Make sure you don’t miss these tax deductions

Did you end up with a diminished pay packet last couple of months, thanks to higher tax deductions? Well, you can’t get your employer to refund the same, especially if you did not provide the required tax saving proofs on time. But not all is lost.

You can still claim some deductions at the time of filing your return by June/July provided your investments/expenses fall within March 31. That way, you can at least apply for a refund or reduce any further taxes that you may pay on ‘other income’ at the time of filing returns.

What you missed at workplace

First, the good news is that almost all that you can submit as proof to your employer can still be claimed on filing returns, if you missed it. For instance, your HRA proof may have been rejected for lack of a revenue stamp on the rent receipt or absence of a lease agreement or landlord’s PAN no. (if rent paid  exceeds Rs 1 lakh a year), you can still claim the same while filing your returns.

However, ensure you have the correct documentary proof in hand at home. While this need not be submitted by you to the IT authorities, it is better to keep it in hand, in case of any scrutiny.

Under Section 80C, you can still make all the tax-saving investments  up to Rs 1.5 lakh before March 31 and claim this said deduction later. This could be all the investment options that come under this section, including your insurance premium or principal amount repaid on home loan. So is the case with medical premium under Section 80D.

Similarly, interest paid on your home loan too can be claimed if you did not submit this proof to your employer.

Also, if you did not claim your children’s tuition fee for this year (because you paid in the previous financial year ending March 2013), you can claim this year’s payment (if you had paid say in March 2014 for 2014-15) under Section 80C.

Yes, tuition fees (up to 2 children) under Section 80C can be claimed in the year of payment, even if you pay it in advance for the next school year.

The not-so-known tax benefits

Besides the usual deductions that you submit through your employer, there are quite a few benefits that your employer may not specifically bring to your notice. Make sure you avail them, if they are relevant to you.

Deduction for donations under Section 80G: Many of you may have made donations to recognized charitable institutions or NGOs but may not have submitted proof for the same to your employer. If you have got the 80G certificate for your donation from the charitable trust and wish to claim, you may do so at the time of filing returns.

Note that only 50% of your total contribution (save for Central government funds such as Prime Minister’s relief fund and so on, where 100% of your contribution qualifies for deduction), will qualify for deduction.

But only 50% of the sum contributed by you or 10% of your adjusted gross total income whichever is low will be the amount you can claim. If you contributed say Rs 50,000 to a trust and your gross total income after other deductions is Rs 6 lakh, then either Rs 25,000 (50% of your donation) or Rs 60,000  (10% of your gross income after all deductions) whichever is lower can be claimed. Hence, in this case you can claim Rs 25,000.

Claiming rent without HRA: If you are a self-employed professional or businessman or a salaried employee not receiving house rent allowance (HRA) as part of your emoluments, but pay rent for the house you live in, you can still claim tax deduction under section 80GG of the Income Tax Act.

This little known provision, though, is available only if you do not receive any HRA and you or your spouse or minor child do not own any house in the place where you work or reside.

The amount you can claim is restricted to least of the following: 1. Rs 2000 per month 2. 25% of your gross total income after all other deductions 3. Rent paid minus 10% of your gross total income after all    deductions.

Yes, this deduction will likely be restricted to Rs 24,000 a year (Rs 2000 a month) and not as beneficial as a typical HRA deduction. Still, you get to save some taxes!

You also need to note that this requires you to declare a separate form called Form No. 10BA. You can download it from the Income Tax website

Deduction for education loan: Did you know that you can claim deduction for the interest on  education loan taken by you?

Such a loan could be either for your higher education or higher education of spouse, child or any student for whom you are a legal guardian. This benefit is available under Section 80E of the Income Tax Act.

If such a loan is taken from a recognized financial institution or charitable trust, then you can claim the entire interest actually paid as deduction for 8 consecutive years from the year of starting the interest payment.

Note that higher education is any course that is pursued after school education, for which a loan has been taken by you.

There is no limit on the amount you can claim as long as it is the actual amount paid. The loan, of course, should be in your name.

Deductions for differently-abled people: There are a host of provisions such as Section 80U, 80DD and 80DDB for individuals with disabilities or those who are handicapped.

For instance, Section 80U deals with tax deduction ranging from Rs 50,000-1,00,000 for those with specified disabilities; the amount allowed based on the severity of the disability.

Similarly Section 80DD provides tax relief if you have a dependent with disabilities. The amount allowed is same as above and is allowed whether or not you incur such expense.

Section 80DDB, on the other hand allows deduction for medical expenses incurred for specific ailments such as AIDS, cancer and specified neurological diseases. The maximum amount is restricted to Rs 40,000 but goes upto Rs 60,000 for those above the age of 60.

This deduction can be for self or any dependent, including spouse, child, parents and siblings, provided they are entirely dependent on the individual claiming this benefit.

For more details on the above 2 tax deductions, you can refer to this link.

If you are claiming any of the deductions for differently-abled people for the first time, make sure you consult an auditor as the amount varies based on the severity of the ailment or disability and is also allowed only for ailments specified in the Income Tax Act.