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Income Tax Exemption Under Chapter VI A for Tax Saving for the F.Y.2021-22. Budget 2021: Significant income tax exemptions and rebates

What is the income tax exemption according to the income tax law?

An exemption from an income tax perspective is an investment/expense that helps reduce the tax payable. As a result of income tax deduction, your total income decreases (which means you have to pay tax on what you have to earn). This will reduce the tax on your total income.

Eligible assessors can claim these exemptions under the Income Tax Act. Eligible access is specified under each category for which a waiver is being claimed. In some cases, it is unique in some organizations or HUF, etc.

You need to claim an income tax deduction when you file your income tax return and you should not be required to disclose separately. To reach the taxable amount, the number of exemptions from the total income has to be reduced.

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Let's see how the income tax deduction reduces your tax liability:

Section 80C: Exemption for Life Insurance Premium, Contribution to PF, Children's Tuition Fee, PPF, etc.

This is the most popular income tax exemption. The exemption under this section is individual and the maximum amount that can be claimed under HUF approved to 80C is Rs.1,50,000. The various investment and payment options eligible for discounts under this category are:

Paying life insurance premiums

Annual plan of LIC or any other notified insurer (lifestyle, life sustainability, etc.)

UTI's Unit Linked Insurance Plan (ULIP) or ULS 10 (23D) contribution of LIC Mutual Fund

PPF (Public Provident Fund) contribution

Payment for non-transport pending annuity plans

The amount deducted from the salaries of government employees for the purpose of protecting them from deferred anniversaries

SRF / RPF contribution

Pay tuition fees

Repayment of housing loan

Contribute to higher funds

Senior Citizen Scheme Investment

PPF investment

5 years FD investment

Sukanya Samriddhi Yojana investment

Mutual fund (equity-linked savings scheme) investment

Public sector housing finance companies in cities, towns, and villages, and subscription to the notified deposit scheme of the Housing Development Authority

Section 80CC: Income tax exemption for contributions to the pension fund

Income tax exemptions maybe claimed for contributions made to certain pension plans under section 80CC. The cost of duty exemption can be claimed by individuals (residential or non-resident) and must be clubbed under 80CC at an overall ceiling of Rs 1.5 lakh.

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Section 80CCD (1): In the case of eligible NPS, an income tax exemption tax for contribution by an individual

Contributions made to eligible NPS accounts are tax-deductible up to Rs 1.5 lakh under 80CCD (1). This tax benefit is within the overall ceiling of Section 80C.

Section 80 CCD (1B): Additional Income Tax Exemption for Contribution by Individual in case of Eligible NPS

Section 80 CCD (1B) gives you additional tax savings of up to Rs 50,000 for contribution to the NPS account. This is beyond the scope of Section 80C and this is why Section 80CCD has attracted so much attention.

Section 80CCD (2): An Income Tax Exemption for Employer's Contribution to Eligible NPS

The amount that the employer contributes to the NPS account of an employee is also tax-deductible under section 80CCD (2). The maximum discount limit is Rs. 1,50,000.

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Section 80D: Income tax benefits for medical insurance premiums

Section 80D is one of the most popular tax-saving options. Benefits are acceptable under this tax

Medical insurance

Expenditure on preventive health examination Exp

Other medical expenses

The facility under this section can be availed for self and family up to a maximum of Rs.1,00,000 overall.

Section 80 DD: Income tax for treatment of persons with disabilities

Section 80 DD provides income tax benefits of Rs. 0005,000 and Rs. 1,25,000 in case of severe disability respectively. The benefit can be taken to cover the medical expenses for disabled-dependent relatives. For covered disease

Section 80EE: Income Tax Exemption for Homeowners

An additional discount of up to Rs 50,000 under Section 80EE is available on interest payments on home loans.

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Section 80EEA: Income Tax Exemption for First Time Home Buyers

It is proposed to insert a new section in the case of omission of Chapter VI under Article 70. This section contains section 80EEA which allows taxpayers to make additional concessions to repay the interest on the loan taken. Section 24 allows interest rebates on home loans up to Rs 2 lakh, this section allows homebuyers who take home loans and pay interest on the loans at an additional rebate of Rs 1.5 lakh.

Section 80 GG: An income tax deduction for payment of house rent

In cases where HRA (house rent allowance) or RFA (free rental arrangement) income tax benefit has not been availed. A discount of Rs 60,000 per month can be given for discounted housing.

Section 80U: Income Tax Exemption for Persons with Disabilities

A person who is certified by the medical authority or a government physician can claim a rebate of Rs75,000 for being a disabled person. 1,25,000 under this section.

