5 Useful income tax deductions for the current financial year

Income tax deductions are awarded to people who have paid extra taxes for their income. But, this can happen only when you have filed for your income tax returns before the deadline. To be able to claim for tax refunds, you need to complete the process of your income tax return filing. The tax refunds will be awarded by the Income Tax department who need you to fill your ITR on time within the last date. If there are any extra taxes paid, you will be returned the amount for that extra tax paid. Even if the tax payer’s income is less than the basic income slab of INR 250,000, they would have to complete their income tax return filing so that they can be eligible to claim the TDS (Tax Deducted at Source) deducted from the fixed deposits as a refund which will be processes and given by the income tax department.

Income Tax Deductions

  1. Income Tax Deduction for Interest on Education Loan

There is an income tax deduction available on the interest for education loan which a person takes up for themselves, child or spouse for higher education. This tax deduction is possible under the Sector 80 E of the Income Tax Act. The deduction is only provided on the interest of the loan and not the amount of the loan. This deduction can be applied on domestic as well as international education loans. Higher education, nowadays, is a privilege. Only a small percentage of the population gets access to the best universities and colleges to study in. Allowing income tax deductions on the interest of education loan is a great initiative to allow more and more students the exposure of the best education around the world.

  1. Income Tax Deduction for Interest on Home Loan

Income tax deductions are available on the interest that you pay for the home loan you have taken up under the Section 24 of the Income Tax Act. The interest amount’s deduction is allowed under the Section 24 and the income tax deduction for the principle amount of the home loan taken up is allowed under the Section 80 C of the Income Tax Act. Buying a home is a task in itself as you have to go through the tedious process of searching for homes, looking for the location, finding conveniences nearby, settling on a price in accordance with your budget, etc. Now, taking up a home loan is even harder. Income tax deductions on the interest of your home loan can be of great help.

  1. Income Tax Deduction for Rent Paid

If you are staying in a rented home and paying your rents duly, you are eligible to claim tax deductions under the Section 80 G G of the Income Tax Act. This tax deduction is available to people who have not claimed any deductions for the rent paid or have not benefited from the rent allowance or the ones who have not claimed the HRA which is Exemption for house rent allowance. Income tax deductions on the rent paid can be really useful as renting a home or even a small apartment can be really expensive and paying you rent every month can exhaust you as well as your bank account. So, claim your rent income tax deductions by filing your tax returns on time.

  1. Income Tax Deduction for Treatment Expenses of Certain Specified Diseases

People can get income tax deduction for the medical expenses of the procedures, treatments or surgeries that they have got done for specified diseases. This deduction is possible under Section 80 D D B of the Income Tax Act in India. The deduction is only available for certain specified diseases and not all the wide range of ailments. The tax deduction is made on the amount of the medical expenses that is actually paid or on INR 40,000, whichever of the two is a higher amount.  This useful tax deduction is provided for the ailments or diseases suffered by the person of their dependents.
The dependents that will be covered under this Section include:

  • Children
  • Spouse
  • Parents
  • Siblings

This tax deduction is extremely useful as health is one of the most uncertain things and controlling health ailments is like controlling a lion with a leash, it can’t be done. Medical sector is really expensive and it can drain your pockets out just to get a simple treatment. So, claiming a tax deduction for this will prove really beneficial as tax deductions can save you a lot of unnecessarily paid money. With the ever rising prices in the health sector, which usually doubles up almost year, this is one of the most useful income tax deductions for the current financial year.

  1. Income Tax Deduction for Donations Made

Income tax deductions are allowed under the Section 80 G’s 80 GG A, 80 GG B and 80 GG C to someone who has made a significant donation to an authorized and approved body or institution.

  • 80 GG A: Rural Development and scientific research
  • 80 GG B and 80 GG C: Donations to political parties

This is another one of the useful income tax deductions as donations will help develop the particular field. If money is being donated to rural development, rural areas will only proper and flourish with the developments made. Scientific research opens the world to new and technologically advanced possibilities which can make lives of people easier and longer. So, this is one of the most useful income tax deductions in the current financial year as there are a lot of sufferings that need to be ended.

File your income tax returns on time to get tax deductions and save money! 

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