Income Tax Deductions & Exemptions List (AY 2024-25)

Income tax exemptions and deductions help taxpayers in India save money by encouraging investments and providing relief on specific expenses.

777,606 Views | Updated on: Apr 02, 2025

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Income tax season can be a bit overwhelming, right? But here is the good news: the Indian government offers a comprehensive list of income tax deductions and exemptions that can help you lower your tax burden and save a significant amount of money. All the sections in this list, from Section 80C to Section 80G, cover everything from investments and savings plans to specific expenses, so you can maximize your savings.

Now, if you are wondering about how these exemptions and deductions work with the two available tax regimes, here is a quick overview. The new tax regime offers lower rates but fewer tax breaks, while the old tax regime, with higher rates, provides more opportunities for tax benefits through deductions and income tax exemptions. Depending on your financial needs, you can choose the option that best aligns with your goals.

The assessment year (AY) 2024-25 comes with various deductions and exemptions in income tax. Each of these is designed to help you reduce your taxable income. But what are these terms, and how do they work? Let us help you understand the income tax exemptions and deductions step by step so you can make the most of these opportunities.

What are Tax Deductions?

Tax deductions in India are basically a way for the government to reward you for certain expenses or investments you make. So, when you spend money on specific things like life insurance, saving schemes, or medical treatments, the government allows you to reduce your overall taxable income. This means you end up paying less income tax than you would have without these deductions.

Think of it as a discount on the taxes you owe, provided you have spent your money in areas the government wants to promote. As per the Income Tax Act 1961, there are various sections under the policy that determine your tax deduction benefits based on the type of investment you make. By doing this, they encourage you to save, invest, take care of your health, and even plan for retirement! So, not only do you benefit from these investments in the long run, but you also get a tax break each year.

Income Tax Deductions List in India

Understanding the various deductions available under the Income Tax Act 1961 is essential for you to optimize your tax planning strategies effectively. Here is the list of income tax deductions available in India:

Income Tax Deduction under Section 80C

Section 80C deductions are one of the most popular tax-saving provisions in India. Under this section, taxpayers and HUFs (Hindu Undivided Families) can claim deductions up to ₹1,50,000 in a financial year. Some eligible investments and expenditures under Section 80C include:

a. Employee Provident Fund (EPF)

b. Public Provident Fund (PPF)

c. Equity-Linked Savings Scheme (ELSS)

d. National Savings Certificate (NSC)

e. Life insurance premiums

f. National Pension Scheme (NPS)

g. Home loan principal repayment

h. Tax-saving fixed deposits

Income Tax Deduction under Section 80CCC

Under Section 80CCC of the Income Tax Act, you can claim annual deductions of up to ₹1,50,000 for contributions to designated pension schemes offered by term life insurance companies. However, this deduction is subject to the overall limit specified under Section 80C of the Act.

Income Tax Deduction under section 80CCD

Under section 80CCD(1), you can claim a deduction for contributions to government-notified pension schemes like NPS and Atal Pension Yojana. It allows a deduction of up to 10% of your total salary (for employees) or 20% of your gross income (for the self-employed). The contribution can be deducted from the taxable income under Section 80 CCD(1). If the employer also contributes to your NPS, 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 ₹1,50,000 in total. However, 80CCD(1B) allows an additional ₹50,000 deduction!

Income Tax Deduction under Section 80DD

Section 80DD is designed to help families who are financially responsible for caring for dependents with disabilities. If you have a family member with a physical disability and you are either paying for their medical treatment or maintaining a fund for their well-being, this section offers valuable tax relief.

You can claim a deduction of ₹75,000 if your dependent has a disability (40% or more but less than 80%). But, if your dependent has a severe disability of 80% or more, you can claim a deduction of ₹1,25,000.

Income Tax Deduction under Section 80DDB

This section allows tax deductions for medical expenses incurred for specific illnesses for you and your dependents.

If you are below 60 years of age, you can claim up to ₹40,000 as a deduction for the medical treatment of specific diseases like cancer, chronic kidney disease, neurological disorders, etc.
For senior citizens (60 years and above), the deduction limit is much higher, up to ₹1,00,000, considering the increased healthcare needs at that age.

It is also important to note that to claim this deduction, you will need to provide a certificate from a specialist working in a government or private hospital confirming the illness.

