2014-15: 10 Income Tax
Deductions You Can Claim..!
By Mr. Vineet Agarwal,
KPMG
It is that time of the
year (2-14-15) when your employer asks you to provide investment details so
that income taxes can be calculated correctly & deducted in balance months.
There are certain
deductions that are, at times, overlooked out of ignorance.
Here are the Ten income
tax breaks, you can explore.
Deduction under section
80C..!
The Income-tax Act, 1961 provides a list of
income tax deductions such as investing in PPF, ELSS, NSC & 5 year FD that
are eligible for a deduction under section 80C.
Expenses such as
tuition fee & repayment of home loan are also eligible.
Also the earlier limit
of Rs. 1 lac has been raised to Rs. 1.5 lac from 2014-15 (FY15).
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| Vineet Agarwal, KPMG |
Interest paid on
home..!
Interest paid on home loan can be claimed as
a deduction while calculating income from home.
If the property is
self-occupied, a deduction of Rs. 2 lac is allowed for interest paid. It means
you could have a negative income of Rs. 2 lac that can be set off from your
salary / or other income & thereby reducing your tax liability.
Additional deduction of
Rs. 1 lakh for interest on housing loan..!
Keeping in view the dream of a common man to own a home,
an additional deduction of Rs. 1 lakh has been provided towards interest on
housing loan up to Rs. 25 lakh taken during 2013-14 (FY14).
It is available
only to taxpayers who are buying their first home costing up to Rs. 40 lakh. If
the entire interest was not claimed during 2013-14 (FY14) it can be claimed in
2014-15 (FY15).
Tax rebate of Rs.
2000..!
From 2013-14 (FY14) taxpayers who are in the
lower income bracket get a rebate of Rs. 2000 or / the actual amount of tax,
whichever is less.
A person having income
up to Rs. 5 lakh is eligible for it.
Interest from savings
account..!
Section 80TTA of the Income Tax (IT) Act provides
a maximum deduction of Rs. 10,000 in respect of interest on amounts held in the
saving bank (SB) account during the year.
It provides a welcome relief to income
taxpayers, as previously interest on savings bank account was taxable.
NPS..!
National Pension System
(NPS) helps you in getting pension after retirement. The contributions made by
a person to the NPS qualify for a deduction under 80CCD, subject to certain
conditions.
Separately, employer’s contribution to NPS up to 10% of the
employee’s salary qualifies for an additional deduction.
Education loan..!
Interest paid on loan taken for pursuing
higher education is eligible for deduction for 8 (Eight) successive years,
beginning with the year in which payment of interest is first made.
The
deduction can be availed even if the loan is taken for higher education of
specified relatives.
Medical expenses..!
Actual expenditure incurred on treatment of
specified disease like AIDS, cancer and neurological diseases is deductible to
the extent of Rs. 40000 or / the actual expense whichever is lower.
The limit
is increased to Rs. 60,000 in case of expense incurred for a senior citizen.
The expenditure may be
for self or an eligible dependent, however, essential criteria to claim the
deduction is that a certificate is obtained from the doctor in prescribed
manner.
Medical expenses
incurred on disability..!
Where an individual has incurred expenditure
for medical treatment of a dependent with any disability or / has deposited any
amount under a prescribed scheme for the maintenance of the dependent, he shall
be allowed a deduction of Rs. 50000. Deduction rises to Rs.1 lakh in case of
severe disability.
A deduction equivalent
to above limits is also available if the taxpayer himself is a person with
disability.
Charitable donations..!
Deduction is available in respect of donations
made by an individual to certain funds or / charitable institutions. Donations
shall be made only to registered institutions that are established for a
charitable purpose.
The rate of deduction
shall be 50% or 100% of the amount
donated depending upon the type of institution to which the donation is made.
The author Mr. Vineet
Agarwal is Partner in KPMG.
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