The time of the year has come when all the individuals try and find ways to reduce their tax liabilities. They look forward to make investments in different securities and obtain exemptions or deductions in respect of their income. Here is al list of few deductions which is generally available to the assessee but he doesn’t take it into account while computing his tax liability.
Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, etc. [Sec. 80C]: Often people forget to claim deductions in respect of the investments which they make. These investments qualify for deductions that are available to an individual as a grant for computation of taxable liability. For example- when an assessee makes any payment under a deferred annuity plan, he can get the full amount as a deduction.
Deduction in respect of contribution to certain pension funds [Sec. 80CCC]: if an individual invests in a pension fund, then he is liable to receive a deduction. The deduction in such respect would be the whole amount paid or deposited in the previous year or Rs 1, 00, 000 whichever is lower.
Deduction in respect of contribution to pension scheme of Central Government or any other employer [Sec. 80 CCD]: Only an individual is entitled to this deduction and the deduction shall be in form of:
The amount paid or deposited by the individual in the previous year to the notified pension scheme is deductible subject to maximum of 10% of salary of such individual.
If the Central Government or any other employer makes any contribution to the account of the individual of the said scheme, such contribution is deductible subject to maximum of 10% of salary of the individual.
Deduction in respect of medical insurance premia [Sec. 80D]: medical insurance premia is ground on which you spend many but you don’t remember ay the time of deduction. Deduction is available as Rs. 15, 000 or actual amount of premia paid, whichever is less.
Deduction in respect of maintaining including medical including treatment of a dependant who is a person with disability [Sec. 80DD]: The deduction is available in form of a fixed deduction of Rs 50, 000, irrespective of the actual expenditure incurred or actual amount paid or deposited under the scheme. Most of the people are unaware of this deduction.
Deduction in respect of medical treatment of specified disease or ailment [Sec. 80DDB]: A resident individual can claim deduction in this respect which is offered as Rs 40, 000 or the amount actually paid, whichever is less.
Deduction in respect of repayment of loan for higher education [Sec. 80E]: Repayment of loan taken for higher studies is an available item of deduction which is provided as the actual amount of interest on loan paid during the previous year, at a maximum of eight years.
Deduction in respect of donations to certain funds, charitable institutions, etc [Sec 80G]: deduction is available on a number to investments made in various fund or trusts which is recognized by the government like- the Indira Gandhi Memorial Trust etc.
Deduction in respect of rent paid [Sec. 80GG]: Deduction on rent paid is also available for an individual when the amount paid by him as rent doesn’t exceeds 10% of total income.
Deduction in respect of contributions given to the political parties [Sec 80GGB]: any contribution made towards the political parties can be claimed as a deduction while computing the gross liability of the individual.
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