Producer: Priyanka Das Editor: Nisha Dubey
While the new tax regime provides for limited deductions/exemptions, under the old tax regime, there are many expenses/investments that are eligible for deductions/exemptions.
Here are a few deductions that may not be popular, but could offer potential tax savings.
Contribution to NPS Tier 1 account is eligible for an additional deduction of Rs 50,000 under section 80CCD(1B). This is in addition to the deduction available for NPS contribution up to Rs 1,50,000 under Section 80C.
Salaried individuals who are not in receipt of HRA or self-employed individuals can claim a deduction towards rent paid under section 80GG subject to prescribed conditions. The amount of deduction will be restricted to the least of the following: Rs 5000 per month, 25% of total income, actual rent paid less 10% of total income.
It is worth noting that medical expenditure incurred for senior citizen parents who are not covered under any insurance policy is also eligible for deduction up to Rs 50,000 per financial year under section 80D.
An individual taxpayer can claim a deduction under section 80D towards expenses on preventive health check-ups for self, spouse, dependent children and dependent parents. Deduction is subject to a limit of Rs 5,000 per financial year.
An individual taxpayer is eligible to claim deduction up to Rs 1,50,000 under section 80EEB with respect to interest paid on loan taken from financial institutions for purchase of electric vehicle. The deduction is available if the loan is approved between Jan. 1, 2019, to Mar. 31, 2023.