Tax benefits for AY 2022-23: The filing season for income tax returns (ITRs) has begun. In light of the second wave of the Covid-19 outbreak and the resulting difficulties faced by taxpayers, the Central Government recently extended the deadline for reporting ITRs for the assessment year 2022-23 is July 31. Take a look at the following list of tax deductions you can claim on various payments, incomes, and investments now that you have more time to complete tax returns.
Only payments and investments made in the previous financial year are eligible for deductions in the current assessment year (FY 2021-22). Also, people who chose the New Tax Regime will be unable to take advantage of these Tax benefits or deductions.
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1. Income from House Property
Interest paid on a home loan and a home improvement loan can be deducted from income from house property under Section 24(b). In the case of a self-occupied house, the maximum deduction for interest paid on housing loans is Rs 2 lakh, according to the Income Tax Rules.
This Tax benefits from income from residential property will not be available this year for people who have chosen to file returns under the New Tax Regime.
2. Payments for LIC premium, provident fund, PPF, Pension schemes
- Investments/payments for Life Insurance Premiums, Provident Funds, PPFs, Subscriptions to certain equity shares, Tuition Fees, National Savings Certificates, and Housing Loan Principal can all be deducted under Section 80C.
- A deduction for payments made to an annuity plan of LIC or another insurer for a pension scheme can be claimed under Section 80CCC.
- A deduction for payments made to the Central Government’s pension programme can be claimed under Section 80 CCD (1).
Note: Only Rs 1.5 lakh can be claimed as a total deduction under Section 80C, Section 80CCC, and Section 80 CCD (1).
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3. Payments for Central Government Pension scheme
Tax benefits or tax deduction of up to Rs 50,000 can be claimed under Section 80 CCD (1B) for payments made to the Central Government Pension Scheme, except the deduction claimed under Section 80CCD (1).
A deduction for an employer’s payment to the Central Government’s pension programme can be claimed under Section 80 CCD(2). There are, however, two requirements:
- The deduction ceiling is 10% of pay if the employer is a PSU, state government, or other.
- If your employer is the federal government, you can deduct up to 14% of your pay.
4. Payment for health insurance premium
A deduction for payments paid toward health insurance premiums and preventive health check-ups can be claimed under Section 80 D. However, there are certain limitations:
A deduction of Rs 25,000 can be claimed for self/spouse, dependent children, or patents. If a person is a senior citizen, the limit is Rs 50,000. There is also a Rs 5000 discount for preventive health examinations. This sum, however, does not exceed the total amount of health insurance premiums paid.
A deduction for medical expenses incurred by a senior citizen can be claimed even if no premium is paid for health insurance coverage. In this scenario, the deduction limit is Rs 50,000.
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5. Payment for maintenance/treatment of disabled dependent
A deduction of up to Rs 75,000 can also be claimed in place of payments for the maintenance or medical treatment of a disabled dependent, or any sum paid/deposited under a relevant approved scheme. The deduction limit is Rs 1.25 lakh in the case of those with severe disabilities (80% or more).
6. Payment for medical treatment
A deduction of up to Rs 40,000 can be claimed under Section 80 DD (1B) for payments made towards medical treatment of self or dependant for a specified disease. If the person is a senior citizen, the deduction limit is Rs 1 lakh.
7. Education loan interest payment
The complete amount paid towards interest payments on a higher education loan taken out by yourself or a relative can be deducted under Section 80E.
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8. Home loan interest payment
A deduction of up to Rs 50,000 can be claimed under Section 80EE for interest paid on a loan acquired for the purchase of a residential home property. However, this deduction is only applicable for loans approved between April 1, 2016 and March 31, 2017.
A deduction of up to Rs 1.5 lakh can be claimed under Section 80EEA for interest payments made on a loan taken for the first time for the acquisition of a residential house property, if the loan is sanctioned between April 1, 2019 and March 31, 2022, and the deduction should not have been claimed u/s 80EE.
9. Electric vehicle loan interest payment
A deduction of up to Rs 1.5 lakh can be claimed on interest payments on a loan for the purchase of an electric vehicle under Section 80EEB. This offer is only valid for loans approved between April 1, 2019 and March 31, 2023.
10. House rent payment for those not getting HRA
If you do not receive HRA, you may be able to claim a deduction for rent paid on a home under Section 80 GG. Only the smallest of the following deductions is permitted:
- Before deductions, rent paid reduces overall income by 10%.
- Rs 5,000 per month
- Before this deduction, 25% of total revenue is deducted.
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