A Comprehensive List of Tax Deductions ─ Your Ultimate Guide

Tax deductions are different types of deductions related to income tax. This may be used to lower the taxable income of the person concerned. Therefore, we have identified several ways in which it is possible to avail of tax deductions, starting from PPF (“Public Provident Fund”) to loans and insurance.

Tax deductions can also be defined as claims made to lower a person’s taxable income. It is possible with various forms of expenses and investments, which taxpayers choose, right from life insurance term plans to other options.

Here’s an ultimate guide to the different tax deduction options!

1. Tax Deductions as per Section 80C

Tax Deductions

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Hindu Undivided Families and individuals are both eligible for tax deductions as per Section 80C of the Income Tax Act for a variety of contributions. In addition, a mixture of various deductions, as per Sections 80C, 80CCC, and 80CCD, of Rs 1.5 lakh per year only, are available to eligible taxpayers under Section 80C.

Now let’s find out about the different subsections under Section 80C

  • “Section 80CCC”: Tax deductions for pension fund investments are possible under this specific clause as per the Income Tax Act. Any insurer may provide these pension funds, while a deduction of Rs 1.5 lakh at most may be availed. The only taxpayers who may claim this deduction are individuals.
  • “Section 80CCD”: This section tries to motivate people to save money by giving them a reason to invest in pension plans that the Central Government has announced. Tax deductions are available for employee and employer contributions as long as the total is not more than 10% of the employee’s salary. Individual taxpayers are the only ones who qualify for this deduction.
  • “Section 80CCF”: The provisions of “Section 80CCF” provide for tax deductions on the long-range infrastructure bond purchase that the government has already announced and are available to individuals and HUFs. Under this clause, a person may deduct up to Rs 20,000 in total.
  • “Section 80CCG”: This specific clause, as per the Income Tax Act, allows for a Rs 25,000 reduction each year, at most, for certain individual citizens. Equity savings plan investments made public are eligible for tax deductions, with a 50% investment cap.

You should know that Section 80C offers deductions on a wide range of other investments up to Rs. 1.5 lakh. These include PPF, ELSS, tax-saver FDs, and even premiums paid for life insurance. In addition, principal repayment of home loans is also eligible for tax deductions under this section.

2. Tax deduction as per Section 80D

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Deductions are allowed under Section 80D for money paid in premiums for health insurance policies. This comprises contributions made to a Central Government or other health plan in the interest of kids, oneself, spouse, or parents.

The deduction amount varies from Rs. 25,000 for non-senior citizens to Rs. 50,000 for senior citizens. HUFs and individuals are both eligible to claim deductions under this section, provided that the payment is made through any method other than cash.

Now let’s find out about the different subsections under “Section 80D”

  • “Section 80DD”: In compliance with the rules, tax reductions are possible in two situations. The maximum deductions are Rs. 75,000 for an individual with a less severe disability and Rs. 1.25 lakh for individuals with a severe disability.
  • “Section 80DDB”: This section offers ‘provisions for deductions’ on the cost borne by a person or family for the treatment of particular ailments, and it may be usable by HUFs and resident individuals. The maximum deduction that may be made is Rs 40,000. However, according to the Union Budget 2015, if it applies to a senior citizen’s treatment, the maximum deduction may be Rs 60,000. In the Union Budget for 2018, the tax deduction for very senior citizens and senior citizens has been raised to Rs. 1 lakh under this section.

3. Tax Deduction as per Section 80E

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Section 80E of the Income Tax Act aims to prevent the cost of self-education from increasing one’s tax liability. According to this clause, taxpayers are entitled to tax deductions for the interest paid on loans used to fund their higher education.

The taxpayer may use this loan for either self-education or to support the education of a ward or child. Loans from reputable financial institutions and charitable organizations are allowed for tax benefits, but only an individual taxpayer is eligible for this deduction. For comprehensive tax planning, you should consult with tax planning specialists who can guide you through the tax deductions under section 80E and help you gain a deeper understanding of the benefits of these deductions.

Now let’s find out about the different subsections under Section 80E

“Section 80EE”: No one but an individual taxpayer is believed to be entitled to deductions under Section 80EE, and those deductions are allowed for interest paid on loans made by them to purchase residential properties. If you need additional information or help with this matter, you can always check on the IRS debt forgiveness program or other similar programs to see how things actually work out.

You should maximize your deductions under each section as much as possible. To learn more in-depth about tax saving instruments, you can begin by understanding the meaning of a term plan and its benefits since term insurance coverage will financially secure your family and get tax deductions under Section 80C.

You should also top it up with health-related riders to get deductions under Section 80D. The same section applies if you are getting individual health insurance plans for yourself and your family.