ITR filling 2024: In the last-minute rush to file income tax returns (ITR), it's common to forget some tax deductions. Remember, if you miss claiming a deduction in the current financial year, you won’t be able to claim it in future years. Tax exemptions for investments made during a specific financial year must be claimed in the ITR for that year; they cannot be carried forward. Ensure you collect all necessary documents to claim all available deductions before submitting your ITR.
Here are four deductions to reduce tax
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Deduction for investment in PFF
If you have invested in options such as the Public Provident Fund (PPF) or tax-saving fixed deposits (FDs), you can claim a tax deduction of up to Rs 1.5 lakh per financial year under Section 80C. PPF offers an EEE status, meaning you can claim a tax deduction on your investment, and both the interest earned and the maturity amount are tax-free. Note that a PPF account has a lock-in period of 15 years.
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Tax benefits on investments in EPF
Many salaried employees are part of the Employees Provident Fund (EPF) scheme, which requires employees to contribute 12% of their salary to their EPF account, with the employer matching this amount. You can claim tax deductions under Section 80C only on your own contribution. To make additional contributions, you can opt for the Voluntary Provident Fund (VPF). Note that the total contributions to EPF and VPF cannot exceed your basic salary in any financial year.
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Deduction on investment in ELSS mutual funds
Equity-linked savings schemes (ELSS) are mutual funds that invest in equities and have a lock-in period of three years. You can invest in ELSS and claim a tax deduction under Section 80C. However, the maximum deduction you can claim under Section 80C in a financial year is Rs 1.5 lakh. Among all eligible schemes under Section 80C, ELSS mutual funds have the lowest lock-in period. While you can benefit from tax deductions for investing in ELSS, you will need to pay tax on any gains when you redeem the investments.
- Tax exemption on health insurance premium
If you are under 60 years of age, you can claim a deduction of up to Rs 25,000 for health insurance premiums paid under Section 80D. If your parents are 60 years or older, you can claim a higher deduction of up to Rs 50,000 for their health insurance premiums. Additionally, since FY 2015-16, you can claim an extra deduction of Rs 5,000 for preventive health check-ups.
Also Read: ITR Filing 2024: How much fine you will have to pay for late filing of income tax returns? Know rules
Also Read: ITR Filing 2024: Why is it crucial to verify Income Tax Return? Check time limit
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