Have you opted for the old tax system? Here’s how to claim various deductions when filing RTI
New Delhi: Those who file their income tax return (ITR) under the old tax system must fill in the details of the deductions used under the various sections of Article 80C to 80U of the Income Tax Act , 1961. The details of the deductions should be mentioned once you have completed your income details in ITR-1 form. These deductions can be claimed on income before income tax is levied. However, if you have opted for the new preferential tax regime, you will not be able to claim such tax deductions.
Here is how you can fill in the details of the tax deductions in the ITR-1 form
Details of the tax deductions you receive can be found in Form-16 if you have already submitted the details of the investment to your employer. Also, the tax service offers information pre-filled in the tax declaration forms. But it is necessary to cross-check the information pre-filled in the RTI form because many glitches were noted on the new electronic filing site of the tax service.
If you have not submitted the details of your investment to your employer, then you can claim these deductions when filing the ITRs for income tax.
Once you have completed the income from all sources, claim these deductions by mentioning the amount in the correct section of the RTI form. Here are the different deductions available under the old tax system:
1. Premium payments for life insurance, pension funds, provident funds
Section 80C of the Income Tax Act 1961 allows individuals to claim a deduction of up to Rs 1.50 lakh on premium payments for life insurance, provident fund, PPF, investments in ELSS programs, tuition fees paid for up to two children, national savings certificate, mortgage principal repayment etc …
Premiums paid for annuity plans and pension plans of insurance companies can also be claimed for deduction under Section 80 CCC. Likewise, under Article 80 CCD (1), a deduction can be claimed on investments made in the central government pension scheme.
But the total deduction under the three sections above cannot exceed Rs 1.50 lakh.
2. Investment in the National Pension System (NPS)
Under Article 80 CCD (1B), an additional deduction of up to Rs 50,000 may be claimed on investments made in the NPS by the employee. This is beyond the investment made under Article 80CCD (1).
Under section 80 CCD2, a deduction for contributions made by an employer to the NPS may be claimed. But the extent of the tax benefit will depend on the category of employer.
-In case the employer is a PSU, state government or any other private sector company, the deduction limit is 10% of base salary plus cost allowance (DA).
-In the case where the employer is the central government, the deduction limit is 14% of the basic salary plus DA.
3. Income from home ownership
Under Article 24 (b), an individual can claim a tax benefit on the payment of interest on a home loan, home improvement loan on independent property up to Rs 2 lakh. But the amount paid for mortgage principal repayment can be claimed under section 80C under the overall limit of Rs 1.50 lakh.
However, if you have opted for the new tax regime, you cannot claim this tax benefit.
4. Payment of the health insurance premium
Under Section 80D, a deduction can be claimed from premiums paid to purchase health insurance for self and dependent family members and for preventive health examinations. However, there are different limitations:
For the self-spouse or dependent children or patents: a deduction of Rs 25,000 is allowed under section 80D. In the event that the applicant or members of his family are elderly, this deduction can go up to Rs 50,000. For preventive health checks, only the deduction of Rs 5,000 is allowed under section 80D. Even, a deduction of Rs 50,000 can be claimed on medical expenses incurred for an elderly person under section 80D.
5. Maintenance / treatment costs for disabled dependents
A deduction of up to Rs 75,000 may be claimed on expenses incurred for the maintenance or medical treatment of a disabled dependent. But in case of severe disability (80% or more), the deduction can go up to Rs 1.25 lakh.
6. Payment for medical care
Under Article 80 DD (1B), a deduction of up to Rs 40,000 may be claimed for expenses incurred for the medical treatment of oneself and dependent family members for specified illnesses. This deduction limit will increase to Rs 1 lakh in case one of the family members is an elderly person.
7. Interest paid on the student loan
Under section 80E, an individual can claim a deduction from the payment of interest on a student loan for the graduate studies of a dependent or dependent child or spouse. It should be mentioned here that there is no upper limit to this deduction.
8. Additional deduction on the payment of interest on the mortgage
Under Section 80EE, an additional deduction of up to Rs 50,000 can be claimed for the interest payment made on the loan taken out for the acquisition of residential property by first-time home buyers. Only loans taken out between April 1, 2016 and March 31, 2017 are eligible for this deduction.
Under 80EEA, a deduction of up to Rs 1.5 lakh is available on interest payments made on a home loan taken out for the purchase of a residential property for the first time the loan is sanctioned between April 01 2019 and March 31, 2022.
It should be mentioned here that the above two deductions are in addition to the deductions available under Article 24b.
9. House rent payment deduction for those who do not get HRA
Under Article 80GG, an employee can claim a deduction from the payment of rent even if he does not receive rent allowance (HRA) from his employer. This deduction is also available for the self-employed. But the maximum deduction that can be claimed under this section is Rs 60,000.
10. Interest paid on the loan taken out to buy an electric vehicle
In order to promote the use of electric vehicles, the government allows a deduction of up to Rs 1.5 lakh under section 80EEB for interest paid on the loan taken for the purchase of an electric vehicle. But the loan must have been taken out between April 01, 2019 and March 31, 2023.