As the final date for filing Income Tax Returns (ITR) is nearing, taxpayers are speeding up the process. But taxpayers should not miss out on claiming certain tax breaks and deductions.
Apart from the tax breaks on insurance premium, equity-linked savings schemes (ELSS) and Public Provident Fund (PPF), here are some deductions that taxpayers often miss out on while filing ITR:
Exemption on HRA Salaried employees living in rented accommodation can use the House Rent Allowance (HRA) component in their salary package to deduct their tax outgo. However, not all employers offer HRA. If the HRA is not part of the salary component, the taxpayer has an option under Section 80GG of the Income Tax Act to claim deduction on rent.
Exemption on savings account interest Interest earned on a savings account with a bank or post office is added to the total income and taxed at slab rates, which can be claimed as a deduction of up to Rs 10,000 on the interest income from savings account under Section 80TTA of the IT Act.
Exemption on medical bills of uninsured parents Taxpayers can claim the medical bills of uninsured parents. Specific health insurances also give tax breaks. If you have senior citizen parents who are not covered under any insurance policy but took medical treatment, taxpayers can claim a deduction on their medical bills. Section 80D allows up to Rs 50,000 deduction on the total amount spent on medical treatment of dependent parents aged 60 years and above.
Exemption on donations Donations made to institutions backed by the central government are eligible for 100 per cent deduction, and taxpayers can claim 50 per cent of the total amount made to a private institution. But donations made in kind cannot be claimed as a deduction. Cash donation can be claimed up to Rs 10,000, provided the donor has receipts to back the donation.
Full-time education in India Taxpayers can claim deductions of up to Rs 1.50 lakh every year for tuition fees paid for a maximum of two children, for full-time education in India. This benefit is available for education in any school, college, university or any other educational institution in India.
Tax benefits for interest paid on education loan A person can claim a deduction for interest paid on an education loan taken to finance higher education under Section 80E. The deduction can be claimed for eight years in a row starting from the year in which one starts paying the loan. In addition, there is no monetary limit for claiming a deduction for interest on an education loan. This deduction is available for loans taken for education anywhere in the world.