Income Tax Deduction under Section 80CCG

This section, which offered the tax benefits of the Rajiv Gandhi Equity Savings Scheme, has been withdrawn. Still, if you have claimed a deduction in the previous financial year, you are eligible to continue with the same for the next two financial years.

Income Tax Deduction under Section 80EE

If you are planning to buy a home for the first time, you 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 you should not own any other residential house under their name.

Income Tax Deduction under Section 80EEA

Missed out on Section 80EE? Do not worry! The Indian Income Tax Act provides a tax deduction of up to ₹1,50,000 per financial year for interest paid on home loans taken for purchasing or constructing an affordable house.

It is for first-time homebuyers, so if you are buying your first residential house, you qualify for this deduction.
The loan must have been sanctioned between 1st April 2019 and 31st March 2022.
And lastly, you must not have claimed the deduction under Section 80EE.

This deduction is over and above the ₹2,00,000 limit allowed under Section 24(b), which means you can save even more.

Income Tax Deduction under Section 80EEB

Section 80EEB enables you to claim tax savings on interest paid for loans to purchase electric vehicles, up to ₹1,00,000 (provided that the loan is sanctioned between 1st April 2019 to 31st March 2023). Eligibility criteria, including conditions related to the loan issuer and the electric vehicle, must be met to avail of the deduction.

Income Tax Deduction under Section 80GG

If you do not receive HRA (House Rent Allowance) as part of your salary, Section 80GG allows you to claim a deduction on the rent you pay. The amount you are eligible to claim as a deduction will be the lowest of the following three options:

The rent you pay minus 10% of your total income (before this deduction).
₹5,000 per month (which means up to ₹60,000 a year).
25% of your total income (excluding long-term capital gains, short-term capital gains taxed under Section 111A, or incomes taxed under Sections 115A or 115D).

For example, If your total income (before deductions) is ₹8,00,000 and you pay ₹1,00,000 in rent per year, your deduction will be calculated like this:

10% of ₹8,00,000 = ₹80,000
Rent paid (₹1,00,000) – ₹80,000 = ₹20,000 (This becomes your possible deduction).

Income Tax Deduction under Section 80GGC

Section 80GGC allows you to claim tax deductions for donations made to political parties or electoral trusts. It promotes transparency in electoral funding, encourages financial support to the political system, and helps you reduce your tax liability by claiming deductions against such contributions.

Income Tax Deduction under Section 80U

Taxpayers with disabilities can claim a deduction under Section 80U, and the amount varies based on the severity of the disability. Individuals with at least 40% disability (as certified by a medical authority) can claim a deduction of up to ₹75,000, and individuals with a severe disability (at least 80%) can claim a deduction of up to ₹1,25,000, respectively.

Income Tax Deduction under Section 80D

Section 80D provides deductions on health insurance premiums and preventive health check-ups. The eligible deduction amount varies based on your age and the number of family members covered under the policy.

For Self, Spouse, or Dependent Children

You can claim up to ₹25,000 as a deduction. If you or any of them are senior citizens, this limit goes up to ₹50,000.
Included in this limit is ₹5,000 specifically for preventive health check-ups.

For Parents

You can claim ₹25,000 for their health insurance. If they are senior citizens, the deduction goes up to ₹50,000.
Preventive health check-ups up to ₹5,000 are also covered within this limit.

If no health insurance premium is paid but medical expenses are incurred on a senior citizen, you can still claim a deduction of up to ₹50,000 for medical expenses.

Income Tax Deduction under Section 24(b)

Section 24(b) deals with deductions on the interest paid on home loans. You can claim up to ₹2,00,000 per annum for self-occupied properties. In the case of let-out properties, there is no upper limit on claiming the interest paid on the home loan.

Income Tax Deduction under Section 80E

This section allows you to claim deductions on the interest paid on education loans. These loans must be taken for higher education, either for you, your spouse, children, or a student you are a legal guardian of. There is no cap on the deduction, but it is available for up to 8 years.

Income Tax Deduction under Section 10(14)

Section 10(14) offers deductions on various allowances salaried individuals receive, such as House Rent Allowance (HRA), conveyance allowance, and medical allowance.