Section 80 TTA: Discount on interest on deposits in savings accounts Maximum Rs.10,000/-

The department allows discounts on interest income on deposits in 60 TTA banks, co-operative banks, or post office savings bank accounts.

Section 80 TTB: Discount on interest from deposits by senior citizens Maximum Limit Rs.50,000/- in case of interest income from deposits for resident senior citizens (60 years and above), Noted that no exemption will be allowed under Section 80TTA.

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4) Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the F.Y.2000-01 to F.Y.2021-22 (Update Version)

5) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2021-22

6) Automated Income Tax Revised Form 16 Part B for the F.Y.2021-22

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To avoid ancillary taxes, income tax planning takes time |What is a tax plan?

Effective tax planning and income management provide a healthy flow of white money that reflects the success of the economy. It benefits both citizens and the economy. Every taxpayer's money is dedicated to the betterment of the country.

How to save taxes?

Section 80C

Section 80C is a Unique category where a person can invest a maximum amount of Rs 1.5 Lakhs. Some of the commonly used investment/expenditure opportunities under section 80C is Employee Provident Fund (EPF), Public Provident Fund (PPF), Equity-Linked Savings Scheme (ELSS) Mutual Funds, National Pension System (NPS), Repayment home loan, children's school fees etc.

Section 80CCD (1B)

Deduction made available to additional Rs 50,000 in NPS. You may note that this deduction is available to you under Section 80C. In this way, you can save tax by investing up to Rs 1.5 lakh + 50 Thousand under Section 80C 80CCD & 80CCD(1B) up to Rs 2 lakh in a financial year.

You may also, like- Automated Income Tax Form 16 Part A&B for the F.Y.2020-21 which can prepare at a time 50 Employees Form 16 Part A&B [Who are not able to download Form 16 Part A from the Income Tax Department Site TRACES, they can use this Excel Utility]

Section 80CCD (2)

This deduction is available for the employer's contribution to an employee's NPS account. A maximum contribution of 10% of the basic pay

• Section 80D

The premium paid for the health insurance policy for self, spouse and dependent children up to Rs 25,000 can be claimed as exemption under Section 80D of the Income Tax Act. If your parents are senior citizens (60 years of age or older), this deduction will go up to a maximum of Rs 50,000. Therefore, self-paying health insurance premiums (including spouses and dependent children) and senior citizen parents can help you save up to Rs 75,000 in financial years.

Section 80DD and Section 80DDB

. Section 80 DD provides a tax break on the cost of treatment taken for a dependent disabled person. Dependents here include husband/wife, children, parents, brother and husband's sister.

Depending on the approved discount whether the dependent is disabled or severely disabled. If the dependent is at least 40% disabled, a maximum discount of Rs 75,000 can be claimed. On the other hand, if the disability is 60% or more, it is considered a serious disability and the maximum discount can be claimed which is Rs 1.25 lakh.

You may also, like- Automated Income Tax Form 16 Part B for the F.Y.2020-21 which can prepare at a time 50 Employees Form 16 Part B

• Section 80U

Disability of 40% or more, you can claim an exemption under 80U Rs.75,000/- and for the above 80% Rs.1,25 Lakh. It is noted that now one can avail both exemptions U/s 80DD and U/s 80U.

Exemption claims under Section 80U are claimed by persons with disabilities and exemptions under Section 80DD are claimed by dependents bearing the cost of treatment of persons with disabilities.

You may also, like- Automated Income Tax Form 16 Part B for the F.Y.2020-21 which can prepare at a time 100 Employees Form 16 Part B

Interest on housing U/s 24 (B)

Anyone can claim tax benefit above a maximum of Rs 2 lakh on the interest paid on the loan in the financial year. If you are paying interest on a home loan for an under-construction property, this benefit will be available after the house is occupied, but it happens within five years.

Section 80EEA

If you have taken a home loan to buy a house under the Affordable Housing Department for the financial year 2010-2011, you can claim an additional tax deduction as an interest, a maximum of Rs 1.5 lakh.

• Section 80TTA

Exempted Interest earned in savings accounts in banks or post offices Maximum Rs. 10 thousand.

Section 80TTB

Senior citizens (Aged 60 years and above) can claim a maximum rebate of Rs 50,000 from the total income under this section. The deduction can not be claimed both section 80TTA and 80TTB

Conclusion

Tax planning is not a day job and should be driven by considering financial goals, liquidity position and taxability on returns. Taxes A taxpayer can save tax and create wealth as well as plan ahead.

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