Income Tax Deductions List - FY 2023-24 (AY 2024-25)
Understanding Income Tax Deductions in India
Income tax deductions are provisions under the Income Tax Act, 1961, that allow taxpayers to reduce their taxable income by certain amounts, thereby lowering their overall tax liability.
Common Deductions Available to Individuals
1. Section 80C:
• Maximum Deduction: ₹1,50,000
• Eligible Investments:
• Public Provident Fund (PPF)
• Equity Linked Savings Schemes (ELSS)
• National Savings Certificate (NSC)
• Employee Provident Fund (EPF)
• Tax-saving Fixed Deposits
• Senior Citizens Savings Scheme (SCSS)
• Life Insurance Premiums
• Sukanya Samriddhi Yojana
• Tuition Fees for Children’s Education
2. Section 80D:
• Maximum Deduction:
• Health Insurance Premiums: ₹25,000 (Individual), ₹50,000 (Senior Citizen)
• Preventive Health Check-up: ₹5,000
3. Section 24:
• Home Loan Interest:
• Self-Occupied Property: Up to ₹2,00,000
• Let-out/Deemed Let-out Property: Entire Interest Amount
4. Section 80E:
• Deduction for Interest on Education Loan without any Upper Limit.
5. Section 80TTA/80TTB:
• Interest on Savings Account (80TTA): Up to ₹10,000
• Interest on Senior Citizens’ Savings Scheme (80TTB): Up to ₹50,000
6. Section 80G:
• Donations to Approved Charitable Organizations:
• 100% Deduction: National Defense Fund, Prime Minister’s National Relief Fund, etc.
• 50% Deduction: Prime Minister’s Drought Relief Fund, Indira Gandhi Memorial Trust, etc.
• 100% Deduction (without Qualifying Limit): Clean Ganga Fund
Additional Deductions for Specific Expenses
1. Section 80CCD(1B):
• Additional Deduction for NPS Contribution: Up to ₹50,000.
2. Section 80EE/80EEA/80EEB:
• Deduction on Home Loan Interest for First-time Homebuyers: Up to ₹50,000 to ₹1,50,000.
3. Section 80GG:
• Deduction for Rent Paid: Subject to Conditions, Maximum ₹60,000.
Understanding income tax deductions is essential for taxpayers to optimize their tax planning and minimize their tax liabilities. By utilizing the available deductions effectively, individuals can ensure compliance with tax laws while maximizing their savings and investments.
