The taxpayer can claim maximum deduction of Rs. In addition to that if he has paid the medical bills of his senior citizen parents, he can claim additional deduction upto Rs.
Your employer may pay premium on your behalf and deduct it from your salaries. Such premium paid is also eligible for deduction under section 80D.
Another key tax saving tool is the interest paid on home loans. Homeowners have the option to claim up to Rs. If the house property is let out, you can claim a deduction for the entire interest pertaining to such a home loan. Please note that from FY , the loss from house property that can be set off against other sources of income has been restricted to Rs. In addition to the above, one can also claim the principal component of the housing loan repayment as a deduction under section 80C up to a maximum limit of Rs 1.
Read more about deductions from house property. Income Tax Act provides a deduction for interest on education loans. The significant conditions attached to claiming such deduction are that the loan should have been taken from a bank or a financial institution for pursuing higher studies in India or abroad by the individual himself or his spouse or children.
One may begin claiming this deduction beginning from the year in which the loan starts getting repaid and up to the next seven years i. Even a legal guardian could avail this income tax deduction. Read more about deductions from Section 80E. Section 80G of the Income Tax Act, offers income tax deduction to an assessee, who makes donations to charitable organizations. Read more about Section 80G.
This exemption is available for Individuals and HUFs. In case the income from bank interest is less than INR 10,, the whole amount will be allowed as a deduction. However, in case the income from bank interest exceeds INR 10,, the amount after that would be taxable.
Read more about deduction from Section 80TTA. Section 80EE allows homeowners to claim an additional deduction of Rs. Subject to the following:. Some companies ask you to sign a bond or agreement stating you will serve the company for a specified period of time. If you happen to leave the organisation before completing this period, the organisation may recover the notice pay or the joining bonus paid to you initially. Plan for Retirement. Table of Contents Expand. Self-Employment Tax Deduction.
Home Office Deduction. Internet and Phone Bills Deduction. Health Insurance Premiums Deduction. Meals Deduction. Travel Deduction. Vehicle Use Deduction. Interest Deduction. Publications and Subscriptions Deduction. Education Deduction. Business Insurance Deduction. Rent Deduction. Startup Costs Deduction. Advertising Deduction. Retirement Plan Contributions Deduction. The Bottom Line. There are two ways of calculating a deduction for a home office and a vehicle used for business purposes.
It pays to do calculations for both methods to see which is more financially beneficial. Meals with clients and business travel are deductible, but meals that are included with entertainment may not be, according to the TCJA. Premiums for insurance that you buy to protect your business and for health insurance are legitimate deductions.
I rent my home. Do I qualify for the home office expense deduction? Is a C corporation eligible for the qualified business income QBI deduction? Which method is better for my business vehicle: standard mileage or actual expense? Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
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Related Articles. Partner Links. Reading Into Transportation Expenses Transportation expenses are costs incurred by an employee or self-employed taxpayer while away from home in a travel status for business. What Is a Freelancer? A freelancer is an individual who earns money on a per-job or per-task basis, usually for short-term work. What Is the Standard Mileage Rate? The standard mileage rate is the cost per mile that the Internal Revenue Service IRS sets for those who claim use of a vehicle as a deductible expense.
The modified adjusted gross income MAGI you report on your tax return is used to determine if you qualify for certain tax benefits. Tax How to file ITR. Tax Saving. ITR Forms. Income Tax Refund. Tax Exemption Limit. Income Tax Slabs. Insure Life Insurance.
Health Insurance. Motor Insurance. Other Risk Covers. Personal Finance News. Mutual Funds. Find out. With effect from assessment year , the taxpayer shall be required to obtain a prescription from a specialist doctor not necessarily from a doctor working in a Government hospital for availing this deduction.
Scope of 'higher education' is enlarged with effect from assessment year to cover any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, Board or university recognised by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so. With effect from the scope of expression 'relative' has also been enlarged to cover the student for whom the taxpayer is the legal guardian.
Donation of any sums paid by the assessee, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf for—.
Donation made to an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both is also eligible for the purpose of deduction under section 80G from the assessment year [this is in consequence of omission of section 10 20A ].
With effect from no deduction shall be allowed in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash. With effect from no deduction shall be allowed under this section in respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash. With effect from deduction will not be allowed if sum is contributed in cash. Time limits stated under section IA 4 iv have been extended from to With effect from Assessment Year Readers are requested to please check the relevant document from below link:.
Following chart explains amendments made in section 40 a i with effect from the assessment year : TDS default pertaining to any sum other than salary payable outside India or payable to a non-resident which is taxable in the hands of recipient in India Law applicable up to the assessment year Law applicable from the assessment year 1. Tax is deductible but it is not deducted Expenditure is not deductible.
