Income tax deductions refer to the expenses or investments that can be subtracted from the total taxable income, thereby reducing the tax liability of an individual.
Some of the common income tax deductions along with their limits for the Financial Year 2021-22 (Assessment Year 2022-23) are:
1. Section 80C: Allows a deduction of up to Rs. 1.5 lakhs on investments in various schemes such as Public Provident Fund (PPF), Equity-Linked Savings Scheme (ELSS), National Pension System (NPS), Tax-Saving Fixed Deposits, etc.
2. Section 80D: Allows a deduction of up to Rs. 25,000 for health insurance premiums paid for self, spouse, and children, and an additional deduction of up to Rs. 25,000 for insurance premiums paid for parents. An additional deduction of up to Rs. 5,000 is available if the premium is paid for parents who are senior citizens.
3. Section 80E: Allows a deduction for the interest paid on an education loan. The deduction is available for a maximum of 8 years or until the interest is paid, whichever is earlier.
4. Section 80G: Allows a deduction for donations made to certain charitable institutions. The deduction is either 100% or 50% of the donation amount, depending on the charity.
5. Section 80TTA: Allows a deduction of up to Rs. 10,000 on the interest earned on savings accounts.
6. Section 80TTB: Allows a deduction of up to Rs. 50,000 on the interest earned on deposits held by senior citizens.
7. Section 24: Allows a deduction of up to Rs. 2 lakhs on the interest paid on a home loan for a self-occupied property.
Note that the limits and conditions for these deductions may vary from year to year, and taxpayers are advised to consult with a tax professional or refer to the official government website for the latest information.