Income Tax Deductions for AY 2021-22: The tax return (ITR) filing season has started. The Central Government recently increased the deadline for ITR filing for the assessment year 2021-22 from July 31 to September 30, 2021, because of the second wave of the Covid-19 pandemic and the subsequent difficulties taxpayers face. As you now have more time to file tax returns, look at the following list of tax deductions you can claim on various payments, incomes, and investments. In the current assessment year, you can only claim the following conclusions on payments and assets made in the previous financial year (FY 2020-21). Also, these deductions will not be available for those who opted for the New Tax Regime.
1. Income from House Property
Under Section 24(b), deduction from income from House Property on interest paid on housing and improvement loansn is allowed. According to the Income Tax Rules, the upper limit for deduction of interest paid on housing loans is Rs 2 lakh for a self-occupied property.
For those who have opted to file returns under the New Tax Regime, this deduction from income from house property will not be available from this year.
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- Under Section 80C, the deduction can be claimed on investment/payment for Life Insurance Premium, Provident Fund, PPF, Subscription to certain equity shares, Tuition Fees, National Savings Certificate, Housing Loan Principal, etc.
- Under Section 80CCC, a deduction can be claimed towards payments made to an annuity plan of LIC or another insurer towards the pension scheme.
- Under Section 80 CCD (1), deduction towards payments made to the pension scheme of the Central Government can be claimed.
Note: The combined deduction of only Rs 1.5 lakh under Section 80C, Section 80CCC, and Section 80 CCD (1) can be claimed.
3. Payments for the Central Government Pension scheme
Under Section 80 CCD (1B), a deduction up to Rs 50,000 towards payments made to the Pension Scheme of the Central Government, excluding deduction claimed under 80CCD (1), can be claimed.
Under Section 80 CCD2, a deduction towards contribution made by an employer to the pension scheme of the Central Government can be claimed. However, there are two conditions:
- If the employer is a PSU, State Government, or others, the deduction limit is 10 percent of the salary.
- If the employer is Central Government, the deduction limit is 14 percent of wages.
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Under Section 80 D, deductions towards health insurance premiums and preventive health checkups can be claimed. However, there are various limits:
- For Self/Spouse or Dependent Children or Patents: A deduction of Rs 25,000 can be claimed. This limit is Rs 50,000 in case any person is a senior citizen. Also, Rs 5000 deduction for preventive health checkups is allowed. However, this amount is not above the overall ceiling of the health insurance premium paid.
- Even if no premium is paid on health insurance coverage, a deduction towards medical expenditure incurred on a senior citizen can be claimed. The deduction limit, in this case, is Rs 50,000.
5. Payment for maintenance/treatment of disabled dependent
Also, a deduction up to Rs 75,000 can be claimed instead of payments made for care or medical treatment of a disabled dependent or paid/deposited any amount under a relevant approved scheme. However, for persons with severe disabilities (80$ or more), the deduction limit is Rs 1.25 lakh.