Income Tax Deduction under Section 80G

Donations made to specified funds and charitable institutions are eligible for deductions under Section 80G. The deduction varies from 50% to 100% of the donated amount, depending on the nature of the recipient organization.

Income Tax Deduction under Section 80TTA and 80TTB

Under Section 80TTA, you can claim deductions of up to ₹10,000 on interest earned from savings accounts. For senior citizens, Section 80TTB provides deductions of up to ₹50,000 on interest earned from savings accounts, fixed deposits, and recurring deposits.

Income Tax Deduction under Section 80RRB

Section 80RRB of the Income Tax Act allows you to claim deductions for royalty payments received. Royalty is compensation received for the use of intellectual property like books, art, or inventions. The deduction is either ₹3,00,000 or the royalty received, whichever is lower.

Income Tax Deduction under Section 80QQB

Under Section 80QQB, royalties earned from specific publications like journals, newspapers, or textbooks are ineligible for deductions. Additionally, any royalty income from abroad must be repatriated within a specified time frame to qualify for deductions. Authors of books (other than textbooks) can claim deductions on royalty income under Section 80QQB, up to ₹3,00,000 annually.

Income Tax Exemptions 2024-25

Income tax exemptions reduce your taxable income without any investment. Let’s look at the income tax exemption list for AY 2024-25.

House Rent Allowance (HRA)

If you’re a salaried individual living in rented accommodation, House Rent Allowance (HRA) is one of the best ways to save on taxes. If your employer is giving you HRA as part of your salary, you can claim an income tax exemption on it. But the amount you can save depends on a few factors:

Total HRA you get from your employer
50% of your salary if you live in a metro city or 40% if you live in a non-metro
Rent paid minus 10% of your basic salary and dearness allowance (DA)

Whichever amount is the lowest will be considered for income tax exemption.

Leave Travel Allowance (LTA)

Did you know that you can save on taxes by travelling? Leave Travel Allowance (LTA) lets salaried employees claim tax exemptions on travel expenses during their leave. But the catch is that it only covers travel within India. You cannot claim LTA for international trips. Whether you travel by road, train, or air does not matter as long as it is within the country. This exemption applies only to travel costs and not other expenses like hotel stays or food.

Mobile Reimbursement

Do you use your personal mobile phone for work-related calls or emails? You can claim a tax exemption in India if your employer reimburses you for these expenses! The best part is that you can claim tax-free reimbursement on the actual bill amount or the amount your employer provides as part of your salary package, whichever is lower. This little-known exemption can save you some extra cash without you even realizing it.

Food Coupons

Food coupons from your employer are also partially exempt from taxes. The exemption works out to ₹50 per meal, and you can claim up to two meals per working day. If you get food coupons as part of your salary, this is a great way to enjoy a tax benefit on something as essential as food.

Relocation

Relocating for a job can be quite expensive with moving costs, transportation of vehicles, and flight or train tickets. But the good part is, if your employer reimburses you for any relocation-related expenses, these reimbursements qualify for a tax exemption. Whether you are shifting to a new city for a promotion or taking on a new role, ensure you get the tax benefits for these costs.

Child Education

If you have kids, you probably know how education can be costly. Luckily, many employers offer an education allowance for their employees’ children. Under this exemption, you can claim up to ₹100 per month per child for a maximum of two children. This may not seem like a lot, but every little bit counts when it comes to saving on taxes.

Telephone Bills

If you use a landline for official purposes, the expenses incurred can be reimbursed by your employer. As with mobile expenses, the exemption amount will be the actual bill or the amount specified in your salary package, whichever is lower.

Books and Periodicals

If your job requires you to stay updated through books, newspapers, or periodicals, you can claim income tax exemptions in India on the expenses. Like the other reimbursements, the exemption here is limited to the actual amount spent or the amount provided by your employer, whichever is lower.

Benefits of Tax Deductions

While tax deductions in India may seem complex and overwhelming, understanding their benefits can help you in strategic financial planning and responsible decision-making.

Reduced Tax Liability

One of the most apparent benefits of tax deductions is that they help reduce an individual’s or business’s overall tax liability. By deducting eligible expenses and investments from your taxable income, you can lower the portion of your income subject to taxation. This allows you to save a significant amount, which you can reinvest in your future ventures, purchase goods and services, or save for the future.

