How much can I save through deductions?

Can I save more than Rs 1.5 Lakh in Taxes through deductions?

Hey @sushil_verma

There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.

What are the different types of deductions that i can claim? I am a salaried individual and would like to save some taxes!

Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.

For eg,

  • Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
  • Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
  • Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.

Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.

Hello @Maharshi_Shah
I have a query w.r.t Seftion 80EEB. As we know this section is applicable only for Individuals.

But you have mentioned that if the deduction has to be claimed as business expense, it has to be registered in the name of the Owner or the business Enterprise. “Did you mean proprietorship firm?” Because a Business enterprise being a partnership firm or companies cannot avail the benefit this Section 80EEB.

In addition to that, you have mentioned it is applicable from FY 2020-21. But this benefit is applicable for the ASSESSMENT YEAR 2020-21 and onwards, as it is states in the BARE ACT. Kindly check on this.

Thanks!

The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).

Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).

As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.

Thanks for the response!

Yes, now you have made it clear that it is allowed for Proprietorship Firm as a business expense and NOT to any business enterprise.

And coming to the applicability of this Section, Please note this section is applicable from the AY 2020-21, i.e., FY 2019-20, and not FY 2020-21 as you said.
I am sharing the INCOME TAX BARE ACT link here. Kindly search for 80EEB under Section Column and go through it once. https://www.incometaxindia.gov.in/pages/acts/income-tax-act.aspx

Hey @Sharath_thomas , we have updated the content according to the appropriate assessment year. Thanks for the feedback. :slight_smile:

No issues. You’re welcome!

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Can we take deduction for interest paid for e-margin in income tax return against LTCG/STCG/intraday/F&O profits?

Hey @shindeonkar95

In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.

However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.

Hope, it helps!

Hello,

Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?

There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?

I couldn’t find anything on this. Any help is appreciated.

Hello @Veejayy,

Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.

Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.

These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!

Also, interest earned on these bonds will be taxable.

Hope this helps!

Hi, I need to file my income tax for FY21, I am using Quicko platform for filing, I wanted to confirm if the ELSS investment amount for the FY21 is to be added in the section 80C, since I already the amount of Rs30,072 , should I add my ELSS amount to this existing amount and submit the total

Hey @Sheirsh_Saxena, yes, the investment amount needs to be added under 80C.