Budget 2022: Taxpayers Pay Attention. Know How Much Exemption Available in Income Tax

When the budget will be presented on February 1, there will be many important milestones in the budget speech, where every citizen of the country will try to understand what was the matter of work for him. But, the most important is personal tax. This section gets the most attention. Especially the salaried class keeps trying to know what provisions have been made for them. But, due to the complex language of the budget document, it is not easy for them to understand. If every section of income tax is known, then the announcements related to it in the budget can be understood. For this it is important to understand that in which section of the Income Tax Act, how much exemption/ deduction is available.

Section 80C

The option related to Social Security, Investment Component is exempted under section 80C of the Income Tax Act (Income tax section 80C). These include investment in PPF, LIC premium, Sukanya Samriddhi Yojana, NSC, Tax Saving Mutual Fund (ELSS) and Tax Saving FD. In the current rules, income tax exemption is available on total investment up to Rs 1.5 lakh. Tuition fees for two children, home loan principal amount, stamp duty for home purchase and registration charges are also part of section 80C and can claim income tax exemption.

Section 80CCD(2D)

Under section 80CCD(2D), the benefit of income tax exemption is available on investment in the National Pension System (NPS) up to 10% of the basic salary. The special thing about NPS is that the exemption on investment in it is applicable on all tax slabs. In the last 12 years, investors have got great returns in NPS.

Section 24B

A total deduction of up to Rs 2 lakh is available on monthly installments on home loan interest under section 24B.

Section 80D

Income tax exemption can be claimed under section 80D on health insurance premiums. In this, the policyholder, spouse and children get tax exemption on the premium. In this option, an exemption can be taken on the premium up to Rs 25,000. There is an exemption on premium of Rs 25,000 for buying health insurance for parents. If the parents are senior citizens, then they can get tax exemption on their health insurance premium up to Rs. 30,000. Tax exemption can be claimed on premium up to Rs 55,000 on health insurance of self and senior citizen parents.

Section 80DD

Apart from section 80D, there are two more sections in the Income Tax Act. In these also, health-related expenses can be claimed for tax exemption. Dependent in section 80DD deals with medical expenses for a disabled person. Dependents can be spouses, children, parents, brothers or sisters. The tax exemption depends on how severe the disability is of the dependent. Medical expenses up to Rs 75,000 will be eligible for tax exemption if the dependent is up to 40 per cent disabled. At the same time, if the dependent is disabled up to 80 percent, then medical expenses up to Rs 1,25,000 can be covered.

Section 80DDB

Cancer, kidney disease expenses are covered under section 80DDB. In this, tax exemption can be taken on expenditure on illness for self or dependent. People below 60 years of age get tax exemption on expenditure up to Rs 40,000 for the treatment of this type of disease. For dependents in the age group of 60 to 80 years, tax exemption up to Rs 60,000 can be claimed on illness expenses. In case of super senior citizens, the tax exemption limit is up to Rs. 80,000.

Section 80U

Under section 80U, if a person himself is more than 40 percent disabled, then he can claim tax exemption. However, the benefit of section 80U and section 80DD will not be available together. The benefit of tax exemption is similar to that of section 80DD. The difference is that this section is related to own disability. At the same time, section 80D provides exemption on medical expenses of dependents.

Section 80E

If you have taken an education loan for yourself, your spouse, or child, then you can take a deduction under section 80E on the interest amount on it. This amount can be up to any limit and can be taken for studies anywhere in the country/ abroad. The condition for getting the exemption is that the loan should be taken for full time higher education and taken from any financial institution or charitable institution.

Section 80TTA

Interest earned from bank account or post office deposit has to be shown in ITR as income from other sources. If the interest amount in a financial year is less than Rs 10,000, then you can claim income exemption under section 80TTA. However, tax is to be paid as per the income tax slab on interest income above Rs 10,000.