If, however, TDS is deposited in a subsequent year, it will be deducted in that year No amendment. The law which is applicable for the assessment year will apply for assessment year onwards 2. If, however, TDS is deposited in a subsequent year, it will be deducted in that year Disallowance provisions will not be applicable if TDS is deposited up to the due date of submission of return of income under section 1.
Tax is deductible and it is so deducted during the month of March but it is not deposited up to April 30 falling immediately after the end of the financial year Expenditure is not deductible.
Following chart explains amendments made in section 40 a i with effect from the assessment year : TDS default pertaining to any sum other than salary payable outside India or payable to a non-resident which is taxable in the hands of recipient in India Law applicable up to the assessment year Law applicable from the assessment year Tax is deductible but not deducted, but Payee has furnished his return of income after taking into account said income and paid tax thereon Expenditure is not deductible.
If, however, TDS is deposited in a subsequent year, it will be deducted in that year Were deductor has failed to deduct the tax and payee has furnished his return of income after considering such income and paid tax thereon, deductor shall not deemed to be an assessee in default, then it shall be deemed that the assessee has deducted and paid the tax on the date on which the payee has furnished his return of Income.
Accordingly expenditure shall be allowable as deduction. From assessment year onwards the deduction under Section 80D will be available as per the limit specified below: Individual HUF For self, spouse and dependent children : Rs. For parents of the assessee : Additional Rs.
Donation of any sums paid by the assessee, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf for— i the development of infrastructure for sports and games; or ii the sponsorship of sports and games, in India; is eligible for the purpose of deduction under section 80G [this is in consequence of omission of section 10 23 ].
With effect from Assessment Year i. Taxes levied by local authority and borne by owner if paid in relevant previous year. Interest on borrowed capital Rs. Standard deduction of 30 per cent of arrears of rent or unrealised rent received.
Against 'profits and gains of business or profession' A. Deductible items. Rent, rates, taxes, repairs excluding capital expenditure and insurance for premises.
Repairs excluding capital expenditure and insurance of machinery, plant and furniture. Tangible Assets buildings, machinery, plant or furniture ; ii. Note: Taxpayers engaged in business of generation or generation and distribution of power have the option to claim depreciation on written down value basis also. Taxpayer engaged in business of generation or generation and distribution of power. Depreciation 1 in respect of following assets shall be allowed at prescribed percentage on written down value of each block of asset as per WDV method : i.
All taxpayers engaged in: a manufacture or production of any article or thing; or b generation, transmission or distribution of power if taxpayer is not claiming depreciation on straight line basis. Proviso to Section 32 1 iia. Note: 1. Manufacturing unit should be set-up on or after April 1, All taxpayers setting-up an undertaking or enterprise for production or manufacture of any article or thing in any notified backward area in the state of Andhra Pradesh, Bihar, Telangana or West Bengal.
Company engaged in business of manufacturing or production of any article or thing. All taxpayers who acquire new plant and machinery for purpose of setting-up manufacturing unit in notified backward areas in the State of Andhra Pradesh, Bihar, Telangana or West Bengal. Development allowance - 50 per cent of actual cost of planting subject to certain conditions and limits planting should have been completed before Assessee carrying on business of prospecting for, or extraction or production of, petroleum or natural gas or both in India.
Note: Expenditure on scientific research incurred within 3 years before commencement of business in the nature of purchase of materials and salary of employees other than perquisite is allowed as deduction in the year of commencement of business to the extent certified by prescribed authority. Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction Subject to certain conditions Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business.
Note: i. Capital expenditure excludes land and any interest in land; ii. No depreciation shall be allowed on such assets. Note: Company should enter into an agreement with the prescribed authority for co-operation in such research and development and fulfils such conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed;.
Company engaged in business of bio-technology or in any business of manufacturing or production of eligible articles or things. Expenditure incurred before on acquisition of patent rights or copyrights [equal to appropriate fraction of expenditure on acquisition to be deducted in fourteen equal annual instalments beginning with previous year in which such expenditure has been incurred] subject to certain conditions.
Lump sum payment made in any previous year relevant to assessment year commencing on or before , for acquisition of technical know-how [consideration for acquisition to be deducted in six equal annual instalments 3 equal annual instalments where know-how is developed in certain laboratories, universities and institutions ] subject to certain conditions. Capital expenditure incurred and actually paid for acquiring any right to use spectrum for telecommunication services shall be allowed as deduction over the useful life of the spectrum in equal instalments.
Expe nditure incurred for obtaining licence to operate telecommunication services either before commencement of such business or thereafter at any time during any previous year. Lying and operating a slurry pipeline for the transportation of iron ore; setting-up and operating a notified semi-conductor wafer fabrication manufacturing unit; developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility 4 , carried on by the assessee during the previous year in which such expenditure is incurred subject to certain conditions Note: No deduction of any capital expenditure above Rs 10, shall be allowed where such expenditure is incurred otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed.
All assessees Note: Such deduction is available to Indian company in case of following business, namely;- i Business of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network.
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