Tax deductions help you save your tax liabilities. Deductions can be claimed on certain expenses like investments made in government schemes, fees for education, charitable contributions, insurance schemes, retirement plans, etc. The government of India has provided such deductions to inculcate the habit of saving and investing in the individual and institutional tax payers. Most of these tax saving provisions are covered from section 80C to section 80U of the Income Tax Act 1961.
Deductions under Section 80C
Tax deductions under section 80C allow you to claim a deduction of maximum Rs 1.5 lakhs. This amount is a combination of deductions available under Section 80C, 80CCC, 80CCD(1). These deductions are available for individuals and Hindu Undivided Families. Investments eligible under this section 80C are
- Employee Provident Fund (EPF)
- Voluntary Provident Fund (VPF)
- Public Provident Fund (PPF)
- National Savings Certificate (NSC)
- 5 Year Post Office Time Deposit
- 5 Year Tax Saving Bank Fix Deposit
- Equity Linked Saving Schemes (ELSS)
- Unit Linked Insurance Plans (ULIP)
- Senior Citizens Saving Schemes
- Sukanya Samridhhi Scheme
Deduction under Section 80U
An individual suffering from disabilities himself is eligible for tax deductions under section 80U. A person with disability meaning suffering from at least 40% of the disability is eligible for a deduction for Rs 75,000 and person with severe disability meaning suffering from at least 80% of the disability is eligible for Rs 1,25,000. A certain medical authority to certifies the level of disability in a person.
Hence, you can see that there are several tax deductions available for the taxpayers under various sections of the Income Tax Act mentioned above. If you plan your taxes carefully, you can easily maximise your tax savings. A good tax filing intermediary like H&R Block can also help you file your tax returns and save maximum amount of taxes legally.