Expenses for which you can claim income tax deductions
March 31 is the deadline to make tax investments for the 20-21 fiscal year. Those who haven’t made their tax savings for the year may be planning to do so now, as they only have a few days left. However, this year many of you may be financially strained due to job losses or pay cuts and therefore may not have excess cash to make those money-saving investments. tax. Also, it’s never a good idea to borrow money to save taxes. Therefore, we list some of the expenses which, if you incur, can be claimed as expenses so that you do not need to make any additional investment if you are able to exhaust your Section 80 C deduction after these expenses.
Tuition: Under Section 80C, you can claim a deduction of up to ₹1.5 lakh against school fees (excluding donations and development fees) for up to two children during the fiscal year.
Fees can be paid at any school, university, college or any other educational institution located in India.
Remember that this deduction cannot be claimed for fees paid for training courses or hostel or mess fees.
So, for example, if you pay tuition fees of ₹60,000 for each of your two children, you can claim a deduction of ₹1,20,000 under Section 80C.
Repayment of the capital of the mortgage loan: If you have received a home loan, you can claim a deduction of up to ₹1.5 lakh under Section 80 C on principal repaid during the year.
If you make the claim, remember that you cannot sell the property within five years of owning it.
If you sell the property, the deduction claimed will be added to income in the year of sale. You can also claim stamp duty and registration fees under the ₹1.5 lakh limit.
“This year, if you have opted for the moratorium on EMIs, the principal reimbursed will be less because you have not paid any EMIs during this period. Therefore, it must be remembered that the deduction can be claimed on the principal actually paid and not on what was due at the beginning of the year,” said Prakash Hegde, a Bengaluru-based chartered accountant.
Life insurance premium paid: If you paid a life insurance premium for yourself or your spouse, you can claim a deduction of up to ₹1.5 lakh against the life insurance premium paid under Section 80C.