Tax deductions

Lesser Known Tax Deductions You Can Claim When Filing the RTI


Even if the filing deadline for income tax returns (ITRs) for the current tax year is more than two months away, it is advisable to start the process now. Among the many reasons, filing an ITR in advance will give you ample time to assess all the deductions, large and small, that you may be claiming.

In addition to the deductions sought under Article 80C on insurance premiums, share-linked savings plans (ELSS) and the public provident fund (PPF), interest on mortgage loans and premiums on Health insurance Under section 80D, there are a bunch of deductions that taxpayers often miss.

mint lists four lesser-known tax deductions:

Medical tests for prevention

Karan Batra, founder of Charteredclub.com, said very few people are claiming a deduction on preventive health checks. “We can enjoy up to ??5,000 on preventive control for himself, dependent children, spouse or parents under the age of 60 under section 80D. For parents aged 60 or over, ?? 7,000 can be claimed, ”Batra said. The preventive health check-up includes medical tests that are done to screen for and detect any possible illness.

Previously, payments made in cash for a preventive health check were not allowed to be deducted, but the same is now allowed.

Medical expenses for elderly parents

If your parents aged 60 or older are not covered by a medical insurance policy, you can still claim a deduction on the money spent on their medical bills.

Section 80D allows a deduction up to ??50,000 on medical expenses. “Most people easily spend ??50,000 in a month on medications from their elderly parents, yet not claiming a deduction due to lack of awareness, ”Batra said.

It should be noted that these expenses can only be deducted when paid other than in cash.

That said, if a taxpayer had paid cash due to unavoidable circumstances, they could still claim a deduction, said Sudhir Kaushik, co-founder of Taxspanner.com. “As long as you can justify the cash payment method, you can still claim a deduction on them. It may happen that payment by check cannot be made before the deadline or that there is no alternative available. “

Section 80C in small print

Very few people know that there are a multitude of deductions available under the ??Section 80C 1.5 lakh ceiling.

First, those who manage a home loan can also claim a deduction on the principal component of the loan. It is a known fact that interest on the home loan can be claimed as a deduction under section 24 and section 80EE, depending on the taxpayer’s case. The main part of the loan is deductible in the ??Section 80C 1.5 lakh limit.

The condition here is that you do not sell the property within five years of owning it.

Second, the stamp duty paid for registering a house can also be claimed as a deduction under section 80C.

Kaushik said it is common for taxpayers to forget about the tax deduction available on interest reinvested on the National Savings Certificate (NSC). “Interest on the NSC is not paid to the taxpayer and is instead reinvested. You can claim a deduction on interest earned. “

Donations

“Last year, as a result of covid-19, many people had to make donations that could be claimed as a deduction if they have receipts,” Batra said.

Donations made to a fund supported by the central government can be fully claimed, while those made to a private institution are eligible for a 50% deduction.

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