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Income Tax Deduction
Deduction is the amount, which is reduced from the gross total income before computing tax.

There are other deductions such as for donations, for repayment of loans taken for educational purposes etc.

Deductions on Interest ( U/s 80L)
Up to Rs. 12,000/- : If interest is earned on Govt. Securities, Bank deposits, Post Office deposits, debentures, National Savings Certificates etc.,
Additional deduction up to Rs. 3,000/- On interest from Govt. Securities, if not already covered in the Rs. 12,000/- limit mentioned earlier.

Deductions on premium for medical insurance (U/s 80cc)
Up to Rs. 10,000/- If premium for medical insurance is paid by cheque for a person, or his dependent family member or member of the HUF.
Up to Rs. 15,000/- For senior citizens

Deductions on expenditure on handicapped dependent (U/s 80DD)
Up to Rs. 40,000/- If any expenditure has been incurred on the treatment, nursing, training of a handicapped dependent, or for creating an insurance benefit for such person subject to the condition that doctor working in a government hospital has issued the necessary certificate.

Deductions on treatment of diseases ( u/s 80DDB)
Up to Rs.40,000 /- If an individual or an HUF actually incurs expenditure for treatment of certain specified diseases for himself, dependents or a member of HUF.
Rs.60,000 /- For treatment of senior citizens
(This deduction is available only for certain specified diseases.)

Deductions on contribution to pension funds ( u/s 80CCC)
Up to Rs.10,000 /- If an individual contributes to specified pension funds The pension will however be taxable on receipt.
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