Income tax allowances and deductions for F.Y.2021-22. Salary employees constitute a
major part of the overall taxpayers of the country and their contribution to tax collection
is significant. Income tax deductions provide a wide range of tax-saving
opportunities for the salaried class. With the help of these deductions and deductions,
one can significantly reduce his taxes.
Most valuable as well as common deductions and allowances U/s 80 C are available to salary individuals.
Exemption of allowance
House rent allowance
A salaried person with rented accommodation can avail of the benefit of HRA (House Rent Allowance). It can be fully or partially exempt from income tax. However, if you do not live in rented accommodation and still continue to receive HRA, it will be taxable. If you cannot submit a rent receipt to your employer to claim an HRA, you can claim a waiver at the time of filing your income tax return. So, please keep the rent receipt and proof of any payment for the rent.
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You can claim at least one of the following as an HRA discount.
A. Total HRA received from your employer
B. Rent paid 10% less (basic salary + DA)
C. 40% of salary for non-metro (basic salary + DA) and 50% of salary for metro (basic salary + DA)
Standard deduction
The Finance Minister of
The money limit has been increased by Rs 40,000 to Rs 50,000 in the interim budget 2019.
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Release Travel Allowance (LTA)
The Income Tax Act provides for LTA exemption for salaried employees, which is limited to travel expenses during their holidays. You can claim LTA twice in a four-year block. If a person does not use this discount in the block, he can carry it to the next block. The following are the restrictions applicable to LTA:
LTA is not only the cost of domestic travel and international travel
This type of travel method must be by rail, air travel or public transport
Child allowance
Children education allowances as part of your salary. Such allowances received by the employer for the education of children is exempt from tax.
However, the children education allowances for two children @ Rs.100 P.M.
Approved subtraction
Sections 80C, 80CCC and 80CCD (1)
Section 80C is the commonly used option for income tax exemption up to Rs.1.5 Lakh. Expenditure/investment within 80C from income generated due to capital gain is not allowed. This means that if a person's income only includes capital gains, then section 80 cannot be used for tax protection. Some of these investments are eligible for discounts up to a maximum of Rs 1.5 lakh under Sections 80C, 80CCC and 80CCD (1).
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Section 80D exemption limits are:
25,000 for a premium paid for oneself / family.
Rupees 50,000 for premium for senior citizen parents.
In addition, health checks of Rs 50,000 are also approved and covered in the overall range.
Discount up to Rs. 10,000 for medical expenses incurred by senior citizens (years 60 years or more) or senior citizen parents up to Rs.40000/-
The taxpayer can claim a maximum rebate of Rs. 5,000. 50,000 including the amount of premium and medical expenses if he is a senior citizen
(60 years or more). In addition, if he pays the medical bills of his senior citizen parents, he can claim an additional discount of up to Rs 10,000. 50,000.
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Home Loan Interest (Section 80C and Section 24)
Another capital-saving tool is interest on home loans. Max Limit Rs. 2 lakh as a discount for interest on home loans for self-occupied property.
In addition to the above, one can claim up to a maximum limit of Rs 1.5 lakh under Section 80C, the main component of repaying a housing loan.
Grants (Section 80G)
Section 80G of the Income Tax Act, 1961 proposes deduction of income tax to an appraiser who donates to charities. This discount varies depending on the recipient organization, which means anyone can get a 50% or 100% discount on the amount donated, with or without restrictions.
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Section 80TTA of the Income-tax Act, 1961 offers a rebate of up to INR 10,000 on income earned from savings account interest. This discount is available for individuals and HUFs. If the bank's interest income is less than INR 10,000, the entire amount will be deducted.
However, if the bank's interest income is more than INR 10,000, the next amount will be taxable.
Home Loan Interest (Section 80EE)
Section 80E allows homeowners to claim an additional Rs. 50,000 (Section 2) for the interest portion of the home loan EMI. Subject to the following:
The loan must not exceed Rs. 35,00,000
The cost of the property can not exceed Rs.50,00,000.
The person must not have any other property registered in his name at the time of granting the individual.
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5) Individual Salary Structure as per the Govt and Private Concern’s Salary Pattern
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8) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21
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10) Automatic Convert the amount into the in-words without any Excel Formula
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