Dependent Relative:
Deduction for Medical Expenditure for individuals and HUFs below age 60
Income Tax Deduction under Section 80DDB, a deduction of up to ₹40,000 is available to an individual or a HUF below 60 years of age. It is for any expenses towards treating specified critical ailments for self and dependents.
Deduction for Medical Expenditure for senior citizens and super senior citizens
Previously, for FY 2017-18, the limit was ₹60,000 for senior citizens and ₹80,000 for super senior citizens. It has been changed to ₹1,00,000 for all senior citizens, including super senior citizens.
This section which offered the tax benefits of the Rajiv Gandhi Equity Savings Scheme has been withdrawn. Still, if an individual has claimed a deduction in previous financial year, you are eligible to continue with the same for the next two financial years.
This section allows individuals to claim a deduction for the loss under the head Income from House Property. It allows a tax benefit on the repayment of a second house loan up to ₹2,00,000. The unclaimed amount of loss may be carried forward for eight years and set off against house property income. Any interest paid on the housing loan is also eligible for a tax benefit. Municipal taxes, interest paid on loans taken for the house, and 30% of the net annual income are allowed as a deduction.
Interest on loan paid for education is eligible for Section 80E. Please note that principal repayment on loan cannot be claimed as a deduction. The loan should have been taken for yourself, your children, and your spouse or for an individual for whom you are a legal guardian.
Individuals buying a home for the first time may claim an additional deduction of ₹50,000 on the home loan interest paid. This includes a clause that the loan should be sanctioned in or after FY 2016-17, and the loan amount should be less than ₹35,00,000. Furthermore, the house’s value should not exceed ₹50,00,000, and the individual should not own any other residential house under his name.
Section 80EEA allows a deduction for interest payments up to ₹15,00,000. This deduction is over and above the deduction of ₹2,00,000 available under section 24. An individual should not own any house on the date of a loan sanction to claim this deduction.
Section 80G encompasses all donations to charitable organisations and disaster relief funds. The contribution should be provided by check, cash, or draught. The amount of deduction eligible is ₹2,000. Moreover, for donations made to political parties, the same deduction could be claimed under 80GGC.
The deduction amount for this section is ₹60,000 per annum, and the section applies to only those who neither own a residential house nor receive a House Rent Allowance. Therefore, the amount of deduction will be the least of the following:
25% of the total income ₹5,000 per month amount of 10% of the adjusted total income deducted from the rent paid
This section allows a deduction of ₹10,000 from the total gross income of individuals or Hindu Undivided families. The deduction is allowed for the interest earned on the deposits made in a savings account in a bank, cooperative society or post office. However, the deduction will not be applicable for the interest earned from fixed deposits in the bank.
This section allows a deduction for individuals who are physically and mentally challenged.
Income Tax Exemptions for Salaried Employees 2022-23
Here is the income tax exemption list 2022-23:
It is advisable to plan the investment to avoid last-minute hassles. If you cannot invest in the right products, you would have to pay the entire tax depending on your income. The above income tax deductions list will help you plan and achieve your financial goals.
Ref. No. KLI/22-23/E-BB/999
Ref. No. KLI/22-23/E-BB/490
