Income Tax Exemptions for the FY 2018 -19 : Plan Better, Save More
The Union Budget of 2018 has brought around a wide array of changes to the realm of tax filing, investment declaration and more. As we slowly pace towards the new financial year, new tax advancements and developments continue to offer multiple benefits.
Let us take a look at all the sections that act as guiding lights in the process of tax filing and declaration.
- Section 80C: Under this section, there are certain financial instruments that can be wisely utilised for deduction of tax. However, not much has changed under the Section 80C. Some of these instruments include Public Provident Fund (PPF), deposits made in post offices, investment in National Savings Certificate (NSC), Equity linked savings schemes (ELSS), tuition fees pertaining to children, premiums paid on insurances such as life, health, and medical, Sukanya Samriddhi Yojana, Senior Citizens Savings Schemes (SCSS), Home loan interest payment, National Pension System (NPS), rural bonds pertaining to National Bank for Agriculture and Rural Development (NABARD), and so on.
- Section 80CCC: If you have made any donations to Annuity plans that Life Insurance Companies generally provide for obtaining pension amount from the given fund, then you can make a claim on the same. However, bear in mind that the maximum amount for deduction in this case will be Rs.1.5 lakh.
- Section 80CCD: If an individual has invested in the National Pension Scheme (NPS), then a 10% deduction will be made on his/her basic salary. According to the established new Section 80CCD (1B), in case an employee has made excess contributions, then an additional deduction upto Rs.50,000 will be leveraged. This amount is beyond Rs.1.5 lakh.
- Section 80D: If a senior citizen has a medical cover of Rs.10 lakh, then the deduction amount (as per the proposed changes) will be Rs.50,000. This in turn benefits the senior citizens to a great extent. In case you are paying the premiums for a health insurance which is actually for your parents, you will be awarded a deduction upto Rs.20,000.
- Section 80DDB: If you are an Indian citizen who is less than 60 years in age, you will be able to make a claim of Rs.40,000, in order to treat any specific illnesses or diseases. You can claim the same amount for your dependants as well, provided there is an illness that demands special attention. Citizens above 60 years in age can make a claim of Rs.60,000 and those who are above 80 years in age, can claim Rs.80,000 as per this section. However, it is vital to carry medical certificates and any corresponding documents, to make claims for deductions.
- Section 80DD: In case you are spending a huge portion of your income on the treatment of your immediate family members (includes spouse, children, siblings, and parents) who have a disability of a certain form, you can make a claim of Rs.75,000.
- Section 80U: Very similar in nature to Section 80DD, the deduction in tax herein is only for the employee who might be mentally or physically handicapped.
- Section 24: This section deals with interests that are paid on home loans. You can make a claim of Rs.2 lakh if you possess a self-occupied accommodation under this particular section. In case you have taken a loan for a property that is not occupied by you, the entire amount will be completely exempted under Section 24 of the Income Tax Act, 1961. Moreover, if a taxpayer has taken a loan for reconstruction/renovation of his/her property, a Rs.30,000 deduction per year will be allowed.
- Section 80EE: Under this section, first time buyers of properties will henceforth be allowed an additional deduction of Rs.50,000 on interests paid. This section in reality came into being during Financial Year 2016-17.
- Section TTA: If you have invested in savings schemes or in post offices, you can claim upto Rs.10,000 from the total earnings, under this section. However, interests received on fixed deposits are not considered in this section.
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