Income Tax Deduction for FY 2017-2018 / AY 2018-2019

0
943
views

Income Tax Deduction provided by the government to assist the tax payer to reduce his tax liability against his taxable income. Therefore, the assessee can plan his taxable income in appropriate way and enjoy the tax benefit allowed. However, depending on the type of tax deduction you claim, the amount of deduction varies. These deductions encourage individuals and commercial institutions to take part in activities having social benefits.

It is the high time of the year when taxpayers are looking for the options to save their income tax liability. Since they have to make the investment before 31st March’ 2018 to claim the deduction in the financial year 2017-18.

Section 80C

This section provides provisions for tax deductions on a number of payments/ Investments, with both individuals and Hindu Undivided Families eligible for these deductions. Eligible taxpayers can claim deductions to the tune of Rs 1.5 lakh per year.

  1. PPF (Public Provident Fund)
  2. EPF (Employees’ Provident Fund)
  3. 5 years Bank or Post office Tax saving Deposits
  4. National Savings Certificates (NSC)
  5. ELSS Mutual Funds (Equity Linked Saving Schemes)
  6. Children’s Tuition Fees
  7. Life Insurance Premium (LIC)
  8. Sukanya Samriddhi Account Deposit Scheme
  9. SCSS (Post office Senior Citizen Savings Scheme)
  10. Repayment of Home Loan (Principal only)
  11. National Pension System
  12. NABARD rural Bonds
  13. Stamp duty charges for purchase of a new house

Section 80CCC

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 under above section. The maximum Tax deduction allowed under this section is Rs 1.5 Lakhs.

Section 80CCD

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 2016-17 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.

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.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 and 80CCC put together cannot exceed Rs 1,50,000 for the financial year 2017-18.

RELATED ARTICLESMORE FROM AUTHOR