Outlook Money
In addition to tax-saving investment options like the National Pension System, Public Provident Fund, etc the Income Tax Act, of 1961, also offers deductions for expenses incurred, which can reduce the tax liability to a huge extent.
Under Section 80C, a maximum deduction of up to Rs 1,50,000 in a financial year is allowed, this is under the old tax regime. Further, 80G and 80D of the Income Taxes Act allow for other deductions.
Under the new tax regime payment for travel costs received to cover the travel expenses for employment purposes and the daily allowance received to cover regular charges can be claimed for deduction.
Up to Rs 1,50,000, the old tax regime allows a deduction for tuition fees in India, per year. Only tuition fees, play-school activities, pre-nursery, and nursery classes of up to two children are covered.
Contributions made to approved organizations, ranging from 50 per cent to the full amount of the donation are eligible for deduction by Section 80G of the I-T Act.
Section 80C of the Income Tax Act allows for deductions on life insurance premiums and under section 80D, individuals are eligible to deduct premiums paid toward medical insurance policies for themselves, their spouses, children, and parents.
Under section 24(b) of the Income Tax Act, individuals can claim a deduction for the interest paid on home loans. Under this provision, one can claim a deduction of up to Rs 2 lakh per financial year for self-occupied properties.