Encouragement of Charitable Contributions

Tax deductions play a major role in encouraging charitable giving. Many governments offer tax deductions to people who donate to registered charities or non-profit organizations. By providing this incentive, governments hope to promote philanthropy and support the crucial work carried out by charitable entities. Not only does this benefit society as a whole, but it also allows you to contribute to causes you are passionate about while simultaneously reducing your tax burden.

Stimulating Investment and Economic Growth

Many tax deductions, like those under Section 80C, are designed to encourage investments in areas that promote economic growth. Thus, governments often grant deductions for capital expenditures, research and development, and other business-related expenses. By doing so, they encourage businesses to reinvest their earnings into the economy, leading to job creation, innovation, and increased productivity.

Promoting Homeownership and Real Estate Investments

Sections 80EE and 24(b) make it easier to own a home by reducing the tax burden on home loan interest. Deductions for mortgage interest, property taxes, and certain home improvements aim to make homeownership more accessible and affordable. These incentives can motivate individuals to invest in real estate, promote a stable housing market, and support the construction industry. Moreover, homeownership often builds equity for individuals, helping them build wealth over time.

Facilitating Education and Skill Development

Tax deductions can also be advantageous in education and skill development. Various governments provide tax breaks for expenses related to higher education, including tuition fees and interest on student loans. Additionally, certain professional development expenses may be deductible for individuals seeking to enhance their skills and expertise. Tax deductions contribute to a more skilled and competitive workforce in the country by encouraging investment in education and continuous learning.

Wrapping Up

Understanding income tax deductions and exemptions can seem tricky at first, but once you get the hang of it, it becomes clear how beneficial these provisions are. From reducing your tax liability to encouraging investments and charitable contributions, these deductions and exemptions play a key role in personal finance management.

Keep in mind the key to maximizing your savings is staying informed about the latest updates and ensuring you make use of every available deduction and exemption in income tax. The more you explore and understand, the better decisions you can make about your finances.

Also remember, saving on taxes is not just about reducing what you owe, rather it is about making smarter investments in your future!

FAQs on Income Tax Deduction List

What are the deductions in income tax?

Income tax deductions list, such as those under Sections 80C, 80D, 80G, and 80E, offer various benefits. Examples include deductions for investments like PPF and ELSS, medical insurance premiums, charitable donations, and interest on education loans.

Can I claim the 80C deductions at the time of filing the income tax return in case I have not submitted proof to my employer?

No, you cannot claim deductions under Section 80C when filing your income tax return if you have not submitted the necessary proof of investments or expenses to your employer. To avail of the deductions, you must provide the relevant proof to your employer during the income tax declaration submission period, usually at the beginning of the financial year. Your employer will consider these proofs and adjust your TDS (Tax Deducted at Source) accordingly.

I have availed a loan from my employer to pursue higher education. Can I claim the interest paid on such a loan as a tax deduction under Section 80E?

Yes, you can claim the interest paid on a loan from your employer for pursuing higher education as a tax deduction under Section 80E. This deduction is available for a maximum of 8 years or until the interest is fully repaid, whichever is earlier. However, please note that this deduction is only applicable for loans taken for the individual’s own education or for the education of their spouse, children, or a student for whom they are a legal guardian.

Is there any restriction or maximum limit up to which I can claim a tax deduction under Section 80E?

There is no upper limit on the amount of interest you can claim as a deduction under Section 80E. The entire interest you pay on the loan qualifies for the deduction. Please note that the deduction only applies to the loan’s interest component, not the principal amount.

Can a company or firm reap the benefits of Section 80C?

No, Section 80C deductions are not available to companies or firms. Section 80C provides tax-saving benefits on various investments and expenses for individual taxpayers only. Some of the eligible deductions under Section 80C include investments in Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity-Linked Saving Scheme (ELSS), National Savings Certificate (NSC), and payment of life insurance premiums, among others.

Can a company claim a deduction for donations made under Section 80G?

Yes, companies can claim a deduction for donations made to eligible charitable institutions under Section 80G of the Income Tax Act. The deduction amount varies based on the charitable organization type and can be 50% or 100% of the donated amount. However, it is important to ensure that the charitable institution is registered under Section 80G to avail of this deduction.

Are the tax exemptions available under Section 80D available to corporations?

