COMMON DEDUCTIONS YOU MIGHT BE MISSING ON YOUR TAX RETURN
It is recommended that you begin the process of filing income tax returns (ITRs) for the current assessment year even though the deadline is still several months away. Among the many benefits, filing your ITR ahead of time will allow you enough time to consider every deduction—large or small—that you are eligible to make.
There are other lesser-known deductions that taxpayers frequently overlook, in addition to the popular ones under Section 80C on insurance premiums, equity-linked savings schemes (ELSS) and Public Provident Fund (PPF), interest on house loans, and medical insurance premiums under Section 80D.
Here are 4 lesser-known common deductions you might be missing on your tax return:
1.Medical Tests for Prevention:
Seldom do consumers file claims for deductions related to routine medical exams. Under Section 80D, one can get up to ₹5,000 for a preventive check-up for oneself, dependent children, a spouse, or parents under the age of sixty. ₹ 7,000 is available for parents who are 60 years of age or older. The purpose of a preventive health check-up is to screen for and identify potential ailments through medical testing.
Prior cash payments for preventative health checkups were not eligible for deduction; however, they are now.
2.Senior citizen parents' medical costs:
You may still deduct the amount you pay for your parent’s medical expenses if they are 60 years of age or older and not covered by health insurance.
Medical expenditures are deductible up to ₹50,000 under Section 80D. Due to ignorance, the majority of people readily spend ₹50,000 per month on their elderly parents’ medications but fail to claim a deduction for it.
It should be mentioned that only when these costs are paid for with a method other than cash can they be deducted from taxes.
3.The fine wording of Section 80C
Few people are aware that there are numerous deductions possible under Section 80C’s ₹1.5 lakh cap.
First, there is a deduction available to borrowers who are also servicing their house loans for the main amount owed. It is well known that, depending on the taxpayer’s situation, interest on a house loan may be deducted under Sections 24 and 80EE. Under Section 80C, the principal portion of the loan is deductible up to ₹1.5 lakh.
This is subject to the requirement that you hold onto the property for five years before selling it.
Secondly, under Section 80C, the stamp duty paid for home registration may also be deducted.
4.DONATIONS
Following COVID-19 last year, a large number of people must have made gifts that, if they have receipts, can be deducted from their taxes.
Contributions to a government-backed fund are fully deductible, but contributions to private institutions are only deductible to the extent of 50% of the donation.
OVER TO YOU
If taxpayers choose to itemise, they can benefit from several important deductions. Save service receipts and maintain a file all year long to ensure you have documentation of even the smallest costs you make for your health, business, and charitable causes. These costs can ultimately result in lower tax payments as they accumulate.