Income Tax Deduction Options (Tax Saving Options)

Income Tax deduction Options (Tax Saving Options)

  • The dividend declared by Indian companies is not taxable in the hands of the share holders
  • If your annual taxable income comes under Rs 5 lakh, you will be entitled to a tax rebate of Rs 2,000.
  • Payment of premium for annuity be deposited to keep Deduction is available up to a contract for maximum of Rs. 10,000
  • Medical insurance premium paid for self, spouse or dependent children.
  • For interest payment on loan taken for higher studies for the education of self or spouse or children.
  • Deduction in respect of repayment of loan taken up to Rs. 40,000 per year.
  • For Rent Paid:  Least of the following:
    1). Rs. 2000 per month
    2). 25% of total income
    3). Rent paid less 10% of total income
  • Deduction of Rs. 40,000 in respect of expenditure incurred on medical treatment, training and rehabi­litation of a handicapped dependent relative.
  • Donations to certain funds, charitable institutions, political parties etc.
  • Deduction of Rs. 40,000/- to an individual who suffers from a physical disability or mental retardation
  • Interest/Dividend/Income from :
  1. Any Govt. Security
  2. NSC
  3. Notified  debentures   of public sector   undertakings,   cooperative societies/Land  mortgage  bank  or land development bank.
  4. Notified   National   Deposit Scheme or any other deposit Scheme framed by Central Govt. and notified
  5. Deposit   under   Post   Office Monthly   Income   Account.
  6. Deposits with banking companies, banking   co-op,   societies,   land mortgage   or   land   development bank.
  7. Deposits,   with   any   public companies   providing   long   term finance for construction or purchase of houses.
  8. Income from Units of Mutual Fund specified under clause (23D) of Sec. 10.

Income which are not deductible for tax benefit

  • Interests on FDs are fully taxable as income.
  • Salaried individuals do not get tax deduction on Travel insurance policies.
  • Employer’s contributions to PF are non deductible.
  • Gifts cross the limit of Rs 50,000 in a year are taxed as income of recipient.