The Union government is unlikely to extend beyond July 31, the deadline to submit income tax returns (ITR). A salaried individual, whose total income exceeds the basic exemption limit for a financial year, should pay his returns. However, under various sections of the Income Tax Act, 1961, taxpayers can claim to lower their tax liabilities.
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Though there are popular deductions such as investments in Public Provident Fund (PPF) under Section 80C, taxpayers can also avail some lesser-known tax deductions:
(1.) Deductions for contribution to pension funds: Under this, an individual who has contributed to any annuity plan of any insurance company in the financial year 2021-22, can claim a deduction for the amount paid from gross total income. Both resident and non-resident individuals, under Section 80CCC, can ask for deductions of up to ₹1.5 lakh for buying pension products.
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(2.) Deductions for interest on savings account: Under Section 80TTA of the IT Act, a citizen, who has multiple savings accounts, can claim deductions of up to ₹10,000 on the interest earned in a financial year on the savings account. Besides savings accounts, these can also be claimed for co-operative bank accounts, and post office savings schemes.
{{/usCountry}}(2.) Deductions for interest on savings account: Under Section 80TTA of the IT Act, a citizen, who has multiple savings accounts, can claim deductions of up to ₹10,000 on the interest earned in a financial year on the savings account. Besides savings accounts, these can also be claimed for co-operative bank accounts, and post office savings schemes.
{{/usCountry}}(3.) Deductions for medical insurance and preventive health check-up: Those who have purchased for themselves, partner, dependent or children are eligible for this under Section 80D. A taxpayer can claim up to ₹25,000 for paying medical insurance premium if purchase for oneself, spouse, dependent children or parents. If parents are senior citizens, a ₹50,000 deduction can be claimed in the financial year 2021-22.
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(4.) Deductions for paying rents to parents: The House Rent Allowance (HRA) exemption should be a part of the salary package. Under HRA, you will be entitled to at least one of the following: The HRA amount received as salary; 50 per cent of the salary if you rent a house in Delhi, Mumbai, Chennai and Kolkata (40% for non-metro cities); and rent paid, i.e. 10% of the salary (basic component + dearness allowance).
Rent agreement and rent receipts are mandatory for this deduction.
(5.) Deductions for donations under Section 80G: These can be claimed if a taxpayer, during a financial year, gave donation – through cheque, draft or cash – to any approved body or charitable organisation. You can claim a 50% or even 100% deduction on donations with or without restriction; also, there is no maximum limit for the deductions.
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(6.) Deductions for purchasing electric vehicles: These are available under Section 80EEB, introduced in Budget 2019. Under this, a maximum deduction of ₹1.5 lakh is permitted.