Let me help you with what is tax deduction. A tax deduction in India refers to the reduction in taxable income that an individual or organization can claim under various sections of the Income Tax Act, 1961. It helps lower the overall tax liability by allowing taxpayers to subtract specific expenses or investments from their gross income.
What Does Tax Deduction Means?
Tax deductions are incentivized by the government to encourage savings, investments, and expenditures on essential areas like health, education, and housing. Common tax deduction sections include:- Section 80C: Deductions up to Rs. 1.5 lakh for investments in schemes like Public Provident Fund (PPF), Employee Provident Fund (EPF), National Savings Certificate (NSC), and premium payments for life insurance policies.
- Section 80D: Deductions for medical insurance premiums, up to Rs. 25,000 for individuals and Rs. 50,000 for senior citizens.
- Section 24(b): Interest paid on home loans qualifies for deductions, with a cap of Rs. 2 lakh per year for self-occupied properties.
- Section 80E: Deductions on interest paid for education loans.
- Section 80G: Contributions to eligible charitable institutions and funds.
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What Is Tax Deduction?
shikha
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2024-12-30T08:52:45+00:00 2024-12-30T08:52:45+00:00Comment
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