INCOME TAX REBATES THAT DON’T NEED FRESH INVESTMENTS
12 income tax rebates you can use for FY 2020–21
Without investing your money AFRESH in any scheme ,you can claim Tax Deduction /rebate in FY 2020–21 by utilizing the following Tax provisions:
SUMMARY OF REBATES AVAILABLE
- Rebate under section 87 A for the Resident Indians with below taxable income of Rs 5.00 lakhs ( Available both in old and new regimes )
2. Standard Deduction of Rs 50,000 for Salaried persons / pensioners
3. Health Insurance premium paid between Rs 25,000 to Rs 1.00 lakh under section 80D
4. Interest on Education Loan paid under section 80E
5. Deductions allowed Rs 50,000/1,50,000 under Section 80EE/80 EEA for the Interest on Housing loans with certain conditions .
6. Deductions allowed Rs 2.00 lakhs under Section 24 for the Interest on Housing loans .
7. Deductions allowed Rs 1,50,000 under Section 80 EEB for the Interest on loans taken for purchase of electric vehicles .
8. Interest on savings bank accounts are exempted by tax up to an amount of Rs 10,000 under Section 80TTA and for senior citizens only if they have not claimed under section 80TTB .
9. Interest received by a senior citizen on deposits with banks / co-operative societies / post office is exempted up to Rs 50,000 under section 80 TTB .
10. Rent paid in excess of 10% of total income for furnished/unfurnished residential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less) subject to certain conditions under section 80GG
11. Donations made to certain organizations under sections 80G & 80 GGA,80 GGB
12. Total tuition fee paid by a parent for maximum of two children is eligible for tax exemption under 80C .
All above listed rebates , except Rebate no 1 , are available only if you opt for old regime except no 1 which is available both in old and new regimes . Some of the rebates come with riders / eligibility criterion as below
REBATE UNDER SECTION 87A OF INCOME TAX ACT
SECTION 87A — An assessee, being an individual resident in India, whose total income does not exceed Five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax on his total income with which he is chargeable for assessment year 2021–22 of an amount equal to hundred per cent of such income-tax or an amount of Twelve thousand and five hundred rupees, whichever is less.
The above section is applicable only for residents whose total taxable income for the year is less or equal to Rs 5,00,000.Hence to obtain the above rebate ,you may use other tax rebates under various sections like 80C , 80D , 80E etc to see that your taxable income becomes less than Rs 5,00,000 . The rebate under the section is available whether you opt for section 115 BAC or not .
INCOME TAX REBATES AVAILABLE UNDER SECTION 8OC
Cumulative deduction allowed under Section 80C, 80CCC, and Section 80 CCD for savings/investments, premium for annuity / pension fund is Rs. 1.5 lakh. Now under Section 80CCD, a deduction of up to Rs. 50,000 is allowed over and above the limit of Rs. 1.50 lakh under Section 80C in respect of contributions made to NPS . While Some provisions under 80C require fresh outgo of funds , there are some provisions which do not require any fresh investments . PF deducted from the salary by the employer is one such provision . The other is tuition fee paid .
TAX REBATE UNDER 80C FOR TUITION FEE PAID
Total tuition fee paid by a parent for maximum of two children is eligible for tax exemption under 80C .
“Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children” is eligible to be deducted under 80C .
Tuition fees paid for self or spouse is NOT eligible under 80C .
Fees paid to educational institutions situated outside India are not eligible . Only University, college, school or other educational institution must be situated in India though it can be affiliated to any foreign institutes.
Tuition fee Paid for children for full time courses only is eligible. Obviously fees paid for coaching classes will not be eligible . Pre-nursery, play school and nursery class fees is also covered under section 80C (circular 9/2008 & 8/2007). If both husband and wife are tax payers ,both can utilise the deduction separately for the individual payments made by them
REBATE ON HEALTH INSURANCE PREMIUMS PAID UNDER SECTION 80D
Deduction allowed on Health insurance Policies under 80 D is Rs. 50,000/- for senior citizens and up to Rs. 25,000/- for others .For senior citizens,if no insurance amount is paid ,hospital expenditure up to Rs 50,000 is allowed . An assessee can claim additional Rs 50,000 for his/her parents if they are senior citizens and Rs 25,000 in other cases .Overall claim cannot exceed Rs 1,00,000 . All payments should have been made in any mode other than cash .Cost of preventive health check up up to Rs 5,000 can be claimed within the overall limit and it could have been made in cash also .
INCOME REBATES UNDER SECTION 80TTA AND 80TTB ON DEPOSIT INTEREST
The interest you earn on your savings bank accounts is exempt up to Rs 10,000 under section 80TTA . Further if senior citizens have invested any amount as Term Deposit in a bank or post office , total interest earned by them up to Rs 50,000 i exempt from income tax under section 80TTB . If you claim under 80TTB , you will not be able to claim under section 80TTA .
REBATES ON VARIOUS INTEREST AMOUNT PAID
The interest you have paid on various loans taken by you will allow you to get rebates on your income tax . Some of them are
1. Interest on Education Loan paid under section 80E
2. Deductions allowed Rs 50,000/1,50,000 under Section 80EE/80 EEA for the Interest on Housing loans with certain conditions .
3. Deductions allowed Rs 2.00 lakhs under Section 24 for the Interest on Housing loans .
4. Deductions allowed Rs 1,50,000 under Section 80 EEB for the Interest on loans taken for purchase of electric vehicles .
RENT PAID TO CERTAIN EXTENT ATTRACTS REBATES
Rent paid in excess of 10% of total income for furnished/unfurnished residential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less) subject to certain conditions under section 80GG
You may check details of the above rebates in the website PLAN N PROGRESS where you can also explore various other rebates available and can utilize while submitting IT Returns
