Income Tax Deductions and Exemptions F.Y.2018-19 With Automated Master of Form 16 Part - B for F.Y.2018-19
Income Tax Deductions
The tax deduction is a reduction in tax obligation from your gross taxable income. Tax deductions are deducted from taxable income which is also known as adjusted gross income. Tax deduction varies in amount as different incomes are treated differently under various sections of the income tax act.
Income Tax Deductions and Exemptions: Budget 2018-19 Highlights
All Salaried Individuals
· Standard Deduction of Rs. 40,000 has been allowed for salaried taxpayers. Medical Allowance and Transport Allowances has been discontinued.
· Government to contribute 12% EPF contribution for new employees (with less than 3 years of employment) in all sectors.
· New women employees (with less than 3 years of employment) to contribute only 8% of salary for EPF contribution as opposed to 12% earlier.
Senior Citizens
· Tax deduction under Section 80 D for Health Insurance expenditure has been increased to Rs. 50,000 from Rs. 30,000 earlier.
· Expense of up to Rs. 1 lakh incurred on critical illness has been exempted from tax under Section 80 DDB. Earlier the exemption was Rs. 60,000 for senior citizens and Rs. 80,000 for very senior citizens.
· Tax exempted interest income on deposits with banks has been increased from Rs. 10,000 to Rs. 50,000. Further, TDS will not be required to be deducted under section 194A and it has been extended to all FD and RD schemes.
Income Tax Deductions under section 80C to 80U
Section
|
Permissible limit
|
Type of investment, expense or income
|
Eligible claimants
|
80C
|
Maximum Rs. 1,50,000 (aggregate of 80C, 80CCC and 80CCD)
|
PPF, EPF, Bank FD's, NSC, LIC premium, tuition fees
|
Individuals, HUFs
|
80CCC
|
Maximum Rs. 1,50,000 (aggregate of 80C, 80CCC and 80CCD)
|
Pension funds
|
Individuals
|
80CCD
|
Maximum Rs. 1,50,000 (aggregate of 80C, 80CCC and 80CCD)
|
Pension fund initiated by the central government
|
Individuals
|
80TTA
|
Up to Rs. 10,000 per year
|
Interest on bank savings account
|
Individuals and HUFs
|
80CCG
|
50% of the amount invested a subject maximum of Rs. 25,000
|
Equity saving schemes
|
Individuals
|
80CCF
|
Up to Rs. 20, 000
|
Long-term infrastructure bonds
|
Individuals and HUFs
|
80D
|
For individual taxpayers- Premium up to Rs. 25,000 in the case of individuals and up to Rs. 30,000 for senior citizens
For HUFs- Premium up to Rs. 25,000 and up to Rs. 30,000 in case the member insured is a senior citizen or super senior, citizen |
Medical insurance premium and Health check up
|
Individuals and HUFs
|
80E
|
No limit defined
|
Interest on repayment of Education loan
|
Individuals
|
80EE
|
Maximum Rs. 50,000
|
Interest on the loan payable for acquiring a residential house property
|
Individuals
|
80G
|
Differs from the amount of donation
|
General donations of any recognized society
|
Individuals, HUF's, Companies, Firms
|
80GGA
|
Depends on a quantum of donation
|
Donations to Scientific Research or Rural development
|
Those who do not have income from business or profession
|
80GGB
|
Depends on the quantum of donation
|
Donations to political parties
|
Indian companies
|
80GG
|
Rs. 5000 per month or 25% of total income whichever is less
|
Rent paid if HRA is not received
|
Individuals not receiving HRA
|
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