No, the Section 80D deduction is only for individuals and Hindu Undivided Families (HUFs). It covers health insurance premiums for yourself, your spouse, children, and parents, but it does not extend to companies or firms.

What are the tax exemptions available under Section 80DD?

Section 80DD provides tax relief for individuals and HUFs who spend on the care of a dependent with a disability. If you incur expenses for their medical treatment or rehabilitation, you can claim up to ₹75,000 as a deduction. For severe disabilities, this amount goes up to ₹1,25,000.

Are bank recurring deposits eligible for tax deduction?

No, bank recurring deposits (RDs) are not eligible for tax deduction under Section 80C. The only term deposits that qualify for tax deduction under Section 80C are Fixed Deposits (FDs) with a minimum lock-in period of 5 years in a scheduled bank.

Are all allowances taxable for salaried individuals?

No, not all allowances are taxable for salaried individuals. Some allowances are fully taxable, while others are partially or fully exempt from tax. For example, the House Rent Allowance (HRA) can be partially exempt if certain conditions are met. Similarly, the Leave Travel Allowance (LTA) and certain allowances for specific purposes may also be exempted up to prescribed limits.

Can both earning members of a family claim tax deductions for a home loan taken as co-applicants?

Yes, both earning members of a family who are co-applicants of a home loan can claim tax deductions individually. Each co-applicant can claim deductions on the principal amount under Section 80C and on the interest paid under Section 24(b) of the Income Tax Act, subject to specified limits.

Can self-employed individuals claim the HRA benefit?

No, the HRA benefit is available only to salaried individuals and not to self-employed individuals. Self-employed individuals cannot claim HRA as they do not receive a fixed salary from an employer, which is a prerequisite for claiming HRA deductions.

How can I save tax on an education loan?

You can save tax on an education loan by claiming deductions on the interest paid under Section 80E of the Income Tax Act. Ensure that the loan is taken for higher education for yourself, your spouse, children, or a student for whom you are a legal guardian. There is no upper limit on the deduction, and you can claim it for a maximum of 8 years or until the interest is fully repaid, whichever is earlier.

What are the examples of income tax exemptions?

Examples of income tax exemptions include the HRA received by salaried individuals, LTA, certain agricultural income, interest earned on tax-saving bonds, income from dividends on certain mutual funds, and exemptions provided for certain allowances for specific purposes.

What are the examples of income tax deductions?

Examples of income tax deductions include deductions under Section 80C for investments in PPF, EPF, ELSS, NSC, and payment of life insurance premiums, deductions under Section 80D for medical insurance premiums, deductions under Section 80G for donations to charitable institutions, and deductions under Section 80E for interest paid on education loans, among others.

How much total deduction is allowed in income tax?

In India, the total income tax deduction allowed depends on various factors such as investments, expenses, and contributions made during the financial year. Common deductions include those under Section 80C (up to ₹1,50,000), Section 80D (health insurance premiums), Section 80E (education loan interest), and others. Taxpayers can avail of deductions based on their eligibility and compliance with the Income Tax Act.

What is a deduction from salary in income tax?

Deduction from salary in income tax refers to the amount subtracted from an individual’s gross salary to arrive at the taxable income. This deduction includes components like provident fund contributions, professional tax, standard deduction (if applicable), and any other eligible allowance or exemption in income tax as per the Income Tax Act.

What is the standard deduction for income tax?

The standard deduction for income tax, set at ₹75,000 under the new regime, applies for the assessment year 2024-25. This fixed amount, deducted from gross salary to calculate taxable income, remains consistent under the old and new tax regimes.

How to calculate tax on salary?

First, determine the taxable income by subtracting allowable deductions (such as standard deduction, HRA exemption, etc.) from the gross salary to calculate tax on salary. Then, apply the applicable income tax slab rates to the taxable income to calculate the total tax liability. Finally, deduct any applicable rebates and claim tax credits to arrive at the final tax payable amount.

What deductions can I claim on tax?

Taxpayers can claim various deductions on tax based on investments, expenses, and contributions made during the financial year. Common deductions include those under Section 80C (for investments like PPF, ELSS, etc.), Section 80D (for health insurance premiums), Section 80E (for education loan interest), Section 80G (for donations to charitable institutions), and more. It is essential to review the eligibility criteria and compliance requirements outlined in the Income Tax Act to claim deductions accurately.