Often in the hurry to file Income Tax Return (ITR) at the last minute, you forget to claim some of your tax deductions. Remember that if you do not take advantage of this deduction in the current financial year, then you will not be able to take it in the next financial years as well. If the tax exemption for the investment made during a particular financial year has not been claimed by the taxpayer in the income tax return filed for that year, then it cannot be claimed as a tax deduction. Before filing the income tax return, gather all the documents to claim all these deductions.
Deduction for investment in PFF
If you have invested in some investment options like Public Provident Fund (PPF), tax-saving FD etc. then under Section 80C, you can claim a tax deduction of up to Rs 1.5 lakh in a financial year. PPF has EEE status, which means you can claim tax deductions for investing in it. Moreover, the interest earned on it is non-taxable and the maturity amount is also tax-free. PPF account comes with a lock-in period of 15 years.
Tax exemption benefits on investing in EPF
Many salaried employees are covered under the Employees Provident Fund (EPF) scheme. In this scheme, employees are mandatorily required to deposit 12% of their salary in their EPF account. This contribution is also matched by the employer. However, you are eligible to claim tax deduction under section 80C only on your contribution. To make additional contributions to the EPF account, you can opt for Voluntary Provident Fund (VPF). The total contribution to EPF and VPF cannot exceed the basic salary in any financial year.
Deduction on investment in ELSS mutual funds
Equity-linked savings schemes (ELSS) are mutual funds that invest in equities and have a lock-in period of three years. You can invest in them and claim tax deduction under Section 80C. However, keep in mind that you can only claim up to Rs 1.5 lakh in a financial year as deduction under Section 80C. Of all the eligible schemes under Section 80C, ELSS mutual funds have the lowest lock-in period. While you can claim tax deduction for investing in ELSS mutual funds, you will have to pay tax on the gains from redeeming them.
Tax exemption on health insurance premium
If you are below the age of 60, you can claim a deduction of up to Rs 25,000 for paying health insurance premium under Section 80D. If the parents are aged 60 years or above, the deduction amount can go up to Rs 50,000. A cumulative additional deduction of Rs 5,000 is allowed for preventive health check-ups from FY 2015-16.
