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Paying tax is an important responsibility of an individual towards a nation, however, at the same time, with financial planning you can save your taxes while fulfilling your responsibility by using the tax saving schemes given by the government.

Tax planning is an integral part of a financial plan that helps in the reduction of tax liability and increment of contributions towards retirement schemes.

Let us deep dive into the various deductions available for an Individual under Income tax act :

Section 80C – Deductions on Investments/Payments

Income tax department with a view to encourage savings and investments amongst the taxpayers have provided various deductions from the taxable income. Investments in following schemes are eligible for deduction under this section :

1. Payment of annual premium of a Life Insurance policy (LIC). The deduction is eligible only if the premium is less than 10% of the sum assured.

2. Payment of Children’s Tution fees for two chlidrens.

3. Repayment of the principal portion of loan taken to buy or construct a residential house property.

4. Investment in Tax Saving FDs.

5. Investment in Public Provident Fund (PPF) and Employee Provident Fund (EPF)

6. Investment in Sukanya Samridhi Yojna.

7. Investment in National Pension system (NPS).

It is important to note that overall limit including the all the investments/payments for claiming deduction under this section is Rs 1.5 lakh except an additional deduction of Rs 50,000 allowed for contribution to Atal Pension Yojna.

Section 80D – Medical Insurance

  • Deductions are eligible for individuals or alongside the policies availed in the name of individual, his/her spouse and dependent children. The maximum limit of deduction benefit is Rs 25000.
  • An additional deduction for insurance of parents is available up to Rs 25,000, if they are less than 60 years of age. If the parents are aged above 60, the deduction amount is Rs 50,000 A deduction of Rs 5000 is also available for payment made in respect of health checkup. Please refer the below table for details :
    Individual Exemption Limit Health Checkup Include Total deduction
    Self or family INR 25000 INR 5000 INR 25000
    Self and family + Parents INR (25000+25000) 50000 INR 5000 INR 55000
    Self and family + Senior citizen Parents INR (25000+50000) 75000 INR 5000 INR 75000
    Self (Senior citizen) and family + Senior citizen Parents INR (50000+50000) 1,00,000 INR 5000 INR 1,00,000

Section 80E – Interest on Education Loan

A deduction is allowed to an individual for interest on loans taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian.

This deduction is available for a maximum of 8 years (beginning the year in which the interest starts getting repaid) or till the entire interest is repaid, whichever is earlier.

Section 80G – Donations

The various donations specified in u/s 80G are eligible for deduction up to either 100% or 50% with or without restriction. Donations to funds like Prime Minister’s National Relief Fund, National Defense Fund and National Foundation for Communal Harmony also allow 100% deduction Every taxpayer must smartly optimize their tax liability through tax-saving investments that offer financial growth besides saving tax outgo.

Section 80TTA – Interest on Savings Account

Individuals may claim a deduction of maximum Rs 10,000 against interest income from your savings account with a bank, co-operative society, or post office.
This deduction is not available on interest income from fixed deposits, recurring deposits, or interest income from corporate bonds.

Section 80TTB – Interest Income (Senior citizens)

Deduction with respect to interest income from deposits held by senior citizens will be allowed upto Rs 50000.

Please note that the above deductions are only some of the common deductions available for an individual. There are also many other deductions available under Income Tax Act which may be availed with proper planning.


CA Nitesh Rawat | nitesh.chartered @gmail.com | 8209904900


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  1. Ashok Kumar Sethi says:

    Dear Rawat,
    You have provided useful information about availing of income tax deductions for all categories. Thanks.

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July 2024