List of Top 10 Income Tax Deductions for YY 2021-22 for Salaried Employees: Tax Benefits on Payments, Investments and Income
Income tax deductions for YY 2021-22: The tax filing season (ITR) has started. The central government recently increased the deadline for filing the ITRs for the 2021-22 tax year from July 31 to September 30, 2021, given the second wave of the Covid-19 pandemic and subsequent difficulties faced by taxpayers . As you now have more time to file your tax returns, take a look at the following list of tax deductions you can claim on various payments, income, and investments.
You can claim the following deductions in the current tax year only on payments and investments made in the previous year (FY 2020-21). In addition, these deductions will not be available to those who have opted for the new tax regime.
1. Income from home ownership
Under Section 24 (b), home ownership income deduction from interest paid on the home loan and home improvement loan is allowed. According to income tax rules, the upper limit for the deduction of interest paid on home loans is Rs 2 lakh in the case of independent property.
For those who have chosen to file returns under the new tax regime, this home ownership income deduction will not be available from this year.
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2. Payments for LIC premium, provident fund, PPF, pension schemes
- Under section 80C, a deduction can be claimed on the investment / payment of the life insurance premium, contingency fund, PPF, subscription to certain shares, tuition fees, national savings certificate, home loan principal, etc.
- Under Section 80CCC, a deduction on payments made to the annuity plan of LIC or another insurer to the pension plan may be claimed.
- Under Article 80 CCD (1), a deduction from payments made to the central government pension scheme can be claimed.
Note: The total combined deduction of only Rs 1.5 lakh under section 80C, section 80CCC, section 80 CCD (1) can be claimed.
3. Payments for the central government pension scheme
Under Article 80 CCD (1B), a deduction of up to Rs 50,000 for payments made to the central government pension scheme, excluding the deduction claimed under 80CCD (1), may be requested.
Under Article 80 CCD2, a deduction for the contribution made by an employer to the central government pension scheme can be claimed. However, there are two conditions:
- In the event that the employer is a PSU, state government or other, the deduction limit is 10 percent of salary.
- In case the employer is the central government, the withholding limit is 14 percent of the salary.
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4. Payment of the health insurance premium
Under Article 80D, a deduction from payments made for health insurance premiums and preventive health examinations can be claimed. However, there are different limitations:
- For the self-spouse or dependent children or patents: a deduction of Rs 25,000 can be requested. This limit is Rs 50,000 in the event that a person is an elderly person. In addition, a deduction of Rs 5000 for preventive health checks is allowed. However, this amount is not higher than the overall ceiling of the health insurance premium paid.
- Even if no premium is paid on health insurance coverage, the deduction for medical expenses incurred for an elderly person can be claimed. The deduction limit, in this case, is Rs 50,000.
5. Payment for maintenance / treatment of disabled dependents
In addition, a deduction up to Rs 75,000 may be claimed in lieu of payments made for maintenance or medical treatment of a disabled dependent or paid / deposited any amount under a relevant approved scheme. However, in the case of severely disabled people ($ 80 or more), the deduction limit is Rs 1.25 lakh.
6. Payment for medical care
Under Section 80 DD (1B), a deduction of up to Rs 40,000 may be claimed for payments made for the medical treatment of the individual or dependent for a specified illness. This deduction limit is Rs 1 lakh if â€‹â€‹the person is an elderly person.
7. Payment of interest on the student loan
Under Section 80E, the deduction from the total amount paid for interest payments on the self or parent’s graduate loan can be made.
8. Payment of interest on the mortgage
Under Section 80EE, a deduction of up to Rs 50,000 can be claimed for the payment of interest made on the loan taken out for the acquisition of residential property. However, this deduction is only available for loans sanctioned between April 1, 2016 and March 31, 2017.
Under 80EEA, a deduction of up to Rs 1.5 lakh on interest payments made on the loan taken out for the acquisition of a residential house for the first time when the loan is sanctioned between April 1, 2019 and March 31, 2022 and the deduction should not have been claimed u / 80EE
9. Payment of interest on the electric vehicle loan
Under section 80EEB, a deduction of up to Rs 1.5 lakh can be claimed on interest payments on the loan for the purchase of an electric vehicle. This is only available for loans sanctioned between April 1, 2019 and March 31, 2023.
10. Paying the rent of the house for those who do not get the HRA
If HRA is not part of your salary, the deduction from the rent paid for a house can be claimed under section 80 GG. However, only the lesser of the following deductions are allowed:
- Rent paid reduced by 10% of total income before deduction
- 5,000 rupees per month
- 25 percent of total income before this deduction
The deadline for filing the ITR for the 2021-2022 tax year is September 30, 2021.