It’s that time of the year, when one needs to calculate tax liabilities. However before you do so, remember to analyse various sections of tax deductions under the Income Tax Act as tax planning does not end with Section 80C. Apart from this, there are other tax deductions provided by the Income Tax Act, 1961. Let’s understand them:
Tax deduction section 80D qualifies for mediclaim policies. The premium, which is paid for medical insurance policy for self and family members to protect them from sudden medical expenses, comes under this section. The maximum amount allowed for exemption annually for self, spouse and dependent parents/children is R15,000. In case of a senior citizen, the maximum amount extends up to R20,000. If you are paying the premium for your parents (whether dependent or not), you can claim an additional maximum deduction of R15,000.
According to the Income Tax Act, if you are paying a premium to Life Insurance Company (LIC) or any other insurance company (approved by the Income Tax board) for the medical treatment of a ‘dependent’ physically disabled person, you can avail exemption under the section 80DD. Here, the ‘dependent’ should be none other than your spouse, children, parents or sibling. If the person is suffering from 40% of any disability, a sum of R50,000 can be claimed in a year. Similarly if the disability is 80%, the sum goes up to R1,00,000 per year. For initiating the process of deduction you need to submit the medical certificate issued by a medical authority along with the return of income.
If you have incurred expenses on medical treatment of self or your ‘dependents’, you can claim a deduction of up to R40,000 or the actual amount paid, whichever is less, under the section 80DDB. For a senior citizen, the maximum exempted amount is R60,000 or the amount actually paid for medical expenses. To claim deduction, you need to submit a certificate from a doctor working in Government hospital.
The interest paid on loan taken for pursuing higher education of self or any dependant is exempted from tax under section 80E. An education loan can be taken for wife, children and minors for whom you are the legal guardian. This deduction is applicable for a period of 8 years or till the interest is paid, whichever is earlier. The deduction is only approved for higher studies, which means full time graduate or postgraduate courses in engineering,