- Leave allowance
- Deduction of interest Income
- Children’s tuition fees, education, hostel allowance, and tuition fees
- Deduction of interest on education loan
- Deduction in respect of medical insurance, expenses, and preventive health scrutiny
- Deduction in respect of interest on loan taken for residential house property
Section 10(5) of the taxation Act grants deduction towards the leave allowance (LTA) supported by the provision of proof of travel and connected expenditure, which are subject to sure conditions. This deduction may be availed just for most 2 journeys inside RBI during a block of 4 calendar years (2018-2021).
However, in FY 2020-21 several taxpayers weren’t able to undertake actual journeys thanks to pandemic-related travel restrictions. Taking this into thought, the government has launched the ‘LTC money Voucher’ theme.
Under the theme, the worker will avail exemption for money allowance received in the position of LTC subject to sure conditions that are needed to be consummated by the payer.
Considering that that eligible class of products and services is large, the good thing about such a theme may be simply availed by salaried taxpayers. However, it’s pertinent to notice that staff who have already availed the LTC exemption double for their current block 2018 -21, aren’t eligible to avail of this theme. In addition, within the non-public sector, solely those staff WHO have LTA as a part of their wage structure will avail of the theme if their company offers the theme to them.
Deduction of interest Income
Taxpayers’ account interest financial gain from bank account control during a bank or post workplace are eligible to assert deduction underneath section 80TTA of the Income-tax Act. The number of the deduction is going to be the lower of, interest derived or Rs 10,000. For resident senior voters, this limit is Rs 50,000 underneath section 80TTB. Senior voters may also avail of the deduction underneath section 80TTB on interest financial gain derived from mounted deposits, adult Savings theme, etc.
Children’s tuition fees, education, hostel allowance, and tuition fees
Any allowance (up to specified limits) for the education of kids still as hostel expenditure (generally named as kids’ Education Allowance & Hostel Allowance) granted to the worker by his/her leader is allowed as exemption underneath section 10(14). The exemption for children’s education allowance and hostel expenditure allowance is restricted to Rs 1,200 and Rs 3,600 annually, annually, severally, up to a most of 2 kids.
Also, underneath section 80C, tuition fees paid to any recognized university, college, college, or alternative institution placed in RBI, for the aim of regular education of any 2 kids are eligible for deduction. Somebody payer (salaried and non-salaried) will avail of this deduction if tuition fee as delineate higher than is acquired by his/her kids. However, the number allowable as tuition fees wouldn’t embody payment within the nature of development fees or donation or revenue enhancement fees, or payment of comparable nature. Further, the deduction isn’t obtainable if payment is formed to a far-off institution.
It is additionally pertinent to notice that kids’ education allowance is completely different from tuition fees. Children’s education allowance is offered as a deduction on condition that it forms a part of the wage part and also the payer has truly incurred expenses towards the education of his kids. The number of allowances deductible is Rs 1,200 annually per kid, up to 2 kids. However, just in case of tuition fees, it’s allowable on the premise of actual expenditure incurred for education of kids to extent of Rs 1.5 Lakhs underneath section 80C, even though identical might not type a part of the wage part of payer.
Deduction of interest on education loan
Section 80E provides for deduction of interest paid on education loans availed from an establishment or approved charitable institution. The deduction may be claimed from a gross total financial gain of the payer thereby reducing the taxable financial gain. The deduction is offered for an amount of eight consecutive years starting from the year within which the payer starts paying the interest. The loan ought to be taken for the aim of upper education, i.e., any course once passing the Senior Secondary Examination or its equivalent, in India or abroad. The education loan may be taken for the education of the payer, spouse, kids, or student for whom the payer may be a trustee.
Deduction in respect of medical insurance, expenses, and preventive health scrutiny
Section 80D provides for deduction in respect of medical payments paid, preventive health check-up expenses, and alternative medical expenditures subject to conditions. Deduction up to Rs 20,000 may be claimed for medical payment acquired self, better half or dependent kids. a further deduction up to Rs 25,000 may be claimed for medical payment acquired folks below sixty years mature. The deduction is additionally obtainable just in case of shopping for a Covid-specific insurance policy like Corona-Kavach.
Deduction in respect of interest on loan taken for residential house property
If a residential property is bought by taking a home equity loan, a person will claim 2 kinds of tax breaks – deduction for reimbursement of the principal of home equity loan underneath section 80C and deduction for interest payment created on the house loan us 25. The latter deduction would be restricted to a most of Rs 20,00,000 annually just in case of a self-occupied property.