Expenses that could help you to save tax:
- House Rent
- Medical Insurance Premium
- Expenses Incurred on Medical Treatment
- Expenses Incurred on Specified disease
- Interest Paid on Education Loan
- Principal Re-payment on Housing loan
- Interest Paid on Home Loan
- School or College Fees for Children
1 : House Rent:
The first & most important expense which most of us are paying for our accommodation is House Rent, if you are a salaried employee then you are eligible for tax exemption as per the section 10(13A) of the Income Tax Act 1961, however if you are self-employed then you can claim the benefits for house rent paid under section 80GG upto Rs 2000 per month.
2 : Medical Insurance Premium:
Another expense that takes care of your tax part along with taking care of your insurance need, the deductions are available under sec 80D of Income Tax Act, 1961 for the premium paid for self,spouse & parents. The Maximum eligibility is for Rs 15000 for self,spouse & children if the insured is not a senior citizen and in case of senior citizen this eligibility is for Rs 20000.
Apart from the above eligibility, you can claim for Rs 15000 more if you insured your parents as well and if one of your parent is senior citizen, the limit of deduction is even higher at Rs 20000.
3 : Expenses Incurred on Medical Treatments:
It includes the expenses incurred on medical treatment for dependent-children or spouse or parents. Deductions are available under Section 80DD of the Income Tax Act, 1961 for the Individuals & HUF for the amount of Rs 50000 and if the disability is severe, a deduction of Rs 1 lac is allowed.
4 : Expenses Incurred on Specified disease:
Expenses incurred on medical treatment of specified ailments such as Aids, cancer, chronic kidney failure, neurological diseases can be claimed under Sec 88DDB of the Income tax Act, 1961 for the amount of Rs 40000 and in case if spent on senior citizens then a deduction of Rs 60000 is allowed.
5 : Interest Paid on Education Loan:
Loan taken for higher education provides the tax incentive under Section 80E of the Income Tax Act, 1961 to the borrower on the interest part of the EMI, 100% of the interest amount paid in a financial year will be deducted from the total income
6 : Principal Repayment on Housing Loan:
Your EMI consists of both the interest and principal portion, so whatever the principal portion you are paying for your home loan EMI in a financial year that amount you can claim as a deduction under sec 80 c of the income tax act and reduce your tax liability.
7: Interest Paid on Home Loan:
You can also claim an interest on your home loan EMI as deductions under sec 24 of the income tax act provided the property should not be under construction, the maximum limit available is of Rs 1.50 lac for a self-occupied property and in case home loan is taken for a property which is not self-occupied then there is no maximum limit of deductions,entire amount paid as an interest can be claimed as deductions under the act.
8: School or College Fees:
School or college fees paid by the parents for their children is also eligible for deductions under sec 80 c to the extent of Rs 100 p.m. per child up to 2 children i.e. the maximum an employee can claim is Rs 2400 per year for 2 of his children.
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