Under Section 80C, the maximum tax exemption limit is Rs 1.5 Lakhs per annum. The various investments that can be claimed as tax deductions under section 80c are listed below;
PPF (Public Provident Fund), EPF (Employees’ Provident Fund), 5 years Bank or Post office Tax saving Deposits National Savings Certificates (NSC), ELSS Mutual Funds (Equity Linked Saving Schemes), Children’s Tuition Fees, Life Insurance Premium, Sukanya Samriddhi Account Deposit Scheme, SCSS (Post office Senior Citizen Savings Scheme), Repayment of Home Loan (Principal only), National Pension System, NABARD rural Bonds, Stamp duty charges for purchase of a new house,
Contributions made towards Annuity plans available with any of the Life Insurance Companies for receiving pension from the fund can be considered for tax benefit. The maximum Tax deduction allowed under this section is Rs 1.5 Lakhs.
Employees can contribute to National Pension Scheme (NPS). The maximum contributions can be up to 10% of the salary (Basic+DA) for salaried or gross income in case of self employed. From 2017-18 and additional tax deduction of up to Rs 50,000 u/s 80CCD (1b) is allowed for excess employee contributions and this is over and above the limit of Rs 1.5 Lakhs.
The definition of Salary is ‘Basic + Dearness Allowance + any other bonus’. If the employer also contributes to Pension Scheme, the entire employer contribution (maximum 10% of the salary) can be claimed as a tax deduction under Section 80CCD (2). This is over and above the limit of Rs.1.5 Lakhs.
It is to be kindly noted that the total deductions under sections 80C, 80CCD (1) and 80CCC put together cannot exceed Rs 1,50,000 for the financial year 2017-18.
Up to Rs 75,000 can be claimed for spending on medical treatments of your dependents (spouse, parents, children or siblings) who have 40% disability. The upto Rs 1.25 lakhs can be deducted in case of severe disability (80%).
Any individual below the age of 60 years can claim upto Rs 40,000 for the treatment of certain specified critical diseases. This can also be claimed for his/her dependents.
Senior Citizens (above 60 years) can claim upto Rs 60,000 and very Senior Citizens (above 80 years) can claim Rs 80,000 under this section.
It is mandatory for an individual to obtain a Medical Certificate from a specialist doctor in a Hospital, to claim Tax deductions under Section 80DDB
This section is similar to Section 80DD but here the Tax deduction is permitted for the employee himself who is physically or mentally challenged.
Upto Rs. 30,000 can be deducted towards the medical insurance premium for senior citizens (above 60 years) and upto Rs. 25,000 can be deducted towards medical insurance of self and dependents (spouse & children).
Additionally, a deduction of up to Rs. 25,000 towards medical insurance premium of parents (father/mother/both) is available. If both the parents (Father & Mother) are senior citizens, then the deduction allowed is up to Rs. 30, 000.
Section 24: Income Tax Benefit for Interest paid on Home Loan
Income tax benefit on payment of Interest paid on home loan is allowed for deduction under Section 24. The maximum deduction allowed under this Section for a self-occupied house property is upto Rs. 2 Lakhs.
In case, the home Loan has been taken for the property which is not self-occupied, there is no maximum limit prescribed and the entire interest paid is fully exempted.
If the taxpayer has availed a home loan for repair works or reconstruction, a maximum deduction of upto Rs 30,000 per financial year is permitted.
In Budget 2017-2018, a new proposal has been made in which, first time home buyers are eligible for an additional tax deduction of up to Rs 50,000 on home loan interest payments under section 80EE. For claiming tax deductions under this new section 80EE, the following criteria have to be met.
The home loan should have been availed or sanctioned in FY 2017-2018.The Loan amount should be less than Rs 35 Lakh.