For most individuals tax deductions are all about investing in Public Provident Fund or life insurance policy. However, there are a host of other deductions which many taxpayers are eligible to claim but don’t do so because they are not aware of them.
“Many tax payers buy health insurance, but many are not aware that they can seek tax exemption up to 15,000 under Section 80 D on health insurance premium payments. They can also seek an additional exemption of 15,000 for their dependent parents and 20,000 if one of their parents is a senior citizen,” says Saakar S Yadav, managing director, myitreturn.com, a tax portal.
Take a look at some lesser-known deductions which may help you save some more.
Medical expenses for specified diseases like AIDS, Cancer
“The actual expenditure incurred on treatment of specified disease such as AIDS, cancer, neurological diseases, etc., is deductable to the extent of 40,000 or the actual expense whichever is lower. The limit is increased to 60,000 in case of expense incurred for a senior citizen,” says Vineet Agarwal, director, KPMG.
The expenditure may be incurred by the taxpayer or an eligible dependent. The tax payer has to obtain a certificate from the doctor to claim the tax deduction.
Deduction for medical expenses incurred on disability
If you have incurred expenditure for medical treatment of a disabled dependant or have deposited any amount under a prescribed scheme for the maintenance of the dependent, you can seek a tax deduction.
“In such cases, tax payers are allowed a deduction of 50,000. The deduction increases to 1,00,000 in case of severe disability. The above deductions are also available if the taxpayer himself is a person with some disability,” says Vineet Agarwal.
Deduction for rent paid if you are not availing HRA
You can claim a deduction for rent paid to the extent of 2,000 per month even if you don’t receive HRA from your employer or you are self-employed. This deduction, available under Section 80GG, is subject to some conditions.
“Neither the taxpayer nor the spouse should own a house at the place of employment. They cannot be self employed, which includes businessmen or professionals. Lastly, the tax payer should not self-occupy his/her house at any other place,” says Vaibhav Sankla, director H&R Block India.
Amount paid under National Pension System
“The contributions made by an employee to the NPS qualify for a deduction under 80CCD and the upper limit of 1,00,000 under Section 80C of the Act. However, effective April 2011, employer contributions to NPS up to 10% of the employee’s salary would qualify for an additional deduction which is a good saving,” says Vineet Agarwal.
Many individuals take up overseas assignments and as a result earn income both in India and abroad. In the event they face taxation in both countries, they may avail credit of taxes paid overseas while filing their tax returns in India.