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 :
- Any Govt. Security
- Notified debentures of public sector undertakings, cooperative societies/Land mortgage bank or land development bank.
- Notified National Deposit Scheme or any other deposit Scheme framed by Central Govt. and notified
- Deposit under Post Office Monthly Income Account.
- Deposits with banking companies, banking co-op, societies, land mortgage or land development bank.
- Deposits, with any public companies providing long term finance for construction or purchase of houses.
- 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.