Income Tax Deductions - Everything You Need to know

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Tax Deductions You MUST Know

Term Insurance Quote
  • 2nd Dec 2021
  • 758

Tax Deductions You MUST Know

Taxes are a very important part of the country, and as dutiful citizens, it is essential that we all pay our taxes on time. This is especially applicable to all the salaried people who qualify for tax payments. Additionally, there is a gamut of ways for tax saving as per the Income Tax Act, 1961. Thanks to these deductions, you can substantially reduce the amount of tax you have to pay, although it all depends on the kind of claims you make. In this article, we will talk about some of these exemptions and deductions.

Income Tax exemption under 80C

As per section 80C of income tax act, you can claim a deduction amounting to almost Rs. 1.5 lakhs every year. It also depends on the kind of investments you have made - for example - provident funds, life insurance, super annuity, etc. Additionally, there are certain subsections under section 80C deduction, namely - 80CCC, 80 CCD, 80 CCF, 80CCG.

Section 80CCC

This section allows you to claim Rs. 1.5 lakhs on pension schemes. It is applicable to individual taxpayers only.

Section 80CCD

As per section 80CCD, if you invest in pension schemes, you are eligible for tax benefits over and beyond the section 80C exemption, which is an additional tax deduction of up to Rs. 50,000.

Section 80CCF

This section is applicable to Hindu undivided families and individuals. As per section 80CCF, you are eligible for tax deductions if you have invested in long-term infrastructure bonds. Claims under this section do not go beyond Rs. 20,000.

Section 80CCG

Depending on your investments in equity schemes, you have to be eligible for the deduction under this section. A maximum of Rs.25000 can be deducted under section 80CCG

Income Tax exemption under 80D

As per section 10D of the Income Tax Act, the individual can avail tax deductions on the accrued bonus amount and the lump sum received on maturity/death benefit.

To put things simply, no matter how much you earn, you can save a significant amount on your taxes by planning your investments in a streamlined and strategic manner. With the above-mentioned deductions under section 80C, section 80D, and section 10D, there are endless possibilities that you can explore to bring down your tax payments. So, double-check your provisions, know your facts, and make the most of your tax deduction benefits!

- A Consumer Education Initiative series by Kotak Life

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