Old Tax Regime: Available Deductions

Deductions under Section 10 LTA**

Section 10 (5), or leave travel allowance exemption, is applicable for individual taxpayers. The LTA exemption applies only to the domestic travel expenses, such as airfare, train or bus fare, incurred by the employee. Other expenses, such as transportation within the destination, sightseeing, hotels, and food, are not covered. Additionally, the exemption is limited to LTA provided in your CTC by the employer. For example, if an employee is given LTA of Rs 30,000 and incurs travel expenses of Rs 20,000, only the amount actually spent on travel would be exempt from taxes and the remaining Rs 10,000 would be included as taxable income

Deductions under Section 10 House Rent Allowance

Section 10 (13A) of the Income Tax Act covers House Rent Allowance (HRA). The part of your salary that you receive for covering house rent and accommodation expenses is exempted from taxation.

However, there are a few exceptions that are included in Section 10 (13A) Rule 2A. The exemption is allowed for least of the following amounts: Actual HRA received

• 50% of [basic salary + DA] for those living in Delhi, Mumbai, Chennai, Kolkata or
• 40% of [basic salary + DA] for those living in other cities
• Actual rent paid (-) 10% of basic salary + DA

Deductions under Section 10 Professional Tax

Every citizen who earns their livelihood through any form of employment is subject to professional taxes imposed by the state government. In short, every single earning individual must pay this tax. The calculation and amount collected can vary from state to state, but 2500 rupees is the maximum amount per year.

Tax Rate in Maharashtra

• Up to Rs.7500 : Nil
• Rs. 7,501 to Rs.10000 : Rs. 175 per month
• Above Rs. 10000 : Rs. 2,500 per annum

This tax paid is deduded from income.

Interest on Housing Loan

A tax payer can deduct both the interest paid on a house loan as well as the principal amount that was repaid on the loan. In the case of self-occupied property, section 24 allows a deduction on the interest paid on a house loan up to a maximum of Rs 2 lakh in a given fiscal year. In the case of self-occupied property, interest payments above Rs 2 lakh would neither be carried forward nor offset against any other income head, such as capital gains, salary, etc.

80C Exemption

It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayer's total income.

Investments Eligible for Deduction Under Section 80C of the Income Tax Act

• Life Insurance Premiums
• Public Provident Fund
• Unit Linked Insurance Plans (ULIPs)
• National Savings Certificate
• Tax Saving FD
• Employee Provident Fund - EPF
• Infrastructure Bonds
• Equity-Linked Saving Scheme
• Senior Citizens Savings Scheme
• Principal Repayment Made Towards Home Loan
• Stamp Duty and Registration Charges
• Sukanya Samriddhi Yojana
• Children Tution fees towrds School

Deduction under Section 80CCD NPS

An additional deduction for investment up to Rs. 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under section 80C of Income Tax Act. 1961.

80D Parents Mediclaim(below 60 years)

Every individual or HUF can claim a deduction from their total income for medical insurance premiums paid in any given year under Section 80D. This deduction is also available for top-up health plans and critical illness plans. Individual and family and parents below 60 years self + parent : 50,0000

80D Parents Mediclaim(above 60 years)

Indidual and family below 60 years but parents above 60 years: 75,000

80DD and 80U for Differently Abled Person

Section 80DD provides tax deductions to the family members and the kin of the taxpayer with a disability, whereas Section 80U provides deductions to the individual taxpayer with a disability himself.

section 80DD is applicable if a taxpayer deposits a specified amount as an insurance premium for taking care of his/her dependent disabled person. Under section 80DD, the deduction limits are the same as Section 80U. Here, a dependent refers to the siblings of the assessee, parents, spouse, children or a member of a Hindu Unified Family.

The amount of deduction available to a disabled individual is Rs 75,000. In the case of 80% disability, the deduction is Rs 1,25,000.

80E Interest on Loan for Higher Eductaion

You can claim a deduction of Interest paid on a loan taken for pursuing higher education from taxable* income under Section 80E of the Income Tax Act, 1961*.

The interest amount paid during the financial year is allowable as a deduction from taxable* income. There is no limit on the deduction amount. The benefit of the deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier. It is applicable even when you have taken an education loan for your spouse, children or for a student for whom you are the legal guardian.

80EEB Interest on Loan for Electric Vechile

Section 80EEB of the Income Tax Act allows you to claim tax savings of up to Rs 1.5 lakh on interest paid on a loan made specifically to purchase an electric car.

You can claim tax deduction benefits only if the loan is approved between 1 January 2019 and 31 March 2023.

Donations

Donations above Rs 2,000 should be made in any mode other than cash to qualify under Section 80G.

The various donations specified in Section 80G are eligible for a deduction of up to 100% or 50% with or without restriction, as provided in Section 80G.