The Income Tax Act of the Indian Government says that there are certain provisions in the taxation system which allows an individual to claim deductions in tax liability. The deductions that can be claimed fall under different sections of the Income Tax Act.
a)Premium paid for medical insurance (Sec 80O):
A maximum deduction of Rs 10,000 per annum is allowable for premium payment towards medical insurance taken by an individual for self, spouse, dependent parents or children.
In case the policy holder is a senior citizen, a maximum amount of Rs 15,000 per annum can be claimed as admissible deduction.
b) Medical treatment of handicapped parents (Sec 80D and 80DDA):
An individual can claim a maximum amount of Rs 40,000 per annum as deduction from his gross total income for expenditures incurred for treatment of handicapped dependent parents.
c)Expenditure incurred for treatment of specified ailment or disease can also be claimed as exemption from tax liability.
d)Repayment of education loan (Sec 80E):
If an individual has taken an education loan for pursuing any kind of course (including vocational courses), a maximum amount of Rs 40,000 per annum out of the principal loan amount is allowable under Sec 80E as admissible deduction.
This deduction can be claimed for a maximum of eight years from taking the loan.
e)Donations made to trusts, charitable funds (Sec 80G):
Donations to the following trusts/funds are fully exempted from tax liability.
-Prime Minister's National Relief Fund
- Prime Minister's Armenia Earthquake Relief Fund
-Chief Minister's Relief Fund
-National Foundation for Communal Harmony
-Samitis for Primary and Adult Education
-National Sports Fund
-National Cultural Fund