The upper the deduction you’ll be able to apply in your earnings, the lesser shall be your web taxable earnings and therefore, the decrease shall be your earnings tax outgo. You may declare sure earnings tax deductions beneath completely different heads and subsequently scale back your general earnings tax legal responsibility. Most of those deductions can be found for these taxpayers who select the outdated earnings tax regime. The query now could be how a lot tax it can save you with and with out investing your hard-earned cash. ET Wealth On-line explains the assorted earnings tax deductions you’ll be able to avail to save lots of your earnings tax for the monetary 12 months 2023-24.
Additionally learn: Finances 2024 expectations: 13 methods the FM can simplify issues for taxpayers: CII

Part 80C provides a tax deduction of as much as Rs 1.5 lakh

Part 80C of the Earnings-tax Act, 1961 is without doubt one of the most generally used deductions that gives a deduction of as much as Rs 1.5 lakh in every monetary 12 months. It’s important to put money into numerous monetary merchandise by March 31, 2024, to avail the advantages of Part 80C.

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Here’s a listing of monetary devices that qualify for Part 80C advantages as follows1) Life insurance coverage premium cost
2) Public Provident fund contribution

3) Tax-saving fastened deposit funding
4) Funding into put up workplace time deposits with a lock-in interval of 5 years
5) Nationwide Financial savings Certificates investments
6) Investments in Fairness-Linked Financial savings Scheme (ELSS)
7) Investments in pension plans or deferred annuity plans
8) Sukanya Samriddhi Yojana investments
9) Contribution in direction of EPF
10) Tuition charges paid for as much as two youngsters in any college, faculty, college or different instructional establishment located inside India
11) Senior Citizen Financial savings Scheme This tax deduction profit is obtainable to all, regardless of their earnings ranges. Do be aware that the Part 80C deduction is obtainable solely beneath the outdated earnings tax regime.

NPS contributions can supply a further deduction of as much as Rs 50,000

In case you put money into the Nationwide Pension System (NPS), you’ll be able to declare a further deduction of Rs 50,000 beneath Part 80CCD (1B) of the Earnings-tax Act, 1961. It’s over and above the general restrict of Rs 1.5 lakh beneath Part 80C. So, if in case you have exhausted the restrict of Rs 1.5 lakh beneath Part 80C by investing in different monetary devices which might be eligible for deduction beneath the talked about part, you’ll be able to contribute to NPS and declare the extra deduction of Rs 50,000 beneath Part 80CCD(1B).

Tax-deductions a salaried taxpayer can declare in FY2023-24 (with out house and HRA)

Part 80D can assist you declare a tax deduction of as much as Rs 75,000

In immediately’s day and age, it’s a should to have medical insurance coverage. When you’ve got purchased medical insurance coverage insurance policies for your self, your loved ones, or your aged dad and mom, you might be eligible to assert a deduction in opposition to them beneath Part 80D of the Earnings-tax Act, 1961. The Part 80D deduction is obtainable solely beneath the outdated earnings tax regime.

If you’re beneath the age of 60 years and have paid a premium of medical insurance for your self, your partner, and dependent youngsters, you’ll be able to declare a deduction of Rs 25,000 beneath Part 80D.

In case you pay premiums of the medical insurance coverage to your dad and mom who’re beneath the age of 60, then you’ll be able to declare a further tax deduction of Rs 25,000. In case your dad and mom are senior residents, then you’ll be able to declare a tax deduction of Rs 50,000 to your paying the premium of their medical insurance insurance policies. So, these taxpayers who’re beneath the age of 60 years and pay medical insurance premiums for senior citizen dad and mom, can declare a most tax deduction of as much as Rs 75,000 beneath Part 80D.

Senior residents can get a deduction of as much as Rs 50,000 for medical insurance premium beneath Part 80D.

Part 80TTA provides a tax deduction of as much as Rs 10,000; Part 80TTB provides as much as Rs 50,000 deduction

When you’ve got a financial savings account, you’ll be able to declare a tax deduction of as much as Rs 10,000 from the web whole curiosity earned from the account. The financial savings account needs to be held with a financial institution, co-operative or put up workplace. When you’ve got a number of financial savings accounts in several banks, they are going to be clubbed collectively and handled as a single account.

This earnings tax deduction is obtainable solely beneath the outdated tax regime. Do needless to say curiosity earned from different sources similar to fastened deposits or recurring deposits, won’t qualify for deductions beneath Part 80TTA.

Part 80TTB of the Earnings-tax Act, 1961 permits a resident senior citizen to assert a deduction in opposition to curiosity earnings on the deposit. Beneath this part, a resident senior citizen who’s 60 years or above can declare a deduction of as much as Rs 50,000 on specified curiosity earnings.

Normal deduction: Declare a flat deduction of Rs 50,000

The usual deduction is a flat deduction salaried people can declare in opposition to taxable wage earnings with out requiring any proof of precise expense incurred. Salaried taxpayers can declare a typical deduction of Rs 50,000 in a monetary 12 months with none investments. This deduction is obtainable beneath each outdated and new earnings tax regimes.

( Initially revealed on Jan 26, 2024 )

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