As a first-time tax filer in India, you can benefit from various deductions and exemptions to lower your taxable income and lessen the bite that taxes take from your income. Here are some key deductions and exemptions available to you.
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Section 80C Deductions
For investments made in specific schemes, you may claim deductions up to ₹1.5 lakh under Section 80C. This includes contributions to the Public Provident Fund (PPF), Employee Provident Fund (EPF), National Savings Certificate (NSC), tax-saving fixed deposits, and payment of life insurance premiums. These deductions help you save taxes while encouraging long-term savings and investments.
Medical Insurance Premiums (Section 80D)
If you have purchased a health insurance policy for yourself, your spouse, parents, or children, you can claim deductions under Section 80D. The maximum deduction limit ranges from ₹25,000 to ₹1 lakh, depending on the age of the insured individuals and whether they are senior citizens.
House Rent Allowance (HRA)
If you live in a rented accommodation and receive HRA as part of your salary, you can claim exemptions under Section 10(13A). The amount of exemption depends on factors such as your salary, HRA received, and actual rent paid. Ensure you have rent receipts and other necessary documents to support your claim.
Interest on Education Loans
If you have taken an education loan for yourself, your spouse, or your children to pursue higher studies, the interest paid on the loan is eligible for deductions under Section 80E. This deduction is permitted for up to eight years or until all interest has been paid, whichever comes first.
Deductions for National Pension Scheme (NPS) Contributions
As a first-time filer, you can claim deductions if you have made contributions to the National Pension Scheme (NPS) under Section 80CCD(1B). This deduction is over and above the limit of Section 80C and allows you to save taxes while planning for your retirement.
