Income Tax Deductions for AY 2021-22: The Income Tax Return (ITR) filing season has began. The Central Government lately enhanced the deadline for ITR filing for the assessment year 2021-22 from July 31 to September 30, 2021, in view of the second wave of Covid-19 pandemic and the subsequent issues faced by taxpayers. As you now have more time in hand to file tax returns, take a look at the following list of tax deductions you can claim on many payments, incomes and investments.
You can claim the following deductions in the present assessment year only on payments and investments made in the prior economic year (FY 2020-21). Also, these deductions will not be offered for these who opted for the New Tax Regime.
1. Income from House Property
Under Section 24(b), deduction from earnings from House Property on interest paid on housing loan and housing improvement loan is permitted. According to the Income Tax Rules, the upper limit for deduction of interest paid on housing loans is Rs 2 lakh in the case of a self-occupied home.
For these who have opted to file returns beneath the New Tax Regime, this deduction from earnings from residence home will not be offered from this year.
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2. Payments for LIC premium, provident fund, PPF, Pension schemes
- Under Section 80C, deduction can be claimed on investment/payment for Life Insurance Premium, Provident Fund, PPF, Subscription to particular equity shares, Tuition Fees, National Savings Certificate, Housing Loan Principal and so on.
- Under Section 80CCC, deduction towards payments made to annuity program of LIC or other insurer towards the pension scheme can be claimed.
- Under Section 80 CCD (1), deduction towards payments made to pension scheme of the Central Government can be claimed.
Note: The total combined deduction of only Rs 1.5 lakh beneath Section 80C, Section 80CCC, Section 80 CCD (1) can be claimed.
3. Payments for Central Government Pension scheme
Under Section 80 CCD (1B), a deduction up to Rs 50,000 towards payments made to the Pension Scheme of the Central Government, excluding deduction claimed beneath 80CCD (1) can be claimed.
Under Section 80 CCD2, a deduction towards contribution made by an employer to the pension scheme of the Central Government can be claimed. However, there are two circumstances:
- In case the employer is a PSU, state Government or other people, the deduction limit is 10 per cent of salary.
- In case the employer is Central Government, the deduction limit is 14 per cent of salary.
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4. Payment for well being insurance coverage premium
Under Section 80 D, deduction towards payments made towards well being insurance coverage premiums and preventive well being verify-up can be claimed. However, there are many limits:
- For Self/Spouse or Dependent Children or patents: Deduction of Rs 25,000 can be claimed. This limit is Rs 50,000 in case any particular person is a senior citizen. Also, Rs 5000 deduction for preventive well being checkups is permitted. However, this quantity is not above the general ceiling of the well being insurance coverage premium paid.
- Even if no premium is paid on well being insurance coverage coverage, deduction towards health-related expenditure incurred on a senior citizen can be claimed. The deduction limit, in this case, is Rs 50,000.
5. Payment for upkeep/therapy of disabled dependent
Also, a deduction up to Rs 75,000 can be claimed in lieu of payments made for upkeep or health-related therapy of a disabled dependent or paid/deposited any quantity beneath a relevant authorized scheme. However, in the case of persons with extreme disability (80$ or more), the deduction limit is Rs 1.25 lakh.
6. Payment for health-related therapy
Under Section 80 DD (1B), a deduction up to Rs 40,000 can be claimed for payments made towards health-related therapy of self or dependent for specified illness. This deduction limit is Rs 1 lakh in case the particular person is a senior citizen.
7. Education loan interest payment
Under Section 80E, deduction of total quantity paid towards interest payments greater education loan of self or relative can be made.
8. Home loan interest payment
Under Section 80EE, a deduction up to Rs 50,000 can be claimed towards interest payment made against the loan taken for the acquisition of a residential residence home. However, this deduction is offered only for loans sanctioned in between 1st April 2016 to 31st March 2017.
Under 80EEA, a deduction up to Rs 1.5 lakh deduction towards interest payments made on loan taken for acquisition of residential residence home for the initial time exactly where the loan is sanctioned in between 1st April 2019 to 31st March 2022 & deduction really should not have been claimed u/s 80EE
9. Electric car loan interest payment
Under Section 80EEB, a deduction up to Rs 1.5 lakh can be claimed on interest payments of loan for the obtain of an electric car. This is offered only for loan sanctioned in between 1st April 2019 to 31st March 2023.
10. House rent payment for these not finding HRA
If HRA is not a portion of your salary, deduction towards rent paid for a residence can be claimed beneath Section 80 GG. However, only the least of the following is permitted as a deduction:
- Rent paid decreased by 10 per cent of total earnings ahead of deduction
- Rs 5,000 per month
- 25 per cent of total earnings ahead of this deduction
The due date for filing ITR for the assessment year 2021-22 is September 30, 2021.