Deduction we use to forget while computing taxable income
Medical treatment of specified ailments under section 80DDB
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Deductions of expenses on medical treatment of
specified ailments (such as AIDS, cancer and neurological diseases) can
be claimed under Section 80DDB. The maximum amount of deduction allowed
from gross total income is restricted to Rs 40,000. In case of senior
citizen the deduction goes upto Rs 60,000 (wef A.Y 2019-20 the maximum
amount of deduction will be Rs 100,000. Further in case of super senior
citizen the maximum amount of deduction from A.y 2016-17 to A.y 2018-19
will be Rs 80,000 and from A.Y 2019-20 the maximum limit will be Rs
1,00,000 on condition that no medical reimbursement is received from any
insurance company or employer for this amount.
In order to claim this deduction, however, you
will have to submit Form 10-1 from a specialist doctor working in a
government hospital in India, confirming the treatment of the disease.
Deduction for Medical treatment of dependent – Section 80DD
Under Section 80DD
of the Act, where an individual has incurred expenditure for the
medical treatment, training and rehabilitation of a dependent, being a
person with disability or has paid or deposited any amount under
prescribed scheme for the maintenance of dependent, such individual will
be allowed a deduction to the extent of Rs 75,000. However, if the
dependent is suffering from severe disability, a deduction of Rs 125,000
will be allowed.
Charitable deductions under section 80G
Deduction is also available under Section 80G
of the I-T Act in respect of donations made by an individual to certain
funds, charitable institutions and so on. There is no restriction on the
amount of charity. The rate of deduction, however, is either 50 or 100
per cent, depending on the choice of trust. Also, donations must be
made to registered institutions only.
Deductions under section 80GG in respect of rent paid
Deduction to the extent of Rs 5,000 per month
or 25 per cent of total income or the excess of actual rent paid over 10
per cent of total income (whichever is less) is available under Section
80GG of the I-T Act in respect of rent paid by an individual on his
accommodation, provided the individual does not get any house rent
allowance.
Foreign taxes paid
Foreign Tax Credits may be claimed by an
individual in respect of doubly-taxed income which is taxed in India as
well as in a foreign country provided the conditions as prescribed under
the Double Taxation Avoidance Agreement between India and the foreign
country are satisfied. Even if there is no Double Taxation Avoidance
Agreement between India and the foreign country, credits may also be
claimed under the Act, subject to specified conditions.
Deduction under section 80U for Person with disability
Under Section 80U of the Act, an individual
who is certified by the prescribed medical authority to be a person with
disability shall be allowed a deduction of Rs 75,000 (Rs 50,000 upto
A.y 2015-16) and an individual, who is certified as a person with severe
disability, shall be allowed a deduction of Rs 1,25,000.( Rs 1,00,000
upto A.y 2015-16)
Interest on loan taken for Home improvement
Expenditure incurred by an individual on
repair and maintenance of house property and interest paid on loan taken
for such repairs and maintenance of house property are allowed as
deduction while computing income from house property. Thus, if you have
gone for any home improvement project, don’t forget to make your claim.
Allowance for daily expenses
Allowance
for daily expenses are exempt from tax under Section 10(14)(i) of the
Act read with Rule 2BB(1)(b) of the Income-Tax Rules, 1962, if the same
are actually incurred on ordinary daily charges while the employee is on
tour and absent from his normal place of duty.
Profit on sale of property used for residence
It would also help to remember that capital
gains arising from the transfer of residential property is exempt from
tax in the hands of individual under Section 54
of the Act to the extent “expenditure is incurred on the purchase of
another residential house within a period of one year before or two
years after the date of transfer or expenditure is incurred on
construction of a house property within a period of three years after
the date of transfer.
Tuition fee paid for the education of children- Section 80C
Believe it or not, but many taxpayers often
forget to claim deduction in respect of the tuition fee paid for the
education of their children. Deduction, however, is available to an
individual under Section 80C
of the I-T Act in respect of tuition fees (excluding any payment
towards any development fees or donation or payment of similar nature),
whether paid at the time of admission or thereafter to any university,
college, school or other educational institution situated within India
for the purpose of full-time education of any of the children of the
individual.
Interest on loan taken for higher education – Section 80E
Taxpayers also tend to forget that the
interest paid on an education loan taken for higher studies qualifies
for deduction under Section 80E
of the I-T Act. Also, effective April 1, 2008, the said deduction is
also available where the loan is taken for the purpose of higher
education of spouse or children of the individual or the student for
whom the individual is a legal guardian. Thus, if you have taken a loan
for higher education, don’t forget to make your claim. Also remember
that the deduction benefit on interest is allowed for maximum eight
years, or till the interest is fully paid.
(Republished with Amendments)
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