Income Tax Deductions Available For The Financial Year 2017-18

• Posted By Amritesh
• On April 20th, 2017
• Comments: no responses

Individuals whose Annual Income is above Rs 2,50,000/ p.a- will be liable to pay Taxes on the earnings above the prescribed amount. However, Individuals earning up to Rs 3,50,000/- p.a can avail Tax Credit up to Rs 2,500/- Under Section 87A on the Tax payable. Thereby, implying that Individuals with Income up to Rs3,00,000 would not be required to pay tax as per the new Tax Slabs for the Financial Year 2017-18.

In this post we would discuss the Tax Deductions available under various Sections and the investment options available to the Individuals. Kindly refer to the Link shared below for the latest Income Tax Rates.

Income Tax Slabs & Rates Financial Year 2017-18 (Assessment Year 2018-19)

Deductions Available Under Various Sections

 DEDUCTIONS U/S 80C

Tax Deductions are available to the Individuals under Section 80C, 80CCD, 80CCC up to the extent Rs 1,50,000/-. These are now effectively clubbed under Section 80C with the aggregate deduction ceiling of Rs 1,50,000/-. The image shared above provides the brief of the various investment options available to the under the Section. One may read about the investment schemes in details in the links shared below.

Employees’ Provident Fund (EPF)

Public Provident Fund (PPF)

Equity Linked Saving Schemes (ELSS)

National Savings Certificate (NSC)

Term Insurance Plans

Unit Linked Insurance Plans (ULIP)

Life Insurance Policies

Sukanya Samriddhi Scheme (SSS)

Senior Citizen Savings Scheme (SCSS)

Retirement Plans

Tax Saver Term Deposits (Fixed Deposits)

Repayment of Principal of House Loan taken is also eligible for Deduction along with Registration Charges and Stamp Duty paid towards the same. However, the amount should be within the deduction limit of Rs 1,50,000/-.

DEDUCTIONS U/S 80 CCD (1b)

Investment up to Rs 50,000/- is eligible for deduction up and over the deduction available U/S Section 80C on Contribution made to National Pension Scheme (NPS) and Atal Pension Yojana (APY).

National Pension Scheme (NPS)

Atal Pension Yojana (APY)

Individuals may invest in both the schemes and avail cumulative deduction upto Rs 50,000/- on the investment.

DEDUCTIONS U/S 80D

Further deductions up and above the Deductions availed U/S 80C & 80CCD (1b) is available U/S 80D on payment made towards Health Insurance Premium. It covers the premium paid on the Health Insurance cover for self and family. Deduction of Rs 25,000/- can be availed for the premium paid for Self, Spouse and dependent children. Additional deductions of Rs 30,000/- is available on premium paid towards the Mediclaim Insurance of parents (Senior Citizens).

Health Insurance

DEDUCTION U/S 80DDB

Deduction to the extent of Rs 40,000/- on Medical Expense of Self and dependent relative can also be availed. In case of very Senior Citizens the limit goes up to Rs 80,000/-.

DEDUCTIONS U/S 80E

Deduction is also available on the education loan for higher studies (Graduation or Post Graduation) in the fields of Medicine, Engineering, Management, or Science. The deduction is available from the 1^st year and subsequently for next 7 years. Deduction available is Rs 40,000/- p.a on the EMI paid as principal cum interest.

DEDUCTIONS U/S 80G

Deductions are also available for the donations made to notified NGO’s, Charitable Institutions are eligible for 50% or 100% deduction as provided under the act. However the maximum limit to the deduction claimed is 10% of the Adjusted Gross Total Income after claiming other deductions.

Some of the Prescribed Notable Institutions where 100% Deduction is available without qualifying limit:

National Defence Fund

Prime Minister Relief Fund

Swacch Bharat Kosh

National Sports Fund

National Children’s Fund

Clean Ganga Fund and many more….

DEDUCTIONS U/S 80GG

Deduction available in respect of House Rent Paid, the least of the following:

1.) Rent paid less 10% of the total income.

2.) Rs. 5000/- per month. (Maximum Deduction available is 60,000/-)

3.) 25% of total income, provided that

Assessee or his spouse or minor child should not own residential accommodation at the place of employment, or anywhere else and is not in receipt of House Rent Allowance. The deduction is available provided the Individual, does not receive any benefit of deduction U/S 10 (13A) for House Rent Allowance.

DEDUCTIONS U/S 24(b)

Deductions up to Rs 2,00,000/- is available on the interest paid on the Loan availed for purchase/construction of self occupied House Property. However the acquisition and construction of such house property should be completed within 5 years from the end of Financial year in which Home Loan was taken. The sum should be borrowed on or after 01/04/1999 to be eligible for deduction.

DEDUCTION U/S 80DD &U

Deduction of Rs 75,000 U/S 80DD is available to meet the expenses and medical treatment of disabled dependent person. In case of severe disability (more than 80%) the Deduction limit is Rs 1,25,000/-.

Deduction of Rs 75,000 U/S 80U is available to meet the expenses and medical treatment of Resident Individual (Self). In case of severe disability (more than 80%) the Deduction limit is Rs 1,25,000/-.

DEDUCTION U/S 80TTA

Deduction from Gross Total Income up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account (not time deposits) with a bank, co-operative society or post office.