“The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.” — Mark Twain
What Tax Deductions Can Individuals Legally Claim?: Understanding what tax deductions you can legally claim is essential for smart financial planning. Fortunately, the Indian Income Tax Act offers several deductions that can significantly reduce your taxable income. By utilizing these provisions, individuals can not only save money but also make wise financial choices for the future.
Section 80C – Most Popular Deductions
The most widely used tax-saving section is Section 80C, which allows deductions up to ₹1.5 lakh per year. Eligible investments and payments include:
- Life insurance premiums
- Public Provident Fund (PPF)
- ELSS mutual funds
- Tuition fees for children
- Principal repayment on home loans (Read more)
Section 80D – Health Insurance Premiums
Section 80D allows deductions for medical insurance:
- ₹25,000 for self, spouse, and children
- ₹50,000 for senior citizen parents
- ₹5,000 for preventive health checkups (within limit)
Section 24(b) – Interest on Home Loans
You can claim up to ₹2 lakh per annum under Section 24(b) for interest paid on home loans for self-occupied properties.
Section 80E – Education Loan Interest
Under Section 80E, there’s no upper limit on the interest amount deduction. The loan must be for higher education and can be claimed for 8 years.
Section 80G – Charitable Donations
Donations made to recognized NGOs and relief funds are deductible under Section 80G. Deductions can be 50% or 100% based on the organization.
Section 80TTA/80TTB – Savings Interest
- 80TTA offers ₹10,000 for interest on savings accounts for individuals below 60.
- 80TTB provides ₹50,000 for senior citizens, covering FD and RD interest too.
Section 10(14) – Allowances
Exemptions under Section 10(14) include:
- HRA
- LTA
- Transport and Meal Allowances
Section 80CCD(1B) – NPS Contributions
An extra ₹50,000 deduction is allowed for contributions to the National Pension Scheme (NPS), over and above the ₹1.5 lakh limit under Section 80C.
✅ PAA-Style FAQ Section
What Is The Maximum Deduction Under Section 80C?
Up to ₹1.5 lakh per year for qualifying expenses and investments like PPF, ELSS, and insurance.
Can I Claim Health Insurance And Education Loan Deductions Together?
Yes. Section 80D and 80E are independent and can be claimed simultaneously.
Is Interest On Home Loan Fully Deductible?
Yes, up to ₹2 lakh annually under Section 24(b) for a self-occupied home loan.
Can Donations Be Fully Deducted?
Some donations are 100% deductible under Section 80G, while others are limited to 50%.
How Do Senior Citizens Save More Tax?
They benefit from Section 80TTB for interest income and higher limits under Section 80D for medical insurance.