If you are a salaried person, the details of the deductions are mentioned in your Form 16 provided you gave all the details of deductions claimed to your employer. If you have not given the information(s) to your employer, then there is no need to worry as you can directly claim the deductions at the time of filing the ITR.
Also read: What is Form 16? How to download Form 16 to file income tax return (ITR)
“From FY 2023-24 onwards, the new tax regime is the default regime. So, in case you still wish to be under the old regime, make sure you select it right while filing the ITR,” says chartered accountant Shreya Jaiswal.
What are the deductions you can claim under the old tax regime
There are some deductions which only salaried individuals can claim, like standard deduction. There are also some deductions which only senior citizens can claim. In this article we have articulated some of the important deductions that you may avail yourself of at the time of ITR filing if you have opted for the old tax regime.
“You can still claim additional deductions in your ITR even if they are not appearing in your Form 16, provided you have legitimate proof for it,” says Jaiswal.
Deductions under section 80C, 80CCC, 80CCD (1), 80CCD(1B) and 80CCD (2)
Under the old tax regime, the most used deduction is under section 80C as it’s very easy to claim. All you need to do is make the eligible investments in certain instruments and using that you can claim tax deduction under section 80C. Some of these instruments include tax-saving FDs, ELSS mutual funds, etc.The deduction under section 80CCC can be claimed if you have purchased or renewed any insurance policy that provides pension benefits.
Deductions under sections 80CCD (1), 80CCD(1B), and 80CCD (2) can be claimed if you have made investments in notified pension funds such as Atal Pension Yojana (APY), National Pension Scheme (NPS), etc. Deduction under section 80CCD (2) can be claimed if your employer contributes to NPS on your behalf.
As per CA Bhagyashree Thakkar, the maximum deduction government employees can claim under section 80 CCD (2) is the least of the actual employer contribution or 14% of the salary (basic+DA). For others, it is the least of the actual employer contribution or 10% of the salary (basic+DA) whichever is less.
The total aggregate amount of deduction that you can claim under sections 80C, 80CCC and 80CCD (1) is Rs 1.5 lakh. You can claim an additional deduction of Rs 50,000 under section 80CCD (1B) over and above the deductions under sections 80C, 80CCC and 80CCD (1).
Deductions under sections 80D, 80DD, 80DDB and 80U
Under section 80D if you are not a senior citizen above the age of 60 years, you can claim a maximum deduction of Rs 25,000 on premiums paid on a health insurance policy. Under this overall limit of Rs 25,000 you can claim up to Rs 5,000 as a deduction for money spent on preventive health check-ups. The total amount paid for preventive health check-ups for self and parents cannot exceed Rs 5,000 in a year.
In case you are a senior citizen or you have bought a health insurance policy for your senior citizen parents, the deduction limit on annual premium increases to Rs 50,000. However, if your senior citizen parents are not covered under any health insurance policy, this deduction of up to Rs 50,000 can be claimed for medical expenditure.
Table showing deductions that can be claimed under section 80D
Source: CA Bhagyashree Thakkar
Under section 80DD you can claim a deduction for expenses incurred for caring for a disabled person who can be your spouse, son/daughter, brother/sister and parents except in-laws. Do note that if the disabled person himself wants to claim the deduction for his/her disability then they can do so under section 80U. However, once the disabled person claims this deduction on his own no other individual can claim any deduction for this person’s disability.
Section 80DDB deduction can be claimed for expenses incurred for treatment of specified diseases, either for yourself or a dependent. The maximum deduction that can be claimed is Rs 40,000. In case of senior citizens, the maximum deduction that can be claimed is Rs 1 lakh. Moreover, you must remember that while claiming deduction under section 80DDB, the maximum amount of deduction available is reduced by the amount of reimbursement of treatment cost, if any, received from the employer or insurance company.
Deduction under section 80E
Under section 80E you can claim a deduction for interest paid on education loans. There is no limit on the maximum amount of deduction that can be claimed under section 80E. However, you can claim this deduction till completion of eight years starting from the financial year in which the interest payment began or until interest is paid in full, whichever is earlier.
Deduction under section 80G
You can claim this deduction if only you have donated to specified funds or institutions notified by the income tax department. While claiming this deduction, you have to fill in the details of the institutions to which donations have been made in the additional tab ’80G’ in the ITR form. If you have made a donation in cash, then the maximum amount you can claim as a deduction is Rs 2,000.
Deduction under section 80GG
According to Thakkar, you can claim a deduction for house rent paid under section 80GG provided you have satisfied certain conditions and do not have a house rent allowance (HRA) component in your salary.
Least of the following amount is available as deduction under this section:
a) Rent paid in excess of 10 percent of total income
b) 25% of the total income
c) Rs 5,000 per month
Deduction under section 80TTA
You can claim a deduction of up to Rs 10,000 if you have earned any interest on your savings account balance either held with a bank or post office or both. This deduction can be claimed only by individuals whose age is below 60 years.
Deduction under section 80 TTB
Senior citizens who have earned interest income from deposits held with banks and/or post offices can claim a deduction of up to Rs 50,000 under section 80TTB. The deduction under this section includes interest income received from savings accounts, fixed deposits, and post office schemes such as Senior Citizens’ Savings Scheme (SCSS), Post Office Savings Account, and others.
Deductions that you can claim under new tax regime
According to Thakkar, there are not many deductions that can be claimed under the new tax regime. Standard deduction is available for salaried employees filing ITR under both old and new tax regimes.
“The new tax regime offers exemption for voluntary retirement under section 10(10C), gratuity under section 10(10) and leave encashment under section 10(10AA),” says Thakkar.
Here are some other deductions that you can claim under the new tax regime:
- Rs 15,000 or 1/3rd of their pension whichever is lower can be claimed by a family pensioner as a deduction
- Salaried individuals can claim deduction under section 80CCD (2) for employer’s contribution to an NPS account.
There has been no change in the deductions that can be claimed under the old tax regime. However, for the new tax regime, only one change was made for FY 2023-24. “The only change is, the deduction under section 80CCD (2) for the employer’s contribution to the NPS fund is also available under the new regime,” says Abhishek Soni, co-founder, Tax2Win.
