Salary Deductions That Can Save Taxes for You
It's important for a person to know what are the income tax saving methods they can use. Most people end up paying more taxes because they aren't educated with the methods of tax saving. They end up with lesser savings and more taxes.
Rent paid deduction- In case you are an employee, you are allowed a deduction under Section 80GG. The amount of deduction that can be claimed is the least of rent paid less 10% of his total income; 25% of his total income and Rs 5,000 per month. However, "to claim this deduction, the individual should not have income for which exemption can be claimed under section 10(13A) and neither the individual, spouse of the individual or minor child of such individual should own accommodation in the place of the individual's employment.
Loan deduction- An individual can claim loan reduction for pursuing higher education, and this can be claimed on the interest paid towards the loan.
Donation Deduction - The rate of deduction is either 50 or 100 per cent of the amount contributed, depending where the funds are donated. Such deductions are restricted to 10% of the gross total income of the donor.
Deduction in case of disability- Under Section 80U of the Act, a resident individual who is certified by the prescribed medical authority to be a person with disability can claim deduction of Rs 75,000 and in case the individual suffers from severe disability, the amount of deduction that can be claimed is Rs 125,000.
Deduction for tuition fees of Children- The tuition fee that we pay for kids school and college can be claimed for deduction under Section 80c.
Deduction on Interest earned on Savings Account- Interest earned up to Rs 10,000 as interest can be claimed as deduction. The provisions related to this tax benefit are covered under Section 80TTA of the I-T Act.
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