Here are common deductions other than the tax saving investments such as 5 year FD, PPF and ELSS Funds covered under Section 80 C which has an upper limit of ₹1.5 lakh.
Most individuals have to file their income tax return for FY 2019-20 by 31st December 2020. While filing your return, remember to claim deductions other than the popular Section 80 C (used for investments like PPF, ELSS funds etc). The deadline to make tax-saving investments for FY 2019-20 was extended to 31 July 2020 on account of the covid-19 pandemic. Here are common deductions other than the tax saving investments such as 5 year FD, PPF and ELSS Funds covered under Section 80 C which has an upper limit of ₹1.5 lakh.
Health Insurance Premiums (Mediclaim)
You can claim a deduction up to ₹25,000 per year for health insurance premiums under Section 80 D of the Income Tax Act. This includes premiums paid for a policy covering yourself, spouse and your children and it includes ₹5,000 for medical checkup. If you have senior citizen parents and are paying premiums for them, you can claim an additional deduction of ₹50,000 for this. All in all you can claim a total deduction of ₹75,000 under this section and also enjoy the benefits of health insurance
Section 80 G (Charitable Donations)
If you have made donations to a public charitable trust, you can claim a deduction under Section 80 G of the Income Tax Act, 1961. The deduction can be 100% of the amount contributed or 50% of the amount contributed depending on the type of institution you have donated to. For instance the Prime Minister’s National Relief Fund has a 100% donation eligibility. With certain categories of institutions, the deduction is restricted to 10% of your adjusted total income and the deduction can be 100% or 50%, once again depending on the category of the recipient NGO or institution. For instance, if you have donated ₹50,000 and your adjusted gross total income is ₹4 lakh per year, the actual deduction relief will be restricted to ₹40,000 (10% of ₹400,000). Ask the organisation you have contributed to for an 80G certificate in order to substantiate your claim.
Section 80 E (Interest on Education Loan)
Interest on education loan is deductible under Section 80 E of the Income Tax Act, 1961. The loan needs to be taken from a bank or financial institution or approved charitable institution. It cannot be taken from family or friends. There is no upper ceiling on the deduction. However the deduction can be taken for a maximum of 8 years from the date you started repaying the loan. You should obtain a statement from your bank showing the breakup of the principal repayment and the interest for the loan.
Section 80 DDB (Medical Treatment)
This is a deduction on expenditure incurred for the treatment of dependent family members for diseases like malignant cancer, AIDS and renal and neurological disorders. The ceiling for this deduction is ₹40,000 which goes to ₹100,000 for senior citizens. “Tax payers commonly forget to claim the deduction under Section 80 DDB for medical treatment of dependent family members. You do not need a certificate of treatment from a government hospital for this. A certificate from a private doctor but of the relevant speciality will do,” said Prakash Hegde, a Bengaluru based Chartered Accountant. The deduction can be claimed for treatment of self, spouse, parents, children or siblings.