Every salaried person must pay an amount from their salary as tax under the Income Tax Act of 1961. Under the Income Tax Act of 1961, there are many provisions and variations with subsections describing the details of tax payments, deductions, and computations. A lot of deductions from subsections 80C to 80U are available. After subtracting all the available tax-saving provisions and deductions, the final amount is paid to the government as the income tax on salary.
If an assessee opt for the old tax regime, he/she can claim the benefits from the following exemptions and deductions for both the previous and current financial years:
- House Rent Allowance (HRA), based on the individual’s rent and salary structure.
- The professional tax of ₹ 2,500.
- Leave Travel Allowance (LTA).
- Deductions on entertainment allowance (applicable for government employees).
- Deduction of the interest payment of home loan for self-occupied/ vacant property under Section 24(b).
- Deduction of the interest payment up to ₹2 lakhs for the purchase/construction/ repair/reconstruction of house property under section 24(b).
- Tax deduction under Section 35(1)(ii), 35(2AA), 32AD, 33AB, 35(1)(iii), 33ABA, 35(1)(ii), 35CCC(a), and 35AD of the IT Act.
- Additional depreciation as specified under Section 32(ii) (a).
- The option to adjust the unabsorbed depreciation of previous years.
- Deductions as specified under Chapter VI-A such as 80IA, 80CCC, 80C, 80CCD, 80D, 80CCG, 80DDB, 80EE, 80E, 80EEA, 80DD, 80EEB, 80GG, 80IB, 80IAC, and 80IAB.
- Minor child, helper allowances and allowances for children’s education.
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Note: This Post was last updated on June 26, 2023
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