The HR Department of your company is all set to roll up their sleeves and email you asking you to submit proofs of your Income Tax Declaration with the approaching new year. Employees have to submit investment proofs and provide income tax declaration so that their employer deducts the correct amount of TDS. There are things that you must be aware of pertaining to investment proofs that an individual needs to provide to their employer. These details are to be submitted under Form 12BB.
Major Sections to Claim Income Tax Declaration
Section 80C
Maximum deduction available under section 80C is INR 1,50,000. Following are the deductions covered under this section.
- Life Insurance: Life insurance Premium slips (in the name of self/spouse/children)
- ELSS/Mutual Fund (Tax Saving): ELSS/Mutual Fund Statement
- PPF: Copy of PPF Passbook (Self, Spouse, any child)
- Principal Repayment of Housing Loan: Home loan Statement mentioning principal amount repayment / Certificate from Bank
- Children’s Tuition Fees (up to 2 children): Children’s Education fee receipts
- Fixed Deposits (Tax Savings): Copy of Tax saving Fixed Deposit receipt
- Unit linked Insurance Scheme / Plan: Receipts /Certificate / Statement of Account / Copy of passbook of the current financial year (Self, Spouse, any child)
- NSC: NSC certificate, Interest statements on NSC purchased
- Sukanya Samriddhi Account: Sukanya Samriddhi Account passbook.
- Deferred Annuity Plan: Proof of the payment made for a non-commutable deferred annuity on the life of the individual himself or spouse or any child
- Subscription to any deposit scheme/pension fund set up by the National Housing Bank (NHB): Subscription proof of deposit scheme or any pension fund or home loan account scheme of the National Housing Bank
Section 80CCC
- Pension Plan: Receipts /Certificate / Statement of Accounts / Copy of passbook of current financial year
Section 80D
The section 80D provides a deduction for payment of medical health insurance premiums.
- Medical Health Insurance for self, spouse, and children
- Proofs: Mediclaim policy copy or Copy of Premium receipt, Health- Checkup receipts
- Deduction Limit: INR 25,000/- (for citizens above 60 years, the limit is INR 50,000/-)
- Medical Health Insurance for parents
- Proofs: Mediclaim policy copy or Copy of Premium receipt, Health- Checkup receipts
- Deduction Limit: INR 25,000/- (If parents are above 60 years then the limit is INR 50,000/-)
Section 80DD
- Expenditure on Dependents with Disability u/s 80DD.
- Proofs: Certificate from Prescribed Authority in Form No. 10-IA or as per the applicable prescribed Form.
- Deduction Limit:
- INR 75,000 for 40% or more disability
- INR 125,000 for 80% or more disability i.e. severe disability
Section 80U
- Expenditure on own Disability u/s 80U.
- Proofs: Certificate from Prescribed Authority in Form No. 10-IA or as per the applicable prescribed Form
- Deduction Limit:
- INR 75,000 for 40% or more disability
- INR 125,000 for 80% or more disability i.e. severe disability
Section 80DDB
Treatment of Specified Diseases u/s 80DDB.
- Proofs: The prescription in respect of the diseases or ailments specified diseases by the specialists
- Deduction Limit: INR 40,000 however, in the case of senior citizens the limit is INR 1,00,000.
Section 80G
Section 80E
- Deduction of education loan interest u/s 80E: Copy of loan certificate reflecting the interest payments
Section 24(b)
- Interest on Housing Loan:
- Proofs: Certificate from Bank/Home Loan statement, Self- Declaration whether the house is self-occupied or let-out one, submit completion certificate or occupancy certificate for claiming interest paid on housing loan
- Deductions: INR 2,00,000 in case of Self-Occupied Property. The total amount of interest paid in case of Let out property
House Rent Allowance (HRA)
Rental agreement or Monthly rent receipts (with Revenue Stamp in case rent in cash is INR 5,000/- or more). In case, the annual rent paid is more than INR 1 Lakh, the landlord’s permanent account number should be quoted.
Section 10(5)
- Leave Travel Allowance: LTA can be claimed in respect of two journeys performed in a block of four calendar years. The current block runs from 2018-2021
- Proofs: Travel tickets such as flight tickets, railway tickets, and bus tickets.
Section 17(2)
- Medical Reimbursement
- Proofs: Original Medical bills (including Parents, Wife/husband, Children)
- Maximum Limit: INR 15,000
FAQ
The provisions of Section 80C are applicable only to individuals or a Hindu Undivided Family (HUF). Hence, a company or a firm cannot take the benefit of Section 80C.
You will be eligible to claim both the interest and principal components of your repayment during the year.
Yes, the interest received on a tax saving FD is taxable.
Hey @sushil_verma
There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.
Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.
For eg,
Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.
The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).
Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).
As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.
Hey @Sharath_thomas , we have updated the content according to the appropriate assessment year. Thanks for the feedback.
No issues. You’re welcome!
Hey @shindeonkar95
In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.
However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.
Hope, it helps!
Hello,
Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?
There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?
I couldn’t find anything on this. Any help is appreciated.
Hello @Veejayy,
Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.
Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.
These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!
Also, interest earned on these bonds will be taxable.
Hope this helps!
Hi, I need to file my income tax for FY21, I am using Quicko platform for filing, I wanted to confirm if the ELSS investment amount for the FY21 is to be added in the section 80C, since I already the amount of Rs30,072 , should I add my ELSS amount to this existing amount and submit the total
Hey @Sheirsh_Saxena, yes, the investment amount needs to be added under 80C.