It is a yearly routine for taxpayers to file Income Tax Return but many times they forget to claim certain deductions. Because of this, you must file ITR in advance so that the IT dept get sufficient time to evaluate all the deductions, small and big that taxpayers can claim.
Some popular deductions that everyone knows about are insurance premiums, PPF (Public Provident Fund) but there are many other deductions that people don’t know about. Taxpayers also miss out on certain tax breaks that may not reflect on their Form 26AS.
As per the new guidelines, there are 70 tax deductions and exemptions the taxpayers can claim. If taxpayers are following the older system then they have to take a look in detail from their last financial year and maximize their tax benefits.
Today we will take a look at the top 4 tax breaks you must avail of when you are filing your IT return:
The employees who receive salaries and are living on rent can use (House Rent Allowance) or HRA in their salary package to deduce their taxes. However, not all companies offer HRA. If that is the case, the taxpayer can claim rent deduction under Section 80GG of the Income Tax Act.
Savings Account Interest Exemption
You must know that the saving account interest that is earned in a bank account or post office is added to the total income and taxed at slab rates. However, you can claim a deduction of up to Rs 10,000 under Section 80TTA of the IT Act as an income from your savings account. After you announce all the income earned in a financial year in the IT Return, you can claim a deduction of Rs 10,000 on it.
Medical Bills Exemptions for uninsured parents
You can exempt taxes by showing the medical bills of uninsured parents in the ITR. During the COVID 19 pandemic, many people subscribed to a variety of health insurances and such insurances support you in times of emergency but also gives you tax breaks. If you have a senior citizen at home who is not covered under any insurance policy but went through medical treatment then you can claim a deduction of Rs 50,000 on the total amount spent on the parent. Parents aged 60 years and above come under this category.
Since COVID 19, many people have come forward to help the people in need and made donations to many COVID 19 relief funds. Not everyone knows about it, but IT rewards charitable services in the form of tax deductions. As per the rules, you can claim for 100% deduction for donations made to the central government and 50% for donations made to private organisations. Donations made in form of clothes, food and medicines cannot be claimed for ITR. Cash donations can be claimed up to Rs 10,000 and they have to provide receipts for the same.
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